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Bitcoin

An interview with David Silver: The attorney on a crusade to clean up crypto’s act

Quick Take

  • Attorney David Silver tells The Block why he’s dedicated his career to fighting crypto scams
  • Despite being a cynic, he invoices clients partly in cryptocurrencies
  • Silver now runs a successful legal practice for victims of investment fraud in Miami. He oversaw around twenty cases of unregistered securities and financial negligence in 2018 alone

David Silver is a big fish in a growing pond. A lawyer by trade, Silver half-jokes that he’s led nineteen of the twenty largest crypto cases domestically this year, and claims to have overseen the first crypto lawsuit in history.

But the corporate attorney turned investment-fraud lawyer earned his crypto trophy almost by accident. His first introduction to the volatile digital currency occurred one evening in 2014 at a charity dinner, four years after leaving Washington DC to start his own law firm in Miami. A guest at the event volunteered to give him five Bitcoin – promptly setting up a wallet and making the transfer. Silver had no idea at the time that he had just been given what would become a digital pot of gold and a subject that would define his career.

A year later, in 2015, Silver launched his first crypto-based lawsuit against Paul Vernon, the manager of the now-disgraced exchange Crypsty, for stealing $20,000-worth of Bitcoin from Silver’s client. Vernon was ordered to pay back the stolen assets, which he had re-routed via one of the world’s largest exchanges, Coinbase. As a result, months later, Silver filed a landmark class-action against Coinbase too, for failing to do due diligence on their customer, the outcome of which is still pending.

“That opened the floodgates,” Silver tells the Block, who in his own words, is now a “D minus list” celebrity with a law firm which is booming amid the SEC crackdown and the bear market. He counts other industry giants like Nano and Tezos among his biggest cases, with the latter gaining support since the token value fell below the initial $0.50 investors paid. Silver’s typical clients are aggrieved investors who believe they are victims of unregistered securities, negligence or unjust enrichment. He’s so in demand that he only accepts around 20% of the cases brought to him.

“It’s kind of like dating, as soon as you get to one level, you can keep doing a little bit better,” he explains.

Even though he’s picky with his clients, however, he says winning the case isn’t everything.

“There are certain cases where I know I won’t collect anything, but I feel a principled fight. I’m going to fight [those] to the bitter end.”

And, he insists, he’s not going anywhere, hellbent on purging the crypto community of fraudsters and securities scammer.

Still, for all his triumphs, David Silver is a polemical figure. Those who boo him at conferences may believe that crypto investors voluntarily bypass accredited-investor laws and regulations, thereby taking a clear risk. Are some of those he advocates just opportunists who got burned thinking they could earn a quick buck then? No, Silver says, arguing “if you buy a car, you expect the brakes to work.” Similarly, when exchanges promise protection in their terms of services or when companies promise a product in their white papers, they’ve got to deliver.

“Otherwise,” he warns, “they’re lying.”

Within the crypto space, Silver sees a lot of players not delivering. And his list starts with his own kind: “Firstly, any lawyer who said something was a utility token and took payment of that token – used securities…Those lawyers are all accountable.” 

Next, is the exchanges – some of them, at least.

“The exchanges that work with regulators are, for lack of a better word, safer. The exchanges that refused to work with the regulators aren’t going to be around next year,” he says.

As for promoters of crypto on Twitter, Silver notes the law is yet to decide, but he’s adamant greater disclosure is needed. But the biggest villain of them all, he says, is the likes of Singapore-based mining firm Giga Watt that recently declared bankruptcy.

“They are the perfect example of everything that was wrong [with crypto]. They raised $30 million, saying they were going to build shacks in the middle of Washington. And rather than build shacks, they bought a Lamborghini.” 

Silver identifies as a crypto cynic, but perhaps surprisingly, he is optimistic about the future.

“The nuclear winter was good for crypto. There’s probably a form of blockchain and crypto that is helpful, but we’re just not there,” he says. Perhaps most surprising of all, however, is that Silver bills his clients partly in crypto and now holds a wide array of currencies, suggesting he’s not a total sceptic.

As for the 5 bitcoin that started it all? He’s still HODLing them.