United States Securities and Exchange Commission v. Qin

Background

The court considered two requests by the Receiver: a motion to freeze and declare certain digital assets to be Receivership Property, and a motion to seal the motion papers. The assets were in a self-custodied cryptocurrency wallet identified in the public order by the ending digits “0B61.” The wallet contained 439,650.32 USD Coin, a digital asset that exists on the Ethereum blockchain. The Securities and Exchange Commission and Circle Internet Financial, LLC, which was not a party to the case, did not object to the request to freeze the assets.

Freeze Order

The court granted the Receiver’s motion to declare the contents of Wallet 0B61, including the USD Coin, to be Receivership Property as defined in the order appointing the Receiver. The court also ordered Circle to blacklist Wallet 0B61 and freeze the USD Coin in that wallet until receiving further instructions from the Receiver.

The Receiver was ordered to notify Circle of the order within one business day after the order was entered. Within five business days after receiving that notice, Circle was ordered to blacklist the wallet, freeze the USD Coin, and confirm those actions to the Receiver in writing.

Sealing Order

The Receiver had been redacting all but the last four digits of cryptocurrency wallet addresses in filed papers to protect Receivership Property. Circle requested that the motion and order be filed without redactions, and the Receiver therefore asked that the motion and proposed order be filed under seal.

The court discussed the public’s common-law right to access judicial documents and the need to carefully review requests to seal. It concluded that the full wallet number could be filed under seal because disclosure would identify the wallet containing Receivership Property. But the court found no grounds to place the supporting motion papers entirely under seal.

The court ordered that two versions of the order be filed: one containing the full wallet number under seal and one publicly filed with all but the last four digits of the wallet number redacted. It also ordered the Receiver to publicly file versions of motion papers ECF Nos. 268–70 that complied with this redaction requirement by January 26, 2024. The Clerk was directed to terminate ECF Nos. 266 and 267.