Federal Judge Dismisses Counterclaim in Crypto Investment Dispute

News | May 22, 2024 By:

On Wednesday, May 8, 2024, the United States District Court for the Southern District of New York dismissed a counterclaim for breach of fiduciary duty in the case of Jobanputra v. Kim.

The case originated in 2021 when Jalak Jobanputra filed a lawsuit against Yoon Kim and his company Mochi Capital, alleging that they failed to provide her share of profits from joint cryptocurrency investments the two had engaged in since 2017. Jobanputra, an investor with over 20 years experience in venture capital and blockchain technologies, claimed she and Kim had orally agreed to work together, with Jobanputra providing her expertise in identifying viable cryptocurrency projects while Kim funded the investments. Profits were to be split 80% for Kim and 20% for Jobanputra.

In response, Kim filed counterclaims alleging that in 2019, the parties had agreed to expand their work into a new joint venture called FP Capital to launch a cryptocurrency investment fund and seek outside investors. Kim claimed the two were joint venturers in FP Capital, and equally shared management control and responsibility for seeking investors and developing strategies. He argued Jobanputra breached her fiduciary duties related to this alleged joint venture.

However, in an August 2023 opinion, Judge Edgardo Ramos dismissed Kim’s original counterclaims, finding he had not sufficiently alleged two key elements necessary to establish a joint venture – that the parties jointly managed FP Capital and that they agreed to share any losses from the fund, beyond just profits. The judge granted Kim leave to amend.

In September 2023, Kim filed amended counterclaims alleging breach of fiduciary duty. He added allegations that both parties were required to consult and agree on important decisions and investments for FP Capital. Kim also directly alleged for the first time that the parties agreed to equally split any profits or losses from the fund.

However, in Wednesday’s opinion, Judge Ramos again dismissed Kim’s counterclaim, finding the amendments still failed to sufficiently demonstrate the parties entered into a joint venture. The judge noted Kim’s new allegation of agreed profit and loss sharing was conclusory without further details. Even allegations that Jobanputra refused to pay expenses, and that profit/loss sharing provisions in separate related entities were consistent with the alleged FP Capital agreement, were not enough.

Since Kim had already twice amended his counterclaims, Judge Ramos denied any further leave to amend. This has the effect of dismissing Kim’s breach of fiduciary duty counterclaim with prejudice.

The dismissal leaves Jobanputra’s original claims against Kim for allegedly withholding her share of profits from their initial cryptocurrency investments still pending.

Please contact BlockTribune for access to a copy of this filing.