Case 3:20-cv-07363-WHO Document 68 Filed 08/09/21 Page 1 of 16
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`MARK SHIN,
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`Plaintiff,
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`v.
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`ICON FOUNDATION,
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`Defendant.
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`Case No. 20-cv-07363-WHO
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`ORDER GRANTING IN PART AND
`DENYING IN PART MOTION TO
`DISMISS SECOND AMENDED
`COMPLAINT; RE-SETTING DATE
`FOR CASE MANAGEMENT
`CONFERENCE
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`Re: Dkt. No. 59
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`Plaintiff Mark Shin alleges that defendant ICON Foundation (“ICON”) improperly
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`interfered with his ownership and possession of ICX tokens, a crypto-asset native to the ICON
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`blockchain network (“ICON Network”), which he created while taking advantage of an
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`unintended error in ICON’s protocols. He appears to raise issues of first impression: both parties
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`attempt to apply common law principles to the unique rules of the ICON Network to accuse the
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`other of, among other things, interference with property rights. This area of law, and the rights of
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`the parties, will benefit from a more complete factual record before decisions on the merits are
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`made. At this stage, I find that Shin has stated a plausible claim. For the reasons set forth below,
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`ICON’s motion to dismiss the Second Amended Complaint is DENIED with respect to the
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`conversion and trespass to chattel claims and GRANTED with respect to the punitive damages
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`claim.
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`BACKGROUND
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`The allegations in the First Amended Complaint are detailed in my previous order, which I
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`incorporate by reference here. See Order Granting Motion to Dismiss with Leave to Amend and
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`Denying Motion to Strike Without Prejudice (“May 2021 Order”) [Dkt. No. 57]. In the Second
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`Case 3:20-cv-07363-WHO Document 68 Filed 08/09/21 Page 2 of 16
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`Amended Complaint, Shin drops his claims for declaratory relief and defamation and now only
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`asserts three property-based claims: (i) conversion based on the frozen ICX tokens in his ICON
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`wallet; (ii) trespass to chattel based on the frozen ICX tokens in his ICON wallet; and (iii) trespass
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`to chattel based on the frozen crypto-assets in his accounts on exchange platforms Binance and
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`Kraken. See Second Amended Complaint (“SAC”) [Dkt. No. 58]. His allegations are largely the
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`same, with some additions noted below.
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`The ICON Network hosts a “delegated proof of stake” blockchain, which allows for the
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`creation of a cryptocurrency called ICX. SAC ¶ 32. ICON “essentially aims for decentralized
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`governance,” where transactions “are verified by a ledger shared within the community network
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`itself, not controlled by a centralized authority.” Id. ¶ 54 (emphasis in original). To achieve such
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`decentralization, ICON “incentivized its users to run full nodes that themselves were comprised of
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`community Public Representatives (‘P-Reps’).” Id. ¶ 55. The ICON Network is controlled by 22 P-
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`Reps. Id. ¶ 68. P-Reps are able to “change the policies of the various nodes or communities of which
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`they are part” on the ICON Network, and, through their voting power can “determine when to update
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`the code underlying the ICON Network and help contribute to the overall ICON ecosystem by
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`developing new apps and new features for the code.” Id. ¶ 55.
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`Sometime in early August 2020, ICON published a software proposal, the “Revision 9
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`Proposal,” which included a series of updates and was adopted on August 13, 2020. Id. ¶¶ 67, 69. On
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`August 22, 2020, Shin “attempted to direct some of his staked ICX tokens from being delegated to one
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`P-Rep to being delegated to another through the ICONex wallet.” Id. ¶ 69. After initiating the
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`redelegation process, “a process he had performed many times before,” Shin “noticed that 25,000 new
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`ICX tokens had appeared in his wallet.” Id. ¶ 70. He “thought that there was a visual bug” and when
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`he tried redelegating his tokens again, he saw that another 25,000 ICX tokens had appeared in his
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`wallet. Id. ¶ 71. “Considering that the protocol was awarding him ICX tokens every time he initiated
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`the redelegation process, Shin continued to repeat the process,” and “[b]y the end of the day, he had
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`received approximately 14 million ICX tokens from the ICX protocol.” Id. ¶ 78. Shin acknowledges
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`that “[t]he authors and developers of the Revision 9 Proposal may not have intended for the network
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`proposal to behave as it did,” but alleges that “this was the proposal that the P-Reps had agreed to and
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`Case 3:20-cv-07363-WHO Document 68 Filed 08/09/21 Page 3 of 16
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`did adopt into the network.” Id. ¶ 80. He claims he is the “lawful owner of the ~14 million ICX
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`tokens rewarded to him on August 22, 2020.” Id. ¶ 81.
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`Shin transferred “a significant portion of” the approximately 14 million ICX tokens to crypto-
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`asset exchange platforms Kraken and Binance. Id. ¶ 82. “A few hours later, he learned that he could
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`no longer transfer any of his crypto-assets—including the ICX tokens—out of his Binance and Kraken
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`accounts.” Id. (emphasis in original). He alleges that this was because ICON contacted Kraken and
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`Binance and “directed them to freeze his accounts on those exchanges, which they did.” Id. ¶ 83.
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`Binance and Kraken froze his accounts based on allegedly false statements by ICON that “Shin was a
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`‘malicious attacker’ who acquired ‘stolen’ funds.” Id. ¶ 85. Shin adds that Binance and Kraken were
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`able to identify his specific accounts because “he had previously provided the exchanges with his
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`personal information—including his driver’s license and home address—when setting up and
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`maintaining his accounts” and because ICON provided both exchanges with “the public key
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`information related to Shin’s ICX transactions.” Id. ¶¶ 87–88.
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`On August 24, 2020, ICON announced on the Medium website (the “Medium Post”) that
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`another software proposal, the “Revision 10 Proposal,” sought to correct the bug that Shin discovered,
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`explaining that on August 22, 2020, an account had “attack[ed] the ICON Network.” Id. ¶ 91.1 Shin
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`claims that the Medium Post “contains multiple misrepresentations” and that he did not “attack” the
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`ICON Network as he “merely initiated a series of transactions directly facilitated by the ICON
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`blockchain and expressly permitted by ICON and P-Reps.” Id. ¶ 94. He adds that it is also false that
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`“the tokens were created by a single account” because he only created 14 million tokens whereas
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`ICON admitted “that nearly 20 million ICX tokens were created through the bug,” and thus other users
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`created 6 million tokens. Id. ¶ 95.
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`Shin also adds new allegations that “numerous affiliates of ICON benefited from the Revision
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`9 minting bug, dating back to at least August 14, 2020—eight days prior to Shin discovering its
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`existence.” Id. (emphasis in original). ICON publicly targeted him as a “scapegoat to distract
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`from its culpability in introducing the Revision 9 minting bug” and “at the same time sought to
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`1 The Medium Post was the basis of Shin’s defamation claim, which he now abandons.
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`cover up the fact that many of its close affiliates received ICX tokens from the same mechanism as
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`Shin.” Id. ¶ 108. Since filing this action, he claims that his counsel has investigated the ICON
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`blockchain to determine the identity of the other ICX wallets that benefited from the bug and has
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`so far identified at least four other entities: “Velic, StakingTeam, ICX Station, and Hyperconnect.”
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`Id. ¶ 109. The SAC lists the number of tokens each of the entities minted and the date the minting
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`occurred, including one on August 17, 2020, two on August 21, 2020, and one on August 22,
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`2020, the same day as Shin. Id. ¶ 110. Shin alleges that the Revision 10 software update only
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`limited his access to the ICX tokens in his wallet, not the other alleged beneficiaries of the
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`Revision 9 bug. Id. ¶¶ 96–107.
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`Though ICON claims it has a decentralized system, Shin contends that it had de facto
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`control over the ICON Network, particularly the network proposal approval process, including the
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`Revision 10 update that deprived him of his property. Id. ¶¶ 117–32. He claims that ICON
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`“punitively changed its code to target Shin, and in doing so interfered with and precluded him
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`from exercising his rights of ownership over his property.” Id. ¶ 98.
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`LEGAL STANDARD
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`Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a complaint
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`if it fails to state a claim upon which relief can be granted. To survive a Rule 12(b)(6) motion to
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`dismiss, the plaintiff must allege “enough facts to state a claim to relief that is plausible on its
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`face.” See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible
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`when the plaintiff pleads facts that “allow the court to draw the reasonable inference that the
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`defendant is liable for the misconduct alleged.” See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
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`(citation omitted). There must be “more than a sheer possibility that a defendant has acted
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`unlawfully.” Id. While courts do not require “heightened fact pleading of specifics,” a plaintiff
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`must allege facts sufficient to “raise a right to relief above the speculative level.” See Twombly,
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`550 U.S. at 555, 570.
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`In deciding whether the plaintiff has stated a claim upon which relief can be granted, the
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`Court accepts the plaintiff’s allegations as true and draws all reasonable inferences in favor of the
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`plaintiff. See Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987). However, the court
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`is not required to accept as true “allegations that are merely conclusory, unwarranted deductions of
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`fact, or unreasonable inferences.” See In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir.
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`2008).
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`I.
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`CONVERSION
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`DISCUSSION
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`“Conversion is the wrongful exercise of dominion over the property of another.” Oakdale
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`Village Group v. Fong, 43 Cal. App. 4th 539, 543–544, (1996). The elements of a conversion are
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`(1) the plaintiff’s ownership or right to possession of the property at the time of the conversion; (2)
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`the defendant’s conversion by a wrongful act or disposition of property rights; and (3) damages.
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`Id.; Burlesci v. Petersen, 68 Cal. App. 4th 1062, 1066 (1998).
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`In its previous motion to dismiss, ICON argued that it is not the “responsible actor” for the
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`Revision 10 release because only P-Reps can vote to determine when to update the code and thus
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`Shin failed to allege that ICON “substantially interfered with [his] property by knowingly or
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`intentionally taking possession of that property.” May 2021 Order at 16–17. I found that Shin had
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`plausibly alleged ICON’s de facto control over the ICON Network, particularly over the network
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`update approval process that included the approval of the Revision 10 Proposal. Id. at 18.
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`However, it was not clear “how the implementation of the Revision 10 Network Proposal
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`impacted Shin’s access to his ICX tokens” given conflicting allegations that he either still had
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`access to the ICX tokens or that his access was restricted by ICON. Id. I gave him leave to amend
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`“to fix this deficiency and plausibly explain what implementation of the Revision 10 Proposal did
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`to his access to the ICX tokens, whether the access to all or specifically the 14 million generated
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`ICX tokens were impacted and how the restriction at issue in this case qualifies as an ‘assumption
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`of control.’” Id.
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`ICON now moves to dismiss the conversion claim on the grounds that Shin fails to allege
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`that: (i) the ICX tokens generated on August 22, 2020 belong to him; (ii) ICON was the one
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`responsible for dispossessing Shin of that property, (iii) ICON engaged in any wrongful conduct;
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`(iv) and Shin suffered damages because of ICON’s conduct. The second argument fails because I
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`previously found Shin’s de facto control allegations plausible and he has now adequately
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`explained how the implementation of the Revision 10 Proposal dispossessed him of the property at
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`issue (essentially locking him out of his ICX wallet) See SAC ¶¶ 96–100 (alleging that after the
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`Revision 10 Proposal was adopted by the ICON Network, “all of [his] ICX tokens were frozen,
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`including ICX tokens he had previous purchased” and that he gets an error message that says
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`“Address is locked” when he attempts to access his ICX wallet). The remaining arguments were
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`not raised in the previous round of motion to dismiss. I address each in turn.
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`A.
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`Shin’s Possessory Interest in the ICX Tokens
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`Property is a broad concept that includes “every intangible benefit and prerogative
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`susceptible of possession or disposition.” Downing v. Mun. Court, 88 Cal. App. 2d 345, 350
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`(1948) (internal quotation marks omitted). The Ninth Circuit applies a three-part test to determine
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`whether a property right exists: “First, there must be an interest capable of precise definition;
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`second, it must be capable of exclusive possession or control; and third, the putative owner must
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`have established a legitimate claim to exclusivity.” Kremen v. Cohen, 337 F.3d 1024, 1030 (9th
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`Cir. 2003) (quoting G.S. Rasmussen & Assocs., Inc. v. Kalitta Flying Serv., Inc., 958 F.2d 896,
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`903 (9th Cir. 1992)).
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`ICON does not dispute that ICX tokens are capable of being possessed. Instead, focusing
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`on the third prong, it argues that Shin has not established a legitimate claim to exclusivity because
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`he did not invest substantial time and money in the 14 million ICX tokens generated on August
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`22, 2020. See Kremen, 337 F.3d at 1030 (plaintiff had legitimate claim to domain name because
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`“many registrants . . . invest substantial time and money to develop and promote websites that
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`depend on their domain names”); Rasmussen, 958 F.2d at 903 (plaintiff had legitimate claim to
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`aircraft design permit because he “expended considerable time and effort in research and design”
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`and permit approval activities). Shin contends that he spent more time minting the ICX tokens—
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`executing a function on the Revision 9 version of the ICON Network the entire day of August 22,
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`2020—than the plaintiff in Kremen who “[w]ith a quick e-mail to the domain name registrar
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`Network Solutions, [] became the proud owner of sex.com.” 337 F.3d at 1026; see SAC ¶ 78. To
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`the extent the parties dispute how much time and effort Shin spent acquiring the ICX tokens, that
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`such factual question cannot be resolved on a motion to dismiss.
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`Case 3:20-cv-07363-WHO Document 68 Filed 08/09/21 Page 7 of 16
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`Regardless of whether Shin took actual possession of the ICX tokens, ICON further argues
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`that Shin had no right to possess the ICX tokens at the time because he illegitimately minted them.
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`It cites Kimball v. Lohmas, 31 Cal. 154, 159 (1866), where the defendant cut and chopped trees
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`into “cord wood” and possessed the land at the time the wood was cut, but the court nevertheless
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`found that the plaintiff could recover the cord wood because the defendant was a trespasser who
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`lacked title to the land. Shin asserts that he is not like the trespasser in Kimball because the
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`property he took did not belong to anyone else. That is, the ICX tokens were not owned by
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`anyone before he took possession over them because he was the one who newly minted them on
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`August 22, 2020.
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`At the previous motion to dismiss hearing, ICON stated that it is not asserting a right of
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`ownership over the ICX tokens. See Transcript of Proceedings Held on April 28, 2021 [Dkt. No.
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`56] at 16:23–24 (“It’s certainly not our position that those 14 million ICX belong to the
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`Foundation. They don’t. Those 14 million tokens ought to be destroyed.”).2 In its briefing now,
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`ICON concedes that the ICX tokens at issue do not technically belong to anyone else, but argues
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`that Shin’s act of minting a large amount of new ICX tokens adversely impacted all other ICX
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`holders who suffered a dilution of their ICX holdings. It cites one case in support of this argument
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`but fails to explain how that case, involving a different type of claim, supports its position that
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`when person A acquires property that dilutes the value of property owned by person B, then
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`person A does not have a possessory right in the acquired property. See Lincoln Nat’l Life Ins. Co.
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`v. McClendon, 230 F. Supp. 3d 1180, 1191–94 (C.D. Cal. 2017) (finding no genuine dispute of
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`material fact as to whether plaintiff had proven the elements of her “Money Had and Received
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`Claim,” which includes “(1) defendant received money; (2) the money defendant received was for
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`plaintiff’s use; and (3) defendant is indebted to plaintiff”).
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`ICON next undermines Shin’s purported analogy that “[t]he circumstances were as if Shin
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`walked into a casino, placed a quarter in a video poker machine, pressed a series of buttons, and
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`won a jackpot” and “staying at the machine, Shin continued to put in quarters, press the same
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`2 ICON’s request for judicial notice of the April 28, 2021 hearing transcript is GRANTED.
`Request for Judicial Notice in Support of Motion to Dismiss [Dkt. No. 60]
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`buttons, and win another jackpot.” SAC ¶ 79. Unlike the casino analogy, ICON argues that Shin
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`fails to allege that he provided any consideration for the ICX tokens he received and instead
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`acknowledges that he did not “know why the protocol awarded him 25,000 newly minted ICX
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`tokens every time he initiated the redelegating process.” Id. ¶ 72. ICON does not provide any
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`case law, however, that requires Shin to allege some type of consideration in order to sufficiently
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`establish his possessory interest and survive a motion to dismiss.
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`On the other hand, Shin relies on the common law principle “that which belong to nobody
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`is acquired by the natural law by the person who first possesses it” to argue that he became the
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`owner of the unowned ICX tokens by exercising possession over them. Geer v. Connecticut, 161
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`U.S. 519, 522 (1896)3; see Martha’s Vineyard Scuba Headquarters, Inc. v. Unidentified, Wrecked
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`& Abandoned Steam Vessel, 833 F.2d 1059, 1064–65 (1st Cir. 1987) (applying this rule to
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`property found in the ocean); Clajon Prod. Corp. v. Petera, 854 F. Supp. 843, 853 (D. Wyo. 1994)
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`(applying this rule to wild animals). ICON attempts to distinguish those cases on grounds that
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`maritime law and law pertaining to possession (or lack thereof) of wild animals cannot stretch into
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`the cryptocurrency context at issue in this case.
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`It is clear that the parties strongly dispute whether Shin’s actions in acquiring the ICX
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`tokens were proper and whether common law principles should apply in this unique context. The
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`inquiry at this stage, however, is whether Shin has plausibly alleged possessory interest in the ICX
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`tokens. I find that he has. Shin plausibly asserts that he has a stronger claim to possession of and
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`title to the ICX tokens than ICON because he minted, created, and staked a claim to the ICX
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`tokens on the blockchain. See SAC ¶¶ 21, 77, 81–82, 99 (describing that a blockchain is “a ledger
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`that tracks the ownership and transfer of bitcoin in existence,” and in this case his acquired ICX
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`tokens are reflected in the ICON Network blockchain and appear in his ICX wallet address, from
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`3 Geer was overruled in part by Hughes v. Oklahoma, 441 U.S. 322, 325 (1979), but the overall
`common law principle that Shin relies on still stands. See People v. Rinehart, 1 Cal. 5th 652, 661,
`377 n.3 (2016) (“Hughes retracted Geer’s 19th-century view that state regulation of fish and game
`was immune to commerce clause objections, but left otherwise undisturbed the several states’
`power ‘to protect and conserve wild animal life within their borders.’”) (quoting Hughes, 441 U.S.
`at 338).
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`which he is currently locked out). He also alleges that he was able to control the ICX tokens at
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`issue before ICON locked him out with the implementation of Revision 10. See id. ¶¶ 43–47, 82.
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`(alleging that he was able to transfer a significant portion of the acquired ICX tokens from his ICX
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`wallet to exchange platforms Binance and Kraken). Whether Shin’s alleged ownership right is in
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`fact legitimate cannot, and need not, be resolved on a motion to dismiss.
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`B. Wrongful Conduct by ICON Foundation
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`ICON argues that Shin has not alleged that ICON engaged in any wrongful conduct in
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`enacting Revision 10, which restricted his access to the ICX tokens, because he cannot establish
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`that he was entitled to ICX free from the restrictions of the ICON Network or the other features
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`inherent to all ICX. Relying on the principle that “there can be no conversion where an owner
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`either expressly or impliedly assents to or ratifies the taking, use or disposition of his property”
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`ICON cites to paragraphs in the SAC where Shin acknowledges that ICX are subject to the
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`Network protocol and that the software that ran the Network could be updated. Chen v. PayPal,
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`Inc., 61 Cal. App. 5th 559, 576, (2021), reh’g denied (Mar. 19, 2021), review filed (Apr. 8, 2021)
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`(quoting Farrington v. A. Teichert & Son, Inc., 59 Cal. App. 2d 468, 474 (1943)); see SAC ¶¶ 50,
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`51, 55, 56, 61. It adds particular emphasis on paragraph 61, where Shin, after explaining that
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`users who “engage with the ICON protocol and develop it . . . will be rewarded with additional
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`ICX,” id. ¶ 60, states: “At the same time, because the ICON blockchain is supposed to consist of
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`no centralized authority, the system also includes penalties to discourage hacking or interrupting
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`service. Users who seek to disrupt the ledger-verification process are subject to the ecosystem
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`automatically destroying a portion of their staked ICX. This process, like all other ICON
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`processes, is supposedly decentralized, without ICON or any other central authority controlling
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`it.” Id. ¶ 61. Accordingly, ICON argues, under Shin’s own recitation of the facts, the P-Reps took
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`authorized, remedial actions to protect the ICON Network via Revision 10, which cannot amount
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`to a trespass on Shin’s alleged property.
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`Shin responds that he never consented to the programmatic restriction of all of his ICX
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`tokens. He explains that paragraph 61 of the SAC only states that, under some circumstances,
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`users “are subject to the ecosystem automatically destroying a portion of their staked ICX”—not
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`9
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`Case 3:20-cv-07363-WHO Document 68 Filed 08/09/21 Page 10 of 16
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`the entirety of their staked ICX or any of their other ICX. SAC ¶ 61. More importantly, unlike
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`the plaintiffs in Chen, he points out that ICON never imposed any terms of service or any other
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`contractual terms governing the use of ICX token that would have given ICON the right to freeze
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`or destroy ICX tokens. See Chen, 61 Cal. App. 5th at 576 (affirming dismissal of the complaint
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`because “by having consented to the user agreement, which expressly assigns any interest on the
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`pooled funds to PayPal, appellants cannot assert a cause of action for breach of fiduciary duty
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`arising out of that practice” and similarly cannot “frame PayPal’s practice as ‘conversion’ of their
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`funds” because they assented to the taking).
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`ICON fails to address this point (that no terms of service existed authorizing the ICON’s
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`restriction of Shin’s ICX tokens), and instead doubles down on its argument that P-Reps used the
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`“inherent features” of ICX to limit the harm Shin caused by his exploits and, consequently, that
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`cannot give rise to a conversion claim. I am not persuaded that defeats the plausibility of Shin’s
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`allegations. Even if, as ICON contends, Shin has generally stated that P-Reps have the authority
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`to set policies for the platform, he has not conceded that the authority stretches to restricting his
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`access to ICX tokens, which is what he alleges the implementation Revision 10 Proposal did. To
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`the extent that ICON rehashes the argument that it had no part in the alleged wrongful act because
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`P-Reps passed the implementation of Revision 10, I have already rejected that argument in my
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`previous order. The SAC contains the same de facto control allegations that I found sufficient and
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`further explains how the implementation of Revision 10 restricted Shin’s access to the ICX tokens.
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`See SAC ¶¶ 96–107. As pleaded, Shin has sufficiently alleged conversion by a wrongful act.
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`C.
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`Cognizable Harm
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`ICON argues that because the ICX tokens were never Shin’s property to begin with and are
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`not property that he is entitled to retain, Shin was not harmed by the passage of the Revision 10
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`update that restricted his access to those ICX tokens. As discussed above, Shin has sufficiently
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`alleged his possessory interest in the ICX tokens. He adequately alleges that he suffered
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`cognizable harm when ICON’s wrongful conduct (implementation of Revision 10) deprived him
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`of access to the ICX tokens. See SAC ¶ 100 (alleging that “the implementation of Revision 10
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`effectively ‘locked’ Shin out of his ICX wallet, preventing him from staking or transferring the
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`10
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`Northern District of California
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`United States District Court
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`Case 3:20-cv-07363-WHO Document 68 Filed 08/09/21 Page 11 of 16
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`ICX and thereby preventing him from enjoying any of the rights or privileges associated with his
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`ownership of these tokens”). ICON argues that Revision 10 simply prevented Shin from
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`transferring ICX that did not belong to him, but Shin alleges that Revision 10 restricted his access
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`to all of his ICX tokens—tokens he generated on August 22, 2020 as well as tokens he purchased
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`before that date. See id. ¶ 135.
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`Because Shin plausibly alleges a possessory interest in the ICX tokens, ICON’s conversion
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`by a wrongful act or disposition of property rights, and cognizable damages, ICON’s motion to
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`dismiss the conversion claim is DENIED.
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`II.
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`TRESPASS TO CHATTEL
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`To prevail on a claim for trespass to chattel, Shin must allege that ICON intentionally and
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`without authorization interfered with his possessory interest in personal property and that such
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`unauthorized use proximately resulted in damage to him. See In re Facebook Internet Tracking
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`Litig., 263 F. Supp. 3d 836, 842 (N.D. Cal. 2017). “Conduct that does not amount to a substantial
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`interference with possession, but which consists of intermeddling with or use of another’s personal
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`property, is sufficient to establish a cause of action for trespass to chattel.” eBay, Inc. v. Bidder’s
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`Edge, Inc., 100 F. Supp. 2d 1058, 1070 (N.D. Cal. 2000).
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`In its previous motion to dismiss, ICON argued that “like the conversion claim, the
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`trespass to chattel claim fails because Shin has not alleged that ICON exercised dominion over his
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`property.” May 2021 Order at 19. I found that Shin “adequately alleged that ICON had ‘de facto
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`control’ over the network proposal approval process, particularly with respect to the
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`implementation of the Revision 10 Proposal,” but that he failed to “plausibly explain what exactly
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`the Revision 10 Proposal did and how that ‘intermeddled’ with his ‘use’ of his ‘personal
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`property.’” Id. As discussed above, he has now fixed that deficiency. I also instructed Shin that
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`“[t]o the extent that he chooses to bring a trespass to chattel claim based on his frozen exchange
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`accounts, he must plausibly allege how ICON ‘intermeddled’ with his access and use of the tokens
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`in those exchange accounts, particularly in light of ICON’s argument that it does not have any
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`‘control’ over those accounts.” Id. at 20.
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`In the SAC, Shin now parses out his trespass to chattel claim based on the ICX tokens that
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`were frozen by the implementation of Revision 10 (count 2) and the crypto-assets in his Binance
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`and Kraken accounts that were frozen by ICON’s direction to those exchange platforms (count 3).
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`ICON moves to dismiss both claims on multiple grounds, many of which have been addressed
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`above.
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`A.
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`ICX Tokens Frozen Through Revision 10
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`AS with his conversion claim, Shin has plausibly alleged a true, legal possessory interest in
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`the ICX tokens to maintain his trespass to chattel claim. ICON argues that the implementation of
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`Revision 10 was not done “without authorization” because Shin concedes that P-Reps set policies
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`for the ICON Network so the remedial actions the P-Reps authorized in this case cannot amount to
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`trespass. In re Facebook, 263 F. Supp. 3d at 842. As discussed above, those allegations do not
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`defeat the plausibility of his claim. ICON faults Shin for not citing any legal authority or binding
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`agreement by the parties that would prohibit his ICX tokens from being restricted by the P-Reps.
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`On the flip side, ICON has not cited any binding agreement (like a user terms of service
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`agreement) that necessarily authorized the restriction of his ICX tokens and that would undermine
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`Shin’s allegation that his access was restricted “without authorization.”
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`ICON’s motion to dismiss the second cause of action is DENIED.
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`B.
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`Crypto-Assets Held by Shin on Binance and Kraken
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`Shin alleges that ICON “intermeddled with his use of his crypto-assets . . . by directing
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`Kraken and Binance to freeze Shin’s accounts on those exchanges, and through falsely informing
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`Kraken and Binance that Shin was a ‘malicious attacker’ and that the ICX tokens that he
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`transferred to their exchanges were ‘stolen. . . .’” SAC ¶ 147. ICON raises two arguments with
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`respect to this claim. The first is already resolved above—Shin has adequately alleged possessory
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`interest in the ICX tokens that were subsequently transferred to the exchange accounts. Second,
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`ICON argues that it is not the party preventing Shin from exercising any purported possessory
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`interest.4
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`4 ICON also argues, but drops in its reply brief, that because I previously held that the statements
`in question, describing Shin as a “malicious hacker” who had “stolen” ICX tokens, were protected
`opinions and thus insufficient