The Holistic Trader crypto influencer Michael Watkins ordered to pay $30,000 after defamation case over negative Trustpilot review backfires

Ms Tatana signed up to The Holistic Trader in 2020 because she wanted to learn how to trade cryptocurrencies. She paid a monthly fee of $120 to belong to a Telegram group that discussed crypto trading and was administered by Mr Watkins, and $5000 (0.11 bitcoin) for a lifetime subscription.

She soon started to receive “buy” and “sell” recommendations that she implemented. In December 2020, she paid Mr Watkins $US566 to join his crypto trader beginners course, which included eight live sessions of “real-time advice”.

Mr Watkins, who is now based in Melbourne, declined to comment for this story.

Money evaporated

According to Ms Tatana, while crypto prices were in a bull market, the trades Mr Watkins suggested performed moderately well, but once the market turned, his performance dropped considerably.

She said she and other members of The Holistic Trader group watched as their money evaporated.

In early 2021, Mr Watkins asked the 31 members of his group to leave public reviews on Trustpilot.

“If you guys appreciate all the sleepless nights and migraines that I suffer thru to make us money then I would love it if you took five minutes to leave a review,” a Telegram message sent in January 2021, and viewed by the Financial Review, reads.

A month later, Mr Watkins sent another message, saying: “There are 31 people in the group, why do I not have 31 Trustpilot reviews?”

In March 2021, Mr Watkins launched a “thousand to million dollar challenge”, whereby members could copy his trades for 10 months and potentially turn $1000 into $1 million.

Ms Tatana was interested and, given Mr Watkins was based in London at the time, asked if there would be set days or times for the live sessions.

“I’m sorry Kristel but that’s a really dumb question, does the market have set days when it’s bullish or bearish?” Mr Watkins replied in a text message seen by the Financial Review.

In April, Mr Watkins’ copy trader service went live, and the Holistic Trader group could observe the trades in real time. However, Ms Tatana alleges that after just two weeks, the investments were reduced to nil.

“Just watching it be completely liquidated was pretty awful,” she said.

Doubling down

According to court documents, Mr Watkins argued crypto exchange Binance “liquidated” the account and that Ms Tatana and other members of the group were shown proof of this.

“Miss Tatana and the other members were informed that the account had been liquidated by Binance due to another of their shutdowns during high-volatility trading periods and was presented with proof in the form of a trading report showing the liquidations from Binance on an Excel spreadsheet directly exported from the Binance exchange,” Mr Watkins said in court filings.

Mr Watkins then requested group members send another $US1000, for him to trade on their behalf, with the promise of a share of the profits.

“I said I would never directly manage other peoples [sic] money but maybe it would resolve a lot of issues,” wrote Mr Watkins in the group chat, seen by the Financial Review.

The group responded and by April, a Binance account linked to Mr Watkins had 31 ethereum, worth about $42,000 at the time, which the Financial Review has confirmed.

But Ms Tatana alleges the money was again lost.

‘Difficult decision’

According to Mr Watkins’ court filings: “The money was lost due to the highly volatile nature of cryptocurrency trading, something she was very well made aware of and signed disclaimers stating she understood and accepted and as can be seen from previous exhibits all evidence and proof were very clearly presented to all members in very open and transparent way.”

In July 2021, a message appeared from Mr Watkins saying he had made the “very difficult decision” to close The Holistic Trader.

“I am fed up busting my ass for endless abuse,” the message reads.

The angry members of The Holistic Trader took to Trustpilot to vent their dismay.

Ms Tatana also wrote a review entitled: “Don’t join!” It went on to say, “Unfortunately … this guy thinks he’s Jesus in any sort of trading environment but he’s far from it from what I’ve witnessed.”

The review was soon “flagged” and made invisible.

Ms Tatana, who had advised her brother and father to join The Holistic Trader, said she was upset but wrote it off as a learning experience.

“I’d come to terms with the fact the money was probably lost, but I didn’t expect what happened next,” she said.

Defamation claim

In October 2021, Mr Watkins and a company called BlockTraders – which was, according to Ms Tatana’s defence, incorporated after the review was published – served Ms Tatana with a defamation suit.

The suit alleged that her online review had defamed him and demanded damages and removal of the review, plus legal fees.

Ms Tatana said she “couldn’t believe” she was facing a lawsuit, and self-represented until Melbourne-based barrister Lachlan Molesworth took on her case pro bono.

During two years of legal proceedings, Mr Watkins failed to adhere to a series of orders made by Justice David O’Callaghan regarding his legal case and evidence, while Ms Tatana and Mr Molesworth submitted more than 800 pages in their defence.

In February this year, less than three weeks before the trial date, Mr Watkins emailed the judge, asking for the case to be dismissed “with a zero costs award order”.

Mr Watkins said it was pointless to continue the case because Ms Tatana could not afford the damages and costs that he was claiming. Ms Tatana disputed this, pointing to a lack of evidence.

Justice O’Callaghan ruled that the case had been improperly brought, and ordered Mr Watkins to pay the fees that Mr Molesworth would have incurred, had he not been working pro bono.

Mr Molesworth calculated his fees would have been $44,750, but Mr Watkins was ordered to pay $31,323.60.

In a statement to the Financial Review, Mr Molesworth said the ruling was important because it was a strong statement by the Federal Court that people cannot use the law to pressure others without prosecuting the case, just because the other party only has pro bono representation.

“The court is prepared to penalise you – and as this case shows, penalise you severely,” he said.