He Went After Crypto Companies. Then Someone Came After Him.
"Kyle Roche was a rising star in the field of cryptocurrency law — until his career imploded. Who orchestrated his downfall?
When he arrived in London in late January 2022, Kyle Roche was riding high. At just 34 years old, he had established himself as one of the biggest players in the burgeoning field of cryptocurrency litigation. He boasted a law firm bearing his name, lawsuits filed against more than a dozen crypto companies and a huge verdict against the man who claimed to have invented Bitcoin.
Now a new opportunity beckoned. Two businessmen had flown Mr. Roche over from Miami to discuss investing in a new business venture he was forming. A waiting car whisked him from Heathrow Airport to meet the men in a plush townhouse in Mayfair.
That evening, Mr. Roche went to dinner with one of the men, who identified himself as Mauricio Andres Villavicencio de Aguilar. Mr. Villavicencio, who said he was from Argentina, had picked one of London’s fanciest restaurants, Jean-Georges in the Connaught hotel.
When he woke up the next morning, Mr. Roche says, he felt groggy. He couldn’t remember much aside from being pretty sure he had spotted Mr. Villavicencio’s business partner, a Norwegian named Christen Ager-Hanssen, lurking at a nearby table. The brain fog was odd because he didn’t think he’d had all that much to drink. As he flew back to Miami a few days later, Mr. Roche couldn’t shake the feeling that something was amiss.
Months passed. Then, one day last summer, Mr. Roche’s world detonated. A website called Crypto Leaks posted two dozen videos of him that had been secretly recorded during his meetings with Mr. Villavicencio and Mr. Ager-Hanssen.
The videos portrayed Mr. Roche and his law firm, Roche Freedman, as being in the pocket of one of their crypto clients. In one clip, Mr. Roche revealed that the client, a company called Ava Labs, had granted him tens of millions of dollars’ worth of its digital tokens, making him beholden to the company and its founder, whom he likened to a “brother.”
In other clips, Mr. Roche made it sound like his sole concern, even when representing other clients, was to promote Ava Labs’ interests. He bragged that he had managed to distract regulators from looking into Ava Labs and suggested that his lawsuits against other crypto companies were designed to harm Ava Labs’ competitors.
In the videos filmed at Jean-Georges, Mr. Roche looked intoxicated, waving his hands, cursing and referring to jurors as “idiots.”
After he got over his initial shock, Mr. Roche realized he had a major problem on his hands. The videos made him look corrupt. To defend himself, he published a pieceon Medium saying they had been “illegally obtained” and “spliced out of context,” and he denied being in cahoots with Ava Labs.
It was too late. One after another, companies that Roche Freedman had sued filed motions to disqualify the firm from their cases. In October, the first of those motions succeeded: A federal judge in New York tossed Roche Freedman from a case it had filed against Tether, the operator of the world’s most used “stablecoin.”
Within days, Mr. Roche was forced to resign from the law firm he had founded. With his career in tatters, he says, he enrolled in ethics classes and began to see a therapist.
Mr. Roche was felled by his own loose lips and his overly cozy relationship with a client. But he also was the victim of an elaborate international setup.
The question was: Who was behind it?
The New Sheriff
Mr. Roche grew up in a working-class family in Buffalo. The oldest of four siblings, he shared a bedroom with intellectually disabled twin brothers. Watching them struggle with simple tasks while he breezed through school made Mr. Roche feel both guilty and determined to succeed so he could one day provide for them.
After attending Purdue University and working for a few years as a management consultant, he enrolled at Northwestern University’s Pritzker School of Law. During his first semester, in the fall of 2013, he caught the crypto bug. Joe Delich, a classmate who later worked with Mr. Roche at his law firm, remembers him constantly checking the price of Bitcoin on his laptop during classes. Mr. Roche cashed out before a big price drop, earning about $100,000 in profits. He used the money to pay his tuition.
As a third-year student, Mr. Roche collaborated with a professor on a paperdiscussing Bitcoin’s virtues as the first currency free from government interference. That led to an opinion piece in The Wall Street Journal.
“That was the first moment I thought, ‘Oh, wow, maybe I can do something with this,’” he said.
By then, Mr. Roche was a first-year associate at Boies Schiller Flexner, where he was developing a reputation as the kid who understood crypto. When a colleague in Miami approached him a few days after the Journal piece with a Bitcoin-related case, he jumped at the opportunity.
The case pitted a man named Ira Kleiman against Craig Wright, the Australian computer scientist who claims to be Bitcoin’s enigmatic creator, Satoshi Nakamoto. Mr. Kleiman wanted to sue Dr. Wright for defrauding his brother David, a paraplegic computer forensics expert who had died in his mid-40s, out of billions of dollars of Bitcoin they supposedly mined together in Bitcoin’s early days.
The facts were murky: There was evidence that Dr. Wright and David Kleiman had indeed been friends, and David Kleiman had been known to carry around his neck an encrypted hard drive that might or might not have contained the passwords to Bitcoin wallets. But many people considered Dr. Wright a fraud, calling into question the notion that he had mined early blocks of Bitcoin, much less cheated someone out of them.
To Mr. Roche, that was one of the allures of the case. If he could make Dr. Wright hand over his files during discovery, he might be able to solve Bitcoin’s great enduring mystery: Satoshi Nakamoto’s true identity. Mr. Roche and his young Miami colleague, Velvel Freedman, were soon devoting most of their time to the case.
In 2019, with the Kleiman case slowly progressing toward a trial, Mr. Roche met a new client, who was locked in a dispute with a crypto company. In a matter of days, he negotiated a lucrative settlement on the client’s behalf. As a token of his gratitude, the client agreed to invest $7.5 million with Mr. Roche and Mr. Freedman so they could start their own law firm. At first, Mr. Roche set up shop in a co-working space in Brooklyn, but when the pandemic hit he joined Mr. Freedman in Miami.
Their firm, Roche Freedman, soon made a splash. Mr. Roche had watched with increasing skepticism as a number of crypto start-ups rode Bitcoin’s growing popularity by marketing new digital coins that surged in value and then crashed. It reminded him of pump-and-dump scams in which a group inflates the price of a stock by talking it up publicly before selling all at once and making off with the profits.
Regulators didn’t seem to be doing anything about it, so Mr. Roche decided he would. On April 3, 2020, Roche Freedman filed lawsuits seeking class action status against seven issuers of digital coins, alleging they had pumped what amounted to unregistered securities with false statements and then dumped them, leaving retail investors holding the bag.
It also sued four crypto exchanges for enabling the coin issuers’ conduct, foreshadowing some of the legal arguments the Securities and Exchange Commission used to sue Binance and Coinbase this month. (Binance and Coinbase have vowed to fight the S.E.C. in court.)
Those suits were just an opening salvo: Sixteen months later, Mr. Roche filed his biggest securities fraud case yet. It alleged that a British entrepreneur, Dominic Williams, and entities he controlled had swindled investors out of billions of dollars by aggressively promoting, and then dumping, a digital coin tied to a grandiose plan to revolutionize computing.
Mr. Williams had boldly proclaimed that his Internet Computer blockchain — a decentralized network of computers powered by a digital token called ICP — would supplant the big cloud services offered by Amazon and Microsoft and become humanity’s primary computing platform. But after an initial surge that briefly made it one of the most valuable cryptocurrencies, ICP had plummeted 92 percent — a collapse that Mr. Roche’s lawsuit attributed to “massive” selling by Mr. Williams and other insiders. (Mr. Williams denied the allegations.)
If crypto was the Wild West of finance, Mr. Roche had announced himself as the new sheriff. But sheriffs, as he would soon learn, make enemies.
A Big Verdict
Around the time Mr. Roche was working on his first pump-and-dump lawsuits, he befriended Emin Gun Sirer, a Cornell University computer science professor who was hatching a cryptocurrency project of his own in the Brooklyn co-working space where Mr. Roche initially worked. Mr. Roche agreed to do legal work for Dr. Sirer’s company, Ava Labs, in exchange for an equity stake and a small percentage of the cryptocurrency tokens it planned to issue.
Such arrangements aren’t uncommon in the tech industry. Mr. Roche’s former boss David Boies had struck a similar one with Theranos, the blood-testing company whose founder, Elizabeth Holmes, was later convicted of fraud. The scandals involving Theranos and another client, Harvey Weinstein, had badly tarnished Mr. Boies’s reputation, but to Mr. Roche he remained a role model.
When Mr. Roche reached his deal with Dr. Sirer in September 2019, he says, there was no guarantee that Dr. Sirer’s project would be successful. At the time, the tokens granted to him were valued at less than 3 cents each.
A year later, Dr. Sirer’s blockchain, Avalanche, went live. As crypto fever spread, its AVAX tokens rocketed to more than $100, making Mr. Roche a multimillionaire.
Mr. Roche’s compensation agreement with Ava Labs was supposed to be confidential, but anyone who wanted to gather intel on him would soon be able to find out about it. In February 2021, Roche Freedman fired one of its partners, Jason Cyrulnik. He hit back with a lawsuit that disclosed each partner’s share of the AVAX tokens.
That fall, Kleiman v. Wright went to trial in U.S. District Court in Miami. Mr. Roche gave a fiery opening statement during which he repeatedly pointed an accusatory finger at Dr. Wright.
In the end, the trial didn’t resolve whether Dr. Wright had really invented Bitcoin, but the jury ordered him to pay $100 million in damages to a company Ira Kleiman had inherited from his dead brother. (The judge later tacked on $43 million in interest.) Mr. Roche and Mr. Freedman toasted over cocktails at a Miami restaurant. Their law firm stood to make more than $10 million.
With the Kleiman trial over, Mr. Roche turned to a project he and Dr. Sirer had been discussing: Ryval, a company that would help people raise money on Avalanche to pay for lawsuits. Mr. Roche saw it as a GoFundMe for litigation and thought it could level the legal playing field between individuals and big corporations.
But while he was plotting his new venture, someone was plotting his downfall.
In December 2021, Mr. Roche received an email from someone he trusted introducing him to Mr. Villavicencio, according to a copy of the message reviewed by The New York Times. Mr. Villavicencio presented himself as an associate of Mr. Ager-Hanssen, a venture capitalist who was interested in Mr. Roche’s new project. Mr. Roche had no idea who the two men were, but he welcomed the approach: He was raising money for Ryval, which had received some attention in the crypto press.
After an introductory Zoom call, Mr. Roche agreed to fly to London at the men’s expense the next month.
They met at Mr. Ager-Hanssen’s townhouse office, where things soon took a strange turn: According to Mr. Roche, Mr. Ager-Hanssen pressed his index finger to Mr. Roche’s forehead — “I didn’t think it was a gun motion, but I thought he was trying to intimidate me” — and said that if he was going to invest with him, he needed to know everything Mr. Roche was capable of.
In hindsight, Mr. Roche wishes he had gotten up and left. Instead, he took it as a cue to sell himself harder. According to Mr. Roche, Mr. Ager-Hanssen spent the next couple of hours goading him into bragging about his relationship with Ava Labs while Mr. Villavicencio, who was sitting across a table from him, secretly filmed him.
Armed with the information he had gleaned from the lawsuit filed by the fired Roche Freedman partner, Mr. Ager-Hanssen coaxed Mr. Roche into saying he had been granted 1 percent of the supply of Avalanche’s AVAX tokens. At the time, that would have been equivalent to more than $100 million. (Mr. Roche says he exaggerated the 1 percent figure, and AVAX tokens have since lost 80 percent of their value.)
Mr. Ager-Hanssen then asked Mr. Roche to give examples of how he had made himself useful to Ava Labs executives.
“They haven’t been sued yet, and there’s a reason for that,” said the baby-faced Mr. Roche, wearing a blazer over a button-down shirt and sweater, according to a video clip from the meeting.
“Brilliant,” Mr. Ager-Hanssen replied. “Good answer.”
Mr. Roche later elaborated. “I deal with making sure that the S.E.C. and the C.F.T.C. have other magnets to go after,” he said, referring to the Commodity Futures Trading Commission. He added, “Litigation can be a tool” to attack competition. “It’s a fantastic tool.”
That night, when Mr. Roche got to Jean-Georges, he says, he found Mr. Villavicencio at a table and a drink waiting for him. Mr. Roche recalls Mr. Ager-Hanssen arriving about 15 minutes later and sitting at a nearby table with a tall blond man. Mr. Roche says the rest of the evening was a blur. He now believes the drink was laced with a drug, though he has no proof.
In one video clip from the restaurant, Mr. Roche revels in his power to crush companies with lawsuits. In another, Mr. Villavicencio asks him whether Ava Labs has sued any of its competitors. Mr. Roche replies, “No, they have me do that on behalf of the class,” suggesting that he filed his class actions against other crypto companies at Ava Labs’ behest.
After the dinner at Jean-Georges, Mr. Roche never saw Mr. Villavicencio again, though he did meet one last time with Mr. Ager-Hanssen in New York.
On Aug. 26, Mr. Roche was in California to attend a wedding when one of his clients came across the Crypto Leaks videos on Twitter and sent him a link.
Blindsided, he scrambled to understand when and where they had been recorded. Once he pieced it together, he called Mr. Freedman and reached out to clients to do damage control.
Mr. Roche’s biggest worry was his comments suggesting he had filed lawsuits to harm Ava Labs’ competitors and to distract regulators. It was baseless bluster, he now says, blaming the blue-collar kid in him who was trying to impress a prospective investor. He says he started putting together the first lawsuits a month before he met Dr. Sirer, the Ava Labs founder.
Dr. Sirer denied that he or Ava Labs had anything to do with those lawsuits, some of which he said he strongly disagreed with. Six weeks before Crypto Leaks published its videos, Ava Labs’ general counsel wrote an article criticizing one of the Roche Freedman lawsuits as “scurrilous.”
To insulate his law firm, Mr. Roche recused himself from the lawsuits Roche Freedman had filed against crypto companies, sold his stake in Ava Labs back to the company and stopped representing it. (Mr. Roche declined to say whether he profited on the sale.)
When it became clear that wouldn’t be enough, he resigned from his firm, which was renamed Freedman Normand Friedland.
‘Someone That Doesn’t Exist’
A week after the videos surfaced, Mr. Roche got another jolt: A friend of one of his colleagues reported that he had heard rumors at a crypto event that Mr. Roche’s life was in danger, according to an affidavit later filed in court. Spooked, Mr. Roche and his fiancée hunkered down in a short-term rental in Brooklyn.
Mr. Roche felt that his world was unraveling. He says he became so stressed that he stopped eating and lost 10 pounds. After several weeks, he and his fiancée returned to Miami but, still worried for their safety, moved to an apartment leased under a relative’s name.
While Mr. Roche’s career imploded, Mr. Ager-Hanssen called for Mr. Roche’s disbarment and tweeted about a report he had compiled on Mr. Roche that largely repeated the Crypto Leaks allegations. He also emailed Mr. Cyrulnik, the former Roche Freedman partner, and offered to help him prove his case against Mr. Roche and his former firm.
To Mr. Roche, the implication was clear: Mr. Ager-Hanssen had set him up.
In an interview, Mr. Ager-Hanssen denied that. “This was not an operation run by me at all,” he said. “It was run by someone else.” He said that he had been genuinely interested in investing in Ryval, that Mr. Villavicencio had filmed the videos at his office without his knowledge and that he wasn’t at Jean-Georges that night. Mr. Ager-Hanssen said he thought he knew who was behind the operation, but he wouldn’t reveal the person’s identity.
Mr. Villavicencio, for his part, seems to have disappeared. Attempts to reach him at the phone number and email address he gave Mr. Roche were unsuccessful.
Mr. Ager-Hanssen said he didn’t know Mr. Villavicencio’s whereabouts. He said he had met the man only a few weeks before Mr. Roche came to London and allowed that Villavicencio was probably not his real name. “Of course, it’s someone that doesn’t exist,” he said.
But Mr. Ager-Hanssen, in addition to running his venture capital firm, has long had a sideline digging up dirt on behalf of wealthy clients entangled in business disputes in Britain and Scandinavia.
On multiple occasions, he has secretly recorded his targets. For example, in a 2014 interview, he recounted how he had snared the adversary of a Swedish financier with a hidden microphone and boasted that he employed former intelligence officers from the C.I.A., MI6 and Mossad.
But if Mr. Ager-Hanssen did set Mr. Roche up, who hired him to do it — and why?
A Series of Clues
Plenty of people had reason to celebrate Mr. Roche’s downfall.
First in line were Dr. Wright, the man who claims to be Satoshi Nakamoto, and Calvin Ayre, a gambling tycoon who bankrolls Dr. Wright. Dr. Wright quickly sought to exploit the videos, filing an unsuccessful motion to disqualify Roche Freedman from the Kleiman case. And after the videos came out, Mr. Ager-Hanssen became chief executive of nChain, a company that Mr. Ayre funds and that employs Dr. Wright as chief science officer.
Through a spokeswoman, Mr. Ayre acknowledged that he and Dr. Wright were “pleased” when the videos came out. But they denied having anything to do with the London sting.
Mr. Roche believes them because he thinks he knows who hired Mr. Ager-Hanssen: Mr. Williams, the British entrepreneur who was the target of Roche Freedman’s biggest pump-and-dump lawsuit.
A series of clues, documented by his former law firm in court filings, led Mr. Roche to that conclusion. The first is that on May 12, 2022, Mr. Williams wrote on Twitterthat he was “coming for” his critics. That was the same day the cryptoleaks.info domain name was registered.
Then, on June 9, 2022, the Crypto Leaks website went live. Billing itself as the defender of “the honest crypto community,” it posted two reports that aligned with Mr. Williams’s interests. The first espoused a complicated theory about the ICP token crash that Mr. Williams had previously floated on Twitter.
The second attacked The Times for an article it had published about the crash. Mr. Williams tweeted a link to that Crypto Leaks report, calling it “Gobsmacking.” The Dfinity Foundation, a Swiss nonprofit that Mr. Williams created to oversee his blockchain, has since sued The Times for defamation in New York. The Times is seeking to dismiss the suit.
The videos of Mr. Roche were the crux of Crypto Leaks’ third exposé. After they were published, Mr. Williams and Dfinity filed a motion to disqualify Roche Freedman as plaintiffs’ counsel in the pump-and-dump lawsuit, saying Mr. Roche’s comments demonstrated “a disregard for the integrity of the judicial system.”
In court filings opposing the motion, Mr. Roche’s former firm accused Mr. Williams of being behind Crypto Leaks and said the videos filmed at Jean-Georges showed signs of deepfake alterations. It also blamed Mr. Williams for the rumored death threats against Mr. Roche.
Pete Padovano, a spokesman for Dfinity and Mr. Williams, denied that anyone at the foundation had made death threats. Asked if he was connected to Crypto Leaks, Mr. Williams said, “We appreciate the coverage of Crypto Leaks and believe their articles speak for themselves.”
Mr. Roche spent last fall lying low, but he has recently begun to rebuild his career as a solo practitioner.
In April, he won a $12.5 million verdict on behalf of six former Cantor Fitzgerald partners who sued the Wall Street firm for withholding some of their compensation. The judgment, which Cantor has appealed, opened the way for Mr. Roche to file a separate class action against the firm. Mr. Roche is also representing dozens of investors in a dispute with Coinbase.
But Mr. Roche’s videotaped remarks continue to dog him and his former firm. Last month, the judge overseeing the pump-and-dump case granted Mr. Williams’s motion and disqualified Freedman Normand Friedland as plaintiffs’ counsel.
The judge cited Mr. Freedman’s continuing friendship with Mr. Roche — and the fact that they together control a cryptocurrency wallet holding more than a million AVAX tokens. He also voiced concern that the law firm was consumed by “extreme animosity” toward Mr. Williams, which might lead it to turn down equitable settlement offers.
Unless the lead plaintiff can enlist new lawyers by August, the lawsuit is essentially dead. In Mr. Roche’s view, the plot against him worked to perfection.
John Carreyrou is an investigative reporter on the Business desk. He is the author of the bestselling book, “Bad Blood: Secrets and Lies in a Silicon Valley Startup,” about Elizabeth Holmes and Theranos. @JohnCarreyrou"