Dr. Stephen Castell, a renowned computer software, systems and Fintech expert witness professional, instructed on behalf of the Plaintiffs in the earlier high- profile FTX & Voyager Class Action lawsuits and since last week also involved in the Binance litigation, explains the new Class Action Complaint.
The suit, filed by Adam Moskowitz, founding and managing partner of The Moskowitz Law Firm, alleges Binance traded cryptocurrencies as unregistered securities, and that influencers promoted them unlawfully.
The filing of the Complaint in the Southern District Court of Florida, Miami Division was picked up immediately by newspapers like Fortune and The Guardian, especially as it shows a wider social and media challenge: the impact of influencers on crypto recommendations.
Binance, the world’s largest crypto exchange, boasts vast profits, and its influx of money is fuelled by a lot of global influencers, who, it is alleged, are themselves profiting from hefty payouts. They include Swedish social media star Carl Runefelt, who boasts four million followers across YouTube, Twitter, Instagram, and TikTok, and who posts passionately about the “good life,” with his Bugatti, his watch, his yacht in Monte Carlo, and his Binance investments.
Last week’s filed Complaint was followed by a market reaction, hitting the Binance crypto coin “BNB” significantly.
Castell, who is an appointed expert witness on behalf of the Plaintiffs in the Class Action suit against FTX, instructed by lead attorney Adam Moskowitz, is also similarly involved in the 2021 filing against Crypto Broker Voyager over trading fees. Pending disclosure of the relevant software, systems and data documentation evidence in the litigation discovery process, he has provisionally modelled and calculated some large numbers by way of expert opinion: damages sought could exceed each $1 billion for Voyager and FTX, and $2 billion for Binance.
Voyager Digital Ltd. allegedly misled customers by charging hidden fees on transactions, advertising its trades as “100% commission-free”, but building in “secret commissions” into the pricing of every trade that “in most cases exceed the disclosed fees and commissions charged by its competitors.”
The Voyager Class Action Complaint cites preliminary analyses conducted by two experts – Richard Sanders, the co-founder and lead investigator of CipherBlade, a blockchain forensics and cybercrime investigation firm, and Stephen Castell, chairman of UK-based Castell Consulting, which specialises in IT.
Castell in his report predicted the total damages owed to the platform’s users may exceed $1 billion. “What these experts have shown us is that Voyager is set up, in a way, like a carnival – every consumer is going to lose”, says attorney Adam Moskowitz.
Castell, an expert in IT systems, risk management, and business analysis, with a past career in merchant banking and international trade finance, and having been in the 1980s one of the high-profile founders of the innovative London Over the Counter Share Market for financing New Technology based Firms, has for over three decades been at the forefront of multiple high-stakes legal cases, including the largest and longest software contract disputes internationally, and now involving major players in the finance and cryptocurrency sectors.
As an expert witness on behalf of the Class Action Plaintiffs claiming against SBF and CZ in both the FTX and Binance litigation, Dr. Castell has become a leading authority on the workings of the global banking system. He touches upon a range of issues, including outdated business models, mismanagement, and the role of bad actors in the decline of the banking industry, noting that it is no surprise that the banking industry’s decline has also stimulated new opportunities for growth, like the rise of digital assets and blockchain technology, albeit there is still a long way to go for developing a rigorous framework of compliance and regulations in these new sectors.
Dr Stephen Castell has also posited that “conventional governance models are often ill-suited to the demands of a digital world, rendering politicians who lack cognitive competence obsolete”.
While AI certainly plays a significant role in the next digital chapter, AI and ChatGPT will not be able to replace expertise totally – yet. As a Computer Specialist, he highlights his rule on data and systems soundness and security: Presume nothing, and trust no software or data. He counsels: “Always challenge the reliability of AI, and other complex multi connected intelligent computer systems – just look at the cost if you don’t!”.
Dr Castell will be addressing the Future Financial & Crypto Markets at the MEWS Metaverse Entertainment World, a business-to business summit taking place in Monaco May 3-5, and will be giving a thought-provoking insight into the FTX, Voyager and Binance litigations in his role as expert witness, as well as on challenges facing the banking industry. The first quarter in 2023 has been a case of ‘shaken, not stirred’, and doubtless there may be more to come on SVB, as well as on Credit Suisse.
For those interested in hearing Dr. Stephen Castell’s discourse during the MEWS, and to discuss with him, please visit https://www.themews.world.