Shin v. ICON Foundation

Background

The court addressed several requests by Mark Shin: permission to seek reconsideration of the order appointing a receiver, a 90-day extension of discovery, and additional information from ICON Foundation. The court also vacated the hearing scheduled for February 21, 2024.

The receivership order concerned cryptocurrency and fiat currency traceable to tokens Shin had created using a software bug. The court had appointed a receiver after finding a need to hold the seized assets and prevent them from being concealed or spent while the litigation continued. Shin argued that the dismissal of criminal charges in a Colorado state court case changed the basis for the receivership. ICON opposed reconsideration.

Reconsideration

The court denied Shin’s motion for reconsideration of the June 28, 2023 receivership order. It held that the Colorado court’s dismissal of the criminal charges did not substantively change the need for a receiver and might strengthen that need. The court stated that the factors it had previously considered—including the risk that the property could be lost, concealed, damaged, diminished in value, or squandered; the inadequacy of other legal remedies; and the interests ICON sought to protect—continued to support maintaining the receiver.

Discovery schedule

The court declined to grant Shin’s requested 90-day general extension of discovery. Shin relied on the complexity of the case, the cryptocurrency network and financial entities involved, the timing of his new counsel’s appearance, unidentified participants, the Colorado criminal case, mediation, holidays, and the number of claims. The court concluded that these circumstances did not justify reopening discovery after the case had been pending for three years and after Shin had already received two schedule modifications.

The court nevertheless allowed Shin to take one deposition under Federal Rule of Civil Procedure 30(b)(6). That rule permits an organization to designate a representative to testify about information known or reasonably available to the organization. The deposition could last no more than seven hours and had to occur within 30 days. The court identified topics including ICON’s knowledge and conduct concerning Shin, the identities of relevant representatives, and how and why those representatives and decision-makers disciplined Shin rather than others.

Digital-wallet request

Shin asked ICON to produce all digital-wallet information known to be controlled by ICON’s council members, employees, agents, representatives, service providers, and other affiliates. He said the information was needed to determine who used the bug, those individuals’ relationships with ICON, what they did with the tokens, and how they learned about the bug. ICON responded that it had already identified all 395 wallet addresses associated with the 395 affected accounts that received bug-generated ICX.

The court found Shin’s newest request too unspecific and did not grant it. The court noted that Shin had not identified any of the 395 affected wallet addresses that he claimed were associated with ICON or its affiliates. It stated that the limited deposition might provide information relevant to this issue or might support a later request to reconsider reopening discovery.

Blockchain log data and final schedule modification

Shin also requested internet-protocol log data for all digital wallets that benefited from the bug. ICON said it had produced the requested data on February 5, 2024, but Shin claimed that the production omitted data for the user who allegedly triggered the bug 44 times.

The court ordered ICON to supplement its February 5 production with any log data it had for that user. To the extent ICON possessed log data covering the complete period between Revision 9 and Revision 10 and had not produced it, the court directed ICON to do that as well. The court stated that the deposition and this required production were the full extent of its current modification to the case-management schedule. If the deposition revealed information that should have been produced earlier and the parties could not agree on additional discovery, they could bring the dispute to the court through a dispute letter.