Burwick Law defeated the defendant's motion to dismiss in Xeon Protocol v. Bray, with the Supreme Court of New York, Monroe County, denying the motion in its entirety on July 16, 2026. All five causes of action, breach of contract, fraud, conversion, unjust enrichment, and breach of fiduciary duty, survive and will proceed toward discovery. Max Burwick argued the motion for the plaintiff. The defendant had argued each claim failed to state a cause of action. The Court rejected every argument: on breach of contract, it held the plaintiff wasn't required to cite a specific contractual provision; on fraud, it found the concealment-based allegations sufficiently particularized under CPLR 3016(b) given the pre-discovery posture of the case; on conversion, it held the allegations, read in the plaintiff's favor, adequately stated a claim; on unjust enrichment, it held the claim was properly pled in the alternative, especially since the defendant himself disputed whether the underlying agreement covered the alleged misappropriation; and on breach of fiduciary duty, it held the claim was adequately alleged and not duplicative of the others. The order concludes simply that the motion to dismiss is denied. This is the second time the Court has rejected an attempt to dismiss the case, after previously rejecting a capacity-to-sue challenge in July 2025.
Burwick Law Defeats Motion to Dismiss on All Five Claims in Xeon Protocol Digital Asset Theft Lawsuit
Xeon Protocol v. Bray, Index No. E2025006299 (Sup. Ct., Monroe County)
Burwick Law, PLLC has defeated the defendant's motion to dismiss in Xeon Protocol v. Bray, a digital asset theft and fraud lawsuit pending in the Supreme Court of the State of New York, Monroe County. In a decision and order signed on July 16, 2026, Justice Daniel J. Doyle denied the defendant's motion to dismiss under CPLR 3211(a)(7) in its entirety, allowing all five causes of action to proceed: breach of contract, fraud, conversion, unjust enrichment, and breach of fiduciary duty. Max Burwick of Burwick Law appeared for the plaintiff on the motion.
The ruling is the second time the Court has denied a motion to dismiss in the case. In July 2025, the Court rejected the defendant's argument that Xeon Protocol lacked legal capacity to sue. With this decision, the Court has now also held that every claim in the Complaint is sufficiently pled to move forward.
The Allegations
Burwick Law represents Xeon Protocol, a South African company specializing in blockchain-based decentralized financial services. The lawsuit, commenced on March 25, 2025, alleges that Jonathan Bray, the company's former Project Development Manager and Lead Developer, carried out a deliberate and unauthorized governance attack on the company's treasury.
According to the Complaint, as summarized in the Court's decision, Xeon Protocol secured its funds in a multi-signature wallet that required approval from multiple authorized signatories before any transaction could be executed. The Complaint alleges that in September 2024, Bray unilaterally altered the wallet's configuration, removed an authorized signatory, and added wallets under his personal control. He then allegedly initiated transactions that drained approximately 30.78 ETH, valued at approximately $78,834, from the company's wallet, and dispersed the funds across multiple wallets and blockchains using cross-chain services in an effort to obscure their origin. The Complaint further alleges that, despite repeated demands, the defendant has not returned the assets.
These allegations have not been adjudicated. On a motion to dismiss under CPLR 3211(a)(7), the court accepts the facts alleged in the complaint as true for purposes of the motion, and the plaintiff's claims remain subject to proof as the litigation proceeds.
The Court's Claim-by-Claim Ruling
The defendant sought dismissal of the Complaint in its entirety for failure to state a cause of action. The Court reviewed each of the five claims and denied the motion as to all of them.
On breach of contract, the defendant argued that the Complaint failed to identify a specific contractual provision that was breached. The Court held that the claim "is sufficiently pled," that the plaintiff "was not required to cite to specific contractual provisions," and that the balance of the litigation will address whether the alleged conduct breached the parties' agreement.
On fraud, the defendant argued that the claim lacked the particularity required by CPLR 3016(b). The plaintiff responded that the fraud alleged is based on concealment, and that the precise mechanics of the wallet alterations and transfers cannot be known before discovery. The Court found that the Complaint alleges a valid fraud cause of action with the requisite particularity, holding that at this early stage of the proceedings, prior to discovery into the mechanics of the alleged fraud, the plaintiff has sufficiently particularized the allegations.
On conversion, the Court held that the allegations of the Complaint, read in the light most favorable to the plaintiff, sufficiently state a claim, and that the conversion claim should proceed to discovery.
On unjust enrichment, the Court held that the claim is properly pled in the alternative under CPLR R. 3014, noting that the defendant himself has challenged whether the parties' agreement applies to the misappropriation allegations.
On breach of fiduciary duty, the Court held that the Complaint alleges the requisite elements of the claim and that dismissal is not warranted on the ground that the claim is duplicative. Whether the allegations can be proven "will be determined by the balance of this litigation."
The decision concludes: "ORDERED that the motion to dismiss is DENIED."
Why the Ruling Matters
Insider control of wallet infrastructure is one of the most serious risks facing digital asset companies. This decision allowed each of the traditional New York causes of action asserted here to proceed past the pleading stage on allegations of an insider governance attack. The Court permitted a fraud claim premised on concealment to go forward where the plaintiff cannot yet know the precise on-chain mechanics without discovery, and it allowed a conversion claim over digital assets held in a company multisig wallet to proceed. The decision also confirms that a plaintiff alleging breach of contract need not cite specific contractual provisions to survive dismissal.
The case will now proceed toward discovery. Burwick Law will continue to prosecute the claims on behalf of Xeon Protocol.
About Burwick Law
Burwick Law, PLLC is a plaintiff-side law firm focused on digital asset and cryptocurrency litigation. The firm represents investors, companies, and communities in matters involving fraud, theft, and misconduct in blockchain markets.
Attorney Advertising. Prior results do not guarantee a similar outcome. This article is for general informational purposes only and does not constitute legal advice. The factual allegations described above are drawn from court filings and the Court's July 16, 2026 decision. They remain allegations, and the denial of a motion to dismiss is not a determination of the merits of the claims.