Caleb Hobbs sues Quantum Blocks Capital over $60M crypto disappearance

Caleb Hobbs, a Wilmington businessman, and his company Hobbs Electric LLC filed a proposed nationwide class-action lawsuit June 19, 2026, against Quantum Blocks Capital, alleging weak financial controls let a single manager divert nearly $60 million in investor assets.

The case centers on Caleb Hobbs and Wilmington-based Hobbs Electric LLC, which the complaint says invested at least $2.45 million in USD Coin (USDC) between December 2024 and September 2025. The allegations have not been proven in court.

Lawsuit alleges crypto fraud through weak financial controls

According to the complaint, QBC managers Jason A. Williams and Domenico Grillo personally solicited investments from Hobbs and Hobbs Electric, promising returns of between 10% and 20% twice a year.

Investors were allegedly told that the returns would be generated through a combination of an artificial intelligence-driven Bitcoin trading program known as “Logic” and diversified real-estate investments.

Instead, the lawsuit alleges, investor funds transferred through cryptocurrency exchanges Kraken and Binance ultimately came under the control of QBC manager Clive Smith.

The complaint claims Smith had control over millions of dollars without adequate board oversight or dual-authorization requirements. Those alleged weaknesses, the plaintiffs argue, created an environment in which the suspected crypto fraud could occur without immediate detection.

The complaint describes Smith’s control as “inadequately supervised,” while QBC had presented itself to investors as a “professionally managed” fund.

Those characterizations are allegations contained in the lawsuit and have not been established by a court.

Investor withdrawals trigger questions over crypto fraud

The fund’s problems allegedly became apparent in January 2026, when scheduled distributions failed to arrive.

For approximately two months, according to the lawsuit, QBC managers told investors that the delays stemmed from a routine “know-your-customer” verification process involving Binance.

The lawsuit alleges that managers also told investors they were communicating with Binance founder Changpeng Zhao and had spent roughly 300 hours communicating with Binance customer service.

The explanation later changed, according to the complaint.

In April 2026, QBC’s legal counsel allegedly informed the fund that Smith had been stripped of his authority and was under investigation by the FBI. The development raised questions about the whereabouts of investor funds and the internal controls that had governed their movement.

On May 13, QBC formally demanded that Smith repay $59,966,213.09, according to the lawsuit. The fund accused him of diverting the money into accounts under his control and accounts belonging to third-party nominees.

The allegations form the central basis of the crypto fraud claims brought by Hobbs and Hobbs Electric.

There is no finding in the provided report that Smith has been convicted of a crime, and the allegations contained in the civil lawsuit remain subject to the legal process.

QBC says it is working to recover investor funds

The lawsuit alleges that Quantum Blocks Capital subsequently froze redemptions, withdrawals and new subscriptions, leaving investors uncertain about how much money remains in the fund.

The plaintiffs are seeking class-action certification on behalf of affected investors. They are also seeking compensatory and punitive damages, an order freezing relevant assets and a complete accounting of the remaining funds.

Quantum Blocks Capital disputed the characterization of its management team’s role in the alleged crypto fraud and said its managers were working to recover the missing assets.

“The complaint alleges that Mr. Smith misappropriated investor funds,” — Quantum Blocks Capital, in a statement provided to WECT.

The company said Grillo, Williams and Devanzante were pursuing efforts to recover the money and establish what happened to the funds.

“Messrs. Grillo, Williams, and Devanzante are working to recover those funds for Quantum Blocks Capital’s investors, many of them their own close friends and family members,” — Quantum Blocks Capital.

The company also said its managers were focused on determining the facts surrounding the alleged crypto fraud and responding to the accusations made against them.

The lawsuit’s outcome could determine whether the investors recover any portion of the nearly $60 million that QBC has demanded from Smith. It could also shed further light on how cryptocurrency investment funds structure access to client assets and what safeguards are in place to prevent a single individual from exercising unchecked control.