A former COO of a Vancouver-based marketing company has been ordered to return a laptop that may contain millions in cryptocurrency.
While Bitcoin and other cryptocurrencies have been around for a decade, many businesses are still not that knowledgeable about this new technology. This lack of understanding can lead to unintended consequences, especially when coupled with a lack of oversight. A marketing company has taken its former COO to court to regain a laptop that can possibly contain millions in cryptocurrencies.
COO Takes Lead in Cryptocurrency for Company: Bad Decision
The ex-COO is Jason Bradley Arnold, and he’s been taken to court by his former employer, Shair.Com Global Digital Services Ltd., over some missing cryptocurrency. Shair.com is an online publishing and marketing company, and Arnold was brought in as COO in 2011.
According to the court document, Arnold portrayed himself as “being very knowledgeable and experienced in computer technology.” The company bought Arnold a laptop, which he used for his duties as COO. The laptop was meant to be fully linked to Citrix, a secure server that the company used to allow employees to remotely gain access to needed information.
In 2013, Shair.com became interested in cryptocurrency, and Arnold was given the lead in this new endeavor due to him having the most expertise with crypto. At the beginning of 2014, the COO told the company he had created a Bitcoin wallet on the laptop that the company could use. He also told them that he created a digital and paper backup of the wallet as well as another digital backup on the Citrix server.
Arnold then spent $18,500 of company money to purchase bitcoins, which took place between June and August of 2014. He then supposedly converted some of the BTC into Whitecoin.
Company Kept in the Dark
However, Shair.com was unaware of the purchase of BTC and subsequent trading for Whitecoin. In addition, Arnold did not provide them with any information about the supposed backup wallets he had created.
Arnold and Shair.com parted ways in April 2017, but it wasn’t until December 2017 that Shair.com realized that he still had his company laptop. They also realized that he not uploaded any of the wallet info to Citrix, nor had he created the backup wallet on the server at all.
Shair.com then asked Arnold to return the laptop, but he did not, saying that the laptop had died. He told the company that “everything was lost on it, including the wallet.” Arnold did say that he had 26 Dash in his possession, which he then transferred over.
The judge noted in his ruling that the company hired a digital currency consultant to figure everything out. The consultant found that nine digital wallets were linked to Arnold, and the consultant also discovered the initial cryptocurrency purchase, which the company did not know about.
The value of the cryptocurrency on the laptop (if it’s still there) could be considerable. If the crypto is all Bitcoin, then the $18,500 originally spent is now worth $225,000 in value. However, if the bitcoins had been converted into Whitecoin, the value would be a staggering $5.3 million.
Shair.com petitioned the court for the laptop to be returned. They also asked that $3 million of Arnold’s holdings be frozen and held until the end of the lawsuit. These assets include three homes, two ATVs, a boat, two vehicles, and a rural plot of land.
At the ruling made last month, Arnold didn’t bother to show up or have a lawyer present. The judge made two rulings on this case. First, he ruled that the laptop be returned, saying:
The plaintiff [Shair.com] has established that it has a claim to a proprietary interest in the laptop computer and in any digital currencies purchased by the defendant flowing from the plaintiff’s initial $18,500 investment in Bitcoin. I would note that in his correspondence, the defendant [Arnold] did not deny that interest. He simply stated that his computer had died and that the wallet information was no longer available.
Given the nature of digital currencies and difficulty in tracking ownership of digital wallets, I am satisfied that there is a reasonable apprehension that the currencies may be transferred outside of the jurisdiction.
As for Shair.com’s request that $3 million of Arnold’s assets be frozen, the judge denied this. He said:
The plaintiff has provided a list of known assets of the defendant in BC that total approximately $3 million. There is no evidence to suggest that the defendant has taken any steps or has any intention of disposing of those assets.
The judge noted that the value of the missing cryptocurrency is actually unknown. Therefore, he says:
While the plaintiff speculates about what that initial investment might be worth now under different scenarios, it is just that, speculation. To tie up almost $3 million of the defendant’s assets in the face of such a speculative claim would, in my view, be unreasonable, particularly given, again, the absence of evidence about likely disposition of assets.
Overall, it’ll be interesting to see if the laptop is returned and if the cryptocurrency can be recovered. This just goes to show that businesses that dabble in the digital currency ecosystem had better know what they’re doing so as to not be taken advantage of.
Do you think the laptop really “died” or did the ex-COO do something with the missing Bitcoin and Whitecoin? Let us know in the comments below.
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