A Californian homeowner is suing a prospective buyer for attempting to pay for 30% of the property using a “worthless” cryptocurrency.
After attempting to sell her home, California-based psychologist Mary Shea is suing buyer, Mike Cherwenka, for attempting to pay for 30% of the property’s value in the form of a “worthless” crypto asset called ‘Troptions.Gold.’ The dispute has left her unable to sell the home as Cherwenka’s company still claims an interest in it.
Shea accuses Cherwenka and his company Best Buy Homes of violating securities and state racketeering laws by misleading herself and other members of the public as to the nature of the Troption virtual currency.
Her complaint states:
“Cherwenka and Best Buy defrauded Shea by executing a scheme whereby they would offer to purchase her property for cash, and then, as part of the scheme, introduce confusing and false statements into the real estate contract that would, in their view, give them license to 'pay' for the property using worthless Troptions.Gold”
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After negotiating a sale price of $125,000, Shea states that Cherwenka presented the contract with clauses relating to a Troptions payment, with no further elaboration made.
The plaintiff states that she was assured by her real estate broker than an independent attorney would confirm the funds prior to the deal’s closure, however she later discovered that the closing attorney was associated with Cherwenka.
On the closing date in March, Cherwenka threatened to sue Shea when she expressed apprehension after being instructed to open a digital wallet to accept the Troptions. After refusing to finalize the sale, Best Buy Homes sued Shea in the state court, despite the case having no standing due to Cherwenka’s name being listed on the contract rather than his firm.
Despite voluntarily dismissing the suit, Best Buy Homes has filed a notice of pending litigation concerning the property — preventing Shea from selling the home or collection rents, and forcing the plaintiff to continue making mortgage payments.
“Every day that Best Buy wrongfully claims an interest in her property, Shea cannot find a buyer who will pay legal tender,” the suit says.
Shea claims she planned to use the funds from the sale to pay off student loan debt.
‘Troptions are worthless’
Troptions.Gold is one of several ‘Troptions’-branded crypto assets promoted by troptionsxchange.com.
Shea cites numerous examples of allegedly false statements published on the company’s website, including assertions that the token can be freely traded for cash, and that the U.S. Commodity Futures Trading Commission ruled that Troptions.Gold comprises a commodity and not a security.
The plaintiff adds that claims the coin can be traded on the XCP decentralized marketplace are false, and suggested there was evidence that the platform’s pairings for Troptions.Gold are manipulated.
Troptions founder dies
Shea alleges that Cherwenka is one of numerous individuals who have heavily promoted the coin through social media posts and in-person events.
In February 2019, Missouri secretary of state Jay Ashcroft issued a cease-and-desist against Troptions Corporation and its founder Garland Harris — accusing the firm of “selling an unregistered security and making false and misleading statements,” seeking up to $60,000 in fines for the violations.
The plaintiff notes that the suit was later voluntarily dismissed due to the death of Harris, not because it was found to lack merit.