Olympic Skater Apolo Ohno Beats $50 Million Crypto Fraud Suit

Former Olympic speed-skating champion Apolo Ohno shook off claims in California federal court that his company, Hybrid Trade Ltd., sold unregistered securities in the form of cryptocurrency and misappropriated $50 million.

The investors waited too long to file their Securities Act claims, the U.S. District Court for the Central District of California said Tuesday.

The plaintiffs, six individuals and three related companies, allege Hybrid sold digital tokens that were “a mere vessel for defendants’ personal enrichment.”

The investors alleged Hybrid failed to act when $4.4 million in cryptocurrency was stolen in a breach in August 2018.

An investigator hired by one of the plaintiffs to look into the breach concluded that “defendants misappropriated nearly $20 million of investor funds,” and that “defendants had ‘very little to show’ for the approximately $50 million in investor funds raised,” the court said.

The plaintiffs alleged that Ohno and others created a separate company Allysian Sciences, “for the specific purpose of serving as a so-called ‘exit vehicle’ through which Defendants could—and ultimately did—funnel to themselves the investment funds received from Plaintiffs and others that were intended for Hybrid.”

The complaint, filed Aug. 13, 2021, alleged Hybrid made the unregistered sales between January 2018 and June 6, 2018. Those claims are barred because the complaint was filed more than one year after the violation on which the claim is based, the court said.

And the plaintiffs failed to bring their securities fraud claim within two years of discovering the “facts constituting the violation,” the court said.

After dismissing the Securities Act claims, the court declined to exercise jurisdiction over the remaining state law claims, including intentional misrepresentation and breach of contract.

Judge Mark C. Scarsi issued the opinion.

Novian & Novian LLP represents the plaintiffs. Greenberg Traurig LLP represents Ohno.

The case is Kang v. Hybrid Trade Ltd., C.D. Cal., No. 21-cv-06593, 2/15/22.