Class-action suit filed against Massive Adoption Bitcoin conference

When you promise to pay someone back, you should pay them back, right? But Jacob Kostecki, who organized a cryptocurrency conference called “Massive Adoption,” never did—even after he himself canceled the event. Now the Boulder, Colorado resident is facing a lawsuit. 

Crypto attorney David Silver of Silver Miller filed a class-action lawsuit against Kostecki in a Colorado district court on Thursday.

According to the complaint, Kostecki planned a cryptocurrency conference for February 27-28 in Memphis. He sold tickets and hotel and airfare packages at shockingly low prices, collecting some $75,000 in the process. When he canceled the event on January 31, due to “cash issues,” he promised to pay everyone back. But months later, people still complained of never having received a penny. 

Anyone who has followed Kostecki on Twitter knows that he has apologized profusely for this, and made repeated promises to make good on his debts. And they also know, from past reports, that he has a somewhat questionable past.  

Silver said he intervened when he saw Kostecki taking advantage of people who could not necessarily afford legal representation: “I felt people whom he owed money needed an advocate to protect their interests.”

In a Twitter thread on April 20, he outlined the details of the case and threatened to file a lawsuit if Kostecki did not make good on his debts. According to the complaint, Kostecki—who has yet to respond to Decrypt for comment—is apparently now blaming Covid-19 for the mess. Lockdowns for the pandemic did not begin until mid-March in the US.

“We approached Mr. Kostecki several weeks ago with a simple offer to resolve the debts he has already acknowledged he owes to the would-be Massive Adoption attendees,” Silver told Decrypt. “Mr. Kostecki declined our simple offer and instead thinks that blaming the worldwide health crisis and making more empty, time-delaying promises on Twitter is his way out of this.”

The nitty-gritty

“Promises are like crying babies in a theater, they should be carried out at once,” the complaint begins, borrowing a line from the author Norman Vincent Peale. The complaint goes on to say that the longer Kostecki fails to carry out his promises, the longer it will cause disturbance to the audience around him.

According to the complaint, Kostecki sold not only tickets but complete packages to his event. He promised deals, plane tickets, lodging, and parties for around $300-$400. (Most roundtrip airfares within the US cost more than that alone.) He also collected funds in cryptocurrency whenever possible.

Ashley Gentry, of San Dimas, Calif., is the lead plaintiff in the suit, which asserts that there are some 2,000 others in the class. (In a Medium article written in May 2019, Kostecki said that the event—which he originally scheduled for November, before he postponed it to February—would have 2,000 attendees and 60 speakers.)  

Gentry said she purchased tickets for herself, her husband, and one other person in December. She bought a package deal, which also included airfare for $794 for all three people, according to the complaint.  

Though Silver is still working with Kostecki on formulating a "quick and simple resolution," he said the lawsuit demonstrates that “hollow Twitter promises are not enough.” 

“We seek damages in excess of $75,000,” the attorney said, which includes the money people lost, interest, other costs, and attorney fees. Typically in a class-action, a law firm only collects fees if it recovers money but according to Silver, who is doing the work pro-bono, "even if we collect attorney’s fees, we will give it back to the victims."