A federal court has affirmed an arbitration decision favoring DigitalOcean LLC in a dispute over a cryptocurrency theft. The ruling stems from a hack that led to a customer losing $6.87 million in Bitcoin stored on the company's cloud systems. The decision relies on terms of service provisions shared between the parties.
On March 12, 2026, Judge Katherine P. Failla of the US District Court for the Southern District of New York upheld an arbitration award in favor of DigitalOcean LLC. The case involves plaintiff Guido Malato, who suffered losses when cybercriminals accessed his Bitcoin holdings on DigitalOcean's cloud-storage network, resulting in $6.87 million stolen.
An arbitrator from the American Arbitration Association determined that DigitalOcean bore no liability for the incident. The arbitrator's decision was based on "shared responsibility provisions" outlined in DigitalOcean's terms of service. Judge Failla ruled that the arbitrator did not disregard applicable law in reaching this conclusion, thereby enforcing the arbitration outcome.
The dispute highlights the risks associated with storing digital assets on third-party cloud platforms. Malato had maintained his cryptocurrency on DigitalOcean's systems, which were compromised in the hack. While the exact timeline of the breach is not detailed in the ruling, the arbitration focused on contractual obligations rather than the technical aspects of the security failure.
This affirmation underscores the enforceability of arbitration clauses and terms of service in technology-related disputes, particularly in the cryptocurrency sector where hacks are a persistent concern. No further appeals or additional claims were mentioned in the court's decision.
