Crypto & Digital Asset Disputes

Overview

The rapid growth of cryptocurrency and digital asset platforms has outpaced the regulatory frameworks designed to protect consumers. The result is an environment where exchanges, custodial wallets, and DeFi platforms can restrict access to funds, modify terms unilaterally, and respond to disputes with opacity and delay—often with little regulatory oversight.

Prescott & Hargrove represents individuals and businesses in disputes with digital asset platforms and related entities. Our approach applies traditional legal frameworks—contract law, consumer protection statutes, unjust enrichment, and conversion claims—to the specific circumstances of crypto-related disputes.

Who This Practice Area Serves

• Individuals whose exchange accounts have been frozen, restricted, or closed without adequate explanation
• Users who cannot withdraw funds from a platform despite completing all requested verification
• Investors who lost access to assets due to platform actions, policy changes, or custodial failures
• Businesses that accepted digital assets as payment and face disputes over settlement or conversion
• Parties involved in disputes over token sales, NFT transactions, or smart contract execution failures

Common Dispute Scenarios

• An exchange freezes an account citing “compliance review” and provides no timeline for resolution
• A platform applies updated terms of service retroactively to justify withholding funds deposited under prior terms
• A withdrawal request is pending for weeks or months with no substantive update from the platform
• A platform deactivates an account following a user complaint or regulatory inquiry
• An exchange executes a trade incorrectly or fails to process a transaction, causing financial loss
• A custodial platform becomes unresponsive, and the user cannot access their assets through any support channel
• An offshore-domiciled exchange or platform refuses to engage with U.S.-based legal correspondence

Our Approach

Digital asset disputes require counsel who understands both the technology and the applicable legal frameworks. We approach each matter by first identifying what type of entity is involved—a registered money services business, an unregistered offshore exchange, a decentralized protocol, or a hybrid platform—because this determines which legal theories and jurisdictional strategies are available.

We then build the documentary record: on-chain transaction histories, platform communications, terms-of-service archives, verification submission records, and any written representations about account status or fund availability. For disputes involving blockchain data, we work with forensic tools and, when needed, third-party analysts to verify on-chain facts.

Our escalation strategy may include formal demand correspondence, regulatory complaints to FinCEN, the SEC, the CFTC, or state money transmitter regulators, and civil litigation in the jurisdiction best positioned to assert authority over the platform. For offshore entities, we evaluate available service mechanisms and enforcement pathways.

Cross-Border Matters

Technology platforms and digital asset operators frequently structure themselves across multiple jurisdictions. Where a dispute requires engagement with counsel outside the United States, we coordinate through our international counsel network across the United Kingdom, the Netherlands, Malta, the Dutch Caribbean, Singapore, Gibraltar, and Canada.