Morrison Cohen Secures Full Dismissal for Digital Assets VCs

On April 28, 2026, Morrison Cohen secured a major win for digital asset VC firms that underscores the limits of aiding-and-abetting and trade secret theories aimed at investors.

The Plaintiffs in Khmel, et al. v. Vlasov, et al. include an individual and multiple entities connected to the Bankex project; the Second Amended Complaint alleges that two former Bankex engineers left Bankex, misappropriated Bankex’s proprietary technology, started a competitor called Matter Labs, and developed ZKsync, a Layer 2 Ethereum scaling solution based on zero-knowledge roll-ups.

Morrison Cohen’s clients Dragonfly Digital Management, LLC and Placeholder Management LLC are two investment firms that provided funding to Matter Labs. Plaintiffs alleged that by investing in Matter Labs, Morrison Cohen’s clients: a) aided and abetted the former Bankex engineers’ breach of fiduciary duty; b) misappropriated Bankex’s trade secrets; and c) were unjustly enriched to Bankex’s detriment.

Following oral argument on April 27, 2026, Justice Joel M. Cohen ruled from the bench and issued a formal order the next day. The Court agreed with Morrison Cohen’s arguments that the investment firms lacked actual knowledge of and did not provide substantial assistance to the former Bankex engineers’ alleged breach, and lacked a sufficiently close relationship with Bankex for the Plaintiffs to state claims for misappropriation or unjust enrichment. The Court also held that because the alleged misappropriation allegedly occurred in 2018, the relevant statute of limitations had expired.

This dismissal represents a decisive victory for Morrison Cohen’s clients. The fact that Justice Cohen ruled from the bench illustrates the strength of Morrison Cohen’s arguments.

The Morrison Cohen team was led by Jason Gottlieb, Michael Mix and Rachel Fleder Rothman.