He Went After Crypto Companies. Then Someone Came After Him. Kyle Roche was a rising star in the field of cryptocurrency law — until his career imploded. Who orchestrated his downfall? In secretly recorded videos, the lawyer Kyle Roche described his close relationship with one of his cryptocurrency clients.Credit...Gili Benita for The New York Times By John Carreyrou June 18, 2023 When he arrived in London in late January 2022, Kyle Roche was riding high. At just 34 years old, he had established himself as one of the biggest players in the burgeoning field of cryptocurrency litigation. He boasted a law firm bearing his name, lawsuits filed against more than a dozen crypto companies and a huge verdict against the man who claimed to have invented Bitcoin. Now a new opportunity beckoned. Two businessmen had flown Mr. Roche over from Miami to discuss investing in a new business venture he was forming. A waiting car whisked him from Heathrow Airport to meet the men in a plush townhouse in Mayfair. That evening, Mr. Roche went to dinner with one of the men, who identified himself as Mauricio Andres Villavicencio de Aguilar. Mr. Villavicencio, who said he was from Argentina, had picked one of London’s fanciest restaurants, Jean-Georges in the Connaught hotel. When he woke up the next morning, Mr. Roche says, he felt groggy. He couldn’t remember much aside from being pretty sure he had spotted Mr. Villavicencio’s business partner, a Norwegian named Christen Ager-Hanssen, lurking at a nearby table. The brain fog was odd because he didn’t think he’d had all that much to drink. As he flew back to Miami a few days later, Mr. Roche couldn’t shake the feeling that something was amiss. Crypto Leaks posted two dozen videos of him that had been secretly recorded during his meetings with Mr. Villavicencio and Mr. Ager-Hanssen. The videos portrayed Mr. Roche and his law firm, Roche Freedman, as being in the pocket of one of their crypto clients. In one clip, Mr. Roche revealed that the client, a company called Ava Labs, had granted him tens of millions of dollars’ worth of its digital tokens, making him beholden to the company and its founder, whom he likened to a “brother.” In other clips, Mr. Roche made it sound like his sole concern, even when representing other clients, was to promote Ava Labs’ interests. He bragged that he had managed to distract regulators from looking into Ava Labs and suggested that his lawsuits against other crypto companies were designed to harm Ava Labs’ competitors. Pharrell Williams, Louis Vuitton’s New Don Prestigious Rose Breeder Names Its New Bloom for a Black Gardener The Tropicana, a Relic on the Las Vegas Strip, Could Be Demolished Image Some of the videos were recorded while Mr. Roche had dinner with a supposed investor at a restaurant in London’s Connaught Hotel.Credit...Joshua Bright for The New York Times In the videos filmed at Jean-Georges, Mr. Roche looked intoxicated, waving his hands, cursing and referring to jurors as “idiots.” a piece on Medium saying they had been “illegally obtained” and “spliced out of context,” and he denied being in cahoots with Ava Labs. It was too late. One after another, companies that Roche Freedman had sued filed motions to disqualify the firm from their cases. In October, the first of those motions succeeded: A federal judge in New York tossed Roche Freedman from a case it had filed against Tether, the operator of the world’s most used “stablecoin.” Within days, Mr. Roche was forced to resign from the law firm he had founded. With his career in tatters, he says, he enrolled in ethics classes and began to see a therapist. Mr. Roche was felled by his own loose lips and his overly cozy relationship with a client. But he also was the victim of an elaborate international setup. The question was: Who was behind it? The New Sheriff Mr. Roche grew up in a working-class family in Buffalo. The oldest of four siblings, he shared a bedroom with intellectually disabled twin brothers. Watching them struggle with simple tasks while he breezed through school made Mr. Roche feel both guilty and determined to succeed so he could one day provide for them. a paper discussing Bitcoin’s virtues as the first currency free from government interference. That led to an opinion piece in The Wall Street Journal. “That was the first moment I thought, ‘Oh, wow, maybe I can do something with this,’” he said. By then, Mr. Roche was a first-year associate at Boies Schiller Flexner, where he was developing a reputation as the kid who understood crypto. When a colleague in Miami approached him a few days after the Journal piece with a Bitcoin-related case, he jumped at the opportunity. The case pitted a man named Ira Kleiman against Craig Wright, the Australian computer scientist who claims to be Bitcoin’s enigmatic creator, Satoshi Nakamoto. Mr. Kleiman wanted to sue Dr. Wright for defrauding his brother David, a paraplegic computer forensics expert who had died in his mid-40s, out of billions of dollars of Bitcoin they supposedly mined together in Bitcoin’s early days. The facts were murky: There was evidence that Dr. Wright and David Kleiman had indeed been friends, and David Kleiman had been known to carry around his neck an encrypted hard drive that might or might not have contained the passwords to Bitcoin wallets. But many people considered Dr. Wright a fraud, calling into question the notion that he had mined early blocks of Bitcoin, much less cheated someone out of them. to sue Binance and Coinbase this month. (Binance and Coinbase have vowed to fight the S.E.C. in court.) badly tarnished Mr. Boies’s reputation, but to Mr. Roche he remained a role model. When Mr. Roche reached his deal with Dr. Sirer in September 2019, he says, there was no guarantee that Dr. Sirer’s project would be successful. At the time, the tokens granted to him were valued at less than 3 cents each. A year later, Dr. Sirer’s blockchain, Avalanche, went live. As crypto fever spread, its AVAX tokens rocketed to more than $100, making Mr. Roche a multimillionaire. Mr. Roche’s compensation agreement with Ava Labs was supposed to be confidential, but anyone who wanted to gather intel on him would soon be able to find out about it. In February 2021, Roche Freedman fired one of its partners, Jason Cyrulnik. He hit back with a lawsuit that disclosed each partner’s share of the AVAX tokens. That fall, Kleiman v. Wright went to trial in U.S. District Court in Miami. Mr. Roche gave a fiery opening statement during which he repeatedly pointed an accusatory finger at Dr. Wright. In the end, the trial didn’t resolve whether Dr. Wright had really invented Bitcoin, but the jury ordered him to pay $100 million in damages to a company Ira Kleiman had inherited from his dead brother. (The judge later tacked on $43 million in interest.) Mr. Roche and Mr. Freedman toasted over cocktails at a Miami restaurant. Their law firm stood to make more than $10 million. With the Kleiman trial over, Mr. Roche turned to a project he and Dr. Sirer had been discussing: Ryval, a company that would help people raise money on Avalanche to pay for lawsuits. Mr. Roche saw it as a GoFundMe for litigation and thought it could level the legal playing field between individuals and big corporations. But while he was plotting his new venture, someone was plotting his downfall. The Setup In December 2021, Mr. Roche received an email from someone he trusted introducing him to Mr. Villavicencio, according to a copy of the message reviewed by The New York Times. Mr. Villavicencio presented himself as an associate of Mr. Ager-Hanssen, a venture capitalist who was interested in Mr. Roche’s new project. Mr. Roche had no idea who the two men were, but he welcomed the approach: He was raising money for Ryval, which had received some attention in the crypto press. After an introductory Zoom call, Mr. Roche agreed to fly to London at the men’s expense the next month. denied that he or Ava Labs had anything to do with those lawsuits, some of which he said he strongly disagreed with. Six weeks before Crypto Leaks published its videos, Ava Labs’ general counsel wrote an article criticizing one of the Roche Freedman lawsuits as “scurrilous.” To insulate his law firm, Mr. Roche recused himself from the lawsuits Roche Freedman had filed against crypto companies, sold his stake in Ava Labs back to the company and stopped representing it. (Mr. Roche declined to say whether he profited on the sale.) called for Mr. Roche’s disbarment and tweeted about a report he had compiled on Mr. Roche that largely repeated the Crypto Leaks allegations. He also emailed Mr. Cyrulnik, the former Roche Freedman partner, and offered to help him prove his case against Mr. Roche and his former firm. 2014 interview, he recounted how he had snared the adversary of a Swedish financier with a hidden microphone and boasted that he employed former intelligence officers from the C.I.A., MI6 and Mossad. wrote on Twitter that he was “coming for” his critics. That was the same day the cryptoleaks.info domain name was registered. an article it had published about the crash. Mr. Williams tweeted a link to that Crypto Leaks report, calling it “Gobsmacking.” The Dfinity Foundation, a Swiss nonprofit that Mr. Williams created to oversee his blockchain, has since sued The Times for defamation in New York. The Times is seeking to dismiss the suit. The videos of Mr. Roche were the crux of Crypto Leaks’ third exposé. After they were published, Mr. Williams and Dfinity filed a motion to disqualify Roche Freedman as plaintiffs’ counsel in the pump-and-dump lawsuit, saying Mr. Roche’s comments demonstrated “a disregard for the integrity of the judicial system.” In court filings opposing the motion, Mr. Roche’s former firm accused Mr. Williams of being behind Crypto Leaks and said the videos filmed at Jean-Georges showed signs of deepfake alterations. It also blamed Mr. Williams for the rumored death threats against Mr. Roche. Pete Padovano, a spokesman for Dfinity and Mr. Williams, denied that anyone at the foundation had made death threats. Asked if he was connected to Crypto Leaks, Mr. Williams said, “We appreciate the coverage of Crypto Leaks and believe their articles speak for themselves.” John Carreyrou is an investigative reporter on the Business desk. He is the author of the bestselling book, “Bad Blood: Secrets and Lies in a Silicon Valley Startup,” about Elizabeth Holmes and Theranos. More about John Carreyrou A version of this article appears in print on June 18, 2023, Section BU, Page 1 of the New York edition with the headline: Who Was Out to Get This Man?. Inside the World of Cryptocurrencies
What were the factors and individuals involved in the downfall of lawyer Kyle Roche's career in cryptocurrency law?
The article is very interesting, but it was not copied and pasted properly. Some important sentences are only fragments.
Example #1 Just below the last photo, it says: a piece on Medium saying they had been “illegally obtained” and “spliced out of context,” and he denied being in cahoots with Ava Labs. That's not a complete sentence. It starts with lowercase, lacks a grammatical subject. Something is missing. Example #2 a paper discussing Bitcoin’s virtues as the first currency free from government interference. That led to an opinion piece in The Wall Street Journal. Same problem. The first part of the sentence is missing. Maybe it's only missing a couple of words, e.g., maybe all that's missing is "In August, 20XX, Roche published" But you can't be sure. Might be something more substantive that got left out.