Williams v. Block.One
- Lewis Kaplan
- 1:20-cv-02809
- U.S. District Court · Southern District of New York
- 4
In Williams v. Block.One, Judge Kaplan required more information before deciding the settlement-approval and attorneys’ fees motions.
The order affected the plaintiffs, the proposed settlement class, and plaintiffs’ counsel. Counsel had to provide additional information before the court would decide whether to approve the settlement or award attorneys’ fees.
What happened
In Williams v. Block.One, plaintiffs asked the court to approve a $27.5 million class-action settlement involving purchases of certain cryptocurrency tokens. Their lawyers also requested about $5.5 million in attorneys’ fees.
The court found that the submissions did not adequately explain the estimated number of eligible tokens, the proposed claims process, or the requested fees and expenses. It also sought information about the proposed class representative, token ownership, foreign and domestic transactions, and how the settlement would be allocated.
Judge Lewis A. Kaplan did not approve or deny either motion. He ordered plaintiffs’ counsel to provide additional information by November 10, 2021.
The detailed version
- Williams v. Block.One · No. 1:20-cv-02809
- Lewis Kaplan
- Nov. 3, 2021
Background
The opinion concerns a proposed class-action settlement in Williams v. Block.One. The document also lists a second action, No. 20-cv-3829 (LAK), involving Crypto Assets Opportunity Fund LLC and others against Block.One and others. Plaintiffs sought approval of a settlement fund totaling $27.5 million. Plaintiffs’ counsel separately sought approximately $5.5 million in attorneys’ fees.
The proposed settlement class covered people and entities that directly or through an intermediary purchased or otherwise acquired ERC-20 tokens or EOS tokens between June 26, 2017, and May 18, 2020, subject to stated exclusions. Plaintiffs said that most EOS purchasers were foreign and estimated that only 25% of the 900 million tokens issued by Block.one were likely eligible for recovery. The court noted that plaintiffs had not explained the basis for the statement that most EOS purchases were foreign.
Issues Identified by the Court
The court required more information before it could make an informed decision about settlement approval and the fee request. Regarding settlement administration, the court found that plaintiffs had provided only general information about the claims-administration and verification process, even though the proposed settlement presented a novel cryptocurrency settlement structure.
Regarding fees, counsel submitted a lodestar calculation—a method that estimates fees by multiplying hours worked by reasonable hourly rates—based on 2,824.5 hours worked by nine lawyers and three paralegals. The court said that the submission gave little information about what the reported hours covered. It requested a consolidated summary showing each person’s hours and rates, an analysis of work categories, biographical information, support for the requested hourly rates, and explanations for expenses including a $25,000 item labeled “PH” and more than $4,000 in undescribed service fees.
The court also requested an explanation of the assumption about foreign EOS purchasers and its effect on the settlement amount. It directed counsel to address whether Crypto Assets Opportunity Fund was typical of other proposed class members regarding the domestic or foreign classification of its purchases and whether it was an adequate class representative. The court further sought details about wallet-address verification, purchases through exchanges allowing off-chain transactions, proof of token ownership on May 18, 2020, the settlement allocation formula, leftover funds, and the meaning of “contract” or “trade” date in cryptocurrency transactions.
Order and Effect
Judge Lewis A. Kaplan ordered plaintiffs’ counsel to provide the requested information on or before November 10, 2021. The opinion did not approve or deny the proposed settlement and did not approve or deny the attorneys’ fees request. The classification is procedural because the order addressed what information was needed to evaluate settlement approval and fees rather than deciding the underlying claims.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.