Tobias Kaplan, Plaintiff, v. JOHN DOE CIRCLE INTERNET FINANCIAL LLC UNEVEN LABS INC (2026)

The following e-filed documents, listed by NYSCEF document number (Motion 004) 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 62 were read on this motion to DISMISS.

The following e-filed documents, listed by NYSCEF document number (Motion 005) 58, 59, 60, 61, 63, 66, 67 were read on this motion to DISMISS.

This action arises from an unidentified individual's theft of 13,342,433 USD Coin ("USDC," equivalent in value to $13,342,433) from Plaintiff Tobias Kaplan's cryptocurrency wallet in January 2026. Defendants Circle Internet Financial, LLC ("Circle LLC") and Circle Internet Group, Inc. ("Circle Inc.") (collectively, "Circle") and Defendant Uneven Labs, Inc. ("Uneven Labs") played no role in the theft. Nevertheless, Plaintiff alleges that: (i) Circle should have responded more quickly and decisively to Plaintiff's urgent entreaties to freeze the stolen USDC still in the thief's possession before it was entirely dissipated; and (ii) Uneven Labs' Relay.Link network subsequently facilitated the thief's dissipation of the USDC, and that both therefore should be held liable for some or all of his loss. Circle and Uneven Labs move separately to dismiss Plaintiff Tobias Kaplan's Amended Complaint against them.

For the reasons set forth in greater detail below, Circle's motion is granted and Uneven Labs' motion is denied without prejudice pending jurisdictional discovery. In brief, the Court concludes that Circle was not under a legal duty to freeze the USDC remaining in John Doe's wallet upon request by Plaintiff (with whom it had no commercial or other relationship) absent a court order, which Circle's then-applicable terms of service required. Moreover, Circle's purported inaction in response to Plaintiff's does not constitute aiding and abetting John Doe's theft. The Court denies without prejudice Uneven Labs' motion to dismiss on personal jurisdiction grounds, finding that Plaintiff has made a "sufficient start" to establishing personal jurisdiction so as to warrant jurisdictional discovery. The Court will defer ruling on Uneven Labs' substantive arguments for dismissal unless and until jurisdictional discovery demonstrates that it has jurisdiction to do so.

BACKGROUND

According to the Amended Complaint, the factual allegations of which are assumed to be true for purposes of this motion to dismiss, on January 25, 2026, at approximately 2:23 p.m. Eastern Time,¹ a cybercriminal (Defendant John Doe)² stole 13,342,433 USDC from Plaintiff's cryptocurrency wallet (NYSCEF 25 ["Am. Compl."] ¶ 2).

Circle LLC is the centralized issuer, administrator, and controller of USDC, which is a "stablecoin" that operates through a smart contract designed and governed by Circle LLC (Am. Compl. ¶ 18). Circle LLC is a wholly owned subsidiary of Circle, Inc., a registered Money Services Business, and together they "operate as an integrated enterprise with respect to the issuance, administration, and control of USDC" (id. ¶¶ 17, 19).

Plaintiff alleges, on information and belief, through the foregoing structure Circle retains exclusive authority over the USDC smart contract that governs every transfer of USDC, including the unilateral ability to blacklist or freeze identified wallet addresses, immobilizing identified USDC tokens on the blockchain to prevent further transfers pending legal determinations (Am. Compl. ¶¶ 19—20). Circle alone possesses this technical ability (id. ¶ 20). The Amended Complaint alleges that every transfer of USDC, including those at issue here, occurs through the smart contracts administered by Circle (id. ¶¶ 162, 164).

Plaintiff further alleges, on information and belief, that Uneven Labs is a Delaware corporation that owns, operates, and controls Relay.Link, which he describes as a "high-speed, no-[Know Your Customer], fee-generating cross-chain routing system," which John Doe purportedly used "57 times to convert WETH on Base to ETH, and that the transfers occurred rapidly, in structured and fragmented tranches, immediately after a large-scale theft (NYSCEF 66 at 3, citing Am. Compl. ¶¶ 11-13, 55). Plaintiff alleges, also upon information and belief, that Uneven Labs conducts business in New York and publicly represents that Relay.Link operates from New York, according to the location indicated on its X (formerly Twitter) account and related public materials (Am. Compl. ¶ 21).

According to Plaintiff, Relay.Link enables users to execute cross-chain swaps and bridge cryptocurrency assets between blockchain networks, including between the Base and Ethereum blockchains. Plaintiff further alleges that Uneven Labs controls the routing logic, transaction execution pathways, and fee monetization associated with Relay.Link's operations (id. ¶ 22). Users of Relay.Link are not required to create a custodial account or provide identifying information prior to executing cross-chain bridge transactions through the service (id. ¶ 23). Plaintiff further alleges that the operators of cross-chain bridge infrastructure—including Uneven Labs—are well aware that bridge routing services are frequently used in the immediate aftermath of major cryptocurrency exploits to move stolen assets across chains before issuers, exchanges, and investigators can respond (id. ¶ 187).

Circle's Policies

Circle's Legal & Privacy USDC Terms, submitted by Circle with this motion, provide that: "When USDC is sent to a third-party USDC address, such transaction is completed on USDC Supported Blockchains. This means that such transaction is irreversible and Circle does not have the ability to reverse or recall any transaction once initiated. You bear all responsibility for any losses that might be incurred as a result of sending USDC to an incorrect or unintended USDC address" (NYSCEF 46 ["USDC Terms"] § 13).

The USDC Terms also state that "Circle reserves the right to 'block' certain USDC addresses and, if such addresses are Circle custodied addresses, freeze associated USDC (temporarily or permanently) that it determines, in its sole discretion, may be associated with illegal activity or activity that otherwise violates these Terms . . . ." (USDC Terms § 13). It further provides that "USDC is issued and redeemed in accordance with Circle's blocklisting policy. Circle reserves the right to block the transfer of USDC to and from an address on chain as permitted under the blocklisting policy" (id.).

Circle's "blocklisting" policy (formally, an "Access Denial Policy") in turn provides that "Circle has the ability to block individual addresses from sending and receiving Circle Stablecoin on every blockchain to which Circle Stablecoin is issued" but that "Circle will not deny access to individual addresses, other than in circumstances that strictly conform to the requirements set forth under Part 3, Policy Exceptions" which include (1) "where Circle determines, in its sole discretion, that failure to grant a denial of access request presents a threat to the security, integrity, or reliability of the Circle Stablecoin network" and (2) "to comply with a law, regulation, or legal order from a duly recognized U.S. or French authorized authority, U.S. or French court of competent jurisdiction, or other governmental authority with jurisdiction over Circle" (NYSCEF 13 ["Access Denial Policy"]). Circle's policies also make clear to users that it "is not responsible for any losses or other issues you might encounter using USDC on non-Circle platforms." (USDC Terms § 13).

At oral argument, Plaintiff's counsel represented that Circle recently amended its Access Denial Policy to provide that "if there's a credible threat from law enforcement they can pause the stablecoin, they can blocklist it, and then wait for [a] court order" (NYSCEF 68, 69 ["9.15.26 tr"] at 25-26). That revised policy, assuming the representation is accurate, was not in effect at the time of the events relevant to this case.

The Theft

According to the Amended Complaint, the theft occurred through the exploitation of a smart-contract vulnerability involving Matcha Meta and SwapNet (Am. Compl. ¶ 34; see also NYSCEF 15 [article discussing security incident]). After the theft from Plaintiff's account, "John Doe" began to exchange the stolen USDC to Ethereum and then routed the proceeds across blockchain networks through Uneven Labs' Relay.Link service (Am. Compl. ¶ 50—55).

"Immediately after discovering the theft, Plaintiff contacted his counsel and requested urgent intervention to prevent further dissipation of the stolen digital assets. Plaintiff's counsel thereafter traced the cryptocurrency transactions, confirmed that Plaintiff's assets had been stolen and were being actively swapped by the criminal, and started drafting an email to Circle's legal department requesting that they freeze the stolen USDC" (Am. Compl. ¶ 35).

Notice to Circle

On January 25, 2026, at 4:27 p.m., Plaintiff's counsel emailed Circle's legal department, identified the wallet address holding the stolen USDC, and requested that Circle immediately exercise its issuer-level authority to freeze the stolen tokens (Am. Compl. ¶ 36; see also NYSCEF 10 [email to Circle Legal]). In that email, Plaintiff's counsel advised Circle's legal department that the "criminal is currently swapping Mr. Kaplan's USDC to ETH and laundering the stolen funds." (Am. Compl. ¶ 36; NYSCEF 10). At that time, according to Plaintiff, over 3.7 million USDC remained in the cybercriminal's wallet and could have been frozen by Circle (Am. Compl. ¶ 36). Plaintiff's counsel simultaneously contacted ten Circle employees and directors through LinkedIn to ensure that Circle received actual notice of the emergency freeze requests (Am. Compl. ¶ 37).

At 5:26 p.m., Plaintiff's counsel emailed Circle's "blocklist" email address requesting an immediate freeze of the John Doe's wallet (Am. Compl. ¶ 38; see also NYSCEF 11). At 5:55 p.m., Circle responded and denied the request, stating: "In accordance with Circle's Access Denial Policy, we require a valid order from a U.S. court of competent jurisdiction to consider blocklisting requests." (Am. Compl. ¶ 39; see also NYSCEF 12 [email from Circle to Murphy]; Access Denial Policy).

The next day, on January 26, 2026, Plaintiff had an officer from the Chicago Police Department reach out to Circle to request that the funds be frozen. Circle was also on notice that Plaintiff had been corresponding with the FBI regarding the theft. Nevertheless, Circle declined to freeze the stolen USDC (id. ¶ 46).

The events underlying this case purportedly became the subject of contemporaneous reporting within the digital-asset industry. On January 26, 2026, the same day that Chicago Police contacted Circle, industry publication Protos reported that approximately $3 million in stolen USDC associated with the SwapNet exploit remained unfrozen in a publicly visible wallet address on the Base blockchain while the incident was being actively investigated by blockchain security researchers (Am. Compl. ¶ 80). Several industry publications and blockchain experts publicly criticized "bad actor" Circle for failing to freeze the stolen USDC (Am. Compl. ¶¶ 80—83 and n 18—20).

On January 27, 2026, at approximately 10:44 a.m., Plaintiff's counsel notified Circle that emergency proceedings were being initiated in New York State Supreme Court, that law enforcement had been contacted, and again requested temporary immobilization pending judicial review. That afternoon, Plaintiff's counsel once again emailed Circle and put it on notice that Plaintiff was seeking same-day relief and a court order directing Circle to freeze the funds remaining in the criminal's wallet (Am. Compl. ¶ 47). Circle did not respond to either email (id. ¶ 48). At approximately 1:20 p.m. on January 27, 2026, Defendant John Doe swapped the remaining 3,003,333 USDC into Wrapped Ethereum ("WETH") (Am. Compl. ¶ 49).

Later that afternoon, at 5:47 PM, shortly after receiving Plaintiff's application for emergency relief, the Court signed and filed Plaintiff's proposed Order to Show Cause and issued a temporary restraining order mandating that Circle Inc. "temporarily freeze and preserve approximately 3,000,000 USDC traceable to the unauthorized access described in the Complaint and presently held at blockchain address, [omitted] by effectuating issuer-level controls sufficient to prevent further transfer of the identified USDC, pending further order of the Court" (NYSCEF 16). By that time, however, all of the stolen 13.3 million USDC had already been swapped and dissipated (NYSCEF 57 at 5).

Procedural History

As noted, Plaintiff commenced this action on January 27, 2026, by filing a summons and complaint, along with an Order to Show Cause seeking a temporary retraining order (see NYSCEF 1-3). The Court granted Plaintiff's Order to Show Cause, imposing a temporary restraining order and set a schedule for a preliminary injunction hearing on February 13, 2026 (NYSCEF 16).

During the preliminary injunction hearing, Circle's counsel pointed out the logistical hurdles to freezing three "pooled" wallets (into which Plaintiff's USDC apparently were "moved" from John Doe's wallet), which would impact millions of USDC held by other investors unrelated to Plaintiff or John Doe, and in any event it appeared the USDC had by then been "exchanged by the criminal for Wrapped Ethereum, which is a different type of asset, and moved into a different wallet" (NYSCEF 27 at 22). As a result, it was unclear "whether there is even any USDC left over that is being held by the criminal" (id. at 23).

After the hearing, the Court granted Plaintiff's motion in part such that "Defendant John Doe, and all persons acting in concert with John Doe, are enjoined pending resolution of this litigation or further order of the Court from transferring, bridging, converting, redeeming, dissipating, or otherwise disposing of any USDC traceable to Plaintiff's stolen funds" (NYSCEF 24). The Court denied the remaining relief as to Circle, "without prejudice to seeking more targeted relief against Defendants or other entities" (id. [emphasis in original]).

Thereafter, Plaintiff filed an Amended Complaint, asserting claims for (1) conversion (against John Doe), (2) negligence (against Circle), (3) aiding and abetting conversion (against Circle), (4) negligence (against Uneven Labs), and (5) aiding and abetting conversion (against Uneven Labs) (see NYSCEF 25). Circle and Uneven Labs both moved to dismiss. Oral argument was held on September 15, 2026 (NYSCEF 68, 69).

DISCUSSION

I. Circle's Motion to Dismiss

On a motion to dismiss pursuant to CPLR 3211(a)(7) for failure to state a viable claim, the court must "accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory" (Leon v Martinez, 84 NY2d 83, 87 [1994]). A motion to dismiss pursuant to CPLR 3211(a)(1) should be "granted only where the documentary evidence utterly refutes plaintiff's factual allegations, conclusively establishing a defense as a matter of law" (Goshen v Mut. Life Ins. Co. of New York, 98 NY2d 314, 326 [2002]).

A. Negligence (Count Two)

Plaintiff argues that Circle owed Plaintiff a duty of care based on its exclusive control over the USDC smart contract, the instrumentality through which the harm occurred, and its unilateral ability to halt the continued dissipation of stolen assets after receiving actual notice that those assets remained identifiable and fully capable of being frozen (Am. Compl. ¶¶ 118—27). However, as discussed below, Circle did not owe a duty of care to Plaintiff (with which it had no prior relationship) under the circumstances described in the Amended Complaint. Accordingly, Plaintiff's negligence claim is dismissed.

"It is fundamental that to recover in a negligence action a plaintiff must establish that the defendant owed him a duty to use reasonable care, and that it breached that duty" (Turcotte v Fell, 68 NY2d 432, 437 [1986]). The Court of Appeals has stated that "[w]e fix the point of a duty in a particular case 'by balancing factors, including the reasonable expectations of parties and society generally, the proliferation of claims, the likelihood of unlimited or insurer-like liability, disproportionate risk and reparation allocation, and public policies affecting the expansion or limitation of new channels of liability' " (Moore Charitable Found. v PJT Partners, Inc., 40 NY3d 150, 160-61 [2023]).

In this case, Plaintiff acquired his USDC on the secondary market and stored it in a cryptocurrency wallet he owned and controlled. Plaintiff does not allege that Circle sold him his USDC or that it had any involvement in his cryptocurrency wallet or any responsibility for the theft. Nor does Plaintiff allege that Circle has a relationship—contractual or otherwise—with Plaintiff or that Circle has ever done any business with him.

Despite this, Plaintiff argues that Circle voluntarily assumed a duty to Plaintiff. Under New York law "an 'assumed duty,' or a 'duty to go forward,' may arise once a person undertakes a certain course of conduct on which another relies." (Heard v City of New York, 82 NY2d 66, 72 [1993]). "[T]he question is whether defendant's conduct placed plaintiff in a more vulnerable position than plaintiff would have been in had defendant done nothing" (id.).

Again, however, Plaintiff's allegations are insufficient. He does not allege that Circle engaged in any conduct upon which he could have reasonably relied. Circle's Legal & Privacy terms expressly advise USDC holders that "Circle is not responsible for any losses or other issues you might encounter using USDC on non-Circle platforms" (USDC Terms § 13) and its then-applicable Access Denial Policy would not have been triggered until Plaintiff obtained a court order. Plaintiff lost his USDC on a non-Circle platform (Am. Compl. ¶¶ 33, 34, 36, 49, 102, 105) and pleads that "theft" of USDC was a "well known and foreseeable risk[ ] within the digital asset ecosystem" (id. ¶ 122).

Nevertheless, Plaintiff argues that a negligence "duty arises where a cryptocurrency platform operates the system through which transactions occur and is in the best position to prevent the loss." However, while there are some circumstances where liability is imposed when "defendant's relationship with either the tortfeasor or the plaintiff places the defendant in the best position to protect against the risk of harm" (Hamilton v Beretta U.S.A. Corp., 96 NY2d 222, 233 [2001]), those circumstances are typically limited to situations "that require[ ] defendant to protect plaintiff from the conduct of others. Examples of these relationships include master and servant, parent and child, and common carriers and their passengers" (id.). Here, Plaintiff does not allege any such relationship with Circle or even between Circle and John Doe. Moreover, expanding a duty to Plaintiff in this case would impose the specter of "limitless liability" on Circle that New York law cautions against (Beretta, 96 NY2d at 233), and would essentially make Circle an insurer against bad actors in secondary market transactions involving USDC. Nor did Circle's alleged conduct place Plaintiff in a more vulnerable position than if Circle had done nothing (Heard, 82 NY2d at 73). Instead, he claims that Circle had an affirmative duty to act, which it did not.

In opposition to this motion, Plaintiff relies heavily upon the non-precedential opinion in Atwal v iFinex Inc. (2022 WL 18859078 [WDNY Oct. 19, 2022] [Foschio, MJ), accepted in part and rejected in part on other grounds, 2023 WL 3063450 [WDNY Mar. 22, 2023]). In that case, a federal Magistrate Judge recommended denying a motion to dismiss a negligence claim, finding that the plaintiff "plausibly alleged that by operating the online platform on which the cryptocurrency transaction took place, with such transactions recorded on the EOS blockchain, Defendants were in the best position to monitor transactions of EOS involving Plaintiff's Account, and thus voluntarily assumed a duty of care" (id. at *12). However, that case involved a situation in which defendants had agreed to be "bound to the provisions of the EOS Constitution," which required them to comply with arbitration orders regarding freezing and transfer of ownership of EOS tokens (id. *2). When the plaintiff's EOS was stolen, the defendants responded by voluntarily freezing it on the platform, but then did not follow the arbitrator's orders requiring them to maintain the freeze and return the tokens, allowing the tokens to be stolen (id. at *3). That is not the situation here. Plaintiff does not allege that Circle undertook any similar obligation. As noted, Circle's then-applicable Access Denial Policy informed USDC holders that Circle will freeze addresses only in response to, among other things, a legal order from a court with jurisdiction or other legal authority.³

He v Apple, Inc. (189 AD3d 1984, 1986 [3d Dept 2020]), upon which Circle relies, did not involve cryptocurrency theft but is nevertheless instructive on the question whether Circle owed a duty to assist Plaintiff simply because it had the ability to do so. In that case, the plaintiff "fell victim to a scam" under which "individuals posing as federal tax officials telephoned her, demanded payment for unpaid taxes and directed her to make that payment by providing redemption codes from iTunes gift cards." (id. at 1984). The plaintiff "proceeded to purchase several thousand dollars worth of iTunes gift cards and gave the codes to the scammers. After realizing that she had been duped, plaintiff reported the matter to local police and asked for a refund from defendant Apple, Inc. and the retailers from whom she had purchased the gift cards. The retailers and Apple denied her requests, citing the policy that lost or stolen gift cards are nonrefundable" (id.). The plaintiff sued Apple based on "its failure to suspend the scammers' iTunes account after learning of their conduct" (id. at 1986). The Court held that "even if Apple was in a position to protect plaintiff from the scammers, it would ordinarily have no duty 'to control the conduct of third persons to prevent them from' harming her. Inasmuch as plaintiff failed to allege that Apple had 'actual control' over the scammers' actions or a relationship with plaintiff that obliged it to protect her from them, there are no indications of a special relationship that would create such a duty" (id. [internal citation omitted]). The court went on to note that "Apple made clear to purchasers that iTunes gift cards were nonrefundable, that Apple disavowed any responsibility for stolen gift cards and that Apple reserved the right, but did not assume the obligation, to close a user's iTunes account upon learning of fraudulent activity" (id.).

While the facts of Apple are less technically complex than the present case, the principle is applicable. In both cases, the plaintiff is seeking to hold an "issuer" liable for the bad acts of downstream actors in large part on the ground that the otherwise uninvolved issuer was in a position to neutralize the value of its product in the hands of the wrongdoer. And in both cases, the "issuer" publicly disclaimed to all users any responsibility to do so, in Circle's case absent a legal order from a court or other legal authority. The same is true here.

In sum, the factors governing whether to impose a negligence duty on Circle as a stranger to the dealings between Plaintiff and John Doe point firmly against doing so in these circumstances. Given the myriad ways in which USDC is traded, imposing a time-sensitive duty on Circle to step in as soon as a potentially damaged holder raises the alarm could create broad and uncertain liability. Moreover, when faced with such a situation, Circle would have to make an instant determination whether the party requesting the "blocklisting" is in the right, at the risk of facing potential liability from the blocklisted party if it makes the wrong choice. This is the type of situation in which imposing a broad common law negligence duty to all USDC holders in the absence of any prior relationship between the parties is unwarranted.⁴

B. Aiding and Abetting (Count Three)

Plaintiff's aiding-and-abetting conversion claim also fails. Plaintiff does not allege that Circle had knowledge of John Doe's theft and therefore neither aided nor abetted it. "In order to plausibly allege actual knowledge, a plaintiff must allege facts indicating that the alleged aider and abettor had direct and clear knowledge of the wrongdoing—'mere notice or unreasonable awareness' is not enough" (Huang v Hong Kong and Shanghai Banking Corp. LTD, 2022 WL 4123879, at *4 [SDNY Sept. 9, 2022] [applying New York law]). Plaintiff's allegation that the theft was "objectively verifiable from the publicly available blockchain records provided to Circle" (Am. Compl. ¶ 161) after the fact does not establish Circle's actual knowledge of the theft.

Plaintiff also fails to allege substantial assistance. "Substantial assistance requires an affirmative act on the defendant's part" (Betz v Blatt, 160 AD3d 696, 700 [2d Dept 2018]). "Mere inaction by an alleged aider or abettor constitutes substantial assistance only if the defendant owes a fiduciary duty directly to the plaintiff" (id.). Plaintiff's aiding-and-abetting claim is premised on Circle's alleged inaction (Am. Compl. ¶ 97 [alleging "refusal to take temporary protective action during the freeze-capable window."]), and as noted above Circle did not have a duty (and certainly not a fiduciary duty) to act. In these circumstances, Plaintiff fails to plead any facts suggesting that Circle aided and abetted John Doe's conversion of Plaintiff's USDC. Therefore, this claim is dismissed as well.

II. Uneven Labs' Motion to Dismiss (Counts Four and Five)

Plaintiff asserts claims against Uneven Labs for negligence (Count Four) and for aiding and abetting (Count Five). There is, however, a threshold question whether the Court has personal jurisdiction over Uneven Labs, which Plaintiff asserts but Uneven Labs denies.

Plaintiff does not allege that Uneven Labs is subject to general jurisdiction in New York, nor has he alleged facts establishing such jurisdiction (see NYSCEF 66 at 7 ["Plaintiff does not rely on general jurisdiction"]). Rather, Plaintiff asserts that this Court has specific personal jurisdiction over Uneven Labs under CPLR 302 (a) (1), which applies to a defendant who "transacts any business within the state." (CPLR 302 [a] [1]). "In order to determine whether personal jurisdiction exists under CPLR 302 (a) (1), a court must decide (1) whether the defendant transacts any business in New York and, if so, (2) whether the cause of action arises from such a business transaction" (Licci v Lebanese Can. Bank, 20 NY3d 327, 334 [2012] [cleaned up]).

Plaintiff relies on two principal allegations to support in personam jurisdiction under CPLR 302 (a) (1) with respect to his claim that Uneven Labs was negligent and aided and abetted John Doe's activities via transactions taking place in or from New York. First, Plaintiff alleges that a Relay.Link-affiliated X profile lists its location as "New York." Second, he alleges that Relay.Link is a globally accessible software platform that is available to a would-be trader in New York.

While those allegations, standing alone, do not suffice to demonstrate that Uneven Labs facilitated John Doe's transactions in New York, they are enough to constitute "a 'sufficient start' in demonstrating prima facie the existence of personal jurisdiction" (Metro. Partners Group Admin., LLC v Nerney, 248 AD3d 584, 586 [1st Dept 2026]), thus warranting jurisdictional discovery (id.). In the current circumstances, there is no way for Plaintiff, without such discovery, to demonstrate how and where the subject Relay.Link transactions took place, but there is at least a credible basis for asserting that was contact with New York sufficient to trigger personal jurisdiction for purposes of this case. Therefore, the Court will direct a period of targeted jurisdictional discovery, after which Plaintiff may amend his Complaint and Uneven Labs may thereafter move to dismiss on jurisdictional or other grounds.

In the circumstances, the Court believes it would be prudent to defer ruling on Uneven Labs' substantive merits arguments in support of dismissal unless and until Plaintiff establishes at least a prima facie basis that this Court has jurisdiction to do so, which it has yet to do (cf. Kreutter v McFadden Oil Corp., 71 NY2d 460, 470 [1988] ["Liability may be considered only after it is decided, on the basis of CPLR 302, that the defendant is subject to the in personam jurisdiction of our courts"]).

Accordingly, it is

ORDERED that Circle's Motion to Dismiss Counts Two and Three of the Amended Complaint (Mot. Seq. 004) is GRANTED, and the Amended Complaint is dismissed as against Circle with prejudice; and it is further

ORDERED that Uneven Labs' Motion to Dismiss Counts Four and Five of the Amended Complaint (Mot. Seq. 005) is DENIED WITHOUT PREJUDICE, and Plaintiff may seek targeted jurisdictional discovery for a period of 60 days, after which he may further amend his Amended Complaint and, if he does so, Uneven Labs will have 30 days thereafter to answer or move to dismiss.

This constitutes the Decision and Order of the Court.

DATE 11/2/2026

JOEL M. COHEN, J.S.C.

FOOTNOTES

1.   For consistency, all references herein to times are in Eastern Time.

2.   According to the Amended Complaint, "Defendant John Doe is an unknown individual or entity who obtained unauthorized access to Plaintiff's cryptocurrency wallet and intentionally transferred Plaintiff's USDC without authorization. John Doe's true identity is presently unknown to Plaintiff. Plaintiff will amend this Complaint to substitute John Doe's true name and capacity when ascertained." (Am. Compl. ¶ 24).

3.   The District Court in Atwal did not address the Magistrate Judge's substantive decision on the plaintiff's negligence claims. Instead, it concluded that the Magistrate Judge correctly ruled that there was no general personal jurisdiction over the defendants but incorrectly accepted plaintiff's assertion of specific personal jurisdiction, and accordingly the court granted the motion to dismiss (2023 WL 3063450, at *1). As a result, the Magistrate Judge's report and recommendation on which Plaintiff here relies is "of no binding or precedential value" (United States v Stroke, 2019 US Dist LEXIS 232323, at *2 [WDNY Oct. 2, 2019] [collecting cases]), though of course the Court nevertheless may consider whether its reasoning is persuasive. As noted in the text, however, the case is distinguishable on its facts.

4.   Of course, Circle is free (for commercial, competitive, or other reasons) to voluntarily adopt policies to intervene more aggressively in circumstances such as those that impacted Plaintiff, which it appears to have done during the course of this litigation.

Joel M. Cohen, J.