Digital Gold Scheme 3: The Jefferies Claim Sale Scheme

This is the fourth post (but first published) in a series of events about how the Digital Gold lie was fabricated. These posts are designed to simplify the dense complaint into a more easily understood summary, so (in line with the site) we used AI to assist us.

The complaint itself was written by humans and checked by AI.
All of the posts other than this January 2026 "Digital Gold" series are written by Steve Sokolowski.
This specific post is AI-assisted - it was generated initially by a model, then about six hours was spent working with the model to edit it, and then a human manually edited it even more to ensure 100% accuracy.

During the week of January 12, 2026, we will be publishing multiple posts here, one for each of the schemes involved in the creation and the coverup of Digital Gold. They will be published in order from the least technical to the most technical, not in chronological order, so that readers who haven't read the complaint can get themselves up to speed on this complex issue more easily.

We recommend that you read the full 967 pages of description and evidence at https://stevesokolowski.com/sokolowski-v-digital-gold/#mdpa-second-amendment in the complaint itself - just look at "Scheme 3: The Jefferies Claim Sale Scheme." Now, onto why this bankruptcy claim sale is so important in the history of Digital Gold.

What is a bankruptcy claim sale?

Most people hear “bankruptcy claim sale” and their eyes glaze over. That’s understandable.

A normal claim sale is supposed to be boring: a creditor sells the right to receive whatever distributions the bankruptcy estate eventually pays. It’s financial triage. It’s not supposed to be a gag order. It’s not supposed to reach into future lawsuits. It’s not supposed to mention Department of Justice forfeiture funds. It’s not supposed to create a structure where a Wall Street buyer can tell a victim how to litigate.

What happened to us was not boring.

And it makes a lot more sense when you understand the motive.

The “why” that makes Scheme 3 click

By January 2023, the Enterprise had a problem bigger than Genesis’s balance sheet.

Schemes 1 and 2 created a situation where the entire “Digital Gold” story depended on keeping the origin fraud buried. The moment the wrong plaintiffs got into discovery—plaintiffs who could connect the technical sabotage to the financial fraud—the whole structure risked collapse.

That’s why we were targeted.

We weren’t just “a Genesis creditor.” We were the people who ran PROHASHING. We were the people who had the logs, the database artifacts, the institutional memory, and the technical context that most victims will never have. We were the people who could connect the “lending loss” story back to the foundation.

If you’re trying to bury an origin story, you don’t just want to defeat a lawsuit.

You want to prevent the lawsuit from ever reaching the truth.

The story (who / what / when)

November 2022: the crisis window opens

On November 11, 2022, Genesis stopped honoring withdrawals.

That single act created a predictable human crisis: people couldn’t access their own money. Bills didn’t pause. Debt didn’t pause. Life didn’t pause. In this case, Wells Fargo needed to be paid $300,000.

This is exactly the window in which claim sale markets exist. The theory is simple: if you need certainty now, you sell your claim at a discount. An institutional buyer takes the risk and waits for distributions.

Late 2022: we decide to sell the Genesis claim

Stephen publicly stated that the CM LLC depositors wanted to sell the Genesis claim. The reason was straightforward: immediate financial pressure, including bank pressure, and a rapidly deteriorating situation.

And this is where the villains of Scheme 3 step onto the stage.

Jefferies Leveraged Credit Products LLC — a Wall Street distressed credit buyer with the ability to move fast.
Xclaim, Inc. — a claims marketplace.
Andrew Glantz — the deal handler who sat between us and Jefferies.

There’s also a detail people miss unless they’ve lived through this industry.

Barry Silbert is not an amateur in bankruptcy claims trading. Before DCG, he built his career by founding SecondMarket, a marketplace built to trade hard-to-sell assets, including bankruptcy claims. That matters because Scheme 3 is a claim-sale story that behaves like it was designed by someone who understands exactly how claim transfers can be turned into leverage.

January 12–19, 2023: the sprint

Over roughly a week in mid-January 2023, negotiations moved at a pace that should make any normal person uneasy.

This wasn’t a slow, careful transaction where a buyer patiently explains terms and encourages a seller to seek counsel.

It was “decide now.”

It was “imperfect information.”

It was the kind of tempo where the institutional side can force terms the other side would never agree to in a calm environment.

January 18, 2023 (late night): “Make a decision… with imperfect information.”

On the night of January 18, Glantz wrote that Jefferies wanted a deal “in principal [sic]” the next day, and warned Stephen that he’d need to decide “with imperfect information” unless he had a competing offer.

That’s not neutral facilitation. That’s pressure.

January 19, 2023 (morning): the countdown

On January 19, the pressure becomes explicit.

Glantz describes another bidder who “doesn’t understand the balance sheet,” then adds: “More info comes out every day on genesis and they’re threatening to pull the deal.”

He then states: “Jefferies LCP is asking for an answer by mid day,” and follows up with a harder deadline: “Can you commit to an answer by 2pm ET.”

Stephen asked for time to evaluate, and the conversation moved off the record into a call/Zoom.

If you’ve never been in one of these, here’s the plain-English translation: this is how you force a stressed seller to accept terms they haven’t had time to digest.

January 19, 2023 (late afternoon): the “binding agreement” moment

Later that same day, Jefferies’s representative put the deal in writing at a high level, using binding language (“CM will agree…”) and the 25% purchase price.

This is the critical correction to understand the timeline.

They treated the deal as “binding” first. The detailed contract paper came later.

That sequencing matters because it changes how you read everything that follows.

Once the sellers are told they’ve already made a “binding agreement,” the institutional side can draft whatever paper it wants next.

January 21, 2023: the moment the mask slips (“claim,” not “loan”)

Two days later, as Stephen prepared for an interview with Laura Shin about what happened, Glantz sent a message that should make every reader pause.

Glantz wrote that he preferred Stephen “just mention” Xclaim, because he doubted Jefferies “wants a bunch of small creditors who may be following trying to go to them directly.”

Then comes the line that explains a lot about what they were really doing:

“I would also refer to what you agreed to sell as your ‘claim’ against Genesis rather than your loan. That’s how it will be documented.”

Read that again.

This is not a discussion about economics.

It’s narrative management.

It’s insulation.

It’s the marketplace intermediary telling a victim how to describe the transaction publicly so that Jefferies stays protected, the story stays narrow, and the paper trail stays framed as “claims” — not “loans,” as the latter term implies the sale of the other rights that the contract could not sell.

January 24, 2023: the paperwork shows up — and the leverage tightens

By January 24, the post-bankruptcy paperwork phase is underway.

Stephen raised discrepancies in the data being used for the proof of claim filing and warned that if it wasn’t simply a data entry error, it would be difficult to move forward.

Glantz’s response is the tell.

He immediately pivots away from the discrepancy and back to leverage: “You made a binding agreement. If an adjustment needs to be made to the purchase price, we can work through that.” However, Jefferies would later accept a worse deal when it was discovered the account contained fewer bitcoins than expected, without actually changing the price.

That’s the scheme in a single sentence.

First: bind the victim.

Then: deliver the paper.

Then: when the victim notices something wrong, remind them they’re already bound.

January 24–26, 2023: the “template” contract and the dismissal of defects

Once the detailed “Claim Sale and Purchase Agreement” starts circulating, Stephen notices what any careful person would notice: contradictions, mistakes, and language that looks cut-and-pasted from templates.

By this point, Stephen had already been working ten-hour days—every day—since the withdrawals stopped on November 11, trying to keep PROHASHING alive while also dealing with the Genesis collapse. And in the middle of being forced to proofread a Wall Street contract that couldn’t even get basic details right, he wrote one line that captures how brutally one-sided this process was:

“I need to take my mom to the hospital right now for her surgery.”

That’s the human side of the leverage. You’re not negotiating from a conference room with a team of lawyers. You’re juggling real life—family emergencies, employees, and survival—while the institutional side keeps the clock running.

Instead of slowing down to make sure the agreement is coherent and fair, Glantz dismisses the defects as minor and advises Stephen to focus on “bigger points,” then handle “typos and grammar” at the end “in consultation with your lawyer.”

That is not how a clean, routine trade is papered.

It’s how you paper something that was designed to intimidate, confuse, and control.

The price anomaly: 15% vs 25%

One more fact that only gets stranger in this context.

We were presented with a competing offer around 15%.

Jefferies offered 25%.

That spread is not trivial. It’s the difference between “this is normal distressed pricing” and “I need this closed.”

So ask the obvious question:

Why does a sophisticated institutional buyer voluntarily overpay to close fast, and then insist the victim is bound before the written contract even arrives?

One obvious explanation is that the buyer believed it was purchasing something more valuable than the distributions.

And the contract reads exactly like that.

The contract: the moment a claim sale turns into a control device

A lot of people will try to dismiss what comes next with one word: “boilerplate.”

That’s why you have to look at the whole structure.

One weird clause might be boilerplate.

A stack of clauses that all point in the same direction — secrecy, leverage, tripwires, and future-litigation reach — is not boilerplate.

It’s a design.

The contract red flags (in plain English)

Below are the core features, in the order that a normal person would react to them.

1) The secrecy clause: “Don’t even say this agreement exists.”

Confidentiality about price is one thing.

A contract that tries to restrict disclosure of the agreement itself and its terms is something else.

Plain English effect: it blocks public scrutiny, complicates getting counsel, and makes it harder for victims to compare notes.

If the deal is routine, it doesn’t need to hide.

2) The DOJ forfeiture clause: “If the government ever returns money to victims, we get it.”

This is the clause that makes normal people stop and re-read.

A private contract—sold as a bankruptcy claim sale—reaches into forfeiture/remission/restoration-type funds.

Plain English effect: if prosecutors ever recover assets and create a path to compensate victims, the contract tries to route that recovery away from victims and to the claim buyer.

Here’s the key point: DOJ forfeiture language is unusual enough in a claim sale contract that it raises an obvious question: why would a major bank insert such a clause?

It appears when someone is thinking about criminal exposure, asset recovery, restitution, and what happens if the underlying story detonates.

That is exactly why Scheme 3 matters in the larger narrative.

3) The future lawsuit reach: “Not just Genesis—future cases against controlling persons too.”

A bankruptcy claim sale should not need to talk about “future cases.”

Yet this agreement reaches beyond the bankruptcy claim into future litigation against third parties—affiliates, officers, and “controlling persons.”

Plain English effect: it tries to pull future litigation leverage against the people who caused the collapse into a document marketed as a simple claim sale.

That is not a financial trade.

That is an attempt to control who gets to sue.

4) The “litigation remote control” clause: “Even if you can’t assign it, you must sue at our direction.”

You already understand the core principle: you can’t sell what you don’t own.

So what do you do if you want control anyway?

You build a workaround.

This agreement converts into a “participation” structure if assignment fails, requiring the seller to pursue or defend claims “at the direction” of the buyer and on the buyer’s behalf.

Plain English effect: even if the law says certain rights can’t be assigned, the contract still tries to force the victim to act as the buyer’s instrument.

A normal claim sale doesn’t need a remote control.

A cover-up does.

5) The “impairment” tripwire: “A paperwork change can trigger a clawback that bankrupts you.”

The agreement defines an “impairment” event tied to how the claim is scheduled or listed.

Plain English effect: a later amendment or reclassification can become a repayment trigger with interest.

You don’t need to know bankruptcy procedure to understand why this matters.

It’s a financial hammer. And it can be raised at the exact moment a victim tries to litigate aggressively.

6) The “no ultimate beneficiaries” representation: a built-in technical trap

The agreement requires a representation that there are no other “ultimate beneficiaries” to the claim.

But CM LLC is a pass-through structure. Beneficial ownership was known and documented.

Plain English effect: it creates a future “breach” argument based on a representation that clashes with reality.

This isn’t a harmless drafting nit.

It’s a weaponized technicality: “You breached; therefore you’re silenced; therefore you must repay; therefore you lose.”

7) Stacking the pressure tools: indemnity, clawbacks, fast remedies

On top of everything else, the agreement stacks additional pressure tools—repayment exposure, indemnity exposure, and remedies designed to move quickly against the seller.

A single clause can be brushed off.

A stacked architecture of leverage cannot.

That architecture tells you what the deal was really for.

How the contract becomes a weapon: the “ownership cloud”

Here is the strategic trick that makes Scheme 3 so dangerous.

Even if these provisions never survive a judge's scrutiny, the agreement still creates a permanent threshold fight:

“Do the Sokolowskis have standing?”
“Did they sell their rights?”
“Is Jefferies the real party in interest?”
“If assignment fails, does the ‘direction’ clause still bind them?”

A defendant doesn’t need to win those fights forever.

They only need to win them long enough to delay discovery, raise costs, scare off counsel, and keep the public story stuck in procedural mud.

That is why “strategic ambiguity” is such a powerful tactic. If the buyer refuses to disclaim ownership and keeps the cloud alive, the threat never goes away.

And while the threat is alive, the origin story stays buried.

Why Scheme 3 can’t be dismissed as a “commercial dispute”

A sanitized version of this story would sound like this:

“A creditor sold a claim at a discount; later they argued about contract language.”

That framing is convenient for the people who benefit from delay.

It is also the entire point of Scheme 3: to make the public treat this like paperwork.

But the structure of this contract—and the timing, and the pricing, and the DOJ forfeiture language—only makes real sense when you view it as part of a larger containment strategy.

The pattern is simple:

Neutralize PROHASHING so the “Digital Gold” narrative can be locked in.
Conceal Genesis’s insolvency long enough to prevent scrutiny from reaching the foundation (the $1.1 billion promissory note.)
When the two individuals who can connect the dots start moving toward litigation, trap them in procedural quicksand.

That’s why this happened to us.

Not because we were ordinary creditors.

Because we were liabilities.

What to do with this

If you have experience in claims trading, bankruptcy, compliance, or enforcement, ask yourself one question that cuts through everything:

Why does a private “bankruptcy claim sale” contain language about DOJ forfeiture remission, future lawsuits against controlling persons, and compelled participation “at the direction” of the buyer?

If you’re honest, you already know the answer.

A claim sale like this isn’t built to end a dispute.

It’s built to prevent the world from learning why there was a dispute in the first place.