New York Attorney to Repay $5.2 Million Fraudulently Withdrawn from Crypto FirmAuthor: Jimmy AkiLast Updated: 15 August 2020 A federal judge has ruled against a New York City-based attorney who allegedly made premature releases of funds from a crypto investment firm’s escrow account.Yesterday, Law 360 reported that U.S. District Judge Alison J. Nathan had ordered Aaron Etra, a local attorney, to reimburse investment firm Benthos Master Fund after he withdrew funds from the company’s escrow account.Unlawful Fund WithdrawalsThe case dates back to 2018, when the San Francisco-based investment firm reached out to Etra to help create an escrow account for its Bitcoin purchases. The firm had planned to purchase up to $5 million in Bitcoin, and they signed an agreement — conveniently called a Bitcoin Agreement — with Etra and Valkyrie Group, a company that helps third parties who would like to liquidate their crypto holdings.Benthos had wired the funds into the escrow account that Etra had created and waited for Valkyrie to find an interested seller. However, Etra unanimously transferred $4.6 million of the finds out of the account in two transactions months later. Benthos never received any cryptocurrencies.Benthos filed several motions, asking Etra to stop withdrawing its funds and account for the $4.6 million he already took. Etra never replied, and the investment firm took the case to court.Benthos began arbitration claims based on a clause in their contract with Etra in June 2019. The firm also filed to sanction the attorney and hold him in contempt of court. The District Court eventually ruled that Etra should produce all documents related to the missing funds and account for the remaining $400,000.Since he returned the remaining funds and provided records of communications with Bitcoin sellers, the sanctions motion didn’t pass. However, Etra failed to show up for a March arbitration hearing at the International Chamber of Commerce’s International Court of Arbitration at the Hague.Thus, the judge put the attorney on the hook for $5.25 million. The fees include pre-award interest, the cost of damages, and the cost of arbitration. Etra could have been liable for much more if the sale had gone through, of course.A Tough Pill for Benthos to SwallowThe fees also pale compared to what Benthos would have made if they weren’t doing business with a dubious attorney. According to Law 360, the investment firm planned to purchase 10,000 BTC with the $5 million they had.The top cryptocurrency’s value has been on a tear since, rising by over 100 percent to a current price peg of $11,753. Thus, the 10,000 BTC tokens that Benthos planned to purchase would have been worth about $110 million.It’s not too late for Benthos to roll their cash into Bitcoin. The asset has seen a particular surge in the past month, rising from $9,210 on July 14 to over $11,000 currently. Many believe that we could be witnessing another bull run, and while Benthos will most likely not be able to make up to $110 million from this market rally, it could still achieve some sizable returns on its investment.