Shuster Files Lawsuit After Dismissed Case
On December 8, 2025, Gary Shuster, attorney for Utherverse, filed a malicious prosecution lawsuit against Joshua Denne, Blockchain Funding, Blockchain Alliance, Masternode Partners, and Nima Momayez in Orange County Superior Court, per. The suit follows the dismissal of a November 2024 lawsuit in which Blockchain Alliance defendants accused Shuster of fraud, misappropriating investor funds, concealing facts, and making false statements, per.
Background of the Collapsed Blockchain Alliance Scheme
Blockchain Alliance, an MLM crypto scheme launched by Joshua Denne in 2023, collapsed and accused Shuster and other Utherverse defendants of causing its failure, per. In the dismissed suit, defendants claimed Shuster engaged in a “systematic and intentional pattern of fraudulent conduct,” but the complaint admitted many specifics were “unknown to Plaintiffs at this time,” relying heavily on speculation, per. Shuster argues the claims lacked particularity, failing California’s fraud pleading standards (analogous to Federal Rule of Civil Procedure 9(b)), per.
Key Allegations in Shuster’s Malicious Prosecution Suit
Shuster claims the defendants had no probable cause and acted with malice, falsely accusing him of aiding fraud despite no evidence, per. Specific points include:
- The only non-speculative allegation — that he was a California resident — was false. Shuster has been based in British Columbia, Canada, since 2017, per.
- This falsehood aimed to establish jurisdiction and mislead the court, per.
- The suit damaged his California bar license (PFL), impairing his ability to take new clients in British Columbia due to ethical concerns, resulting in lost income and professional opportunities, per.
- Naming Utherverse Gaming LLC as a co-defendant interfered with Shuster’s contractual relationship with the company (as inventor of patents involved in litigation against Epic Games), potentially harming patent value through accusations of dishonesty, per.
- A pre-suit demand letter sought $12 million to avoid an $8.8 billion lawsuit, later reduced by $5 billion in the actual complaint, suggesting the demand was improper and coercive, per.
Shuster also alleges the suit caused him severe emotional distress and physical health issues, per.
Current Status and Broader Context
The case remains ongoing, with a case management conference scheduled for May 14, 2026, per. Blockchain Alliance was a collapsed MLM crypto scheme, and the original lawsuit against Shuster was dismissed without settlement, which Shuster cites as evidence the claims lacked merit, per.
Investor and Professional Implications
This case highlights risks in MLM crypto schemes and the potential legal repercussions of baseless accusations. Professionals and investors should exercise caution when dealing with such projects and verify claims thoroughly.
