Homeowner lawsuit over $170K crypto theft rejected on appeal  

A United States appeals court recently ruled against Ali Sedaghatpour in his lawsuit against Lemonade Insurance regarding a $170,000 crypto scam loss. The court determined that Sedaghatpour’s homeowner’s policy only covered ‘direct physical loss’ of property, which did not apply to digital currency theft. The case set a precedent as Sedaghatpour attempted to claim cryptocurrency as personal property under home insurance, a rare legal maneuver. Despite his arguments, the court concluded that the theft of digital currency did not constitute ‘direct physical loss,’ leading to the dismissal of his claim.

In his lawsuit, Sedaghatpour alleged that he transferred the funds to a fraudulent entity, APYHarvest, which subsequently emptied the crypto wallet he believed was secure in his home safe. Despite his efforts to seek coverage under his policy, the court deemed the loss ineligible under the terms and conditions. This decision highlights the complexities surrounding insurance coverage for digital assets and the need for clarity in policy language.

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