KuCoin Operator Moves to Dismiss Texas Lawsuit Over Crypto Dispute
On Friday, April 25, 2025, Flashdot Limited, Chun Gan, Peken Global Limited, and Ke Tang filed a motion in the US District Court for the Southern District of Texas to dismiss a lawsuit brought by plaintiff William Devitt. The motion, filed under Federal Rules of Civil Procedure 12(b)(2) and 12(b)(6), seeks to dismiss Devitt’s First Amended Complaint, citing lack of personal jurisdiction and failure to state a claim. The case also involves defendants PhoenixFin Private Limited and Mek Global Limited, though these entities were dissolved prior to the lawsuit’s commencement.
Devitt, a Texas resident, alleges that he lost access to his cryptocurrency account on KuCoin, a platform operated by the defendants, following a hack or phishing scam in August 2022. According to the complaint, Devitt created a KuCoin account in March 2022 and deposited 21.259 Bitcoin into a wallet associated with the platform. He claims that at least 13.495 Bitcoin remained in the account when he lost access. Devitt asserts that KuCoin froze his account at his request but failed to restore access due to his inability to provide additional identity verification information.
The lawsuit accuses the defendants of withholding his funds and includes claims under the Racketeer Influenced and Corrupt Organizations Act (RICO), the Texas Deceptive Trade Practices Act (DTPA), the Texas Theft Liability Act (TTLA), and allegations of fraud, breach of contract, negligence, conversion, and unjust enrichment.
The defendants’ motion argues that the court lacks personal jurisdiction over them, as they are foreign entities and individuals with minimal ties to the United States or Texas. Flashdot Limited is incorporated in the Cayman Islands, while Peken Global Limited is based in the Seychelles. Chun Gan and Ke Tang, non-U.S. citizens, are described as founders and majority stakeholders in Flashdot Limited, which owns Peken Global Limited, the operator of KuCoin.
The motion contends that Devitt’s allegations do not demonstrate that the defendants are “at home” in the U.S. or Texas, nor do they show specific activities in Texas related to the dispute. It further argues that Devitt’s attempt to establish nationwide jurisdiction under RICO fails because the RICO claim itself is inadequately pleaded.
On the merits, the motion asserts that Devitt’s claims are deficient. It argues that the RICO claim lacks evidence of causation, a cognizable enterprise, or a conspiracy, and that the allegations rely on a separate U.S. government enforcement action against KuCoin for unrelated issues. The DTPA claim is challenged as time-barred and lacking specificity, failing to establish Devitt as a consumer or connect alleged deceptive acts to a purchase. The fraud claim is criticized for not identifying specific misrepresentations or fraudulent intent.
The TTLA claim is said to lack evidence of intent to deprive Devitt of his property, and the breach of contract claim is deemed vague for not specifying the violated terms. Additionally, the motion argues that negligence, conversion, and unjust enrichment claims are barred by a two-year statute of limitations and the economic loss rule, as they stem from a contractual relationship governed by KuCoin’s User Agreement.
The defendants also note that the dispute may be subject to arbitration, referencing a clause in KuCoin’s updated User Agreement from June 2022. They indicate a forthcoming motion to compel arbitration, arguing that Devitt assented to the updated terms, which cover claims related to the agreement.
Please contact BlockTribune for access to a copy of this filing.
