A New Zealand investor has launched legal action against Launceston-based cryptocurrency influencer Alex Saunders claiming he is owed almost $480,000.
Ziv Himmelfarb filed a statement of claim in the Supreme Court of Victoria this week, detailing several instances in which he allegedly provided Mr Saunders with a loan for an under-development cryptocurrency project.
Mr Saunders was the founder of Nugget's News YouTube channel which provided cryptocurrency investment advice and a fee-based service, with over 140,000 subscribers.
Mr Himmelfarb claimed that, on February 17, Mr Saunders offered him an interest in a "long/short crypto fund" via Facebook Messenger and over a video call, resulting in Mr Himmelfarb transferring Mr Saunders 4 bitcoins to subscribe for an interest in the fund.
At that time, the bitcoins had an Australian value of $269,682.
Mr Himmelfarb alleges that the crypto fund was a "managed investment scheme" under the Corporations Act because it had more than 20 members and was promoted by Mr Saunders, but was not registered as such.
Then on April 9, Mr Himmelfarb alleges Mr Saunders offered him an interest in a "DCB project" via Facebook Messenger.
Two days later, Mr Himmelfarb transferred him $50,000 in US Dollar Coins, valued at $65,283.
He alleges this project was also a managed investment scheme which was not registered.
On July 9, Mr Himmelfarb attempted, via solicitors, to void the alleged contract with Mr Saunders within 21 days and to have the bitcoins and USD Coins returned to him.
After the 21 days were up, Mr Himmelfarb again attempted to have the money returned, totalling $334,965.
"Wrongfully, the Defendant has failed and/or refused to transfer to the Plaintiff the Bitcoins and the USD Coins," the statement of claim reads.
"The Defendant provided no goods or services to the Plaintiff for the Bitcoins and the USD Coins.
"The Defendant has been unjustly enriched to the extent of the Monetary Value of the Bitcoins and the Monetary Value of the USD Coins, and is liable to make restitution to the Plaintiff of the Monetary Value of the Bitcoins and the Monetary Value of the USD Coins, on account of money paid for and at the request of the Defendant."
Mr Himmelfarb also claimed that he transferred Mr Saunders 30 ETH coins by way of a loan on May 13, with a value of $144,305. He alleges this loan was to be repaid by May 23, but this did not occur.
It took the total value of the claims against Mr Saunders to $479,270.
Mr Saunders was yet to file a defence.
He has been uncontactable by the media, including The Examiner, since a range of allegations were raised against him on social media on July 18 following a heated YouTube live stream with US-based cryptocurrency influencer Richard Heart.
On Tuesday, fellow Launceston-based cryptocurrency investor Ben Simpson - who previously worked with Mr Saunders - responded to a question on Twitter about his whereabouts.
"Unfortunately I don't know where Alex is," he said.
"The team and I are doing our best to focus on our Collective Shift members at this stage. Has been a difficult few weeks."
Allegations - separate to those filed by Mr Himmelfarb - centred on a range of screen shots of conversations in which Mr Saunders allegedly asked for loans from other investors in early 2021.
A link to a cryptocurrency wallet, allegedly belonging to Mr Saunders, showed several million dollars' worth of investments being deposited, but then quickly being transferred onto a cryptocurrency exchange for reinvestment.
One screen shot conversation shows Mr Saunders' intention to repay investors in full, depending on the success of his DCB project.
Crypto investors don't get same protections, Senate hears
The issue of regulatory protections for cryptocurrency investors was discussed in detail during a Senate inquiry last week.
Digital law expert Natasha Blycha outlined how the sector was not subject to the same licensing requirements as traditional markets, leaving investors potentially exposed.
"The horse has bolted," she said.
"There are trillions of dollars moving in these market.
"These people are effectively taking that consideration that they have a legitimate expectation that they won't be prosecuted for moving tokens or digital assets around without any kind of licensing.
"Each of the regulators put their hands up in the air, including the stock exchange, saying, 'We don't have the right licences,' or, 'We don't know how to actually regulate these products.'"
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