backOn November 20, 2023, Judge Scott W. Skavdahl of the United States District Court for the District of Wyoming dismissed the claims against Berkower LLC, which were brought by the early supporters of a digital cryptocurrency, named AXC. The plaintiffs alleged that Berkower conspired to further a scheme to defraud these early supporters of the cryptocurrency project, in violation of RICO and additional common law claims of fraud and professional negligence.
As early supporters of the AXC cryptocurrency created by Defendant Axia and its affiliates, Plaintiffs allegedly pledged and transferred certain tangible assets into a trust to back the cryptocurrency. Berkower was hired by Axia to investigate and verify that the Plaintiffs’ assets were properly transferred into the trust, which allegedly included falsely verifying that the Plaintiffs were issued agreed-upon AXC and AXC options, in furtherance of the Defendant’s scheme to defraud Plaintiffs. In response to Berkower’s motion to dismiss, the court held that Plaintiffs failed to adequately plead RICO claims against Berkower, finding that Berkower’s role as an auditor for a one-time transfer of assets did not constitute a pattern of racketeering activity. The court also held that it did not have personal jurisdiction over Berkower for the remaining state law claims, given that Berkower’s only interaction with the state of Wyoming was through its valuation of a Wyoming LLC’s assets.
The case is Axtra LLC et al. v. Axia Issuer Inc. et al., No. 1:22-cv-00144. A copy of the Order is attached here.