Judge Recommends $1.8M Default Judgment in VBit Bitcoin Mining Lawsuit

On Tuesday, March 25, 2025, a U.S. magistrate judge recommended that a federal court partially grant a renewed motion for default judgment in a lawsuit filed by multiple plaintiffs against VBit Technologies Corp. and related entities and individuals.

The case, titled Huntley v. VBit Technologies Corp., involves allegations of securities fraud, common law fraud, conversion, and breach of contract stemming from a purported Bitcoin mining scheme. U.S. Magistrate Judge Sherry R. Fallon for the United States District Court for the District of Delaware issued the recommendation, suggesting a total award of $1,887,029 in compensatory damages, along with post-judgment interest, for 28 plaintiffs.

The lawsuit originated on September 2, 2022, when plaintiffs, led by Morgan C. Huntley, filed claims against VBit Technologies Corp., VBit Mining LLC, Advanced Mining Group, and several individuals, including Don Cong Vo (also known as Don Vo), alleging violations of the Securities Exchange Act of 1934 and Delaware state laws. The plaintiffs later amended their complaint on April 17, 2023, adding VBit DC Corp. and 35 additional plaintiffs, bringing the total number of named plaintiffs to over 40. The amended complaint accused the defendants of operating a Ponzi scheme through Bitcoin mining contracts that promised ownership of mining hardware but instead delivered fabricated returns funded by new investors.

According to court documents, the defendants offered contracts for hosted Bitcoin mining services, claiming that customers would receive fractions of Bitcoin over time from individually owned equipment. The plaintiffs alleged that the defendants engaged in “cloud mining” instead of providing dedicated hardware and used incoming funds from new participants to pay existing customers. The scheme allegedly unraveled in 2022 when Bitcoin’s value plummeted, leading to frozen withdrawals by June of that year, leaving plaintiffs unable to access their investments.

Several defendants, including VBit Technologies Corp., VBit Mining LLC, VBit DC Corp., Advanced Mining Group, Don Vo, and Lillian Zhou, failed to respond to the amended complaint after being served in April 2023. The Clerk of the Court entered defaults against these parties between July 5, 2023, and August 9, 2023, due to their lack of response. Attorneys for some defendants withdrew from the case after losing contact with their clients, and the corporate defendants did not retain new counsel, which is required for them to appear in federal court.

The plaintiffs initially sought default judgment in January 2024, requesting over $2.2 million in damages, but the court denied the motion in May 2024 because insufficient evidence was provided to support the claimed amounts. On August 13, 2024, the plaintiffs renewed their motion, this time submitting mining contracts, payment records, and affidavits to substantiate their losses. The renewed request sought $2,287,823.46 in total damages.

In her report, Judge Fallon reviewed the submitted evidence and validated damages for each plaintiff based on the documentation. While some plaintiffs, such as Morgan C. Huntley ($189,790.82) and Michelle Nguyen ($108,659.12), had their full requested amounts approved, others received less than requested due to incomplete records. For instance, Nigel Richards requested $319,481.11 but was validated for $231,388.11, and Lara Ertwine’s claim of $314,111.28 was reduced to $97,168.20. The total validated amount across all plaintiffs came to $1,887,029, approximately $400,000 less than the requested sum.

Judge Fallon concluded that the defendants’ failure to respond to the lawsuit since 2022, combined with the plaintiffs’ evidence, justified granting the default judgment in part. She found that denying the motion would prejudice the plaintiffs, that the defendants had no apparent defense, and that their unresponsiveness constituted willful conduct. The recommendation also includes post-judgment interest, with plaintiffs instructed to submit a proposed order specifying the applicable statutory rate within 14 days of the report.

The parties have until April 8, 2025, to file objections to the recommendation, which are limited to three pages each. If adopted by the district court, the judgment will be entered against the defaulted defendants.

Please contact BlockTribune for access to a copy of this filing.