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Aaron Greenspan sues most of Silicon Valley over money transfer laws

updated 04:21 pm EDT, Tue May 7, 2013

Facebook, Square, Dwolla, AirBnb, Mt Gox, hundreds of others named

Frequent litigant Aaron Greenspan, one-time claimant to Facebook co-foundership has filed a lawsuit against the vast majority of Silicon Valley's largest investors, and many Internet companies offering "money services businesses" with cash transfers as a primary product. The list of corporate defendants include frequent Greenspan target Facebook, Airbnb, Dwolla, and Square, troubled BitCoin exchange Mt. Gox, and many others. Individuals named in the suit inlude Paypal founder Max Levchin, Airbnb creator Brian Chesky, billionaire Yuri Milner, and Reddit CEO Yishan Wong.

Greenspan claims that his company is being damaged by the defendants' ongoing and willful violations of the California Money Transmission Act (MTA), and stem from "unlawful, unfair, fraudulent and deceptive business activities" being perpetrated. The filing claims that corporate defendants "decided to simply break the law while growing their businesses 'under the radar,' knowing that the likelihood of being caught was low, and in many cases fully aware that their activities would violate both state and federal law."

The filing addresses the difficulty of operating properly under the California MTA, and does admit to being a plaintiff against the California government in regards to the law. The filing states that "many other startups, including all those Defendants engaged in money transmission activities, continued to transmit money without a license, and over time found themselves encouraged" by California's enforcement failures.

Greenspan notes in the filing that he had been threatened with incarceration for operating the FaceCash mobile payment service, and willfully shut it down so as to not violate the law, and was forced to "forego its million-dollar investment in the FaceCash and ThinkLink infrastructure, associated assets, and engineering talent."

Individuals and investors named are said to have "either supported them in this regard, or were willfully negligent of the implications of funding unlicensed money transmitters." Greenspan and his company Think Computer Corporation is seeking injunctive relief against the over 100 defendants, and a jury trial.

GreenSpan is seeking a permanent injunction from the defendants engaging in money transmission activity, recovery from all defendants of damages including pre-judgement interest, punitive damages from "ongoing and willful disregard" for the law, judgment against defendants, costs of the action, and further relief as the court deems proper.


20130506.complaint



By Electronista Staff
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