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Plaintiff in ICX Cryptocurrency Ownership Dispute Asks for Stay Pending Resolution of Criminal Charges

A finger browsing cryptocurrency prices on a smartphone app.

New york, USA - July 25, 2018: Man checking cryptocarrencies exchange to dollar rate on smartphone display.

Mark Shin, Colorado man fighting with ICON Foundation, a blockchain company and creator of the ICX token, has asked the San Francisco, Calif. court overseeing his civil case to pause proceedings until the state criminal case pending against him resolves. The California case, in which Shin and ICON are cross-claimants, involves “emerging technologies and issues of first impression regarding a large quantity of crypto-assets minted.”

As previously reported, Shin created more than 13 million ICX tokens, then valued at nearly $9 million, by taking advantage of an unintentional error in ICON’s protocols, then prompting ICON to freeze his assets. Shin sued to regain possession of his frozen tokens, while according to last week’s motion to stay, ICON repeatedly threatened to report Shin to law enforcement unless he returned all the assets and accepted ICON’s proposed $200,000 pay out.

In the last nine months, the civil court issued two mixed rulings concerning ICON and Shin’s motions to dismiss, allowing some of both parties’ claims to proceed.

Now, Shin asserts that he is in the unenviable position of “pursuing his own civil lawsuit case against ICON, or risking the use of any of his statements against him in a Colorado criminal trial.” The filing explains that although after nine months of investigation by federal authorities, the acting United States Attorney for the District of Colorado refused to file suit against Shin.

However, a Federal Bureau of Investigation agent on the case, allegedly not wanting to lose months of work, “fed” it to the Arapahoe County District Attorney’s Office. The local authority then indicted Shin for theft after conducting no independent investigation and proceeding on what Shin describes as a “nonsensical” theory that he stole the ICX from “ICON Nation,” meaning every person who held their own ICX at the time of the software bug.

Shin’s motion says that a stay is necessary to protect his Fifth Amendment rights during the pendency of the criminal matter. He argues that ICON cannot complain of prejudice because it pushed for the criminal investigation in the first place. “ICON’s calculated decision to goad prosecutors into indicting him, which has now been fully revealed by emails produced by ICON in discovery, has made it impossible for Shin to properly prosecute this action and defend himself from ICON’s counterclaims,” the filing contends.df

In addition, Shin says there is no question of factual overlap between the two cases and accordingly, the endangerment of his constitutional rights as a criminal defendant. “Essentially, ICON’s civil counterclaim seeks to prove the same thing as the Colorado prosecutors—that Shin’s ICX were somehow the property of someone else who owned the ICX before they appeared in his wallet—and thus continued discovery will necessarily implicate Shin’s fifth amendment rights.”

A hearing on the matter is scheduled for March 23 before Judge William H. Orrick.

Shin is represented by Roche Freedman LLP and ICON by Manatt Phelps and Phillips and Morrison Cohen.

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