Cox v. CoinMarketCap OpCo LLC ( 2021 )

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Ryan Cox, No. CV-21-08197-PCT-SMB 10 Plaintiff, ORDER 11 v. 12 CoinMarketCap OpCo LLC, et al., 13 Defendants. 14 15 Pending before the Court is Plaintiff’s Motion for Alternative Service. (Doc. 24.) 16 The Court has reviewed the motion and applicable law and now issues this ruling denying 17 the motion. 18 I. BACKGROUND 19 Plaintiff, Ryan Cox, filed a Complaint with this Court against CoinMarketCap 20 OpCo, LLC (“CoinMarketCap.com”), Binance Capital Management Co. Ltd. (“Binance”), 21 and Bam Trading Services Inc. d/b/a Binance.US (“BAM”), as well as individuals 22 Changpeng Zhao, Catherine Coley, Yi He, Ted Lin, and Does I–X for artificially 23 suppressing the value of the cryptocurrency HEX and artificially inflating the value of other 24 cryptocurrencies. (Doc. 1 ¶ 3.) Plaintiff notes that Binance has been described as an 25 international cryptocurrency exchange that hops around from jurisdiction to jurisdiction to 26 avoid regulators. (Doc. 24 at 2.) 27 Plaintiff has successfully served process on the corporate entities in this lawsuit but 28 has failed to serve each of the individual Defendants, who Plaintiff notes are Chinese 1 nationals whose country of domicile cannot be ascertained. (Id. at 2.) Defendant Zhao, 2 the CEO of Binance, has been on record as stating, “Binance.com has always operated in 3 a decentralized manner as we reach out to our users across more than 180 nations 4 worldwide. As well as pushing the envelope in experimenting on how to become a true 5 DAO (decentralized autonomous organization).” (Id.) Plaintiff has taken extensive action 6 to locate the whereabouts of the individual Defendants, who are officers of Binance. (Id. 7 at 5.) All of Plaintiff’s efforts have been fruitless. (Id. at 5.) Plaintiff describes these 8 individual Defendants as “international ghosts.” (Id. at 2 (internal quotation marks 9 omitted).) A private investigator hired by Plaintiff could not even identify the country of 10 residency for a single Binance officer. (Id.; Doc. 24-1 at 2.) The private investigator was, 11 however, able to identify the Twitter accounts associated with Defendants Zhao, Ted Lin, 12 and Yi He. (Doc. 24-1 at 6–7.) On November 12, 2021, undersigned counsel tweeted a 13 copy of the summons and a link to the Complaint in this case to all three Twitter accounts. 14 (Doc. 24 at 6.) Twitter has verified each individual account, and Plaintiff notes that each 15 user utilizes their account on a regular basis. (Id. at 7.) 16 II. LEGAL STANDARD 17 Rule 4(f) provides three methods of serving an individual in a foreign country: (1) 18 “by any internationally agreed means of service that is reasonably calculated to give notice, 19 such as those authorized by the Hague Convention on the Service Abroad of Judicial and 20 Extrajudicial Documents” (“Hague Convention”); (2) “if there is no internationally agreed 21 means, or if an international agreement allows but does not specify other means, by a 22 method that is reasonably calculated to give notice …”; or (3) “by other means not 23 prohibited by international agreement, as the court orders.” 24 District courts are given discretion to determine when the particularities and 25 necessities of a given case require alternative service of process under Rule 4(f). Rio 26 Properties, Inc. v. Rio Int’l Interlink, 284 F.3d 1007, 1016 (9th Cir. 2002). A party does 27 not need to attempt to serve process under Rule 4(f)(1) and (2) before requesting to serve 28 under Rule 4(f)(3); it stands independently. See id. at 1014–1015 (“[S]ervice of process 1 under Rule 4(f)(3) … is merely one means among several which enables service of process 2 on an international defendant.”). A court may order service under Rule 4(f)(3) so long as 3 the service (1) comports with constitutional notions of due process and (2) is not prohibited 4 by international agreement. Id. at 1015. 5 III. DISCUSSION 6 As Plaintiff has exhausted all other methods of service, he asks to serve Chengpeng 7 Zhao, Yi He, and Ted Lin via Twitter. In support of this request, Plaintiff cites to district 8 court cases where the court authorized plaintiffs to serve via social media under Rule 9 4(f)(3). See, e.g., WhosHere, Inc. v. Orun, No. 1:13-cv-00526-AJT-TRJ, 2014 WL 670817 10 (E.D. Va. Feb. 20, 2014) (authorizing service on an individual in Turkey by email and 11 through Facebook and LinkedIn); see also FTC v. PCCare247 Inc., No. 12 Civ. 12 7189(PAE), 2013 WL 841037 (S.D.N.Y. Mar. 7, 2013) (authorizing service on individuals 13 in India by email and through Facebook). 14 In St. Francis Assisi v. Kuwait Finance House, the district court authorized service 15 of an individual in Kuwait via his Twitter account because service via Twitter was 16 reasonably calculated to give notice and was not prohibited by international agreement. 17 No. 3:16-CV-3240-LB, 2016 WL 5725002, at *1 (N.D. Cal. Sept. 30, 2016). In making 18 this determination, the district court noted that Kuwait was not a signatory to the Hague 19 Convention. Id. 20 Here, Plaintiff is unable to locate the country in which the individual Defendants 21 reside. Plaintiff merely speculates that Defendant Zhao may reside in either Taiwan or 22 Singapore. (Doc. 24 at 9.) Singapore is a signatory to the Hague Convention, but Taiwan 23 is not. (Id.) Without further proof of the country of residency for the individual 24 Defendants, the Court cannot accommodate Plaintiff’s request to serve via Twitter. The 25 Court can only speculate as to whether service by Twitter is prohibited by international 26 agreement as the country of residency cannot be identified. Moreover, in each case where 27 a court approved service via social media, the district court knew the country of residency 28 of the person to be served or—where uncertain—was presented with only one potential || country of residency. See, e.g., WhosHere, Inc., 2014 WL 670817, at *3 (explaining that □□ the defendant was allegedly residing in Turkey); PCCare247 Inc., 2013 WL 841037, at *1 3|| (noting that all individual defendants resided in India); St. Francis Assisi, 2016 WL 4}| 5725002, at *1 (explaining that the defendant was a Kuwait national whose current location || was unknown). Unlike those cases, here, Defendants are alleged to be Chinese nationals 6 || with potential residences in a number of countries, including Taiwan, Singapore, Malta, or 7|| the United States—to name a few. (See Doc. 24 at 2, 9; Doc. 24-1 at 6-7.) Plaintiff has 8 || not presented the Court with enough information to determine the country in which 9|| Defendants reside or, by extension, determine if service via Twitter would violate 10 || international law. 11 Accordingly, the Court must deny Plaintiff's request. IV. CONCLUSION 13 Accordingly, 14 IT IS ORDERED denying Plaintiff's Motion for Alternative Service. (Doc. 24.) 15 Dated this 13th day of December, 2021. 16 17 a . ~P 18 SO 19 Gnvted States District ude. 20 21 22 23 24 25 26 27 28 -4-