Cryptocurrency Theft Lawsuits Diminish Amid Rise in Cybercrime

In the aftermath of digital heists, legal relief remains scarce for victims suing cryptocurrency platforms and mobile service providers accused of inadequately safeguarding users’ assets, including crypto wallets and phone numbers.

Despite rising cybercrime, complaints blaming crypto theft on lax company security fell to a mere 11 cases in 2023 after peaking at 20 new cases a year earlier, according to an analysis of Bloomberg Law’s docket data. The primary reason for victims’ inability to find relief in court is private arbitration provisions saving the largest cryptocurrency exchanges and mobile providers from litigation, dockets show.

Arbitration and other contractual protections ...