A Houston resident and his company have turned to federal court in a bid to avoid paying twice for the same alleged losses, caught between a Securities and Exchange Commission asset freeze and a $141 million default judgment won by a Wyoming investment fund. The interpleader complaint, filed July 1, 2026, in the U.S. District Court for the Southern District of Texas, asks a judge to sort out which claimant has priority over a pool of frozen assets that the plaintiff says is insufficient to cover both.
The legal tangle began in August 2024, when a federal court in Georgia froze the assets of the man and his firm in an SEC enforcement action tied to what the agency described as an alleged securities scheme. The next day, both parties entered consent judgments requiring disgorgement of ill-gotten gains, prejudgment interest, and civil penalties, with the exact amounts left for the court to determine later. That freeze remains in place, barring the man from transferring or selling any property covered by the order.
Separately, Bliss Creek Fund 1, LLC, a Wyoming-based entity, sued the man and his company in Wyoming state court, asserting claims for fraud, negligence, breach of contract, and breach of the implied duty of good faith and fair dealing. When the defendants failed to respond, the Wyoming court entered a default judgment on April 4, 2025, for $141,063,243.99. That sum includes roughly $47 million in principal and compensatory damages, approximately $94 million in punitive damages, and 7% annual interest.
On June 5, 2026, Bliss Creek asked a Texas court for a writ of execution to seize and sell the man's non-exempt property across the state. The problem, according to the filing, is that those assets are exactly the ones the federal freeze prohibits him from moving. Complying with the freeze means he cannot pay the Wyoming judgment; paying the judgment would violate the freeze, potentially exposing him to contempt or further SEC sanctions.
The overlapping claims center on a single stream of funds. Between roughly March 2023 and June 2024, Bliss Creek purchased about $16 million in Tether from the man's company. That amount is included in the SEC's broader calculation of funds raised, which the agency puts at approximately $61.6 million. The SEC is thus seeking to recover Bliss Creek's loss as part of the larger investor pool, while Bliss Creek is pursuing the same dollars independently through its default judgment.
The plaintiff's legal remedy is interpleader, a mechanism that allows a party holding assets subject to multiple claims to deposit the assets with the court and let the court decide how to distribute them. The complaint also requests that any payment made to one claimant be credited against the other. In a footnote, the man disputes that Bliss Creek qualifies as an "investor," arguing that the fund bought in under purchase-and-sale and technology-services agreements, not the promissory notes used by a separate entity.
For compliance officers and fund principals, the case illustrates how a regulatory freeze and a private judgment can converge on the same assets, creating a race to collect from a shrinking pool. It also shows how crypto-era fundraising, once it attracts regulatory scrutiny, can spawn parallel legal battles across multiple states. The SEC's enforcement action and the Wyoming default judgment both remain unresolved on the merits; the disgorgement amounts in the SEC case have yet to be set, and the Wyoming judgment is being challenged on appeal.
The interpleader complaint, filed July 1, 2026, awaits a ruling. No court has yet determined which claim takes priority. The case serves as a reminder that advisors and their clients should be aware of the potential for overlapping claims when assets are frozen by regulators and pursued by private litigants simultaneously.
