Houston Man Sues Crypto Exchange for $1.8M Bitcoin Theft
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On Friday, March 21, 2025, William Devitt filed an amended complaint in the US District Court for the Southern District of Texas against Flashdot Limited, Peken Global Limited, Phoenixfin Private Limited, MEK Global Limited, and individuals Chun Gan and Ke Tang, collectively referred to as the defendants.
The lawsuit alleges that the defendants stole or facilitated the theft of approximately 21.259 Bitcoin (BTC), valued at around $1.8 million, from Devitt through a complex global scheme involving fraud, torts, and contract breaches. Devitt, a Houston resident, is seeking damages and the return of his cryptocurrency, along with a jury trial.
The complaint claims that the defendants operate the KuCoin cryptocurrency exchange platform According to the filing, the platform has been functioning in violation of US federal laws, including anti-money laundering (AML) and know-your-customer (KYC) regulations, without informing its users, including Devitt. The document asserts that the defendants played a significant role in the theft of Devitt’s assets and may still possess or control a substantial portion of the stolen Bitcoin, with at least 13.495 BTC allegedly remaining in his frozen KuCoin account.
The filing details that Devitt opened his KuCoin account on March 8, 2022, using his telephone number, and deposited or had others deposit 21.259 BTC into it between March and August 2022. In August 2022, his access to the account was suspended, allegedly due to a hack that changed the associated email and password without his consent. Devitt notified the defendants, requesting the account be frozen and providing verification details, but claims they refused to restore access or release his funds despite confirming his ownership. The complaint notes that the defendants announced their exit from the US market in August 2024, setting a December 17, 2024, deadline for US users to withdraw funds, yet continued to block Devitt’s access.
The lawsuit accuses the defendants of operating the KuCoin platform as a criminal enterprise, dubbed the “KuCoin Crypto-Theft Enterprise,” which allegedly enabled bad actors to steal cryptocurrency by neglecting AML and KYC requirements. It references a Department of Homeland Security investigation labeling KuCoin a multibillion-dollar criminal conspiracy. The platform, launched in 2017, reportedly served over 30 million users globally, including 1.5 million in the US, generating $184.5 million in fees from US users between September 2017 and March 2024.
Court documents reveal that all defendants except MEK Global Limited were indicted in the Southern District of New York for operating an unlicensed money-transmitting business and violating the Bank Secrecy Act. A guilty plea was entered on January 27, 2025, resulting in penalties exceeding $297 million, a two-year US market exit, and deferred prosecution agreements for Gan and Tang, each forfeiting $2.7 million. The complaint alleges the defendants knowingly flouted US regulations, concealing their US user base and marketing the platform’s lack of KYC as a feature.
Devitt’s claims include racketeering under RICO, violations of the Texas Deceptive Trade Practices Act, fraud, theft under the Texas Theft Liability Act, breach of contract, negligence, conversion, money had and received, unjust enrichment, and a request for a constructive trust over his funds. He seeks treble damages, punitive damages, attorney fees, and the return of his cryptocurrency.
Please contact BlockTribune for access to a copy of this filing.
