Cryptocurrency Litigation &
Digital Asset Recovery
Former DOJ Prosecutors. Nationwide Federal Litigation to Recover Misappropriated Cryptocurrency, Defend Against Freeze Orders and Clawback Actions, and Resolve Complex Digital Asset Disputes.
The federal government’s multi-year crackdown on cryptocurrency fraud has created a massive wave of civil litigation. Federal enforcement actions by DOJ, the SEC, and the CFTC generate court-appointed receivers, asset freezes, and clawback demands that reach far beyond criminal defendants. Investors, counterparties, and innocent third parties are pulled into complex federal litigation over digital assets they may have earned, purchased, or received in good faith.
At the same time, the growth of decentralized finance and smart contract technology has created an entirely new category of commercial disputes. Failed token launches, exploited DeFi protocols, disputed smart contract executions, and misappropriated digital assets are now the subject of high-stakes federal litigation. These disputes involve the intersection of blockchain technology, federal securities and commodities law, common-law fraud claims, and traditional commercial litigation. They demand experienced counsel who understand all aspects of these cases.
Armstrong & Bradylyons PLLC handles cryptocurrency litigation and digital asset recovery on both the offensive and defensive side. The firm prosecutes claims on behalf of clients to recover lost or misappropriated cryptocurrency. It also defends clients’ digital assets against government and third-party freeze orders, asset seizure, clawback actions, and civil and criminal forfeiture proceedings. The firm also litigates smart contract disputes, token offering disputes, and complex commercial claims arising from digital asset transactions.
This practice area builds on the firm’s cryptocurrency fraud defense practice in complex, multi-million-dollar investigations and cases and its DOJ experience in complex cryptocurrency fraud cases. Scott Armstrong served as an Assistant Chief at DOJ’s Fraud Section and has tried 16 federal jury trials, including the first-ever cryptocurrency market manipulation case under Title 15. Drew Bradylyons served as Chief of the Financial Crimes and Public Corruption Unit at the U.S. Attorney’s Office for the Eastern District of Virginia. Their combined experience building and dismantling complex financial fraud cases is the foundation of every cryptocurrency litigation engagement handled by the firm. Scott Armstrong and Drew Bradylyons now represent clients nationwide in cryptocurrency and blockchain litigation and disputes.
Digital Asset Recovery
The firm prosecutes claims on behalf of individuals, investors, and businesses to recover cryptocurrency and digital assets that have been stolen, misappropriated, or fraudulently obtained through false and misleading representations. Recovery actions involve working in concert with sophisticated tracing firms to identify and trace misappropriated assets across multiple wallets and exchanges, obtaining emergency relief in federal court to freeze assets before they are dissipated or hidden, and pursuing conversion, fraud, and unjust enrichment claims against private actors in federal court.
Successful digital asset recovery requires speed, blockchain tracing capability, and the ability to obtain emergency relief in federal court. The firm brings all three. Its attorneys have years of experience working with blockchain transaction data to trace the flow of digital assets, both as federal prosecutors and as defense counsel. That same tracing capability now drives the firm’s offensive recovery practice.
The firm also works closely with its contacts in federal law enforcement to refer cases to FBI, IRS-CI, and other federal agencies so that law enforcement can also pursue cases against threat actors.
Smart Contract Disputes
The firm litigates disputes arising from failed, exploited, or contested smart contract executions. Smart contracts are self-executing code deployed on a blockchain. When these contracts fail, are exploited, or produce disputed outcomes, resolving the dispute often involves complex questions of civil litigation, blockchain operability, software functionality, and blockchain technology.
Smart contract disputes include claims arising from DeFi protocol exploits and vulnerabilities, liquidity pool manipulation, contested token launches and token distributions, oracle manipulation, flash loan attacks, and disputes over governance token voting and protocol upgrades. The firm works closely with subject matter experts to review smart contract code, DeFi protocol architecture, and token economics to build or defend claims. The firm relies on its familiarity with blockchain technology and substantial litigation experience in federal court to aggressively represent the interests of its clients.
TRO and Asset Freeze Defense
The firm defends clients against Temporary Restraining Orders (TROs) and preliminary injunctions seeking to freeze cryptocurrency wallets, exchange accounts, and other digital asset holdings. Emergency freeze orders in crypto cases move fast. A TRO can lock an individual out of their digital assets within hours and often without any notice. Unwinding a TRO and defending against it requires immediate action and counsel who understand both the federal procedural rules governing emergency relief and the underlying blockchain technology. The firm has that experience in spades.
Government agencies, federal receivers, and private litigants all seek emergency freeze orders in cryptocurrency disputes. The firm challenges the legal and factual basis for these orders and works to protect its clients’ access to their digital assets. Where freeze orders are already in place, the firm moves to narrow or dissolve the orders to protect its clients’ legitimate assets.
Clawback and Disgorgement Defense
Federal receivers appointed in SEC and CFTC enforcement cases routinely pursue clawback and disgorgement actions against individuals who received funds from entities later determined to be fraudulent. These actions target investors, employees, vendors, and counterparties who may have had no knowledge of or involvement in the underlying fraud.
Clawback demands can be devastating. A federal receiver may seek to recover profits, principal, salary, commissions, or other payments received from the entity under receivership. The firm defends individuals and businesses against these demands. It challenges the receiver’s tracing methodology, the legal basis for the clawback, and the factual predicate for disgorgement. In this way, the firm defends its clients’ legitimate assets from unexpected litigation involving conduct from years prior.
Cryptocurrency Forfeiture Defense
Federal law enforcement agencies routinely seek to seize and forfeit cryptocurrency in connection with fraud and money laundering investigations. The government may obtain seizure warrants for cryptocurrency held in exchange accounts, hardware wallets, software wallets, and smart contracts. Civil and criminal forfeiture proceedings under 18 U.S.C. §§ 981 and 982 and 21 U.S.C. § 853 can result in the permanent loss of substantial digital asset holdings.
The firm defends individuals against cryptocurrency seizure and forfeiture actions. It challenges the government’s tracing evidence, the nexus between the assets and alleged criminal activity, and the procedural basis for seizure. Forfeiture defense in crypto cases demands counsel who understand both the federal forfeiture statutes and the blockchain analytics evidence the government relies on to trace and attribute digital assets.
The firm also represents clients in forfeiture proceedings filed by the government to recover clients’ legitimate assets. The firm files claims to forfeited property on behalf of clients and petitions the government for a portion of the forfeited property. Scott Armstrong and Drew Bradylyons represent clients in these matters based on their DOJ experience involving multi-million-dollar cases and forfeiture orders.
Token Offering and Securities Litigation
The firm represents founders, promoters, and executives of initial coin offerings (ICOs), token generation events (TGEs), and other digital asset offerings in civil disputes involving allegations of securities fraud, breach of fiduciary duty, and misrepresentation. These disputes arise when investors bring claims alleging that a digital asset constitutes an unregistered security under the Howey test, that offering materials contained material misrepresentations, or that offering proceeds were misappropriated.
The firm challenges the classification of digital assets as securities, defends against investor fraud claims, and litigates disputes over token economics, vesting schedules, and distribution mechanisms. The federal regulatory landscape for digital asset classification remains fragmented and evolving. As a result, the firm also represents clients against cases filed by State Attorneys General, like the New York Attorney General’s Office or the Maryland Attorney General’s Office, as well as various State Securities Boards. Scott Armstrong specifically obtained the dismissal of a wide-ranging case filed by the Texas State Securities Board against an executive involved with the Apertum token. That dismissal is a concrete example of the litigation and blockchain expertise that the firm brings to its engagements on behalf of individual clients.
Parallel Proceedings Coordination
Cryptocurrency disputes frequently generate parallel criminal, civil, and regulatory proceedings arising from the same set of facts. A single course of conduct may produce a DOJ criminal investigation, an SEC or CFTC enforcement action, a FinCEN enforcement action, a state attorney general investigation, civil forfeiture proceedings, and private civil litigation by investors or counterparties.
Scott Armstrong and Drew Bradylyons coordinate the defense of individuals across all of these proceedings. They guard against the prospect that actions taken on behalf of a client in one forum will compromise the client’s position in another forum, such as in a criminal investigation. Scott Armstrong and Drew Bradylyons strategically position a client so that any statements in a civil proceeding will not be turned over to a parallel criminal case. Drew Bradylyons and Scott Armstrong respectively coordinated parallel criminal and civil enforcement matters as Chief of EDVA’s Financial Crimes Unit and as an Assistant Chief at DOJ’s Fraud Section. They understand firsthand how DOJ and the regulatory agencies share information, align strategy, and pursue individuals across multiple proceedings. Scott and Drew protect their clients at all stages.
Armstrong & Bradylyons PLLC’s crypto and digital asset litigation practice combines deep blockchain technology knowledge, command of federal litigation procedure, and trial experience. Scott Armstrong and Drew Bradylyons have the expertise and skill to take any client’s matter through trial, if necessary. These capabilities drive every phase of a cryptocurrency dispute, from the initial demand letter through verdict.
Scott Armstrong and Drew Bradylyons built and tried complex financial fraud cases at the highest levels of DOJ. That experience translates directly to civil cryptocurrency and digital asset litigation. The firm knows how to develop case theories from complex financial data, manage discovery in document-intensive matters, retain and prepare expert witnesses, and distill complex blockchain evidence into an understandable format for a federal judge or jury.
On-Chain Asset Tracing and Recovery
Digital asset recovery begins with competent and robust tracing. The firm works closely with a trusted stable of cryptocurrency tracers to conduct detailed analysis of blockchain transaction data, wallet activity, smart contract interactions, and exchange records to identify, trace, and locate misappropriated digital assets. The firm’s attorneys have worked with complex crypto-transaction data for years, both as federal prosecutors building and trying crypto cases and as counsel pursuing recovery in civil litigation.
The firm’s experience with crypto and digital asset tracing is critical to obtaining relief in federal court. Judges granting TROs and asset freezes require specific, reliable evidence of where the assets are and how they got there. Judges denying or limiting TROs also demand the same evidence from defense counsel. On either side, the firm knows how to identify, build, and present that evidence in court.
Smart Contract and Protocol Analysis
To build or deconstruct a federal complaint, Armstrong & Bradylyons PLLC works with subject matter experts to review smart contract code, DeFi protocol architecture, and token economics to establish the factual and technical basis for its clients’ claims or defenses. In disputes involving protocol exploits, contested token distributions, or failed smart contract executions, Scott Armstrong and Drew Bradylyons have the ability to translate complex blockchain technology into clear, persuasive evidence. They both did just that at DOJ at the highest level and now put those skills to use on behalf of clients.
Digital Asset Classification and Regulatory Defense
Many cryptocurrency disputes turn on whether a digital asset is classified as a security, commodity, or money transmitting instrument. The regulatory landscape is fragmented. The SEC, CFTC, FinCEN, and DOJ have asserted overlapping and sometimes conflicting jurisdiction over digital assets. The firm uses that regulatory ambiguity as both a sword and a shield in cryptocurrency litigation. Scott Armstrong specifically obtained a rare dismissal on behalf of an executive working on behalf of the Apertum Foundation. That case was charged by the Texas State Securities Board, which ultimately dismissed the case against Scott Armstrong’s client shortly after filing the claim.
Federal Trial Experience in Crypto Cases
The firm’s cryptocurrency litigation practice is backed by 25 federal jury trials. That trial experience is not theoretical. Scott Armstrong tried the first-ever cryptocurrency manipulation case under Title 15, a multi-week trial involving over $300 million in alleged spoof and wash trades, voluminous exchange data, and blockchain tracing evidence. Trial readiness changes the calculus at every stage of a dispute, from the initial demand through settlement negotiations. It is not just a talking point. It provides leverage for the clients of Armstrong & Bradylyons PLLC. This experience ensures that Scott Armstrong and Drew Bradylyons’ clients can prosecute or defend their case with confidence that the claims are backed by hard-nosed trial skills earned over decades at DOJ.
Armstrong & Bradylyons PLLC represents a range of clients in cryptocurrency litigation and digital asset disputes in federal courts nationwide.
Investors and Token Holders
The firm represents investors and token holders seeking to recover cryptocurrency lost to fraud, misappropriation, or protocol exploits. The firm also defends investors against clawback and disgorgement actions brought by federal receivers in SEC and CFTC enforcement cases.
Cryptocurrency Executives and Founders
The firm represents cryptocurrency exchange executives, token founders, and protocol developers in civil disputes arising from digital asset offerings, platform operations, and investor claims. The firm also defends these individuals against government freeze orders, forfeiture actions, and parallel regulatory proceedings.
DeFi Protocol Developers and Operators
The firm represents DeFi protocol developers and operators in disputes involving protocol exploits, liquidity pool disputes, governance disputes, and claims arising from contested smart contract executions. The firm’s technical capability in reviewing smart contract code and protocol architecture is critical in these matters.
Crypto Traders and Market Makers
The firm represents cryptocurrency traders, market makers, and trading firms in disputes involving market manipulation allegations, contested trade executions, exchange disputes, and regulatory enforcement actions. Scott Armstrong tried the first-ever crypto market manipulation case under Title 15. That trial experience shapes the firm’s representation of trading professionals.
Crypto Fund Managers and Advisors
The firm represents cryptocurrency fund managers, commodity trading advisors, and investment advisors in disputes with investors, regulatory enforcement actions, and clawback proceedings. These matters frequently involve allegations of mismanagement, misrepresentation of fund performance, and misappropriation of investor assets.
Third Parties and Innocent Recipients
The firm represents individuals and businesses who received cryptocurrency from entities later placed into receivership or subject to government forfeiture. These clients may have had no knowledge of or involvement in the underlying fraud. The firm defends them against clawback demands, freeze orders, and forfeiture proceedings.
The firm’s attorneys have represented clients in high-stakes cryptocurrency litigation and digital asset disputes at every stage. The following matters are representative of the firm’s cryptocurrency litigation practice.
Secured the complete dismissal of an emergency TRO filed in federal court that improperly froze several cryptocurrency accounts of a crypto-trading executive.
Negotiated the complete withdrawal of a clawback demand from a federally appointed receiver seeking approximately $1 million from an executive who had invested in a crypto and forex investment platform that was later determined to have operated as a Ponzi scheme.
Secured the complete dismissal of an Emergency Cease and Desist Order filed by the Texas State Securities Board against executives of the Apertum Foundation for alleged fraud relating to the APTM or Apertum Token.
Represented the founder of a leading DeFi protocol in connection with an investigation by the New York Attorney General (NYAG) into whether the protocol offered unregistered securities and did not disclose alleged protocol risks to users.
Represented a cryptocurrency mining and lending protocol, as well as its CEO, against a DOJ investigation involving alleged investment fraud relating to cryptocurrency investments.
Represented a foreign national against a federal indictment charging conspiracy to commit wire fraud and conspiracy to commit money laundering for allegedly orchestrating a $260 million “social engineering” crypto heist.
At DOJ, served as lead trial counsel in the first-ever trial conviction for conspiracy to commit securities price manipulation under Title 15 involving cryptocurrency and over $300 million in spoof orders and wash trades placed via an automated trading bot.
Scott Armstrong served for nearly a decade at DOJ’s Fraud Section, including as an Assistant Chief in the Market Integrity and Major Fraud Unit. He supervised cryptocurrency fraud investigations and prosecutions nationwide. He tried 16 federal jury trials, including the first-ever cryptocurrency market manipulation case under Title 15 involving over $300 million in spoof and wash trades. Scott handles cryptocurrency litigation and digital asset recovery on both the offensive and defensive side. He prosecutes claims to recover lost or misappropriated cryptocurrency. He defends clients’ digital assets against government and third-party freeze orders, clawback actions, and forfeiture proceedings. His familiarity with blockchain technology, on-chain tracing, and the federal regulatory landscape allows him to handle crypto disputes from their earliest stages through trial.
Drew Bradylyons served as Chief of the Financial Crimes and Public Corruption Unit at the U.S. Attorney’s Office for the Eastern District of Virginia and previously supervised complex financial fraud cases at DOJ’s Fraud Section. Drew coordinated parallel criminal and civil enforcement matters at EDVA, one of the most active federal prosecution offices in the country. He understands firsthand how DOJ and federal regulatory agencies share information, align strategy, and pursue individuals across parallel proceedings. That experience is directly relevant to cryptocurrency litigation, where parallel criminal, civil, and regulatory proceedings are the norm.
Collectively, the firm’s attorneys have tried 25 federal jury trials in complex white-collar fraud cases in federal courts across the country. The firm handles cryptocurrency litigation in federal courts nationwide, including the Southern District of New York, the Eastern District of New York, the District of Columbia, the Eastern District of Virginia, the District of Maryland, the District of New Jersey, the Southern District of Florida, the Northern District of California, and other federal districts where cryptocurrency disputes are concentrated.
What Is Cryptocurrency Litigation?
Cryptocurrency litigation refers to civil legal disputes involving digital assets such as Bitcoin, Ethereum, stablecoins, DeFi tokens, and NFTs. It includes claims to recover stolen or misappropriated cryptocurrency, defense against government and third-party asset freeze orders, clawback and disgorgement actions brought by federal receivers, smart contract disputes, token offering disputes, and forfeiture proceedings.
Cryptocurrency litigation is distinct from cryptocurrency fraud defense, which involves defending individuals against criminal charges brought by DOJ, the SEC, or the CFTC. Armstrong & Bradylyons PLLC handles both.
Can I Recover Stolen or Misappropriated Cryptocurrency?
Yes, in many cases. Recovery requires tracing the assets across the blockchain, identifying where they are held, and obtaining emergency relief in federal court to freeze them before they are dissipated.
Speed is critical. Cryptocurrency can be moved across wallets, exchanges, and blockchains in minutes. An experienced cryptocurrency litigation attorney can trace misappropriated assets using blockchain analytics, file emergency motions for TROs and asset freezes, and pursue civil claims for conversion, fraud, unjust enrichment, and breach of fiduciary duty.
What Is a Clawback Action in a Cryptocurrency Case?
A clawback action is a civil claim brought by a court-appointed receiver or trustee to recover funds paid to investors, employees, vendors, or other recipients from an entity later determined to have operated as a fraud or Ponzi scheme.
In cryptocurrency cases, federal receivers appointed in SEC and CFTC enforcement cases routinely pursue clawback demands against individuals who received profits, principal, salary, or commissions from the entity under receivership. These actions can target individuals who had no knowledge of or involvement in the underlying fraud.
What Is a TRO in a Cryptocurrency Case?
A TRO, or Temporary Restraining Order, is an emergency court order that freezes cryptocurrency held in exchange accounts, wallets, or smart contracts. TROs in crypto cases are sought by government agencies, federal receivers, and private litigants to prevent the dissipation of digital assets during litigation.
A TRO can lock an individual out of their digital assets within hours. Defending against a TRO requires immediate action and counsel who understand both the federal procedural rules governing emergency relief and the underlying blockchain technology.
What Should I Do If I Receive a Clawback Demand from a Federal Receiver?
Retain experienced litigation counsel immediately. Do not respond to the receiver’s demand without legal representation.
A clawback demand from a federal receiver in an SEC or CFTC enforcement case is a serious legal action. It can result in the recovery of profits, principal, salary, and other payments you received from the entity under receivership. Experienced counsel will evaluate the legal basis for the demand, challenge the receiver’s tracing methodology and factual assumptions, and negotiate to reduce or eliminate the clawback liability.
What Is the Difference Between Civil and Criminal Forfeiture of Cryptocurrency?
Civil forfeiture under 18 U.S.C. § 981 is an action brought against the property itself. The government must establish by a preponderance of the evidence that the cryptocurrency is connected to criminal activity. The owner does not need to be charged with a crime.
Criminal forfeiture under 18 U.S.C. § 982 and 21 U.S.C. § 853 is imposed as part of a criminal sentence after conviction. Both can result in the permanent loss of cryptocurrency holdings.
What Is a Smart Contract Dispute?
A smart contract dispute arises when a self-executing program deployed on a blockchain fails, is exploited, or produces a disputed outcome. These disputes include claims arising from DeFi protocol exploits, liquidity pool manipulation, contested token launches, oracle manipulation, flash loan attacks, and governance token voting disputes.
Smart contract litigation requires counsel who can review the underlying code, retain blockchain engineers as expert witnesses, and translate complex technical evidence into clear arguments for a federal court.
Why Does Former DOJ Experience Matter in Cryptocurrency Litigation?
Many cryptocurrency litigation matters arise directly from or run parallel to federal criminal and regulatory enforcement actions. Clawback actions are brought by receivers appointed in SEC and CFTC cases. Forfeiture proceedings are driven by DOJ investigations. TROs and freeze orders are sought in the wake of federal enforcement activity.
Counsel who understand how DOJ, the SEC, and the CFTC investigate and prosecute cryptocurrency cases can anticipate the government’s strategy, protect the client’s position across parallel proceedings, and leverage knowledge of federal enforcement dynamics in civil litigation. Scott Armstrong and Drew Bradylyons bring that experience to every cryptocurrency litigation engagement.
In What Jurisdictions Does Armstrong & Bradylyons Handle Cryptocurrency Litigation?
Armstrong & Bradylyons PLLC handles cryptocurrency litigation in federal courts nationwide. The firm obtains pro hac vice admission in any federal district where a client faces litigation.
The firm is particularly active in the districts where cryptocurrency disputes are most concentrated: the Southern District of New York, the Eastern District of New York, the District of Columbia, the Eastern District of Virginia, the Southern District of Florida, the Northern District of California, and the District of New Jersey. Scott Armstrong and Drew Bradylyons have tried cases and handled investigations in federal courts across the country.
Does Armstrong & Bradylyons Also Handle Cryptocurrency Fraud Criminal Defense?
Yes. In addition to its cryptocurrency litigation practice, Armstrong & Bradylyons PLLC defends individuals in federal cryptocurrency fraud and money laundering criminal cases. The firm’s criminal defense practice covers the full range of federal crypto charges, including wire fraud, money laundering, securities fraud, commodities fraud, and computer fraud.
The firm also represents businesses, executives, and individuals in high-stakes business disputes and complex civil litigation in federal courts nationwide.