In briefA judge threw out an expert report in a case over Nano’s XRB token. The decision shows not just anyone can be an “expert witness” in crypto.
In a high stakes lawsuit, an expert witness can often win a case by helping the court understand technical or scientific evidence—unless, that is, the court decides the expert isn’t worth hearing in the first place. That’s what happened this week when a judge, in a first for a crypto case, threw out evidence because a so-called expert’s opinion had “no reliable basis.”
The case in question involves a lesser known crypto project called Nano that issued tokens with the ticker XRB (unrelated to Ripple’s XRP). When hackers broke into an exchange storing XRB, token holders filed a class action suit accusing those behind the Nano project of securities fraud and other violations.
While most of the charges have been thrown out, a handful are still being disputed, which led lawyers for the XRB holders to file an expert report to support their claims. Unfortunately for the plaintiffs, the person they chose, a financial professional named David Weisberger, lacked the requisite expertise—so much so that the judge took the rare step of throwing out his report altogether.
“Mr. Weisberger has no reliable basis in forming his opinions or conclusions,” wrote U.S. District judge Yvonne Rogers in deciding to strike the report from the record. “Mr. Weisberger’s testimony both in his deposition and in his report reflect a high level of speculation, untethered to and unsupported by any facts in the record.”
The judge went on to blast Weisberger’s report as overly based on social media and lacking any methodology, while stating he possessed “a woeful lack of knowledge as to XRB.”
The decision is notable not only because it’s unusual for a judge to totally reject an expert’s testimony in this fashion, but because it suggests courts may be growing more familiar with cryptocurrency and the credentials required to serve as an expert witness on the topic.
While Weisberger has a background in financial markets, and runs a crypto-related company called CoinRoutes, his lack of familiarity with the specifics of the Nano project appears to have sunk him as a witness.
The judge acknowledged that expert witnesses will not always have to present a review of scientific literature—as is typical in lawsuits involving medical or scientific disputes—when an issue is too “new” or “particular,” as may be the case with crypto. But she added that they must show the “intellectual rigor that characterizes the practice of an expert in the relevant field.”
According to attorney Peter Fox, who is representing Nano, courts in future crypto cases may expect witnesses to possess advanced credentials in computer science or related fields. He added that, as demand for such witnesses increases, it’s likely that law firms will turn to the likes of Ernst & Young or Cornerstone—large consultancy firms that offer courtroom experts in other fields—to supply expert witnesses for crypto cases.
It’s a good bet many will jump at the chance to offer themselves as crypto authorities, not least because the expert witness game is a lucrative one. In the case of Weisberger, court records show he charged rates of $500 to $750 an hour, earning over $10,000 for his time.
The plaintiffs’ lawyer, John Carriel, didn’t respond to a request for comment about the judge’s decision to throw out the report. Weisberger declined to comment on the ruling.