Cryptocurrency scam victims lose case, US appeals court upholds insurance company immunity ruling

The U.S. Court of Appeals for the Fourth Circuit on October 24 rejected a lawsuit brought by Ali Sedaghatpour against his insurance company, Lemonade Insurance. Sedaghatpour claimed to have lost $170,000 in a cryptocurrency scam and asked the insurance company to pay compensation under a home insurance policy. However, the court held that under Virginia law, the insurance policy covered only "direct physical losses," and Sedaghatpour's cryptocurrency losses did not meet that definition.