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YORK\n-----------------------------------------------------------------X\nBIN LI, individually and on behalf of all others\nsimilarly situated,\n\n Plaintiff,\n -against- 23 CIVIL 3346 (GHW)\n\n JUDGMENT\nEQONEX LIMITED, BINANCE GROUP,\nBIFINITY UAB, JONATHAN FARNELL,\nDANIEL LING, ALMIRA CEMMELL, YU\nHELEN HAI, ZHAO CHANGPENG,\n\n Defendants.\n-----------------------------------------------------------------X\n\n It is hereby ORDERED, ADJUDGED AND DECREED: That for the reasons\n\nstated in the Court's Order dated October 22, 2024, Plaintiffs\u2019 claims are dismissed with\n\nprejudice. Judgement is hereby entered in favor of the Defendants and the case is closed.\n\n\nDated: New York, New York\n\n October 22, 2024\n\n\n DANIEL ORTIZ\n _________________________\n Acting Clerk of Court\n\n BY:\n _________________________\n _______________________\n _ ___\n Deputy\n D eputy Clerk\n\f","ocr_status":2,"date_upload":"2024-10-23T02:42:00.509764-07:00","document_number":"55","attachment_number":null,"pacer_doc_id":"127036364393","is_available":true,"is_free_on_pacer":true,"is_sealed":null,"document_type":1,"description":"Judgment - Clerk","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/483517238/","id":483517238,"tags":[],"absolute_url":"/docket/67233991/55/1/zhao-v-eqonex-limited/","date_created":"2026-06-22T06:15:36.491275-07:00","date_modified":"2026-06-23T06:21:19.864757-07:00","sha1":"700c5ae6da9f9b6cdd1cb2d1a44afea2e235a4e6","page_count":10,"file_size":591815,"filepath_local":"recap/gov.uscourts.nysd.597576/gov.uscourts.nysd.597576.55.1.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.597576/gov.uscourts.nysd.597576.55.1.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":" Case 1:23-cv-03346-GHW Document 55-1 Filed 10/22/24 Page 1 of 10\n\n United States District Court\n Southern District of New York\n\n\n\nDaniel Ortiz\nActing Clerk of Court\n\nDear Litigant:\n\nEnclosed is a copy of the judgment entered in your case. If you disagree with a judgment or\nfinal order of the district court, you may appeal to the United States Court of Appeals for\nthe Second Circuit. To start this process, file a \u201cNotice of Appeal\u201d with this Court\u2019s Pro Se\nIntake Unit.\n\nYou must file your notice of appeal in this Court within 30 days after the judgment or order\nthat you wish to appeal is entered on the Court\u2019s docket, or, if the United States or its officer\nor agency is a party, within 60 days after entry of the judgment or order. If you are unable\nto file your notice of appeal within the required time, you may make a motion for extension\nof time, but you must do so within 60 days from the date of entry of the judgment, or\nwithin 90 days if the United States or its officer or agency is a party, and you must show\nexcusable neglect or good cause for your inability to file the notice of appeal by the\ndeadline.\n\nPlease note that the notice of appeal is a one-page document containing your name, a\ndescription of the final order or judgment (or part thereof) being appealed, and the name of\nthe court to which the appeal is taken (the Second Circuit) \u2013 it does not include your reasons\nor grounds for the appeal. Once your appeal is processed by the district court, your notice\nof appeal will be sent to the Court of Appeals and a Court of Appeals docket number will\nbe assigned to your case. At that point, all further questions regarding your appeal must be\ndirected to that court.\n\nThe filing fee for a notice of appeal is $605 payable in cash, by bank check, certified check,\nor money order, to \u201cClerk of Court, S.D.N.Y.\u201d No personal checks are accepted. Please see\nDistrict Court fee schedule at https://www.nysd.uscourts.gov/programs/fees. If you are\nunable to pay the $605 filing fee, complete the \u201cMotion to Proceed in Forma Pauperis on\nAppeal\u201d form and submit it with your notice of appeal to the Pro Se Intake Unit. If the\ndistrict court denies your motion to proceed in forma pauperis on appeal, or has certified\nunder 28 U.S.C. ' 1915(a)(3) that an appeal would not be taken in good faith, you may file a\nmotion in the Court of Appeals for leave to appeal in forma pauperis, but you must do so\nwithin 30 days after service of the district court order that stated that you could not\nproceed in forma pauperis on appeal.\n\nFor additional issues regarding the time for filing a notice of appeal, see Federal Rule of\nAppellate Procedure 4(a). There are many other steps to beginning and proceeding with\nyour appeal, but they are governed by the rules of the Second Circuit Court of Appeals and\nthe Federal Rules of Appellate Procedure. For more information, visit the Second Circuit\nCourt of Appeals website at http://www.ca2.uscourts.gov/.\n THE DANIEL PATRICK MOYNIHAN THE CHARLES L. BRIEANT, JR.\n UNITED STATES COURTHOUSE UNITED STATES COURTHOUSE\n 500 PEARL STREET 300 QUARROPAS STREET\n NEW YORK, NY 10007-1312 WHITE PLAINS, NY 10601-4150\nRev. 5/23/14\n\f Case 1:23-cv-03346-GHW Document 55-1 Filed 10/22/24 Page 2 of 10\n\n\n\n\n U NITED S TATES D ISTRICT C OURT\n S OUTHERN D ISTRICT OF N EW Y ORK\n\n\n\n(List the full name(s) of the plaintiff(s)/petitioner(s).) _____CV________ ( )( )\n -against-\n NOTICE OF APPEAL\n\n\n\n\n(List the full name(s) of the defendant(s)/respondent(s).)\n\n\n\nNotice is hereby given that the following parties:\n\n\n(list the names of all parties who are filing an appeal)\n\n\nin the above-named case appeal to the United States Court of Appeals for the Second Circuit\n\nfrom the \uf0a8 judgment \uf0a8 order entered on:\n (date that judgment or order was entered on docket)\nthat:\n\n\n\n(If the appeal is from an order, provide a brief description above of the decision in the order.)\n\n\n\n *\n Dated Signature\n\n\n\n Name (Last, First, MI)\n\n\n\n Address City State Zip Code\n\n\n\n Telephone Number E-mail Address (if available)\n\n\n\n\n*\n Each party filing the appeal must date and sign the Notice of Appeal and provide his or her mailing address and telephone\nnumber, EXCEPT that a signer of a pro se notice of appeal may sign for his or her spouse and minor children if they are parties\nto the case. Fed. R. App. P. 3(c)(2). Attach additional sheets of paper as necessary.\nRev. 12/23/13\n\f Case 1:23-cv-03346-GHW Document 55-1 Filed 10/22/24 Page 3 of 10\n\n\n\n U NITED S TATES D ISTRICT C OURT\n S OUTHERN D ISTRICT OF N EW Y ORK\n\n\n\n _____CV________ ( )( )\n(List the full name(s) of the plaintiff(s)/petitioner(s).)\n\n -against- MOTION FOR EXTENSION\n OF TIME TO FILE NOTICE\n OF APPEAL\n\n\n(List the full name(s) of the defendant(s)/respondent(s).)\n\n\n\n\nI move under Rule 4(a)(5) of the Federal Rules of Appellate Procedure for an extension of time\n\nto file a notice of appeal in this action. I would like to appeal the judgment\n\nentered in this action on but did not file a notice of appeal within the required\n date\ntime period because:\n\n\n\n\n(Explain here the excusable neglect or good cause that led to your failure to file a timely notice of appeal.)\n\n\n\n\nDated: Signature\n\n\n\nName (Last, First, MI)\n\n\n\nAddress City State Zip Code\n\n\n\nTelephone Number E-mail Address (if available)\n\n\n\n\nRev. 3/27/15\n\f Case 1:23-cv-03346-GHW Document 55-1 Filed 10/22/24 Page 4 of 10\n\n\n\n\n U NITED S TATES D ISTRICT C OURT\n S OUTHERN D ISTRICT OF N EW Y ORK\n\n\n\n _____CV_________ ( )( )\n(List the full name(s) of the plaintiff(s)/petitioner(s).)\n\n -against- MOTION FOR LEAVE TO\n PROCEED IN FORMA\n PAUPERIS ON APPEAL\n\n\n(List the full name(s) of the defendant(s)/respondent(s).)\n\n\n\nI move under Federal Rule of Appellate Procedure 24(a)(1) for leave to proceed in forma\n\npauperis on appeal. This motion is supported by the attached affidavit.\n\n\n\n\nDated Signature\n\n\n\nName (Last, First, MI)\n\n\n\nAddress City State Zip Code\n\n\n\nTelephone Number E-mail Address (if available)\n\n\n\n\nRev. 12/23/13\n\f Case 1:23-cv-03346-GHW Document 55-1 Filed 10/22/24 Page 5 of 10\n\n\n\n Application to Appeal In Forma Pauperis\n\n\n\n______________________v. ______________________ Appeal No. __________________\n\n District Court or Agency No. _________________\n\n\nAffidavit in Support of Motion Instructions\n\nI swear or affirm under penalty of perjury that, Complete all questions in this application and then\nbecause of my poverty, I cannot prepay the docket sign it. Do not leave any blanks: if the answer to a\nfees of my appeal or post a bond for them. I believe question is \"0,\" \"none,\" or \"not applicable (N/A),\"\nI am entitled to redress. I swear or affirm under write that response. If you need more space to answer\npenalty of perjury under United States laws that my a question or to explain your answer, attach a separate\nanswers on this form are true and correct. (28 sheet of paper identified with your name, your case's\nU.S.C. \u00a7 1746; 18 U.S.C. \u00a7 1621.) docket number, and the question number.\n\n\n Signed: _____________________________ Date: _____________________________\n\n\nMy issues on appeal are: (required):\n\n\n\n\n1. For both you and your spouse estimate the average amount of money received from each\n of the following sources during the past 12 months. Adjust any amount that was received\n weekly, biweekly, quarterly, semiannually, or annually to show the monthly rate. Use\n gross amounts, that is, amounts before any deductions for taxes or otherwise.\n\n Income source Average monthly Amount expected next\n amount during the past month\n 12 months\n You Spouse You Spouse\n Employment $ $ $ $\n Self-employment $ $ $ $\n Income from real property (such as $ $ $ $\n rental income)\n\n\n -1-\n12/01/2013 SCC\n\f Case 1:23-cv-03346-GHW Document 55-1 Filed 10/22/24 Page 6 of 10\n\n\n\n Interest and dividends $ $ $ $\n Gifts $ $ $ $\n Alimony $ $ $ $\n Child support $ $ $ $\n Retirement (such as social security, $ $ $ $\n pensions, annuities, insurance)\n Disability (such as social security, $ $ $ $\n insurance payments)\n Unemployment payments $ $ $ $\n Public-assistance (such as welfare) $ $ $ $\n Other (specify): $ $ $ $\n\n\n Total monthly income: $0 $0 $0 $0\n\n\n\n2. List your employment history for the past two years, most recent employer first. (Gross\n monthly pay is before taxes or other deductions.)\n\n Employer Address Dates of Gross\n employment monthly pay\n $\n $\n $\n\n3. List your spouse's employment history for the past two years, most recent employer first.\n (Gross monthly pay is before taxes or other deductions.)\n\n Employer Address Dates of Gross\n employment monthly pay\n $\n $\n $\n\n\n\n -2-\n\f Case 1:23-cv-03346-GHW Document 55-1 Filed 10/22/24 Page 7 of 10\n\n\n\n\n4. How much cash do you and your spouse have? $________\n\n Below, state any money you or your spouse have in bank accounts or in any other\n financial institution.\n\n Financial Institution Type of Account Amount you have Amount your\n spouse has\n $ $\n $ $\n $ $\n\nIf you are a prisoner seeking to appeal a judgment in a civil action or proceeding, you must\nattach a statement certified by the appropriate institutional officer showing all receipts,\nexpenditures, and balances during the last six months in your institutional accounts. If you\nhave multiple accounts, perhaps because you have been in multiple institutions, attach one\ncertified statement of each account.\n\n\n5. List the assets, and their values, which you own or your spouse owns. Do not list clothing\n and ordinary household furnishings.\n\n Home Other real estate Motor vehicle #1\n (Value) $ (Value) $ (Value) $\n Make and year:\n Model:\n Registration #:\n\n\n Motor vehicle #2 Other assets Other assets\n (Value) $ (Value) $ (Value) $\n Make and year:\n Model:\n Registration #:\n\n\n\n\n -3-\n\f Case 1:23-cv-03346-GHW Document 55-1 Filed 10/22/24 Page 8 of 10\n\n\n\n\n6. State every person, business, or organization owing you or your spouse money, and the\n amount owed.\n\n Person owing you or your spouse Amount owed to you Amount owed to your\n money spouse\n $ $\n $ $\n $ $\n $ $\n\n\n7. State the persons who rely on you or your spouse for support.\n\n Name [or, if a minor (i.e., underage), initials only] Relationship Age\n\n\n\n\n8. Estimate the average monthly expenses of you and your family. Show separately the\n amounts paid by your spouse. Adjust any payments that are made weekly, biweekly,\n quarterly, semiannually, or annually to show the monthly rate.\n\n You Your Spouse\n Rent or home-mortgage payment (including lot rented for $ $\n mobile home)\n Are real estate taxes included? [ ] Yes [ ] No\n Is property insurance included? [ ] Yes [ ] No\n Utilities (electricity, heating fuel, water, sewer, and telephone) $ $\n Home maintenance (repairs and upkeep) $ $\n Food $ $\n Clothing $ $\n Laundry and dry-cleaning $ $\n Medical and dental expenses $ $\n\n\n -4-\n\f Case 1:23-cv-03346-GHW Document 55-1 Filed 10/22/24 Page 9 of 10\n\n\n\n Transportation (not including motor vehicle payments) $ $\n Recreation, entertainment, newspapers, magazines, etc. $ $\n Insurance (not deducted from wages or included in mortgage payments)\n Homeowner's or renter's: $ $\n Life: $ $\n Health: $ $\n Motor vehicle: $ $\n Other: $ $\n Taxes (not deducted from wages or included in mortgage $ $\n payments) (specify):\n Installment payments\n Motor Vehicle: $ $\n Credit card (name): $ $\n Department store (name): $ $\n Other: $ $\n Alimony, maintenance, and support paid to others $ $\n Regular expenses for operation of business, profession, or $ $\n farm (attach detailed statement)\n Other (specify): $ $\n Total monthly expenses: $0 $0\n\n\n9. Do you expect any major changes to your monthly income or expenses or in your assets\n or liabilities during the next 12 months?\n\n [ ] Yes [ ] No If yes, describe on an attached sheet.\n\n\n10. Have you spent \u2014 or will you be spending \u2014any money for expenses or attorney fees in\n connection with this lawsuit? [ ] Yes [ ] No\n\n If yes, how much? $ ____________\n\n\n\n\n -5-\n\f Case 1:23-cv-03346-GHW Document 55-1 Filed 10/22/24 Page 10 of 10\n\n\n\n11. Provide any other information that will help explain why you cannot pay the docket fees\n for your appeal.\n\n\n\n\n12. Identify the city and state of your legal residence.\n\n City __________________________ State ______________\n\n Your daytime phone number: ___________________\n\n Your age: ________ Your years of schooling: ________\n\n Last four digits of your social-security number: _______\n\n\n\n\n Print Save Reset Form\n\n\n\n\n -6-\n\f","ocr_status":2,"date_upload":"2026-06-22T06:16:16.555138-07:00","document_number":"55","attachment_number":1,"pacer_doc_id":"127036364394","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Notice of right to appeal","acms_document_guid":""}],"date_created":"2024-10-22T14:17:11.604465-07:00","date_modified":"2025-01-09T03:52:15.048718-08:00","date_filed":"2024-10-22","time_filed":"16:56:10","entry_number":55,"recap_sequence_number":"2024-10-22.002","pacer_sequence_number":204,"description":"CLERK'S JUDGMENT re: 54 Order. It is hereby ORDERED, ADJUDGED AND DECREED: That for the reasons stated in the Court's Order dated October 22, 2024, Plaintiffs' claims are dismissed with prejudice. Judgement is hereby entered in favor of the Defendants and the case is closed. (Signed by Acting Clerk of Court Daniel Ortiz on 10/22/2024) (Attachments: # 1 Notice of right to appeal) (nd) (Entered: 10/22/2024)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/405888603/","id":405888603,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67233991/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/416993783/","id":416993783,"tags":[],"absolute_url":"/docket/67233991/54/zhao-v-eqonex-limited/","date_created":"2024-10-22T13:03:56.598555-07:00","date_modified":"2025-01-09T03:52:15.035552-08:00","sha1":"a1b4aa8bcf7907d358e4326dc7a0d06a1cf03998","page_count":1,"file_size":132371,"filepath_local":"recap/gov.uscourts.nysd.597576/gov.uscourts.nysd.597576.54.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.597576/gov.uscourts.nysd.597576.54.0.pdf","ia_upload_failure_count":null,"thumbnail":"recap-thumbnails/gov.uscourts.nysd.597576/416993783.thumb.1068.png","thumbnail_status":1,"plain_text":" Case 1:23-cv-03346-GHW Document 54 Filed 10/22/24 Page 1 of 1\n DRAFT \u2013 August 29, 2024\n USDC SDNY\n DOCUMENT\n ELECTRONICALLY FILED\n UNITED STATES DISTRICT COURT\n DOC #: _________________\n SOUTHERN DISTRICT OF NEW YORK\n DATE FILED: 10/22/2024\n ----------------------------------------------------------------- X\n :\n BIN LI, individually and on behalf of all others similarly :\n situated, :\n : 1:23-cv-03346-GHW\n Plaintiff, :\n : ORDER\n -v - :\n :\n EQONEX LIMITED, BINANCE GROUP, :\n BIFINITY UAB, JONATHAN FARNELL, :\n DANIEL LING, ALMIRA CEMMELL, YU :\n HELEN HAI, ZHAO CHANGPENG, :\n :\n Defendants. :\n :\n------------------------------------------------------------------ X\n GREGORY H. WOODS, United States District Judge:\n\n On September 18, 2024, the Court granted Defendants\u2019 motion to dismiss and granted\n\n Plaintiffs leave to file a second amended complaint solely to cure the deficiencies identified in the\n\n opinion no later than 30 days from the date of the order. Dkt. No. 52. On October 21, 2024,\n\n Plaintiffs informed the Court that Plaintiffs do not intend to file a Second Amended Complaint.\n\n Therefore, Plaintiffs\u2019 claims are dismissed with prejudice. The Clerk of Court is directed to enter\n\n judgment for Defendants, to terminate all pending motions, and to close this case.\n\n SO ORDERED.\n\n Dated: October 22, 2024\n __________________________________\n GREGORY H. WOODS\n United States District Judge\n\f","ocr_status":2,"date_upload":"2024-10-23T02:42:00.313128-07:00","document_number":"54","attachment_number":null,"pacer_doc_id":"127036362809","is_available":true,"is_free_on_pacer":true,"is_sealed":null,"document_type":1,"description":"Order of Dismissal","acms_document_guid":""}],"date_created":"2024-10-22T13:03:56.587792-07:00","date_modified":"2025-01-09T03:52:15.022830-08:00","date_filed":"2024-10-22","time_filed":"14:59:36","entry_number":54,"recap_sequence_number":"2024-10-22.001","pacer_sequence_number":202,"description":"ORDER: On September 18, 2024, the Court granted Defendants' motion to dismiss and granted Plaintiffs leave to file a second amended complaint solely to cure the deficiencies identified in the opinion no later than 30 days from the date of the order. Dkt. No. 52. On October 21, 2024, Plaintiffs informed the Court that Plaintiffs do not intend to file a Second Amended Complaint. Therefore, Plaintiffs' claims are dismissed with prejudice. The Clerk of Court is directed to enter judgment for Defendants, to terminate all pending motions, and to close this case. SO ORDERED. (Signed by Judge Gregory H. Woods on 10/22/2024) (sgz) Transmission to Orders and Judgments Clerk for processing. (Entered: 10/22/2024)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/405714148/","id":405714148,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67233991/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/416751277/","id":416751277,"tags":[],"absolute_url":"/docket/67233991/53/zhao-v-eqonex-limited/","date_created":"2024-10-21T08:21:58.326456-07:00","date_modified":"2025-01-09T03:52:15.009087-08:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"53","attachment_number":null,"pacer_doc_id":"127036351489","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Notice (Other)","acms_document_guid":""}],"date_created":"2024-10-21T08:21:58.309638-07:00","date_modified":"2025-01-09T03:52:14.997925-08:00","date_filed":"2024-10-21","time_filed":"10:45:20","entry_number":53,"recap_sequence_number":"2024-10-21.001","pacer_sequence_number":200,"description":"NOTICE of Intent Not to File a Second Amended Complaint. Document filed by Kreig Kinnaman, Jaime Chaves, Bin Li..(Goldberg, Jacob) (Entered: 10/21/2024)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/403834164/","id":403834164,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67233991/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/419612818/","id":419612818,"tags":[],"absolute_url":"/docket/67233991/45/zhao-v-eqonex-limited/","date_created":"2024-11-11T21:50:49.296971-08:00","date_modified":"2025-01-09T03:52:14.799720-08:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"45","attachment_number":null,"pacer_doc_id":"","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"","acms_document_guid":""}],"date_created":"2024-10-01T05:41:30.839694-07:00","date_modified":"2025-01-09T03:52:14.791656-08:00","date_filed":"2023-12-11","time_filed":null,"entry_number":45,"recap_sequence_number":"2023-12-11.001","pacer_sequence_number":null,"description":"ORDER. Defendants' November 20, 2023 request for leave to file a motion to dismiss, Dkt. No. 42, is granted. The deadline for Defendants to file and serve its motion to dismiss is January 12, 2024. Plaintiff's opposition is due on February 16, 2024; Defendants' reply, if any, is due on March 4, 2024. (HEREBY ORDERED by Judge Gregory H. Woods) (Text Only Order) (wv) (Entered: 12/11/2023)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/403834163/","id":403834163,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67233991/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/419612817/","id":419612817,"tags":[],"absolute_url":"","date_created":"2024-11-11T21:50:49.265041-08:00","date_modified":"2025-01-09T03:52:14.783467-08:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"","attachment_number":null,"pacer_doc_id":"","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"","acms_document_guid":""}],"date_created":"2024-10-01T05:41:30.798583-07:00","date_modified":"2025-01-09T03:52:14.770892-08:00","date_filed":"2023-12-08","time_filed":null,"entry_number":null,"recap_sequence_number":"2023-12-08.001","pacer_sequence_number":null,"description":"Minute Entry for proceedings held before Judge Gregory H. Woods: Telephone Conference held on 12/8/2023. (Court Reporter present) (wv)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/402817025/","id":402817025,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67233991/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/412752682/","id":412752682,"tags":[],"absolute_url":"/docket/67233991/52/zhao-v-eqonex-limited/","date_created":"2024-09-19T15:08:48.754515-07:00","date_modified":"2025-01-09T03:52:14.969337-08:00","sha1":"76be18b87e0cfd4765d13953251f9efd83d9c830","page_count":40,"file_size":5749367,"filepath_local":"recap/gov.uscourts.nysd.597576/gov.uscourts.nysd.597576.52.0.pdf","filepath_ia":"","ia_upload_failure_count":3,"thumbnail":null,"thumbnail_status":0,"plain_text":" Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 1 of 40\n\n U S D C S D DN RY A F T \u2013 A u g ust 2 9, 2 0 2 4\n D OC U ME NT\n E L E C T R O NI C A L L Y FI L E D\n U NI T E D S T A T E S DI S T RI C T C O U R T\n D O C #: _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _\n S O U T H E R N DI S T RI C T O F N E W Y O R K\n D A T E FI L E D: 9 / 1 8 / 2 0 2 4\n ----------------------------------------------------------------- X\n :\n BI N LI, i n divi d u ally a n d o n be h alf of all ot hers si mil arly :\n sit u ate d, :\n : 1: 2 3 -c v -0 3 3 4 6 -G H W\n Pl ai ntiff, :\n : M E M O R A N D U M O PI NI O N &\n -v - : OR DER\n :\n E Q O N E X LI MI T E D, BI N A N C E G R O U P, :\n BI FI NI T Y U A B, J O N A T H A N F A R N E L L, :\n D A NI E L LI N G, A L MI R A C E M M E L L, Y U :\n H E L E N H AI, Z H A O C H A N G P E N G , :\n :\n D ef e n d a nt s. :\n :\n------------------------------------------------------------------ X\n G R E G O R Y H. W O O D S, U nit e d St at es Distri ct J u d g e:\n\n I. I N T R O D U C TI O N\n\n I n M ar c h 2 0 22, E q o n e x Li mit e d ( \u201c E q o n e x \u201d) , a Si n ga p or e- d o mi cil e d di gital ass ets fi n a nci al\n\n c o m p a n y, e nt er e d i nt o a strat e gi c p art n ers hi p wit h Bifi nit y U A B ( \u201c Bifi nit y \u201d), a p a y m e nts t e ch n ol o g y\n\n c o m p a n y. T h e t er ms of t h e strat e gi c p art n ers hi p ga v e B ifi nit y si g nifi ca nt i nfl u e n c e o v er E q o n e x\u2019s\n\n o p er ati o ns. W h e n a n n o u n ci n g t h e strat e gi c p a rt n ershi p, E q o n e x als o a n n o u n c e d t h at t h e t w o\n\n c o m p a ni es w o ul d c o nti n u e dis c ussi n g a p ot e nti a l m er g er. Fi v e m o nt hs aft er th e strat e gi c\n\n p art n ers hi p b e g a n, E q o n e x d e ci d e d t o cl os e its virt u al c urr e n ci es e x c h a n g e \u2014 its pri m ar y s o ur c e of\n\n r e v e n u e\u2014 a n d Bifi nit y t o o k f ull o w n ers hi p of E q o n e x\u2019s di g it al ass et c ust o di a n b usi n ess . T hr e e\n\n m o nt hs l at er, E q o n e x f o un d its elf u n a bl e t o r e pa y its l o an t o Bifi nit y a n d t ol d i n v est ors it h a d\n\n d o u bts a b o ut t h e c o m p a n y\u2019s a bilit y t o c o nti n u e as a g oi n g c o n c er n. E q o n e x\u2019s st o c k pri c e c oll a ps e d\n\n s h ortl y t h er e aft er.\n\n Pl ai ntiffs br o u g ht t his s e c uriti es cl ass a cti o n o n b e h alf of t h e ms el v es a n d ot h er si mil arl y\n\n sit u at e d i n v est ors wh o a c q uir e d E q o n e x c o m m o n st o c k. Pl ai ntiffs cl ai m t h at Bifi nit y e nt er e d i nt o\n\n t h e str at e gi c part n ershi p m er el y t o ta k e a d v a nt a g e of E q o n e x \u2019s fi n a nci al har ds hi p a n d a c q uir e\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 2 of 40\n\n\n\nE q o n e x\u2019s U. K. -a p pr o v e d di git al ass et c ust o dia n. As a r es ult, Pl ai ntiffs cl ai m t h at D ef e n d a nts, i n\n\nc o n n e cti o n wit h t his s c h e m e, m a d e f als e a n d misl ea di n g st at e m e nts a b o ut t h eir i nt e nti o ns t o\n\nstr e n gt h e n E q o n e x a n d f a cilit at e a m er g er , i n vi ol ati o n of S e cti o n 1 0( b) a n d S e cti o n 2 0( a) of t h e\n\nS e c uriti es E x c ha n g e A ct of 1 9 3 4 (t h e \u201c E x c ha n g e A ct \u201d) a n d R ul e 1 0 b -5. D ef e n d a nts r es p o n d t h at\n\nPl ai ntiffs h a v e f ail e d t o all e g e wit h parti c ul arit y f a cts s u p p orti n g t h e e xist e n c e of s u c h a s c h e m e or\n\ns u p p orti n g D ef e n d a nts\u2019 s ci e nt er .\n\n D ef e n d a nts m o v e t o dis miss all clai ms p urs ua nt t o F e d. R. Ci v. P. 1 2( b)( 6) a n d 1 2( b)( 2).\n\nB e c a us e Plai ntiff s h a v e n ot a d e q u at el y pl e a d e d t h at a n y D ef e n d a nt pla n n e d f or E q o n e x t o fail at t h e\n\nti m e t h at t h e strat e gi c p art n ers hi p wit h Bifi nit y w as a n n o u n c e d, Pl ai ntiffs ha v e n ot a d e q u at el y\n\npl e a d e d t h at a n y of t h e all e g e dl y misl ea di n g stat e m e nts w er e m a d e wit h s ci e nt er. F or t h at r e as o n,\n\na n d f or t h e ot h er r e as o ns d es cri b e d b el o w, D ef e n da nts\u2019 m oti o n t o dis mis s is G R A N T E D.\n\n II. BACK GR O U N D\n\n A. F a ct s 1\n\n 1. T h e P arti e s\n\n E q o n e x is a Si n ga p or e -d o mi cil e d di gital ass ets fi n a n ci al c o m p a n y .2 D kt . N o. 3 9, A m.\n\nC o m pl. \u00b6 4. E q o n e x off er e d di git al ass et c ust o di a n s er vi c es, ass et m a na g e m e nt s er vi c es, a n d\n\nbr o k er a g e s er vi c es . I d. \u201c E q o n e x\u2019s [ c]ust o d y b usi n ess was c o m p os e d of Di gi va ult, \u201d a s e c ur e di git al\n\n\n1 At t h e m oti o n t o dis miss st a g e, t h e C o urt a c c e pts t h e f oll o wi n g f a cts s et f ort h i n t h e A m e n d e d Cl ass A cti o n C o m pl ai nt\n( \u201c A m e n d e d C o m pl ai nt \u201d), D kt. N o. 3 9. C ert ai n f a cts ar e als o dr a w n fr o m t h e F or m 6 -K d o c u m e nts fil e d wit h t h e S E C\nt hat c o nt ai n t h e st at e m e nts Pl ai ntiffs all e g e t o b e f als e or misl e a di n g a n d t hat f or m t h e b asis f or t his a cti o n. D kt. N os.\n4 8 -6, 4 8 -7. B e c a us e Pl ai ntiffs r ef er e n c e t h es e d o c u m e nt s i n t h e A m e n d e d C o m pl ai nt a n d r el y o n t h es e d o c u m e nts f or\nt h eir cl ai ms, t h e C o urt m a y c o nsi d er t h e f a cts c o nt ai n e d t h er ei n f or d e ci di n g a m oti o n t o dis miss. See A T SI Co m mc \u2019ns,\nI nc. v. S h a ar F u n d, Ltd., 4 9 3 F. 3 d 8 7, 9 8 ( 2 d Cir. 2 0 0 7) (\u201c[ T h e c o urt] m a y c o n si d er a n y writt e n i nstr u m e nt atta c h e d t o t h e\nc o m pl ai nt, st at e m e nts or d o c u m e nts i n c or p or at e d i nt o t h e c o m pl ai nt b y r ef er e n c e, l e g all y r e q uir e d p u bli c dis cl os ur e\nd o c u m e nts fil e d wit h t h e S E C, a n d d o c u m e nts p oss ess e d b y or k n o w n t o t h e pl ai ntiff a n d u p o n w hi c h it r eli e d i n\nbri n gi n g t h e s uit. \u201d); Rot h m a n v. Gregor , 2 2 0 F. 3 d 8 1, 8 8 ( 2 d Cir. 2 0 0 0) (\u201c F or p ur p os es of a m oti o n t o dis miss, w e h a v e\nd e e m e d a c o m pl ai nt t o i n cl u d e a n y writt e n i nstr u m e nt . . . a n d d o c u m e nts t h at t h e pl ai ntiffs eit h er p oss ess e d or k n e w\na b o ut a n d u p o n w hi c h t h e y r eli e d i n bri n gi n g t h e s uit . \u201d).\n2 E q o n e x w as i niti all y n a m e d as a d ef e n d a nt i n t his c as e, b ut Pl ai ntiffs wit h dr e w its cl ai ms a g ai nst E q o n e x i n t h eir\n\nA m e n d e d C o m pl ai nt . See D kt. N o. 3 9. T h er ef or e, t h e C o urt will c o nsi d er all cl ai ms a g ai nst E q o n e x t o h a v e b e e n\ndis miss e d. H o w e v er, Pl ai ntiffs still all e g e t hat E q o n e x w as a \u201c pri m ar y vi ol at or \u201d of S e cti o n 1 0( b) f or p ur p os es of\nPl ai ntiffs\u2019 S e cti o n 2 0( a) cl ai ms a g ai nst t h e r e m ai ni n g d ef e n d a nts. A m. C o m pl. \u00b6 8 2.\n\n 2\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 3 of 40\n\n\n\nass et c ust o dia n. I d. \u00b6 3 8. E q o n e x als o o p er at e d a n e x c h a n g e f or tra di n g virt u al c urr e n ci es a n d t h eir\n\nd eri v ati v es (t h e \u201c E x c h a n g e \u201d) . I d. \u00b6 5. I n c o m e fr o m th e E x c h a n g e m a d e u p 7 9. 9 p er c e nt of\n\nE q o n e x\u2019s r e v e n u es i n t h e fis c al y e ar e n di n g i n M ar c h 2 0 2 2. I d. \u00b6 6 1. E q o n e x w as p u bli cl y list e d o n\n\nt h e N A S D A Q i n O ct o b er 2 0 2 0. I d. \u00b6 3 6.\n\n Bi n a n c e is a l ar g e bl o c k c hai n e c os yst e m a n d cr y pt o c urr e n c y i nfrastr u ct ur e pr o vi d er. I d. \u00b6 2 6.\n\nBi n a n c e o p er at es t h e l ar g est bit c oi n e x c h a n g e i n t h e w orl d b y v ol u m e. I d. \u00b6 4 2. Bifi nit y is a\n\np a y m e nts t e c h n ol o g y c o m p a n y i n c or p or at e d i n t h e R e p u bli c of Lit h u a nia. I d. \u00b6 2 7. Bifi nit y is \u201c a\n\np art of Bi n a n c e as its offi ci al fi at -t o-cr y pt o p a y m e nts pr o vi d er. \u201d I d. Bi n a n c e \u201cla u n c h e d Bifi nit y o n\n\nM ar c h 7, 2 0 2 2, t h e s a m e da y t h at E q o n e x a n n o u n c e d t h e st r at e gi c part n ers hi p wit h Bifi nit y. \u201d I d.\n\n Z h a o C h a n g p e n g is t h e s ol e s h ar e h ol d er of Bifi nit y a n d is t h e c o-f o u n d er a n d C hi ef\n\nE x e c uti v e Offi c er ( \u201c C E O \u201d) of Bi n a n c e. I d. \u00b6 3 2.\n\n J o n at h a n F ar n ell is t h e h ea d of Bi n a n c e f or t h e U. K. a n d is t h e C E O of Bifi nit y. I d. \u00b6 2 8.\n\nF ar n ell b e c a m e E q o n e x\u2019s C E O a n d a m e m b er of E q o n e x\u2019s b o ar d of dir e ct ors o n M ar c h 1 7, 2 0 2 2.\n\nI d.\n\n Y u H el e n H ai \u201cis t h e pr esi d e nt of Bifi nit y as w ell as t h e h e a d of t h e N F T a n d f a n t o k e n\n\npl atf or ms of Bi n a n c e a n d t h e Bi n a n c e C harit y F o u n d ati o n. \u201d I d. \u00b6 3 1. Hai was a p p oi nt e d t o s er v e as\n\na m e m b er of E q o n e x\u2019s b oar d of dir e ct ors o n M ar c h 1 7, 2 0 2 2. I d. S h e r esi g n e d fr o m E q o n e x\u2019s\n\nb o ar d o n A pril 2 8, 2 0 2 2. I d.\n\n D a ni el Li n g \u201cs er v es as Bifi nit y\u2019s Dir e ct or of Str at e g y. \u201d I d. \u00b6 2 9. Li n g b e c a m e E q o n e x\u2019s\n\nC hi ef Fi n a n cial Offi c er ( \u201c C F O \u201d) a n d r e pl a c e d H ai o n E q o n e x\u2019s b oar d of dir e ct ors o n A pril 2 8,\n\n2 0 2 2. I d.\n\n Al mir a C e m m ell b e ca m e E q o n e x\u2019s C hi ef C or p orat e Affairs Offi c er ( \u201c C C A O \u201d) o n M ar c h 3 1,\n\n2 0 2 2. I d. \u00b6 3 0. \u201c Pri or t o t h at r ol e, C e m m ell w as s p e ci al pr oj e cts l e a d f or Bifi nit y. \u201d I d.\n\n\n\n\n 3\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 4 of 40\n\n\n\n 2. R e g ul at i o ns C o n str ai n Bi n a n c e\u2019 s O p er ati o n s i n t h e U nit e d Ki n g d o m\n\n I n M a y 2 0 2 1, E q o n e x\u2019s Di gi v a ult r e c ei v e d a p pr o val fr o m t h e U nit e d Ki n g d o m\u2019s Fi n a n cial\n\nC o n d u ct A ut h orit y ( \u201c F C A \u201d) t o r e gist er as a n a p pr o v e d c ust o dial w all et pr o vi d er i n t h e U. K. I d.\n\n\u00b6 3 8.\n\n Ar o u n d t h e s a m e ti m e Di gi v a ult g ot off t h e gr o u n d i n t h e U. K., r e g ul at ors li mit e d Bi n a n c e\u2019s\n\na c c ess t o t h e mar k et. O n J u n e 2 6, 2 0 2 1, t h e F C A or d er e d Bi n a n c e t o st o p all r e g ul at e d a cti vit y i n\n\nt h e U. K., citi n g c o n c er ns a b o ut c o ns u m er pr ot e cti o n, fra u d, a n d m o n e y l a u n d eri n g. I d. \u00b6 4 5. As a\n\nr es ult, \u201c[s] o m e of t h e U. K.\u2019s l ar g est b a n ks, i n cl u di n g S a nt a n d er a n d B ar cl a ys . . . b arr [ e d] c ust o m ers\n\nfr o m s e n di n g m o n e y t o t h e Bi n a n c e e x c h a n g e.\u201d I d. I n r es p o ns e, Bi n a n c e p urs u e d a c c ess t o t h e\n\nU. K. m ar k et t hr o u g h a p art n ers hi p wit h a n F C A -a p pr o v e d p a y m e nts pr o vi d er, P a ys af e, i n F e br u ar y\n\n2 0 2 2. I d. \u00b6 6 6. T h e F C A r eit er at e d its c o n c er ns a b o ut Bi n a n c e b ut ha d li mit e d p o w ers t o o bj e ct t o\n\nt h e P a ys af e arra n g e m e nt. I d.\n\n \u201cI n A u g ust 2 0 2 2, t h e F C A a n n o u n c e d t h at as of A u g ust 1 1, [ 2 0 2 2],\u201d it w o ul d \u201c e x p a n d [] its\n\nc h a n g e i n c o ntr ol r e gi m e t o i n cl u d e F C A -r e gist er e d cr y pt o ass et b usi n ess es.\u201d Id. \u00b6 5 7. Aft er A u g ust\n\n1 1, 2 0 2 2, \u201ca p ers o n or e ntit y wis hi n g t o a c q uir e \u2018c o ntr ol \u2019 of a F C A -r e gist er e d cr y pt o ass et b usi n ess,\n\ndir e ctl y or i n dir e ctl y, w o ul d h a v e t o r e c ei v e pri or F C A a p pr o v al. \u201d I d. \u201c A \u2018 c o ntr oll er\u2019 w o ul d m e a n a\n\np ers o n or e ntit y w h o o w ns m or e t h a n 2 5 % of t h e s h ar es or v oti n g ri g hts i n t h e cr y pt o b usi n ess. \u201d I d.\n\nT his c ha n g e ha d b e e n a nti ci p at e d i n t h e i n d ustr y si n c e b ef or e J u n e of t h at y e ar. I d. \u00b6 5 8.\n\n 3. T h e Str at e gi c P art n er s hi p\n\n O n M ar c h 7, 2 0 2 2, E q o n e x a n n o u n c e d t h at it e nt er e d i nt o a strat e gi c p art n ers hi p wit h\n\nBifi nit y (t h e \u201c Str at e gi c P art n ers hi p \u201d). I d. \u00b6 6. P urs ua nt t o t h e t er ms of t h e Str at e gi c P art n ers hi p,\n\nBifi nit y off er e d E q o n e x a $ 3 6 milli o n c o n v erti bl e l oa n f a cilit y (t h e \u201c L oa n A gr e e m e nt \u201d) . I d. \u00b6 7. I n\n\nr et ur n, Bifi nit y r e c ei v e d t h e ri g ht t o a p p oi nt t h e C E O, C F O, a n d C hi ef L e gal Offi c er ( \u201c C L O \u201d) of\n\n\n\n\n 4\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 5 of 40\n\n\n\nE q o n e x as w ell as t h e ri g ht t o n o mi n at e t w o m e m b ers t o E q o n e x\u2019s b oar d of dir e ct ors. I d. Bifi nit y\n\nals o r e c ei v e d \u201c o v er 2 4. 9 % of t h e s h ar e s of Di gi va ult. \u201d I d. \u00b6 8.\n\n O n M ar c h 1 7, 2 0 2 2, Bifi nit y a p p oi nt e d F ar n ell t o s er v e as E q o n e x\u2019s C E O a n d as a dir e ct or\n\no n E q o n e x \u2019s b oar d. I d. \u00b6 2 8. T h at s a m e da y, Bifi nit y a p p oi nt e d H ai t o s er v e as a dir e ct or o n\n\nE q o n e x \u2019s b oar d. I d. \u00b6 3 1. Aft er s h e r esi g n e d fr o m E q o n e x\u2019s b oar d o n A pril 2 8, 2 0 2 2, Bifi nit y\n\na p p oi nt e d Li n g t o s er v e b ot h as E q o n e x\u2019s C F O a n d as a dir e ct or o n E q o n e x\u2019s b o ar d . I d. \u00b6 \u00b6 2 9, 3 1.\n\nO n M ar c h 3 1, 2 0 2 2, Bifi nit y a p p oi nt e d C e m m ell t o b e E q o n e x\u2019s C C A O . I d. \u00b6 3 0.\n\n 4. T h e M ar c h Pr e s s R el e a s e s\n\n O n M ar c h 7, 2 0 2 2, E q o n e x iss u e d a pr ess r el eas e a n n o u n ci n g t h e Str at e gi c P art n ers hi p (t h e\n\n\u201c M ar c h 7 P r ess R el eas e \u201d). 3 I d. \u00b6 4 7. T h e M ar c h 7 P r ess R el e as e \u201c t o ut e d t h at t h e c o m p a ni es w o ul d\n\n\n3 T he M ar c h 7 Pr ess R el e as e r e a d i n f ull as f oll o ws:\n SI N G A P O R E \u2013 M ar c h 7, 2 0 2 2 \u2013 E Q O N E X Li mit e d ( N A S D A Q: E Q O S) ( \u201c E Q O N E X \u201d or\n t h e \u201c C o m p a n y \u201d), a di git al ass ets fi n a n ci al s er vi c es c o m p a n y, t o d a y a n n o u n c e d t hat it h as e nt er e d i nt o\n a str at e gi c p art n ers hi p wit h Bifi nit y U A B ( \u201c Bifi nit y \u201d), a p a y m e nts t e c h n ol o g y c o m p a n y t h at is p art of\n t h e wi d er Bi n a n c e Gr o u p a n d t h e offi ci al fi at-t o-cr y pt o p a y m e nts pr o vi d er f or Bi n a n c e, t h e w orl d\u2019s\n l e a di n g bl o c k c h ai n e c os yst e m a n d cr y pt o c urr e n c y i nfr astr u ct ur e pr o vi d er.\n Bifi nit y w as est a blis h e d i n 2 0 2 1 b ut offi ci all y l a u n c h e d t o t h e m ar k et t o d a y a n d h as b e e n\n p o w eri n g Bi n a n c e\u2019s fi at -t o-cr y pt o o n a n d off r a m ps, pr o c essi n g milli o ns i n tr a ns a cti o ns gl o b all y f or\n Bi na n c e. c o m us ers. Bifi nit y\u2019s l e a di n g p a y m e nt i nfr astr u ct ur e c o n n e cts tr a diti o n al fi n a n c e t o w orl d-\n l e a di n g a n d e m er gi n g bl o c k c h ai ns, tr a nsf or mi n g h o w b usi n ess es a n d p e o pl e s e n d a n d r e c ei v e m o n e y\n ar o u n d t h e w orl d. Bifi nit y is r e gist er e d wit h t h e R e gistr y of L e g al E ntiti es of t h e R e p u bli c of Lit h u a ni a\n as a cr y pt o w all et s er vi c e pr o vi d er.\n B uilt wit h a f o c us o n r e g ul ati o n, s e c urit y a n d c o m pli a n c e b est -pr a cti c e, E Q O N E X w as t h e\n first di git al ass et fir m wit h a n e x c h a n g e t o b e p u bli cl y list e d i n t h e U. S. E Q O N E X off ers r e g ul at or y -\n f o c us e d tr a di n g s er vi c es c e nt er e d ar o u n d t h e E Q O N E X cr y pt o e x c h a n g e, i nst it uti o n al-gr a d e di gital\n ass et i n v est m e nt s ol uti o ns i n cl u di n g a n ass et m a n a g er t o g et h er wit h t h e p e n di n g l a u n c h of e x c h a n g e\n tr a d e d pr o d u cts a n d str u ct ur e d pr o d u cts, a n d Di gi v a ult, a n F C A-r e g ul at e d hi g h s e c urit y cr y pt o a n d\n di gital ass et c ust o d y s ol uti o n.\n U n d er t h e t er ms of t h e str at e gi c p art n ers hi p, Bifi nit y will a d v a n c e a U S $ 3 6 milli o n\n c o n v erti bl e l o a n t o E Q O N E X a n d will w or k t o g et h er t o m a xi mi z e b usi n ess s y n er gi es cr e at e d b y t his\n n e w str at e gi c r el ati o ns hi p a n d c a pit ali z e o n o p p ort u niti es t o c o o p er at e a n d f urt h er e x p a n d t h eir\n b usi n ess es. I n a d diti o n, Bifi nit y will h a v e t h e ri g ht t o a p p oi nt, fr o m wit hi n Bifi nit y, t h e C hi ef\n E x e c uti v e Offi c er, C hi ef Fi n a n ci al Offi c er, a n d C hi ef L e g al Offi c er of E Q O N E X as w ell as n o mi n at e\n t w o s e ats o n E Q O N E X\u2019s B o ar d of Dir e ct ors. B ot h c o m p a ni es will c o nti n u e t o e n g a g e i n n o n -\n bi n di n g dis c ussi o ns t o e x pl or e p ot e nti al m er g er o p p ort u niti es, s u bj e ct t o r e g ul at or y a p pr o v al.\n T h e str at e gi c p art n ers hi p will i niti all y f o c us o n l e v er a gi n g Di gi v a ult as a n F C A r e g ul at e d\n c ust o di a n, str e n gt h e ni n g t h e t e c h n ol o g y s u p p orti n g E Q O N E X E x c h a n g e, a n d e x p a n di n g Bifi nit y\u2019s\n g e o gr a p hi c al f o ot pri nt t hr o u g h E Q O N E X\u2019s li c e nsi n g fr a m e w or k. B ot h p arti es will als o e x pl or e\n o p p ort u niti es t o gr o w E Q O N E X\u2019s di gital ass et i n v est m e nt s ol uti o ns b usi n ess.\n C hi -W o n Y o o n , C h air m a n of E Q O N E X s ai d t o d a y, \u201c W e ar e e xtr e m el y pl e as e d t o t e a m u p\n wit h Bifi nit y i n a p art n ers hi p t h at is li k el y t o b e tr a nsf or m ati o n al f or b ot h c o m p a ni es a n d f or t h e\n i n d ustr y at l ar g e. Bifi nit y s h ar es o ur str o n g b eli ef i n h el pi n g t o bri d g e t h e w orl d o f tr a diti o n al fi n a n c e\n\n 5\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 6 of 40\n\n\n\n\u2018w or k t o g et h er t o m a xi mi z e b usi n ess s y n er gi es cr e at e d b y t his n e w strat e gi c r el ati o ns hi p a n d\n\nc a pit ali z e o n o p p ort u niti es t o c o o p er at e a n d f urt h er e x p a n d t h eir b usi n ess. \u2019\u201d I d. S p e cifi call y, t h e\n\n\n\n wit h cr y pt o c urr e n ci es, as w ell as o ur c o n vi cti o n t o o p er at e t o t h e hi g h est st a n d ar ds of i n v est or\n pr ot e cti o n, r e g ul at or y o v ersi g ht, s e c urit y a n d g o v er n a n c e. \u201d\n \u201c T his tr a ns a cti o n m ar ks t h e n e xt l o gi c al st e p i n o ur c o m p a n y\u2019s e v ol uti o n, r e pr es e nti n g a n\n i m p ort a nt o p p ort u nit y t o gr o w o ur f o ot pri nt a n d e x p a n d o ur r e g ul at e d off eri n gs f or t h e b e n efit of o ur\n c ust o m ers a n d s h ar e h ol d ers. \u201d\n \u201c Bifi nit y\u2019s c utti n g -e d g e t e c h n ol o g y a n d e xt e nsi v e e x p eri e n c e i n b uil di n g, o p er ati n g, a n d\n m ar k eti n g di git al pl a tf or ms a n d pr o d u cts will h el p dri v e t h e gr o wt h a n d s c al e of o ur e c os yst e m,\n st arti n g wit h Di gi v a ult, o ur c ust o d y s ol uti o n, o ur ass et m a n a g e m e nt b usi n ess a n d i nstit uti o n all y -\n f o c us e d pr o d u cts o n t h e e x c h a n g e. \u201d\n \u201cI l o o k f or w ar d t o w or ki n g cl os el y wit h t h e Bifi nit y t e a m t o s c al e u p o ur pl atf or m a n d dri v e\n l o n g-t er m s ust ai n a bl e gr o wt h. \u201d\n H el e n H ai, Pr esi d e nt of Bifi nit y, c o m m e nt e d, \u201cIt is wit h gr e at e x cit e m e nt a n d e nt h usi as m\n t hat w e e nt er t his p art n ers hi p wit h E Q O N E X. E Q O N E X h as a u ni q u e v al u e pr o p ositi o n a n d\n p os iti o ni n g t h at w e ar e d e e pl y ali g n e d wit h. E Q O N E X h as alr e a d y m a d e si g nifi c a nt pr o gr ess i n\n b uil di n g o ut t h e f o u n d ati o n al r e g ul at e d i nfr astr u ct ur e f or its e c os yst e m. T h eir i nstit uti o n al a p pr o a c h\n a n d a bilit y t o utili z e gl o b al r e g ul at or y fr a m e w or ks t o b uil d a c o m pli a nt b usi n ess dir e ctl y c o m pl e m e nts\n o ur r et ail f o c us a n d will gr e atl y b e n efit Bifi nit y o v er t h e l o n g -t er m. \u201d\n Tr a n s a cti o n D et ail s\n U n d er t h e t er ms of t h e str at e gi c p art n ers hi p w hi c h h as b e e n a p pr o v e d b y t h e B oar ds of\n E Q O N E X a n d Bifi nit y, Bifi nit y h as is s u e d E Q O N E X a U S $ 3 6 milli o n c o n v erti bl e l o a n f a cilit y wit h\n a n 1 8 -m o nt h m at urit y fr o m e a c h dr a w d o w n d at e. T h e i niti al c o n v ersi o n pri c e is U S $ 1. 8 9 p er s h ar e,\n s et wit h r ef er e n c e t o t h e 5 0 -d a y a v er a g e cl osi n g -pri c e of E Q O N E X s h ar es i m m e di at el y pri or t o t h e\n d a t e of t h e L o a n A gr e e m e nt.\n A b o ut E Q O N E X\n E Q O N E X Li mit e d ( N A S D A Q: E Q O S) is a t e c h n ol o g y dri v e n di gital ass ets fi n a n ci al\n s er vi c es gr o u p t hat pr o vi d es i nstit uti o n al gr a d e i nfr astr u ct ur e a n d a f ull s uit e of tr a di n g, c ust o d y a n d\n ass et m a n a g e m e nt s ol uti o ns t o cl i e nts. T h e Gr o u p\u2019s di gital ass ets e c os yst e m h as b e e n d esi g n e d t o\n a c c o m m o d at e t h e n e e ds of i nstit uti o ns a n d i n di vi d u als wit h t h e s a m e d e gr e e of r e g ul at or y o v ersi g ht\n a n d s e c urit y t h e y ar e a c c ust o m e d t o i n tr a diti o n al fi n a n ci al m ar k ets. E Q O N E X\u2019s e c os yst e m p ri m aril y\n e n c o m p ass es E Q O N E X E x c h a n g e, a di gital ass et e x c h a n g e; Di gi v a ult, a F C A a c cr e dit e d h ot a n d c ol d\n di gital ass ets c ust o di a n a n d Bl et c hl e y P ar k Ass et M a n a g e m e nt, a f u n d of cr y pt o -h e d g e f u n ds.\n F or m or e i nf or m ati o n visit: htt ps: / / gr o u p. e q o n e x. c o m /\n F ol l o w E Q O N E X o n s o ci al m e di a o n T witt er @ e q o n e x, o n F a c e b o o k @ e q o n e x, a n d o n\n Li n k e dI n.\n A b o ut Bifi nit y\n Bifi nit y, p o w er e d b y Bi n a n c e, is a p a y m e nts t e c h n ol o g y c o m p a n y t hat pr o vi d es a n e ntr y\n p oi nt t o t h e n e w w orl d of di git al c urr e n c y f or b usi n ess es. It off ers o n-a n d -off -r a m p s ol uti o ns t o\n e m p o w er b usi n ess es t o c o n v ert fi at -t o-cr y pt o tr a ns a cti o ns usi n g m aj or p a y m e nt m et h o ds dir e ctl y.\n F or m or e i nf or m ati o n, visit: htt ps: / / w w w. bifi nit y. c o m /.\n F or w ar d -L o o ki n g I nf or m ati o n\n A n y f or w ar d -l o o ki n g stat e m e nts i n t his pr ess r el e as e ar e b as e d o n a v ail a bl e c urr e nt m ar k et\n m at eri al a n d m a n a g e m e nt\u2019s e x p e ct ati o ns, b eli efs a n d f or e c asts c o n c er ni n g f ut ur e e v e nts i m p a cti n g\n E Q O N E X. Y o u ar e c a uti o n e d t hat a n y s u c h f or w ar d -l o o ki n g st at e m e nts ar e n ot g u ar a nt e es of f ut ur e\n p erf or m a n c e a n d i n v ol v e ris ks a n d u n c ert ai nti es, as w ell as ass u m pti o ns, w hi c h, if t h e y w er e t o e v er\n m at eri ali z e or pr o v e i n c orr e ct, c o ul d c a us e t h e r es ults of E Q O N E X t o diff er m at eri all y fr o m t h os e\n e x pr ess e d or i m pli e d b y s u c h f or w ar d-l o o ki n g st at e m e nts. T h e f or w ar d -l o o ki n g stat e m e nts m a d e i n\n t his pr ess r el e as e s p e a k o nl y as of t h e d at e h er e of a n d w e dis cl ai m a n y o bli g ati o n, e x c e pt as r e q uir e d\n b y l a w, t o pr o vi d e u p d at es, r e visi o ns or a m e n d m e nts t o a n y f or w ar d -l o o ki n g stat e m e nts t o r efl e ct\n c h a n g es i n o ur e x p e ct ati o ns or f ut ur e e v e nts.\nD kt. N o. 4 8 -6.\n\n 6\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 7 of 40\n\n\n\nM ar c h 7 P r ess R el eas e st at e d t h at t h e Strat e gi c P art n ers hi p w o ul d \u201ci nitiall y f o c us o n l e v er a gi n g\n\nDi gi v a ult as a n F C A r e g ulat e d c ust o dia n, str e n gt h e ni n g t h e t e c h n ol o g y s u p p orti n g t h e E Q O N E X\n\nE x c h a n g e, a n d e x p a n di n g Bifi nit y\u2019s g e o gr a p hi c al f o ot pri nt t hr o u g h E Q O N E X\u2019s li c e nsi n g\n\nfra m e w or k. \u201d I d. \u00b6 4 8. It als o t ol d i n v est ors t h at t h e t w o c o m p a ni es w o ul d \u201c c o nti n u e t o e n g a g e i n\n\nn o n -bi n di n g dis c ussi o ns t o e x pl or e p ot e nti al m er g er o p p ort u niti es, s u bj e ct t o r e g ul at or y a p pr o v al. \u201d\n\nI d.\n\n D ef e n d a nt H ai \u2014 t h e n pr esi d e nt of Bifi nit y\u2014 w as q u ot e d i n t h e M ar c h 7 P r ess R el eas e as\n\ns a yi n g t h at E q o n e x\u2019s \u201ci nstit uti o n al a p pr o a c h a n d a bilit y t o utili z e gl o bal r e g ul at or y fra m e w or ks t o\n\nb uil d a c o m pli a nt b usi n ess dir e ctl y c o m pl e m e nts o ur r et ail f o c us a n d will gr e atl y b e n efit Bifi nit y o v er\n\nt h e l o n g-t er m. \u201d I d. O n t his n e ws, E q o n e x\u2019s s h ar e pri c e i n cr e as e d 2 2 p er c e nt b et w e e n M ar c h 4 a n d\n\nM ar c h 9. I d. \u00b6 5 1.\n\n O n M ar c h 7, 2 0 2 2, t h e F C A \u201c iss u e d a stat e m e nt . . . e x pr essi n g c o n c er n \u201d a b o ut t h e\n\np art n ers hi p b et w e e n E q o n e x a n d Bifi nit y . I d. \u00b6 5 2. B ut, as wit h t h e P a ys af e arra n g e m e nt t h at\n\npr e c e d e d it, t h e F C A\u2019s ha n ds w er e ti e d. T h e F C A st at e d t h at it \u201cdi d n ot h a v e p o w ers t o ass ess t h e\n\nfit n ess a n d pr o pri et y of t h e n e w b e n efi ci al o w n ers or t h e c h a n g e i n c o ntr ol.\u201d I d. T h e F C A\n\nn o n et h el ess r eit er at e d its c o n c er ns a b o ut t h e diffi c ult y of eff e cti v el y s u p er visi n g Bi n a n c e. I d.\n\n O n M ar c h 1 7, 2 0 2 2, E q o n e x iss u e d a n ot h er pr ess r el e as e (t h e \u201c M ar c h 1 7 Pr ess R el eas e \u201d)\n\na n n o u n ci n g t h at it a n d Bifi nit y \u201ct o o k t h e n e xt st e p i n s oli dif yi n g t h eir strat e gi c p art n ers hi p \u201d b y\n\na p p oi nti n g F ar n ell a n d H ai t o t h eir n e w p ositi o ns at E q o n e x. 4 I d. \u00b6 5 3. T h e pr ess r el e as e st at e d, i n\n\nr el e v a nt p art:\n\n\n4 T he M ar c h 1 7 Pr ess R el e as e r ea d i n f ull as f oll o ws:\n SI N G A P O R E \u2013 M ar c h 1 7, 2 0 2 2 \u2013 E Q O N E X Li mit e d ( N A S D A Q: E Q O S) ( \u201c E Q O N E X \u201d\n or t h e \u201c C o m p a n y \u201d), a di git al ass ets fi n a n ci al s er vi c es c o m p a n y, a n d Bifi nit y U A B ( \u201c Bifi nit y \u201d), a\n p a y m e nts t e c h n ol o g y c o m p a n y t hat is p art of Bi n a n c e, t o o k t h e n e xt st e p i n s oli dif yi n g t h e ir str at e gi c\n p art n ers hi p wit h t h e a p p oi nt m e nt of E Q O N E X\u2019s n e w C E O a n d t w o n e w m e m b ers t o t h e\n E Q O N E X B o ar d of Dir e ct ors (t h e \u201c B o ar d \u201d).\n J o n at h a n F ar n ell, w h o pr e vi o usl y s er v e d as H e a d of Bi na n c e U K a n d C E O of Bifi nit y, h as\n b e e n a p p oi nt e d as C E O of E Q O N E X a n d a dir e ct or o n t h e B o ar d. H el e n H ai, Pr esi d e nt of Bifi nit y,\n\n 7\n\fCase 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 8 of 40\n\n\n\n\nh as als o b e e n a p p oi nt e d t o t h e B o ar d. B ot h a p p oi nt m e nts ar e eff e cti v e i m m e di at el y. T h e c urr e nt\ni nt eri m C E O A n dr e w El d o n will r e v ert b a c k t o his pri m ar y r ol es of C hi ef O p er ati n g Offi c er a n d\ni nteri m C hi ef M ar k eti n g Offi c er.\n U n d er t h e t er ms of t h e str at e gi c p art n ers hi p a n n o u n c e d l ast w e e k, Bifi nit y h a d t h e ri g ht t o\nn o mi n at e k e y a p p oi nt m e nts, i n cl u di n g t h e C E O a n d t w o n e w B oar d m e m b ers. Bifi nit y will als o\nn o mi n at e t w o a d diti o n al s e ni or l e a d ers i n t h e c o mi n g w e e ks.\n As C E O, J o n at h a n will pl a y a n i nstr u m e nt al r ol e i n f ast -tr a c ki n g t h e c oll a b or ati o n b et w e e n\nb ot h b usi n ess es. T h e i niti al p h as e of t his gr o u n d br e a ki n g str at e gi c p art n ers hi p will p ut i n pl a c e a\nfr a m e w or k f or Bifi nit y t o s af e g u ar d s o m e of its cli e nt ass ets wit h E Q O N E X\u2019s F C A r e gist er e d\nc ust o di a n, Di gi v a ult, i n c o m pli a n c e wit h all a p pli c a bl e r e g ul at or y r e q uir e m e nts. M o vi n g f or w ar d,\nBifi nit y will d e v el o p w a ys t o l e v er a g e t h e E Q O N E X E x c h a n g e as a n alt er n ati v e tr a di n g pl atf or m,\nd e pl o y r es o ur c es t o str e n gt h e n t h e t e c h n ol o g y, a n d als o e x pl or e o p p ort u niti es t o s c al e t h e ass et\nm a n a g e m e nt b usi n ess.\n J o n at h a n is a r es p e ct e d fi n a n c e a n d cr y pt o i n d ustr y l e a d er a n d m ost r e c e ntl y h el d t h e r ol es of\nH e a d of Bi n a n c e f or t h e U nit e d Ki n g d o m a n d C E O of Bifi nit y . Wit h a str o n g c o m pli a n c e p e di gr e e,\nJ o n at h a n w as i n v ol v e d i n d e v el o pi n g t h e c o m p a n y\u2019s gl o b al r e g ul at or y li c e ns e a n d r e gistr ati o n\nr o a d m a p, w hi c h w as cr u ci al f or t h e offi ci al l a u n c h of Bifi nit y i n e arl y M ar c h 2 0 2 2. Pri or t o t h at,\nJ o n at h a n w as Dir e ct or of C o m pli a n c e a n d B o ar d M e m b er of e T or o M o n e y, a n F C A -r e g ul at e d\np a y m e nts fir m. H e als o h e a d e d o p er ati o ns a n d s at o n t h e B oar d at e T or o X, t h e Gr o u p\u2019s cr y pt o\ne x c h a n g e a n d c ust o d y pl atf or m .\n H el e n is Pr esi d e nt of Bifi nit y a n d h ol ds v ari o us s e ni or p ositi o ns wit hi n t h e Bi n a n c e\nor g a ni z ati o n i n cl u di n g h e a di n g t h e N F T a n d f a n t o k e n pl atf or ms a n d t h e Bi n a n c e C h arit y\nF o u n d ati o n. H el e n is a r es p e ct e d gl o b al l e a d er a n d a U nit e d N ati o ns I n d ustri al D e v el o p m e nt\nOr g a ni z ati o n ( U NI D O) G o o d will A m b ass a d or. H el e n f o u n d e d t h e M a d e i n Afri c a I niti ati v e t hat\na d vis e d Afri c a n g o v er n m e nts o n i n d ustri ali z ati o n a n d i n v est m e nts. S h e w as als o t h e C o -F o u n d er of\nC & H G ar m e nts, w hi c h w as a pi o n e er P a n -Afri c a e x p ort -ori e nt e d g ar m e nts m a n uf a ct ur er. S h e is als o\na tr ai n e d a ct u ar y wit h al m ost 2 0 y e ars of e x p eri e n c e w or ki n g wit h F T S E 1 0 0 c o m p a ni es.\n C hi -W o n Y o o n, E Q O N E X C h air m a n s ai d, \u201c W e ar e d eli g ht e d t o w el c o m e J o n at h a n t o t h e\nE Q O N E X m a n a g e m e nt t e a m a n d H el e n t o o ur B o ar d. T h eir a p p oi nt m e nts m ar k t h e n e xt criti c al\nst e p i n d e v el o pi n g t h e Bifi nit y a n d E Q O N E X str at e gi c p art n ers hi p. I l o o k f or w ar d t o w or ki n g wit h\nt h e m cl os el y t o o pti mi z e o ur b usi n ess es a n d f ulfil o ur j oi nt visi o n t o b e c o m e a bri d g e b et w e e n t h e ol d\nw orl d of tr a diti o n al fi n a n c e a n d cr y pt o c urr e n ci es. \u201d\n J o n at h a n F ar n ell, C E O of E Q O N E X s ai d, \u201c E Q O N E X w as o n e of t h e cr y pt o i n d ustr y\u2019s\npi o n e eri n g fir ms, l e a di n g t h e s e ct or t o w ar ds gr e at er r e g ul at or y c o m pli a n c e a n d g o v er n a n c e as a list e d\nc o m p a n y. N o w as w e e m b ar k o n t his gr o u n d br e a ki n g i n d ustr y p art n ers hi p, it\u2019s p arti c ul arl y e x citi n g t o\nj oi n E QO N E X as it a p pr o a c h es s u c h a n i m p ort a nt i nfl e cti o n p oi nt i n its hist or y. \u201d\n \u201c W e c a n alr e a d y s e e t h e str e n gt hs a n d c a p a biliti es t h at w e c a n h ar n ess b et w e e n t h e t w o\nc o m p a ni es. E Q O N E X h as a n o utst a n di n g r e g ul at or y a n d li c e nsi n g tr a c k r e c or d a n d m ar k et -l e a di n g\ne x p ertis e at i d e ntif yi n g o p p ort u niti es f or i nstit uti o ns, w hi c h is m ost cl e arl y e vi d e nt w h e n l o o ki n g at\nt h e Di gi v a ult b usi n ess t h at c o nti n u es t o attr a ct i nstit uti o ns a n d l a w e nf or c e m e nt a g e n ci es. C o u pl e d\nwit h its ass et m a n a g e m e nt b usi n ess a n d e x c h a n g e, t h e o p p ort u nit y t o cr e at e a f ull e c os yst e m b y\nh ar n essi n g Bifi nit y\u2019s t e c h n ol o g y, m ar k eti n g cl o ut a n d cli e nt b as e h as t h e p ot e nti al t o b e tr a nsf or m ati v e\nf or t h e i n d ustr y. \u201d\n J o n at h a n a d d e d, \u201c E Q O N E X a n d Bifi nit y s h ar e t h e s a m e et h os a n d visi o n t o h el p cr e at e s af e\na n d c o m pli a nt cr y pt o c urr e n c y e c os yst e ms f or c o ns u m ers a n d i nstit uti o ns a cr oss t h e w orl d. I\u2019 m\nl o o ki n g f or w ar d t o f ost eri n g tr u e c oll a b or ati o n a n d pr o d u cti vit y a cr oss b ot h b usi n ess es a cr oss b ot h\nt e a ms. \u201d\n As p art of t h es e or g a ni z ati o n al c h a n g es, c urr e nt b o ar d m e m b ers A n dr e w El d o n, E Q O N E X\nC hi ef O p er ati n g Offi c er a n d i nt eri m C hi ef M ar k eti n g Offi c er, a n d P a ul E wi n g, E Q O N E X C hi ef\nFi n a n ci al Offi c er will st e p d o w n fr o m t h e E Q O N E X B o ar d, eff e cti v e i m m e di at el y.\nA b o ut E Q O N E X\n E Q O N E X Li mit e d ( N A S D A Q: E Q O S) is a t e c h n ol o g y -dri v e n di gital ass ets fi n a n ci al\ns er vi c es gr o u p t hat pr o vi d es i nstit uti o n al -gr a d e i nfr astr u ct ur e a n d a f ull s uit e of tr a di n g, c ust o d y a n d\nass et m a n a g e m e nt s ol uti o ns t o cli e nts. T h e Gr o u p\u2019s di gital ass ets e c os yst e m h as b e e n d esi g n e d t o\na c c o m m o d at e t h e n e e ds of i nstit uti o ns a n d i n di vi d u als wit h t h e s a m e d e gr e e of r e g ul at or y o v ersi g ht\na n d s e c urit y t h e y ar e a c c ust o m e d t o i n tr a diti o n al fi n a n ci al m ar k ets. E Q O N E X\u2019s e c os yst e m pri m aril y\n\n 8\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 9 of 40\n\n\n\n As C E O, J o n at h a n will pla y a n i nstr u m e nt al r ol e i n f ast -tra c ki n g t h e c oll a b or ati o n\n b et w e e n b ot h b usi n ess es. . . . M o vi n g f or w ar d, Bifi nit y will d e v el o p w a ys t o l e v er a g e\n t h e E Q O N E X E x c h a n g e as a n alt er n ati v e tr a di n g platf or m, d e pl o y r es o ur c es t o\n str e n gt h e n t h e t e c h n ol o g y, a n d als o e x pl or e o p p ort u niti es t o s c al e t h e ass et\n m a n a g e m e nt b usi n ess.\n\nI d. T h e M ar c h 1 7 P r ess R el e as e als o q u ot e d F ar n el l as sa yi n g t hat E q o n e x, Di gi v a ult, a n d t h e\n\nE x c h a n g e cr e at e d a n \u201c o p p ort u nit y t o cr e at e a f ull e c os yst e m b y h ar n essi n g Bifi nit y\u2019s t e c h n ol o g y,\n\nm ar k eti n g cl o ut[,] a n d cli e nt b as e, \u201d w hi c h w o ul d \u201c[ ha v e] t h e p ot e nti al t o b e tr a nsf or m ati v e f or t h e\n\ni n d ustr y. \u201d I d. H e w e nt o n t o s a y t h at h e w as \u201cl o o ki n g f or w ar d t o f ost eri n g tr u e c oll a b or ati o n a n d\n\npr o d u cti vit y a cr oss b ot h b usi n ess es a cr oss b ot h t ea ms. \u201d I d. O n t his n e ws, E q o n e x\u2019s s h ar e pri c e\n\ni n cr e as e d o v er 3 2 p er c e nt b et w e e n M ar c h 1 7 a n d M ar c h 2 1. I d. \u00b6 5 5.\n\n Pl ai nt iffs all e g e t h at \u201c D ef e n d a nts k n e w . . . b ut o mitt e d t h at t h e \u2018 c oll a b or ati o n\u2019 b et w e e n\n\nE q o n e x a n d Bifi nit y was si m pl y a n att e m pt e d e n d -r u n ar o u n d t h e F C A\u2019s ba n o n Bi n a n c e\n\nu n d ert a ki n g a n y r e g ul at e d a cti vit y i n t h e U. K. \u201d I d. \u00b6 5 4.\n\n 5. E q o n e x\u2019 s C oll a p s e\n\n O n A u g ust 1 5, 2 0 2 2, E q o n e x iss u e d a pr ess r el e as e a n n o u n ci n g a si g nifi ca nt r etr e n c h m e nt i n\n\nits b usi n ess, i n cl u di n g t h e cl os ur e of t h e E x c h a n g e, its m ai n s o ur c e of r e v e n u e:\n\n [ E q o n e x] is t a ki n g d e cisi v e a cti o n t o str e a mli n e its o p er ati o ns a n d f o c us r es o ur c es\n pri m aril y o n t h e b usi n ess es t h at off er t h e m ost p ot e nti al f or r e v e n u e gr o wt h a n d\n l o n g-t er m fi n a n ci al s ust ai n a bilit y: Ass et M a n a g e m e nt a n d C ust o d y. T h e C o m p a n y\n will pr o a cti v el y e xit t h e cr o w d e d cr y pt o e x c h a n g e s p a c e b y cl osi n g t h e E x c h a n g e.\n E Q O N E X C h air m a n C hi -W o n Y o o n r e c e ntl y o utli n e d t h e C o m p a n y\u2019s\n str at e gi c pri oriti es a n d i nt e nti o n t o f o c us its r es o ur c es o n b usi n ess es w h er e it h as\n si g nifi c a nt c o m p etiti v e str e n gt hs a n d c a n l e v er a g e its tra diti o n al fi n a n c e e x p ertis e a n d\n\n\n e n c o m p ass es E Q O N E X E x c h a n g e, a di gital ass et e x c h a n g e; Di gi v a ult, a F C A a c cr e dit e d h ot a n d c ol d\n di gital ass ets c ust o di a n a n d Bl et c hl e y P ar k Ass et M a n a g e m e nt, a f u n d of cr y pt o -h e d g e f u n ds.\n F or m or e i nf or m ati o n visit: htt ps: / / gr o u p. e q o n e x. c o m /\n F oll o w E Q O N E X o n s o ci al m e di a o n T witt er @ e q o n e x, o n F a c e b o o k @ e q o n e x, a n d o n\n Li n k e dI n.\n A b o ut Bifi nit y\n Bifi nit y, p o w er e d b y Bi n a n c e , is a p a y m e nts t e c h n ol o g y c o m p a n y t hat pr o vi d es a n e ntr y\n p oi nt t o t h e n e w w orl d of di git al c urr e n c y f or b usi n ess es. It off ers o n-a n d -off -r a m p s ol uti o ns t o\n e m p o w er b usi n ess es t o c o n v ert fi at -t o-cr y pt o tr a ns a cti o ns usi n g m aj or p a y m e nt m et h o ds dir e ctl y.\n F or m or e i nf or m ati o n, visit: htt ps: / / w w w. bifi nit y. c o m /.\nD kt. N o. 4 8 -7.\n\n 9\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 10 of 40\n\n\n\n e x p eri e n c e. T h e d e cisi o n b y t h e E Q O N E X B o ar d of Dir e ct ors t o a c c el er at e its\n str at e gi c pla n a n d cl os e t h e E x c ha n g e is i n ali g n m e nt wit h t his strat e gi c fr a m e w or k.\n Cl osi n g t h e E x c ha n g e will i m pr o v e t h e C o m p a n y\u2019s fi n a n ci al p ositi o n b y\n m at eri all y r e d u ci n g t h e hi g h -c ost str u ct ur e ass o ciat e d wit h o p er ati n g t h e E x c ha n g e,\n a n d fr e e u p r es o ur c es t o dri v e gr o wt h i n t h e s e g m e nts w h er e it h as si g nifi c a nt\n c o m p etiti v e str e n gt hs.\n E Q O N E X C E O J o n at h a n F ar n ell s ai d, \u201c W e ar e f o c us e d o n o p p ort u niti es\n t h at will dri v e r e v e n u e gr o wt h a n d p ositi o n us f or l o n g-t er m s u c c ess. Cl osi n g t h e\n E x c h a n g e will si g nifi ca ntl y si m plif y o ur b usi n ess, n arr o w o ur f o c us, fr e e u p\n r es o ur c es, a n d all o w us t o o per at e as a m or e effi ci e nt or g a ni z ati o n wit h ca p a cit y t o\n a g gr essi v el y g o aft er m ar k et s e g m e nts t h at off er t h e m ost p ot e nti al. . . . W e t a k e a\n r e alisti c vi e w t h at o ur e x c h a n g e will n ot m o v e t h e n e e dl e f or us fi n a n ci all y o v er t h e\n n e ar -t o- m e di u m t er m. W e d o n\u2019t s e e v al u e i n c o nti n ui n g t o b e ar t h e c osts of\n o p er ati n g a n e x c h a n g e d uri n g w h at m a y b e a pr ol o n g e d m ar k et d o w nt ur n. W e h a v e\n c o n vi cti o n t h at pr o a cti v el y e xiti n g t h e cr o w d e d e x c h a n g e s pa c e is t h e ri g ht d e cisi o n\n t o d eli v er s h ar e h ol d er v al u e. . . . O ur As s et M a n a g e m e nt a n d C ust o d y b usi n ess,\n Di gi v a ult, h a v e alr ea d y m a d e s oli d pr o gr ess wit h t h e a d diti o n al r es o ur c es t h at w e\n h a v e all o c at e d t o t h e m r e c e ntl y, a n d w e ar e b ullis h a b o ut t h eir pr os p e cts as w e\n b e c o m e a n or g a ni z ati o n f o c us e d o n t h es e hi g h -p ot e nti al b u si n ess ar e as. \u201d\n\nI d. \u00b6 5 9. O n t his n e ws, E q o n e x\u2019s s h ar e pri c e f ell o v er 1 8 p er c e nt o v er t h e n e xt t w o d a ys . I d. \u00b6 6 0.\n\n O n A u g ust 1 5, 2 0 2 2, \u201c i n c o n n e cti o n wit h t h e cl os ur e of t h e E x c h a n g e a n d i n a c c or d a n c e\n\nwit h t h e L o a n A gr e e m e nt, Bifi nit y gr a nt e d E q o n e x a w ai v er f or t h e c essati o n of a m aj or b usi n ess\n\na n d E q o n e x a gr e e d t o i n cr e as e Bifi nit y\u2019s s h ar e c h ar g e of Di gi v a ult u n d er t h e L o a n A gr e e m e nt fr o m\n\n2 4. 9 % t o 1 0 0 %. \u201d I d. \u00b6 1 2.\n\n O n N o v e m b er 2 1, 2 0 2 2, E q o n e x \u201c dis cl os e d t h at [it w as] i n br ea c h of c ert ai n pr o visi o ns of\n\nt h e L o a n A gr e e m e nt a n d c o ns e q u e ntl y s e e ki n g a wa vi er fr o m Bifi nit y o n s u c h br e a c h es. \u201d I d. \u00b6 6 2\n\n(i nt er n al q u ot ati o n m ar ks o mitt e d). E q o n e x stat e d t h at its fi n a n cial r es o ur c es \u201c m a y n ot b e s uffi ci e nt\n\nt o s atisf y t h e w or ki ng c a pit al r e q uir e m e nts of t h e [ c o m p a n y] f or a p eri o d of t w el v e m o nt hs . . . ,\n\nw hi c h m a y c ast si g nifi c a nt d o u bt o n [ E q o n e x\u2019s] a bilit y t o c o nti n u e as a g oi n g c o n c er n. \u201d I d. O n t his\n\nn e ws, E q o n e x\u2019s s har e pri c e f ell o v er 4 8 p er c e nt o n N o v e m b er 2 2, 2 0 2 2. I d. \u00b6 6 3. E q o n e x w as\n\nd elist e d b y N A S D A Q o n N o v e m b er 3 0, 2 0 2 2 aft er its s h ar e pri c e f ell t o $ 0. 0 9 3. I d. \u00b6 \u00b6 1 6 -1 7.\n\nE q o n e x h as si n c e fil e d f or b a n kr u pt c y. I d. \u00b6 2 5. Pl ai ntiffs all e g e t hat E q o n e x w as h e a d e d f or\n\ni ns ol v e n c y at t h e ti m e it e nt er e d i nt o t h e Str at e gi c Part n ers hi p. I d. \u00b6 3 ( \u201c[ E q o n e x] als o li e d a b o ut t h e\n\n\n 10\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 11 of 40\n\n\n\nl o a n s uffi ci n g t o sta v e off E q o n e x\u2019s i ns ol v e n c y. \u201d); see also i d. \u00b6 5 0 ( \u201c E q o n e x h a d n o w a y t o r e p a y\n\nBifi nit y . . . . \u201d); id. \u00b6 6 7 ( \u201c E q o n e x was n ot i n a p ositi o n t o r e p a y. \u201d) .\n\n B. Pr o c e d ur al Hi st or y\n\n Pl ai ntiffs c o m m e n c e d t his a cti o n o n A pril 2 0, 2 0 2 3. D kt. N o. 1. Pl ai ntiffs bri n g cl ai ms\n\na g ai nst F ar n ell a n d H ai u n d er S e cti o n 1 0( b) of t h e E x c h a n g e A ct a n d R ul e 1 0 b -5 f or m a ki n g\n\nall e g e dl y m at eri al misr e pr es e nt ati o ns a n d o mitti n g m at eri al i nf or m ati o n a b o ut D ef e n d a nts\u2019\n\ni nt e nti o ns r e g ar di n g t h e Str at e gi c P art n ers hi p . A m. C o m pl. \u00b6 8 2. Pl ai ntiffs als o bri n g cl ai ms a g ai nst\n\nBi n a n c e, Bifi nit y, Z h a o, Far n ell, Li n g, C e m m ell, a n d H ai u n d er S e cti o n 2 0(a) of t h e E x c h a n g e A ct\n\nf or e x er cisi n g t h eir c o ntr ol o v er E q o n e x t o i n d u c e it t o m a k e t h e m at eri al misr e pr es e nt ati o ns a n d\n\no missi o ns all e g e dl y c o nt ai n e d i n t h e M ar c h Pr ess R el e as es . I d. \u00b6 9 6. O n J a n u ar y 1 2, 2 0 2 4,\n\nD ef e n d a nts m o v e d t o dis miss f or f ail ur e t o st at e a cl ai m a n d l a c k of p ers o n al j uris di cti o n. D kt. N os.\n\n4 6, 4 7, 4 8. Pl ai ntiffs fil e d a n o p p ositi o n t o t h e m oti o n t o dis miss o n F e br u ar y 1 6, 2 0 2 4. D kt. N o.\n\n4 9. D ef e n d a nts fil e d t h eir r e p l y o n M ar c h 4, 2 0 2 4. D kt. N os. 5 0, 5 1.\n\n D ef e n d a nts i niti all y m o v e d t o dis miss all of Pl ai ntiffs \u2019 cl ai ms arisi n g fr o m all t h e st at e m e nts\n\nr ef er e n c e d i n t h e A m e n d e d C o m pl ai nt.5 Pl ai ntiffs di d n ot o p p os e all as p e cts of D ef e n d a nts\u2019 m oti o n.\n\nI nst e a d, Pl ai ntiff s li mit e d t h e s c o p e of t h eir clai ms i n t h eir o p p ositi o n bri ef, ar g ui n g o nl y t h at\n\n\u201c D ef e n d a nts m a d e t w o mat eri all y f als e cl ai ms: \u201d ( 1) \u201c t h at t h e Str at e gi c P art n ers hi p w o ul d s u p p ort\n\nE q o n e x, \u201d a n d ( 2) \u201c t h at t h er e w as a p ossi bilit y of a m er g er b et w e e n E q o n e x a n d Bifi nit y. \u201d 6 D kt. N o.\n\n4 9, Pl ai ntiffs\u2019 M e m or a n d u m of L a w i n O p p ositi o n t o D ef e n d a nts\u2019 M oti o n t o Dis miss ( \u201c Pl ai ntiffs\u2019\n\nO p p. \u201d) at 9. Pl ai ntiffs t h us c o n c e d e t h at t h e C o urt s h o ul d dis miss a n y cl ai ms arisi n g fr o m\n\n\n\n\n5 D ef e n d a nts c at e g ori z e d t h e st at e\n m e nts i nt o t hr e e gr o u ps: st at e m e nts a b o ut t h e l o a n, st at e m e nts a b o ut t h e n o n -bi n di n g\nm er g er dis c ussi o ns, a n d st at e m e nts a b o ut t h e str at e gi c p art n ers hi p. D kt. N o. 4 7, D ef e n d a nts\u2019 M e m or a n d u m of L a w i n\nS u p p ort of T h eir M oti o n t o Dis miss ( \u201c D ef e n d a nt\u2019s S u p p ort \u201d) at 4 \u2013 5.\n6 Pl ai ntiffs\u2019 cl ai ms aris e e x cl usi v el y o ut of t h e M ar c h 7 a n d M ar c h 1 7 Pr ess R el e as es iss u e d b y E q o n e x. A m. C o m pl. \u00b6 \u00b6\n\n4 7 \u2013 5 0, 5 3 \u2013 5 4.\n\n 11\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 12 of 40\n\n\n\nst at e m e nts t h at d o n ot r el at e t o w h et h er t h e Str at e gi c P art n ers hi p w o ul d b e n efit E q o n e x or t o t h e\n\np ot e nti al m er g er .\n\n T h e m ai n iss u e f or t h e C o urt t o a d dr ess is t h us w h et h er Pl ai ntiffs h a v e pl ea d e d f a cts\n\ns uffi ci e nt t o all e g e t h at D ef e n d a nts m a de or i n d u c e d t h e M ar c h 7 a n d 1 7 Pr ess R el eas es wit h t h e\n\nk n o wl e d g e t hat t h e y di d n ot i nt e n d t o s u p p ort E q o n e x or t o c o ns u m m at e a m er g er. T h e C o urt will\n\na d dr ess ( 1) w h et h er Pl ai ntiffs a d e q u at el y pl ea d t h at F ar n ell a n d H ai \u201c ma d e \u201d t h e c h all e n g e d\n\nst at e m e nts f or p ur p os es of S e cti o n 1 0( b) li a bilit y; ( 2) w h et h er Pl ai ntiffs a d e q uat el y pl ea d t h e f alsit y\n\nof t h e c h all e n g e d st at e m e nts; (3 ) w h et h er Plai ntiffs a d e q u at el y pl ea d t h at D ef e n d a nts or E q o n e x\n\nk n e w t h at t h e y di d n ot i nt e n d t o s u p p ort E q o n e x or c o ns u m m at e a m er g er w h e n t h e st at e m e nts\n\nw er e m a d e ; (4 ) w h et h er Plai ntiffs a d e q u at el y pl e a d t h at, if a vi ol ati o n of S e cti o n 1 0( b) w er e f o u n d,\n\nD ef e n d a nts \u201c c o ntr oll e d \u201d t h e m a k ers of t h e m at eri al misr e pr es e ntati o ns, s u bj e cti n g t h e m t o S e cti o n\n\n2 0( a) li a bilit y ; a n d (5 ) w h et h er Pl ai ntiffs\u2019 pl e a di n gs est a blis h t hat t h e C o urt h as p ers o n al j uris di cti o n\n\no v er D ef e n d a nts . B e c a us e t h e C o urt fi n ds t h at Pl ai ntiffs \u2019 pl e a di n gs f ail t o st at e a clai m o n t h es e\n\niss u es, t h e C o urt r efrai ns fr o m a d dr essi n g l oss c a us ati o n.\n\n III. L E G A L S T A N D A R DS\n\n A. R ul e 1 2( b)( 6)\n\n T o s ur vi v e a m oti o n t o dis miss u n d er F e d. R. Ci v. P. 1 2( b)( 6), \u201c a c o m pl ai nt m ust all e g e\n\ns uffi ci e nt f a cts, t a k e n as tr u e, t o st at e a pl a usi bl e cl ai m f or r eli ef. \u201d Jo h nso n v. Priceli ne.co m, I nc., 7 1 1\n\nF. 3 d 2 7 1, 2 7 5 ( 2 d Cir. 2 0 1 3) ( citi n g Bell Atl. Cor p. v. T wo m bly , 5 5 0 U. S. 5 4 4, 5 5 5\u2013 5 6 ( 2 0 0 7)). T o\n\nd et er mi n e p l a usi bilit y, c o urts f oll o w a \u201ct w o-pr o n g e d a p pr o a c h. \u201d As hcroft v. I q bal , 5 5 6 U. S. 6 6 2, 6 7 9\n\n( 2 0 0 9). \u201c First, alt h o u g h a c o urt m ust a c c e pt as tr u e all of t h e all e g ati o ns c o nt ai n e d i n a c o m pl ai nt,\n\nt h at t e n et is i n a p pli c a bl e t o l e g al c o n cl usi o ns, a n d t hr e a d b are r e cit als of t h e el e m e nts of a c a us e of\n\na cti o n, s u p p ort e d b y m er e c o n cl us or y st at e m e nts, d o n ot s uffi c e. \u201d H arris v. Mills , 5 7 2 F. 3 d 6 6, 7 2\n\n( 2 d Cir. 2 0 0 9) ( alt er ati o ns a n d i nt er n al q u ot ati o n m ar ks o mitt e d) ( q u oti n g I q b al, 5 5 6 U. S. at 6 7 8).\n\n\n 12\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 13 of 40\n\n\n\nS e c o n d, a c o ur t d et er mi n es \u201c w h et h er t h e \u2018 w ell-pl e a d e d f a ct u al all e gati o ns,\u2019 ass u m e d t o b e tr u e,\n\n\u2018 pl a usi bl y gi v e ris e t o a n e ntitl e m e nt t o r eli ef.\u2019 \u201d H ayde n v. P aterso n , 5 9 4 F. 3 d 1 5 0, 1 6 1 ( 2 d Cir. 2 0 1 0)\n\n( q u oti n g I q b al, 5 5 6 U. S. at 6 7 9). D et er mi ni n g w h et h er a c o m pl ai nt s tat es a pla usi bl e cl ai m is a\n\n\u201c c o nt e xt -s p e cifi c t as k t h at r e q uir es t h e r e vi e wi n g c o urt t o dr a w o n its j u di ci al e x p eri e n c e a n d\n\nc o m m o n s e ns e. \u201d I q bal, 5 5 6 U. S. at 6 7 9.\n\n B e c a us e cl ai ms u n d er S e cti o n 1 0( b) of t h e E x c h a n g e A ct a n d R ul e 1 0 b -5 t h er e u n d er s o u n d\n\ni n fr a u d, t h e y ar e s u bj e ct t o t h e h ei g ht e n e d pl e a di n g r e q uir e m e nts of F e d. R. Ci v. P. 9( b) a n d t h e\n\nPri v at e S e c uriti es Liti g ati o n R ef or m A ct ( t h e \u201cP S L R A \u201d ). Nov a k v. K as a ks , 2 1 6 F. 3 d 3 0 0, 3 0 6\u2013 0 7 ( 2 d\n\nCir. 2 0 0 0). R ul e 9( b) r e q uir es t h at t h e c o m pl ai nt \u201cstat e wit h p arti c ularit y t h e cir c u mst a n c es\n\nc o nstit uti n g fra u d. \u201d F e d. R. Ci v. P. 9( b). T o satisf y t h at r e q uir e m e nt, t h e c o m pl ai nt m ust \u201c( 1)\n\ns p e cif y t h e st at e m e nts t h at t h e pl ai ntiff c o nt e n ds w er e fra u d ul e nt, ( 2) i d e ntif y t h e s p ea k er, ( 3) st at e\n\nw h er e a n d w h e n t h e st at e m e nts w er e ma d e, a n d ( 4) e x pl ai n w h y t h e stat e m e nts w er e fr a u d ul e nt. \u201d\n\nA T SI Co m mc \u2019ns, I nc. v. S h a ar F u n d, Ltd. , 4 9 3 F. 3 d 8 7, 9 9 ( 2 d Cir. 2 0 0 7) ( citi n g Nov a k , 2 1 6 F. 3 d at\n\n3 0 6). T h e P S L R A i m p os es si milar r e q uir e m e nts o n cl ai ms br o u g ht u n d er t h e E x c h a n g e A ct: \u201ct h e\n\nc o m pl ai nt s h all s p e cif y ea c h st at e m e nt all e g e d t o h a v e b e e n misl e a di n g, t h e r eas o n or r e as o ns w h y\n\nt h e st at e m e nt is misl e a di n g, a n d, if a n all e g ati o n r e gar di n g t h e st at e me nt or o missi o n is m a d e o n\n\ni nf or m ati o n a n d b eli ef, t h e c o m pl ai nt s hall stat e wit h p arti c ul arit y all f a cts o n w hi c h t h at b eli ef is\n\nf or m e d. \u201d 1 5 U. S. C. \u00a7 7 8 u -4( b)( 1). T h e P S L R A f urt h er r e q uir es t h at t h e c o m pl ai nt \u201cst at e wit h\n\np arti c ul arit y f a cts gi vi n g ris e t o a str o n g i nf er e n c e t hat t h e d ef e n d a nt a ct e d wit h t h e r e q uir e d st at e of\n\nmi n d \u201d wit h r es p e ct t o e a c h all e g e d misstat e m e nt or o missi o n. 1 5 U. S. C. \u00a7 7 8 u -4( b)( 2)( A). A\n\nc o m pl ai nt will s ur vi v e u n d er t h at h ei g ht e n e d st a n d ar d \u201c o nl y if a r e as o na bl e p ers o n w o ul d d e e m t h e\n\ni nf er e n c e of s ci e nt er c o g e nt a n d at l e ast as c o m p elli n g as a n y o p p osi n g i nf er e n c e o n e c o ul d dr a w\n\nfr o m t h e f a cts all e g e d. \u201d Tell a bs, I nc. v. M a kor Iss ues & Rig hts, Ltd. , 5 5 1 U. S. 3 0 8, 3 2 4 ( 2 0 0 7).\n\n\n\n\n 13\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 14 of 40\n\n\n\n I n r es ol vi n g a m oti o n t o dis miss u n d er R ul e 1 2( b)( 6), c o urts g e n er all y m a y n ot c o nsi d er\n\nm at eri als e xtri nsi c t o t h e c o m pl ai nt. See F e d. R. Ci v. P. 1 2( d). H o w e v er, t h at r ul e is n ot a bs ol ut e. I n\n\na d diti o n t o t h e f a cts all e g e d i n t h e c o m pl ai nt, c o urts \u201c m a y c o nsi d er a n y writt e n i nstr u m e nt att a c h e d\n\nt o t h e c o m plai nt, st at e m e nts or d o c u m e nts i n c or p or at e d i nt o t h e c o m pl ai nt b y r ef er e n c e, l e g all y\n\nr e q uir e d p u bli c dis cl os ur e d o c u m e nts fil e d wit h t h e S E C, a n d d o c u m e nts p oss ess e d b y or k n o w n t o\n\nt h e pl ai ntiff a n d u p o n w hi c h it r eli e d i n bri n gi n g t h e s uit. \u201d A T SI , 4 9 3 F. 3d at 9 8. C o urts m a y als o\n\nc o nsi d er \u201c m att ers of w hi c h j u di ci al n oti c e m a y b e t a k e n .\u201d Goel v. B u nge, Lt d. , 8 2 0 F. 3 d 5 5 4, 5 5 9 ( 2 d\n\nCir. 2 0 1 6) ( cit ati o n o mitt e d). F urt h er m or e, o n a m oti o n t o dis miss , t h e C o urt c a n c o nsi d er\n\nst at e m e nts m a d e i n a c o m p a n y\u2019s p u blic fili n gs wit h t h e S E C. See Kr a mer v. Ti me W ar ner, I nc. , 9 3 7 F. 2 d\n\n7 6 7, 7 7 4 ( 2 d Cir. 1 9 9 1). H o w e v er, t h e C o urt ca n c o nsi d er t h e m \u201c\u2018 o nl y t o d et er mi n e w h at t h e\n\nd o c u m e nts stat e d,\u2019 a n d \u2018 not to prove t he tr ut h of t heir co nte nts .\u2019 \u201d Rot h v. Je n ni ngs , 4 8 9 F. 3 d 4 9 9, 5 0 9 ( 2 d\n\nCir. 2 0 0 7) ( alt er ati o n i n ori gi n al) ( q u oti n g Kr a mer v. Ti me W ar ner I nc. , 9 3 7 F. 2 d 7 6 7, 7 7 4 ( 2 d Cir.\n\n1 9 9 1)).\n\n I V. DI S C U S SI O N\n\n A. S e cti o n 1 0( b) a n d R ul e 1 0 b -5 Li a bilit y\n\n U n d er S e cti o n 1 0( b) a n d R ul e 1 0 b -5, it is u nl a wf ul t o \u201c m a k e a n y u ntr u e st at e m e nt of a\n\nm at eri al f a ct or t o o mit t o st at e a mat eri al f a ct n e c ess ar y i n or d er t o m a k e t h e st at e m e nts m a d e, i n\n\nt h e li g ht of t h e cir c u mst a n c es u n d er w hi c h t h e y w er e m a d e, n ot misl e a di n g . . . i n c o n n e cti o n wit h\n\nt h e p ur c h as e or sal e of a n y s e c urit y.\u201d 1 7 C. F. R. \u00a7 2 4 0. 1 0 b -5( b); see also 1 5 U. S. C. \u00a7 7 8j( b). T o st at e a\n\ncl ai m u n d er S e cti o n 1 0( b) a n d R ul e 1 0 b -5 f or fra u d ul e nt misr e pr es e nt ati o ns, a pl ai ntiff m ust all e g e\n\n\u201c( 1) a m at eri al misr e pr es e nt ati o n or o missi o n b y t h e d ef e n d a nt; ( 2) s ci e nt er; ( 3) a c o n n e cti o n\n\nb et w e e n t h e misr e pr es e nt ati o n or o missi o n a n d t h e p ur c h as e or sal e of a s e c urit y; ( 4) r eli a n c e u p o n\n\nt h e misr e pr es e nt ati o n or o missi o n; ( 5) e c o n o mi c l oss; a n d ( 6) l oss ca usati o n. \u201d G A M C O I nvs., I nc. v.\n\n\n\n\n 14\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 15 of 40\n\n\n\nVive n di U nivers al, S. A. , 8 3 8 F. 3 d 2 1 4, 2 1 7 ( 2 d Cir. 2 0 1 6) ( q u oti n g H alli b urto n Co. v. Eric a P. Jo h n F u n d,\n\nI nc., 5 7 3 U. S. 2 5 8, 2 6 7 ( 2 0 1 4)).\n\n Pl ai ntiffs ass ert S e cti o n 1 0( b) cl ai ms a g ai nst Far n ell a n d H ai . E v e n t h o u g h E q o n e x is n o\n\nl o n g er a d ef e n d a nt, Plai ntiffs als o ass ert t h at E q o n e x is li k e wis e a \u201c pri m ar y vi ol at or \u201d of S e cti o n\n\n1 0( b) f or p ur p os es of Pl ai ntiffs\u2019 S e cti o n 2 0( a) c o ntr ol -p ers o n li a bilit y cl ai ms .7 D ef e n d a nts m o v e t o\n\ndis miss u n d er R ul e 1 2( b)( 6) o n t h e gr o u n ds t h at Pl ai ntiffs h a v e f ail e d t o a d e q u at el y pl ea d ( 1) t h at\n\nF ar n ell a n d H ai m a d e a n y of t h e st at e m e nts Plai ntiffs c h all e n g e; ( 2) t h at t h e c hall e n g e d st at e m e nts\n\nw er e f als e or misl ea di n g or c o nstit ut e d f als e or misl e a di n g o missi o ns; a n d ( 3) t h at D ef e n d a nts or\n\nE q o n e x h a d t h e r e q uisit e s ci e nt er.\n\n 1. F ar n ell a n d H a i Ar e \u2018 M a k er s\u2019 of O nl y T h eir Q u ot e d St at e m e nt s\n\n F ar n ell a n d H ai \u201c ma d e \u201d o nl y t h e st at e m e nts i n t h e M ar c h 7 a n d M ar c h 1 7 Pr ess R el e as es\n\nt h at ar e attri b ut e d t o t h e m, n ot t h e r e m ai n d er of t h e st at e m e nts i n t h e Pr ess R el e as es b e c a us e\n\nPl ai ntiffs f ail t o all e g e t h at eit h er F ar n ell or H ai h a d ulti m at e a ut h orit y o v er t h e s e ot h er st at e m e nts .\n\n In or d er t o b e li a bl e f or a vi ol ati o n of S e cti o n 1 0( b) , a d ef e n d a nt m ust ha v e \u201c m a d e \u201d t h e\n\nall e g e dl y m at eri al misst at e m e nts. J a n us C a pit al Gr p., I nc. v. First Derivative Tr a ders, 5 6 4 U. S. 1 3 5, 1 4 1\n\n( 2 0 1 1). \u201c M a k e \u201d m ea ns \u201ct o st at e, \u201d n ot \u201ct o cr eat e. \u201d I d. at 1 4 2, 1 4 4 \u2013 4 5. \u201c[ T] h e m a k er of a st at e m e nt\n\nis t h e p ers o n or e ntit y wit h ulti m at e a ut h orit y o v er t h e st at e m e nt, i n cl u di n g its c o nt e nt a n d w h et h er\n\na n d h o w t o c o m m u n i c at e it. \u201d I d. at 1 4 2; see also i d. at 1 4 4 ( \u201c Wit h o ut [ ulti m at e] a ut h orit y, it is n ot\n\nn e c ess ar y or i n e vit a bl e t h at a n y f als e h o o d will b e c o nt ai n e d i n t h e stat e m e nt \u201d). B y c o ntrast, \u201c[ o] n e\n\nw h o pr e p ar es or p u blis h es a st at e m e nt o n b e h alf of a n ot h er is n ot its m a k er.\u201d I d. at 1 4 2.\n\n\n\n\n7 See I n re S u pre m a S peci alties, I nc. Sec. Litig., 4 3 8 F. 3 d 2 5 6, 2 8 5 ( 3 d Cir. 2 0 0 6) ( \u201c[ T] h er e is n o r e q uir e m e nt i n t h e l a n g u a g e of\n[ S e cti o n 2 0( a)] t hat t h e c o ntr oll e d p ers o n b e n a m e d as a d ef e n d a nt as a pr e di c at e t o i m p osi n g li a bilit y u p o n t h e\nc o ntr olli n g i n di vi d u al d ef e n d a nts. \u201d) ; Sg al a m bo v. Mc Ke n zie , 7 3 9 F. S u p p. 2 d 4 5 3, 4 8 6 n. 2 0 3 ( S. D. N. Y. 2 0 1 0) (\u201c S o l o n g as\nt h e C o m pl ai nt a d e q u at el y all e g es t h e el e m e nts of a R ul e 1 0 b-5 cl ai m a g ai nst C a n a di a n S u p eri or as a c or p or ati o n, it is of\nn o m o m e nt t hat C a n a di a n S u p eri or is n ot a n a m e d d ef e n d a nt d u e t o b a n kr u pt c y.\u201d).\n\n 15\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 16 of 40\n\n\n\n \u201cI n t h e p ost -J a n us w orl d, a n e x e c uti v e m a y b e h el d a c c o u nt a bl e w h er e t h e e x e c ut iv e h a d\n\nulti m at e a ut h orit y o v er t h e c o m p a n y\u2019s stat e m e nt; si g n e d t h e c o m p a n y\u2019s st at e m e nt; r atifi e d a n d\n\na p pr o v e d t h e c o m p a n y\u2019s st at e m e nt; or w h er e t h e s t at e m e nt is attri b ut e d t o t h e e x e c uti v e. \u201d I n re\n\nF a n nie M ae 2 0 0 8 Sec. Litig. , 8 9 1 F. S u p p. 2 d 4 5 8, 4 7 3 ( S. D. N. Y. 2 0 1 2), aff\u2019 d , 5 2 5 F. A p p\u2019 x 1 6 ( 2 d Cir.\n\n2 0 1 3) ; see also I n re S mit h B ar ney Tr a nsfer Age nt Litig., 8 8 4 F. S u p p. 2 d 1 5 2, 1 6 5 ( S. D. N. Y. 2 0 1 2)\n\n( h ol di n g t h at \u201c o nl y t h os e offi c ers w h os e si g nat ur es a p p e ar o n misl e a di n g st at e m e nts m a y b e li a bl e as\n\nt h e \u2018 m a k ers\u2019 of t h os e st at e m e nts \u201d); I n re L ul ule mo n Sec. Litig., 1 4 F. S u p p. 3 d 5 5 3, 5 7 7 n. 1 4 ( S. D. N. Y.\n\n2 0 1 4), aff\u2019d , 6 0 4 F. A p p\u2019 x 6 2 ( 2 d Cir. 2 0 1 5) ( \u201c T h e o nl y st at e m e nts f or w hi c h t h e [ c o m pl ai nt] all e g es\n\n[t h e c o m p a n y\u2019s f o u n d er a n d dir e ct or] w as t h e \u2018ma k er \u2019 ar e t h os e c o ntai n e d i n t h e [fili n g] t h at [ h e]\n\nsi g n e d . . . . [ H e] t h us c a n n ot b e f o u n d li a bl e f or a n y ot h er st at e m e nts, b e ca us e t h er e ar e n o\n\np arti c ul ari z e d all e gati o ns t h at h e h a d a n y r ol e i n s ha pi n g t h eir c o nt e nt. \u201d). \u201c[I] n t h e or di n ar y c as e,\n\nattri b uti o n . . . is str o n g e vi d e n c e t h at a st at e m e nt w as m a d e b y\u2014 a n d o nl y b y \u2014 t h e p art y t o w h o m it\n\nis attri b ut e d.\u201d J a n us, 5 6 4 U. S. at 1 4 2 \u2013 4 3 .\n\n W hil e e x pli cit attri b uti o n c a n b e a str o n g i n di c ati o n of J a n us\u2019s \u201c ulti m at e a ut h orit y, \u201d it als o c a n\n\nb e f o u n d if \u201c i m pli cit fr o m s urr o u n di n g cir c u mst a n c es,\u201d or, i n ot h er w or ds, e vi d e n c e d b y v ari o us\n\ni n di ci a of c o ntr ol. See City of Roseville E m ployees \u2019 Ret. Sys. v. E nergy Sol utio ns, I nc. , 8 1 4 F. S u p p. 2 d 3 9 5,\n\n4 1 8 ( S. D. N. Y. 2 0 1 1) ( q u oti n g J a n us, 5 6 4 U. S. at 1 4 2\u2013 4 3 ); see also I n Re Weig ht W atc hers I nt\u2019l I nc. Sec.\n\nLitig. , 5 0 4 F. S u p p. 3 d 2 2 4, 2 6 1\u2013 6 2 ( S. D. N. Y. 2 0 2 0) ( \u201c W h et h er t h e d ef e n da nt is t h e \u2018 m a k er\u2019 of t h e\n\nmisst at e m e nt m a y d e p e n d o n i nf er e nti al or cir c u msta nti al e vi d e n c e. \u201d); I O P C ast Iro n Hol di ngs, L L C v.\n\nJ. H. W hit ney C a pit al Part ners, L L C, 9 1 F. S u p p. 3 d 4 5 6, 4 7 3 \u2013 7 4 ( S. D. N. Y. 2 0 1 5) (fi n di n g \u201c ulti m at e\n\na ut h orit y \u201d w h er e d ef e n da nts o w n e d o v er w h el mi n g m aj orit y of c o m p a n y s har es; d ef e n da nts\u2019\n\ne m pl o y e es f or m e d a m aj orit y of t h e c o m p a n y \u2019s b oar d; d ef e n d a nts d e ci d e d w h et h er t o s ell t h e\n\nc o m p a n y; d ef e n da nts\u2019 e m pl o y e es all e g e dl y n e g oti at e d t h e a gr e e m e nt at iss u e; a n d o n e of d ef e n d a nts\u2019\n\ne x e c uti v es si g n e d t h e a gr e e m e nt at iss u e); Li berty Me di a Cor p. v. Vive n di U nivers al, S. A. , 8 6 1 F. S u p p.\n\n\n 16\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 17 of 40\n\n\n\n2 d 2 6 2, 2 7 1 ( S. D. N. Y. 2 0 1 2) (fi n di n g \u201c ulti m at e a ut h orit y \u201d w h er e d ef e n da nt v ett e d a n d a p pro v e d\n\nd o c u m e nts c o nt ai ni n g o missi o ns a n d misst at e m e nts a n d w h er e it fil e d t h os e d o c u m e nts wit h t h e\n\nS E C).\n\n Pl ai ntiffs a d e q u at el y pl ea d t h at F ar n ell a n d H ai w er e t h e \u2018m a k ers \u2019 of t h e st at e m e nts i n t h e\n\nM ar c h 7 a n d 1 7 Pr ess R el e as es t h at w er e attri b ut e d t o t h e m . T h e M ar c h 7 Pr ess R el e as e stat e d,\n\n\u201c H el e n H ai, Pr esi d e nt of Bifi nit y, c o m m e nt e d . . . .\u201d D kt. N o. 4 8 -6. T h e M ar c h 1 7 Pr ess R el eas e\n\nr e a d, \u201cJ o nt h a n F ar n ell, C E O of E Q O N E X s ai d . . . ,\u201d a n d \u201c J o n at h a n a d d e d . . . .\u201d D kt. N o. 4 8 -7.\n\nT h e stat e m e nts i m m e di at el y f oll o wi n g t h es e p hr as es ar e dir e ctl y attri b ut e d t o t h e d ef e n d a nts , w hi c h\n\nis \u201cstr o n g e vi d e n c e \u201d t h at t h e y h a d ulti m at e a ut h orit y o v er a n d t h us \u201c m a d e \u201d t h e st at e m e nts . J a n us,\n\n5 6 4 U. S. at 1 4 2 \u2013 4 3 . T h er ef or e, Pl ai ntiffs a d e q u at el y pl e a d t h at F ar n ell a n d Hai ar e t h e \u2018m a k ers \u2019 of\n\nt h es e q u ot e d st at e m e nts f or p ur p os es of S e cti o n 1 0( b) li a bilit y.\n\n H o w e v er, Pl ai ntiffs di d n ot a d e q u at el y pl e a d t hat eit h er F ar n ell or H ai m a d e t h e ot h er\n\nst at e m e nts c o nt ai n e d i n t h e M ar c h 7 Pr ess R el e as e. F ar n ell a n d H ai w er e n ot a p p oi nt e d t o t h eir\n\np ositi o ns at E q o n e x u ntil M ar c h 1 7. A m. C o m pl. \u00b6 \u00b6 2 8 , 3 1 . Pl ai ntiffs f ail t o all e g e fa cts i n di c ati n g\n\nt h at t h e y h a d ulti m at e a ut h orit y o v er t h e st at e m e nts m a d e i n a pr ess r el eas e iss u e d b y E q o n e x t e n\n\nd a ys b ef or e t h e y ass u m e d t h eir p ositi o ns at t h e c o m p a n y . I d. \u00b6 \u00b6 4 7, 5 3. Pl ai ntiffs d o n ot all e g e t h at\n\neit h er F ar n ell or H ai \u201c si g n e d, r atifi e d, or a p pr o v e d t h e pr ess r el eas e \u201d or t h at t h e pr ess r el e as e as a\n\nw h ol e w as attri b ut e d t o eit h er of t h e m. X u v. Gri ds u m Hol di ng I nc. , 6 2 4 F. S u p p. 3 d 3 5 2, 3 6 0\n\n( S. D. N. Y. 2 0 2 2) ( W o o ds, J.). As a r es ult , F ar n ell a n d H ai c a n n ot b e d e e m e d \u2018 m a k ers\u2019 of t h e n o n-\n\nattri b ut e d st at e m e nts i n E q o n e x\u2019s M ar c h 7 P r ess R el e as e b as e d o n Pl ai ntiffs\u2019 pl e a di n gs .\n\n Pl ai ntiffs si mil arl y f ail t o pl e a d t h at eit h er F ar n ell or H ai m a d e t h e n o n-attri b ut e d st at e m e nts\n\ni n t h e M ar c h 1 7 P r ess R el e as e . F ar n ell a n d Hai all e g e dl y ass u m e d t h eir p ositi o ns at E q o n e x t h at\n\nv er y d a y. A m. C o m pl. \u00b6 \u00b6 2 8 , 3 1 . H o w e v er, t h e pl ea di n gs still l a c k a n y all e gati o n t h at eit h er Far n ell\n\nor H ai h a d a ut h orit y o v er t h e p r ess r el e as e. Pl ai ntiffs f ail t o all e g e f a cts s h o wi n g t h at H ai, as a n e w\n\n\n 17\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 18 of 40\n\n\n\nm e m b er of E q o n e x\u2019s b oar d of dir e ct ors, \u201c h a d a n y r ol e i n s h a pi n g [ t h e pr ess r el e as e\u2019s] c o nt e nt. \u201d I n re\n\nL ul ule mo n Sec. Litig. , 1 4 F. S u p p. 3 d 5 5 3, 5 7 6 n. 1 4 ( S. D. N. Y. 2 0 1 4), aff\u2019 d , 6 0 4 F. A p p\u2019 x 6 2 ( 2 d Cir.\n\n2 0 1 5) ( h ol di n g t h at t h e c o m p a n y\u2019s f o u n d er a n d dir e ct or w as n ot a m a k er, a bs e nt \u201c p arti c ul ari z e d\n\nall e gati o ns t h at h e ha d a n y r ol e i n s h a pi n g [t h e st at e m e nts\u2019] c o nt e nt \u201d).\n\n Li k e wis e, P l ai ntiffs f ail t o pl e a d f a cts s h o wi n g t h at F ar n ell, as E q o n e x\u2019s n e wl y a p p oi nt e d\n\nC E O, was i n v ol v e d i n p u blis hi n g , r atif yi n g, or a p pr o vi n g t h e M ar c h 1 7 Pr ess R el eas e. F urt h er,\n\nF ar n ell di d n ot si g n t h e pr ess r el e as e; to t h e c o ntr ar y, t h e o nl y p ers o n t o si g n b ot h t h e M ar c h 7 a n d\n\nM ar c h 1 7 Pr ess R el eas es w as C F O a n d o utgoi ng dir e ct or, P a ul E wi n g. D kt. N os. 4 8 -6, 4 8 -7. T h e f a ct\n\nt h at F ar n ell w as q u ot e d i n t h e pr ess r el e as e d o es n ot its elf esta blis h his a ut h orit y o v er it wit h o ut\n\not h er \u201ci n di ci a of c o ntr ol .\u201d X u , 6 2 4 F. S u p p. 3 d at 3 6 0 \u2013 6 1 (fi n di n g \u201c ulti m at e a ut h orit y \u201d o v er a pr ess\n\nr el e as e w h er e pl e a di n gs s h o w t h at t h e C E O w as als o a c o -f o u n d er; h a d si g nifi ca nt s h ar e-o w n ers hi p\n\na n d v oti n g p o w er; h a d br o a d d e cisi o n -m a ki n g a ut h orit y o v er t h e m att ers at iss u e ; a n d ma d e l e n gt h y\n\na n d d et ail e d st at e m e nts dis c ussi n g t h e matt ers at iss u e i n t h e pr ess r el e as e e vi d e n ci n g his c o ntr ol\n\no v er t h e r e m ai n d er of t h e r el e as e \u2019s st at e m e nts); see also I n re Aege a n M ari ne Petrole u m Net wor k, I nc. Sec.\n\nLitig. , 5 2 9 F. S u p p. 3 d 1 1 1, 1 3 8\u2013 3 9 ( S. D. N. Y. 2 0 2 1) ( h ol di n g t h at b ei n g q u ot e d i n a st at e m e nt \u201c d o es\n\nn ot est a blis h [ o n e\u2019s] i n v ol v e m e nt i n t h e cr e ati o n of t h e fili n g \u201d). C o ntrar y t o Pl ai ntiffs\u2019 s u g g esti o n, it\n\nis i ns uffi ci e nt si m pl y t o pl e a d t h at \u201c as a r es ult of [ his] p ositi o n[] as C E O, \u201d h e c o ntr oll e d t h e pr ess\n\nr el e as e\u2019s c o nt e nt. X u , 6 2 4 F. S u p p. 3 d at 3 6 0 , 3 6 2.\n\n F or t h es e r e as o ns, Pl ai ntiffs f ai l t o all e g e t h at Far n ell a nd H ai w er e \u2018 m a k ers\u2019 of t h e n o n-\n\nattri b ut e d st at e m e nts i n E q o n e x\u2019s M ar c h 7 or 1 7 P r ess R el e as e s, b ut Pl ai ntiffs h a v e a d e q u at el y\n\nall e g e d t hat Far n ell a n d Hai \u2018 m a d e\u2019 t h eir q u ot e d st at e m e nts i n t h e Pr ess Rel eas es.\n\n 2. Pl ai ntiff s F ail t o Pl e a d t h at H ai\u2019 s St at e m e nt I s F al s e or Mi sl e a di n g\n\n Pl ai ntiffs f ail t o all e g e a n y f a cts t h at w o ul d i n di c at e t h at H ai\u2019s q u ot e d st at e m e nt i n t h e M ar c h\n\n7 Pr ess R el eas e w as f als e or misl e a di n g. \u201c A stat e m e nt is misl e a di n g if a r e as o n a bl e i n v est or w o ul d\n\n\n 18\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 19 of 40\n\n\n\nh a v e r e c ei v e d a fals e i m pr essi o n fr o m t h e stat e m e nt. \u201d Fre u de n berg v. E * Tr a de Fi n. Cor p. , 7 1 2 F. S u p p.\n\n2 d 1 7 1, 1 8 0 ( S. D. N. Y. 2 0 1 0) ( cit ati o n o mitt e d). W h e n a c o m p a n y d o es n ot h a v e a n o bli g ati o n t o\n\ns p ea k b ut d o es s o a n y w a y, it ass u m es \u201ca d ut y t o b e b ot h a c c ur at e a n d c o m pl et e. \u201d C aiola v. Citi b a n k,\n\nN. A., N. Y. , 2 9 5 F. 3 d 3 1 2, 3 3 1 ( 2 d Cir. 2 0 0 2); see also I n re Morg a n St a nley I nfo. F u n d Sec. Litig., 5 9 2 F. 3 d\n\n3 4 7, 3 6 6 ( 2 d Cir. 2 0 1 0) ( e x pl ai ni n g t h at o n c e a cor p or ati o n m a k es \u201ca dis cl os ur e a b o ut a p arti c ul ar\n\nt o pi c, w h et h er v ol u nt ar y or r e q uir e d, t h e r e pr es e ntati o n m ust b e c o m pl et e a n d a c c ur at e \u201d ( q u otati o n\n\no mitt e d)). A n d \u201clit er all y tr u e st at e m e nts \u201d ar e a cti o na bl e if t h e y \u201c cr e at e a m at eri all y misl e a di n g\n\ni m pr essio n .\u201d S E C v. G a belli , 6 5 3 F. 3 d 4 9, 5 7 ( 2 d Cir. 2 0 1 1), rev\u2019d a n d re ma n ded o n ot her gro u n ds , 5 6 8 U. S.\n\n4 4 2 ( 2 0 1 3).\n\n H ai w as q u ot e d i n t h e M ar c h 7 P r ess R el eas e as s a yi n g t h at E q o n e x\u2019s \u201ci nstit uti o n al a p pr o a c h\n\na n d a bilit y t o utili z e gl o b al r e g ul at or y fr a m e w or ks t o b uil d a c o m pli a nt b usi n ess dir e ctl y\n\nc o m pl e m e nts o ur r et ail f o c us a n d will gr e atl y b e n efit Bifi nit y o v er t h e l o n g -t er m. \u201d A m. C o m pl. \u00b6 4 8.\n\nPl ai ntiffs f ail t o all e g e t h at t his st at e m e nt w as f als e or misl e a di n g. 8 T h e st at e m e nt r ef ers o nl y t o t h e\n\np ot e nti al b e n efits of t h e Strat e gi c P art n ers hi p f or Bifi nity . It d o es n ot s a y a n yt hi n g a b o ut w h et h er t h e\n\nStr at e gi c P art n ers hi p w o ul d b e n efit E qo ne x or a b o ut a p ot e nti al m er g e r. T h us, n o r e as o n a bl e\n\ni n v est or c o ul d h a v e r e c ei v e d t h e i m pr essi o n t h at t h e Str at e gi c P art n ers hi p w o ul d s u p p ort E q o n e x or\n\nt h at t h e t w o c o m p a ni es w o ul d p urs u e a m er g er, w hi c h ar e t h e t w o all e g e dl y f als e clai ms o n w hi c h\n\nPl ai ntiffs b as e t h eir all e gati o ns of fr a u d. See Pl ai ntiffs\u2019 O p p. at 9. H ai\u2019s M ar c h 7 st at e m e nt is t h us\n\nn ot m at eri all y f als e or misl e a di n g.\n\n\n\n\n8 T o t h e c o ntr ar y, Pl ai ntiffs all e g e t hat t h e Str at e gi c P art n ers hi p w as i nt e n d e d pri m aril y t o b e n efit Bifi nit y, as Bifi nit y\nw o ul d g ai n a c c ess t o t h e r e g ul at e d U. K. m ar k et, i n w hi c h E q o n e x w as a p pr o v e d t o d o b u si n ess. A m. C o m pl. \u00b6 \u00b6 1 0, 5 0 .\nT h us, t h e A m e n d e d C o m pl ai nt a ct u all y all e g es t hat H ai\u2019s st at e m e nt is tr u e: D ef e n d a nts\u2019 h o p e d t hat E q o n e x\u2019s a bilit y t o\nutili z e gl o b al r e g ul at or y fr a m e w or ks w o ul d b e n efit Bifi nit y o v er t h e l o n g t er m .\n\n 19\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 20 of 40\n\n\n\n 3. Pl ai ntiff s F ail t o A d e q u at el y All e g e D ef e n d a nt s\u2019 S ci e nt er\n\n Pl ai ntiffs f ail t o a d e q u at el y all e g e t h at eit h er F ar n ell, H ai, or a n y ot h er E q o n e x offi c er h a d\n\na ct u al k n o wl e d g e t hat t h e Str at e gi c P art n ers h i p was n ot m e a nt t o s u p p ort E q o n e x or t h at t h er e w as\n\nn o i nt e nt i o n f or Bifi nit y a n d E q o n e x t o m er g e.\n\n a. L e g al St a n d ar d\n\n U n d er t h e h ei g ht e n e d pl ea di n g st a n dar ds of F e d. R. Ci v. P. 9( b) a n d t h e P S L R A, a plai ntiff\n\nall e gi n g s e c uriti es fra u d m ust all e g e \u201c wit h p arti c ul arit y f a cts gi vi n g ris e t o a str o n g i nf er e n c e t h at t h e\n\nd ef e n d a nt a ct e d wit h t h e r e q uir e d st at e of mi n d. \u201d 1 5 U. S. C. \u00a7 7 8 u -4( b)( 2)( A) ; see also Tell a bs, I nc. v.\n\nM a kor Iss ues & Rts., Lt d. , 5 5 1 U.S. 3 0 8, 3 1 3 ( 2 0 0 7). T h e q u esti o n \u201cis w h et h er all of t h e f a cts all e g e d,\n\nt a k e n c oll e cti v el y, gi v e ris e t o a str o n g i nf er e n c e of s ci e nt er, n ot w h et h er a n y i n di vi d u al all e g ati o n,\n\ns cr uti ni z e d i n is ol ati o n, m e ets t h at st a n d ar d. \u201d Tell abs , 5 5 1 U. S. at 3 2 2 \u2013 2 3.\n\n A n \u201ci nf er e n c e of s ci e nt er m ust b e m or e t h a n m er el y pl a usi bl e or r e as o n a bl e \u2014 it m ust b e\n\nc o g e nt a n d at l e ast as c o m p elli n g as a n y o p p osi n g i nf er e n c e of n o nfr a u d ul e nt i nt e nt. \u201d Tell a bs , 5 5 1\n\nU. S. at 3 1 4. If a n i nf er e n c e of fr a u d ul e nt i nt e nt is n ot \u201c at l e ast as c o m p elli n g \u201d as a c o ntr ar y\n\ni nf er e n c e, it is i n a d e q uat e, e v e n i n a \u201c cl os e c as e. \u201d Slayto n v. A m. E x p. Co. , 6 0 4 F. 3 d 7 5 8, 7 77 ( 2 d Cir.\n\n2 0 1 0) . A n i nf er e n c e of s ci e nt er n e e d n ot b e \u201cirr ef uta bl e, i. e., of t h e \u2018s m o ki n g -g u n\u2019 g e nr e, or e v e n\n\nt h e m ost pl a usi bl e of c o m p eti n g i nf er e n c es. \u201d Tell abs , 5 5 1 U. S. at 3 2 4 ( q u ot ati o n o mitt e d); see also City\n\nof Po nti ac Ge n. E m ployees\u2019 Ret. Sys. v. Loc k hee d M arti n Cor p. , 8 7 5 F. S u p p. 2 d 3 5 9, 3 7 2 ( S. D. N. Y. 2 0 1 2)\n\n( \u201c[ A]t t h e m oti o n t o dis miss st a g e, a ti e o n s ci e nt er g o es t o t h e plai ntiff. \u201d). \u201c B ut g e n eri c a n d\n\nc o n cl us or y all e gati o ns b as e d u p o n r u m or or c o nj e ct ur e ar e u n dis p ut e dl y i ns uffi ci e nt t o s atisf y t h e\n\nh ei g ht e n e d pl e a di n g st a n dar d. \u201d C a m po v. Se ars Hol di ngs Cor p. , 6 3 5 F. S u p p. 2 d 3 2 3, 3 3 6 ( S. D. N. Y.\n\n2 0 0 9), aff\u2019d , 3 7 1 F. A p p\u2019 x 2 12 ( 2 d Cir. 2 0 1 0). \u201c T h us, a c o m pl ai nt \u2018 w hi c h f ails t o a d d u c e a n y s p e cifi c\n\nf a cts s u p p orti n g a n i nf er e n c e of k n o wl e d g e a bl e p arti ci p ati o n i n t h e all e g e d fra u d, will n ot s atisf y\n\n\n\n\n 20\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 21 of 40\n\n\n\ne v e n a r ela x e d st a n d ar d.\u2019 \u201d F a ul k ner v. Veri zo n Co m mc \u2019ns, I nc. , 1 5 6 F. S u p p. 2 d 3 8 4, 3 9 3 ( S. D. N. Y.\n\n2 0 0 1) ( q u oti n g Deva ney v. C hester , 8 1 3 F. 2 d 5 6 6, 5 6 9 ( 2 d Cir. 1 9 8 7) ).\n\n \u201c W hil e \u2018t h e a bs e n c e of a m oti v e all e gati o n is n ot fat al,\u2019 m oti v e ca n b e a r el e va nt fa ct or, a n d\n\n\u2018p ers o n al fi n a n ci al gai n ma y w ei g h h e a vil y i n f a v or of a s ci e nt er i nf er e n c e. \u2019\u201d Sl ayto n , 6 0 4 F. 3 d at 7 7 6\n\n( q u oti n g Tell a bs , 5 5 1 U. S. at 3 2 5). I n s u m, \u201c[t] h e i n q uir y o n a m oti o n t o dis miss is as f oll o ws: \u2018 W h e n\n\nt h e all e gati o ns ar e a c c e pt e d as tr u e a n d t a k e n c oll e cti v el y, w o ul d a r e as o n a bl e p ers o n d e e m t h e\n\ni nf er e n c e of s ci e nt er at l east as str o n g as a n y o p p osi n g i nf er e n c e?\u2019 \u201d I n re Scot. Re Gr p. Sec. Litig. , 5 2 4\n\nF. S u p p. 2 d 3 7 0, 3 8 3 ( S. D. N. Y. 2 0 0 7).\n\n F urt h er, r ul e 9( b) r e q uir es t h at \u201c[i] n a c as e i n v ol vi n g m ulti pl e d ef e n d a nts, pl ai ntiffs m ust\n\npl e a d cir c u mst a n c es pr o vi di n g a f a ct u al basis f or s ci e nt er f or e a c h d ef e n d a nt; g uilt b y ass o ciati o n is\n\ni m p er missi bl e. \u201d I n re D D A V P Direct P urc h aser A ntitr ust Litig., 5 8 5 F. 3 d 6 7 7, 6 9 5 ( 2 d Cir. 2 0 0 9); see\n\nalso De A ngelis v. Cor zi ne , 1 7 F. S u p p. 3 d 2 7 0, 2 8 1\u2013 8 2 ( S. D. N. Y. 2 0 1 4) ( \u201c[ Pl ai ntiff] i m pr o p erl y\n\natt e m p ts t o gr o u p-pl e a d t h e s ci e nt er r e q uir e m e nt. \u201d); Pe n n. Ave. F u n ds v. I ny x I nc. , N o. 0 8-c v -6 8 5 7,\n\n2 0 1 0 W L 7 4 3 5 6 2, at * 1 2 ( S. D. N. Y. M ar. 1, 2 0 1 0) ( \u201c\u2018[ G]r o u p pl e a di n g\u2019 of s ci e nt er . . . r u ns af o ul of\n\nt h e P S L R A\u2019s r e q uir e m e nt t h at a pl ai ntiff \u2018st at e wit h p arti c ul a rit y f a cts gi vi n g ris e t o a str o n g\n\ni nf er e n c e t h at t h e d ef e n da nt a ct e d wit h t h e r e q uir e d st at e of mi n d.\u2019 \u201d ( citati o n o mitt e d) ( q u oti n g 1 5\n\nU. S. C. \u00a7 7 8 u -4( b)( 2)) ).\n\n b. T h e C h all e n g e d St at e m e nt s ar e F or w ar d -L o o ki n g a n d P uff er y\n\n T h e stat e m e nts attri b ut e d t o F ar n ell a n d t h e c h all e n g e d st at e m e nts i n t h e M ar c h 7 a n d\n\nM ar c h 1 7 Pr ess R el eas es ar e f or w ar d-l o o ki n g or c o nstit ut e c or p orat e p uff er y, a n d c o ns e q u e ntl y,\n\nPl ai ntiffs m ust pr o v e a ct ual k n o wl e d g e of t h eir falsit y t o st at e a cl ai m u n d er S e cti o n 1 0( b).\n\n T h e P S L R A d efi n es f or w ar d -l o o ki n g st at e m e nts as, a m o n g ot h ers, stat e m e nts of \u201ct h e pl a ns\n\na n d o bj e cti v es of m a n a g e m e nt f or f ut ur e o p er ati o ns \u201d a n d st at e m e nts of \u201cf ut ur e e c o n o mi c\n\np erf or m a n c e. \u201d 1 5 U. S. C. \u00a7 7 8 u -5(i)( 1)( B) \u2013 ( C). T o pl e a d s ci e n t er f or a f or w ar d-l o o ki n g st at e m e nt, a\n\n\n 21\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 22 of 40\n\n\n\npl ai ntiff m ust all e g e t h at t h e st at e m e nt w as m a d e \u201c wit h a ct u al k n o wl e d g e \u201d of its f alsit y. 1 5 U. S. C.\n\n\u00a7 7 8 u -5( c)( 1)( B) ; see also Sl ayto n v. A m. E x p. Co. , 6 0 4 F. 3 d 7 5 8, 7 7 6 ( 2 d Cir. 2 0 1 0) ( \u201c[ T] h e s ci e nt er\n\nr e q uir e m e nt f or f or w ar d-l o o ki n g st at e m e nts is stri ct er t h a n f or st at e m e nts of c urr e nt fa ct. W h er e as\n\nli a bilit y f or t h e l att er r e q uir es a s h o wi n g of eit h er k n o wi n g f alsit y or r e c kl ess n ess, lia bilit y f or t h e\n\nf or m er att a c h es o nl y u p o n pr o of of k n o wi n g f alsit y. \u201d). If t h e all e g e d vi olat or is a b usi n ess e ntit y, a\n\npl ai ntiff m ust pr o v e t h at t h e f or w ar d -l o o ki n g st at e m e nt w as \u201c m a d e b y or wit h t h e a p pr o v al of a n\n\noffi c er of t h at e ntit y . . . wit h a ct u al k n o wl e d g e b y t hat offi c er t h at t h e st at e m e nt w as f als e or\n\nmisl e a di n g. \u201d I d. \u00a7 7 8 u -5( c)( 1)( B)(ii).\n\n Li k e wis e, st at e m e nts of o pti mis m a n d p uff er y c a n b e a cti o n a bl e o nl y w h er e t h e y \u201c c o ntra di ct\n\nf a cts t h at ar e k no w n t o a d ef e n d a nt, \u201d I n re Virt us I nv. P art ners, I nc. Sec. Litig., 1 9 5 F. S u p p. 3 d 5 2 8, 5 3 7\n\n( S. D. N. Y. 2 0 1 6) ( e m p h asis a d d e d), or w h er e t h e y a m o u nt t o \u201c\u2018 misr e pr es e nt ati o ns of e xisti n g f a cts\u2019\n\nt h at w er e m a d e e v e n t h o u g h t h e s p ea k er \u2018k ne w t h at t h e c o ntrar y w as tr u e,\u2019 \u201d Galest a n v. O ne M ai n\n\nHol di ngs, I nc. , 3 4 8 F. S u p p. 3 d 2 8 2, 2 9 8 ( S. D. N. Y. 2 0 1 8) ( e m p h asis a d d e d) ( q u oti n g Nov a k v. K as a ks ,\n\n2 1 6 F. 3 d 3 0 0, 3 1 5 ( 2 d Cir. 2 0 0 0)). \u201c P uff er y e n c o m pass es \u2018st at e m e nts t h at ar e t o o g e n er al t o c a us e a\n\nr e as o n a bl e i n v est or t o r el y u p o n t h e m.\u2019 \u201d I n re Vive n di, S. A. Sec. Litig., 8 3 8 F. 3 d 2 2 3, 2 4 5 ( 2 d Cir.\n\n2 0 1 6) ( q u oti n g E C A, Loc. 1 3 4 I B E W Joi nt Pe nsio n Tr. of C hic ago v. J P Morg a n C h ase Co., 5 5 3 F. 3 d 1 8 7,\n\n2 0 6 ( 2 d Cir. 2 0 0 9) ). \u201c G e n er al st at e m e nts of o pti mis m a n d p uff er y ar e n o n -a cti o n a bl e u n d er f e d er al\n\ns e c uriti es l a ws b e c a us e t h e y ar e n ot \u2018s uffi ci e ntl y s p e cifi c t h at a r e as o n a bl e i n v est or c o ul d r el y o n\n\n[t h e m] as a g uar a nt e e of s o m e c o n cr et e f a ct or o ut c o m e. \u2019\u201d S as k atc he w a n He alt hc are E m p.\u2019s Pe nsio n Pl a n\n\nv. K E Hol di ngs I nc., 2 0 2 4 W L 7 7 5 1 9 5, at * 2 0 ( S. D. N. Y. F e b. 2 6, 2 0 2 4) ( W o o ds, J.) ( q u oti n g Lo pe z v.\n\nCt p art ners E xec. Se arc h I nc. , 1 7 3 F. S u p p. 3 d 1 2, 2 9 ( S. D. N. Y. 2 0 1 6)); see also I n re V ale S. A. Sec. Litig.,\n\n2 0 1 7 W L 1 1 0 2 6 6 6, at * 2 2 ( S. D. N. Y. M ar. 2 3, 2 0 1 7) (st at e m e nts r e g ar di n g \u201c w hat [t h e d ef e n d a nt] is\n\n\u2018s e e ki n g\u2019 t o d o, w h at it is \u2018 c o m mitt e d\u2019 t o d oi n g, w h at it is \u2018f o c us e d o n,\u2019 w h at it is \u2018 ai mi n g\u2019 t o d o, a n d\n\nw h at its \u2018 pri oriti es\u2019 ar e \u201d w er e n o n -a cti o n a bl e).\n\n\n 22\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 23 of 40\n\n\n\n I n t his c as e, all t h e st at e m e nts t h at Pl ai ntiffs all e g e misl e d i n v est ors t h at t h e Strat e gi c\n\nP art n ers hi p w o ul d str e n gt h e n E q o n e x ar e f or war d -l o o ki n g st at e m e nts a n d st at e m e nts of c or p or at e\n\np uff er y. 9 T h e st at e m e nts ass erti n g t h at t hr o u g h t h e Str at e gi c P art n ers hi p, t h e c o m p a ni es \u201c[ m] o vi n g\n\nf or w ar d \u201d \u201c will w or k t o g et h er \u201d a n d \u201c c olla b or at[ e] \u201d t o \u201cstr e n gt h e n \u201d a n d \u201cl e v er a g e \u201d E q o n e x a n d t h e\n\nE x c h a n g e, A m. C o m pl. \u00b6 \u00b6 4 7, 4 8, 5 3 , c o nstit ut e \u201ct h e pl a ns a n d o bj e cti v es a b o ut t h e c o m p a ni es\u2019\n\nm a n a g e m e nt f or f ut ur e o p er ati o ns , \u201d 1 5 U. S. C. \u00a7 7 8 u -5(i)( 1)( B) \u2013 ( C). F urt h er m or e, t h es e st at e m e nts\n\n\u201ct o ut[i n g] \u201d t h at t h e b usi n ess es w o ul d \u201c c o o p er at e \u201d t o \u201c m a xi mi z e b usi n ess s y n er gi es \u201d i n a wa y t h at\n\nw o ul d b e \u201ctr a nsf or m ati v e f or t h e i n d ustr y, \u201d A m. C o m pl. \u00b6 \u00b6 4 7 , 5 3, ar e s uffi ci e ntl y v a g u e s u c h t h at\n\nn o r e as o n a bl e i n v est or c o ul d r el y o n t h e m as a g u ara nt e e t h at E q o n e x a n d Bifi nit y w o ul d t a k e s o m e\n\nc o n cr et e a cti o n.\n\n Li k e wis e, all t h e pl e a d e d st at e m e nts r e gar di n g t h e c o m p a ni es\u2019 i nt e nti o ns t o p urs u e a\n\np ot e nti al m er g er ar e f or war d -l o o ki n g st at e m e nts.1 0 T h e st at e m e nt t h at E q o n e x a n d Bifi nit y \u201c w o ul d\n\nc o nti n u e t o e n g a g e \u201d i n \u201c p ot e nti al \u201d m er g er dis c ussi o ns, id. \u00b6 4 8 , c o nstit ut e t h e pl a ns a n d o bj e cti ves of\n\nc or p or at e m a n a g e m e nt. See F a ul k ner v. Veri zo n Co m mc\u2019 ns, I nc. , 1 5 6 F. S u p p. 2 d 3 8 4, 3 9 7\u2013 9 8\n\n( S. D. N. Y. 2 0 0 1) ( \u201c All of V eri z o n\u2019s c h all e n g e d st at e m e nts . . . c o n c er ni n g t h e st at us of t h e m er g er[]\n\nar e m er el y e x pr essi o ns of o pti mis m c o n c er ni n g a n u n c ertai n f ut ur e e v e nt. \u201d).\n\n\n\n\n9 T h es e st at e m e nts i n cl u d e: \u201c[ T h e c o m p a ni es will] w or k t o g et h er t o m a xi mi z e b usi n ess s y n er gi es cr e at e d b y t his n e w\nstr at e gi c r el ati o ns hi p a n d c a pit ali z e o n o p p ort u niti es t o c o o p er at e a n d f urt h er e x p a n d t h eir b usi n ess. \u201d A m. C o m pl. \u00b6 4 7.\n\u201c[ T h e Str at e gi c P art n ers hi p will] i niti ally f o c us o n l e v er a gi n g Di gi v a ult as a n F C A r e g ul at e d c ust o di a n, str e n gt h e ni n g t h e\nt e c h n ol o g y s u p p orti n g t h e E Q O N E X E x c h a n g e, a n d e x p a n di n g Bifi nit y\u2019s g e o gr a p hi c al f o ot pri nt t hr o u g h E Q O N E X\u2019s\nli c e nsi n g fr a m e w or k. \u201d I d. \u00b6 4 8. \u201c[ T h e c o m p a ni es] t o o k t h e n e xt st e p i n s oli dif yi n g t h eir str at e gi c p art n ers hi p wit h t h e\na p p oi nt m e nt of E Q O N E X\u2019s n e w C E O a n d t w o n e w m e m b ers t o t h e E Q O N E X B oar d of Dir e ct ors (t h e \u201c B o ar d \u201d). \u201d\nI d. \u00b6 5 3. \u201c As C E O, J o n at ha n will pl a y a n i nstr u m e nt al r ol e i n f ast -tr a c ki n g t h e c oll a b or ati o n b et w e e n b ot h b usi n ess es. \u201d\nI d. \u201c M o vi n g f or w ar d, Bifi nit y will d e v el o p w a ys t o l e v er a g e t h e E Q O N E X E x c h a n g e as a n alt er n ati v e tr a di n g pl atf or m,\nd e pl o y r es o ur c es t o str e n gt h e n t h e t e c h n ol o g y, a n d als o e x pl or e o p p ort u niti es t o s c al e t h e ass et m a n a g e m e nt b usi n ess . \u201d\nI d. \u201c C o u pl e d wit h its ass et m a n a g e m e nt b usi n ess a n d e x c h a n g e, t h e o p p ort u nit y t o cr e at e a f ull e c os yst e m b y h ar n essi n g\nBifi nit y\u2019s t e c h n ol o g y, m ar k eti n g cl o ut a n d cli e nt b as e h as t h e p ot e nti al t o b e tr a nsf or m ati v e f or t h e i n d ustr y. \u201d D kt. N o.\n4 8 -7; see also A m. C o m pl. \u00b6 5 3. \u201c[I\u2019 m] l o o ki n g f or w ar d t o f ost eri n g tr u e c oll a b or ati o n a n d pr o d u cti vit y a cr oss b ot h\nb usi n ess es a cr oss b ot h t e a ms. \u201d A m. C o m pl. \u00b6 5 3.\n1 0 T h es e st at e m e nts i n cl u d e: \u201c[ T h e c o m p a ni es will] c o nti n u e t o e n g a g e i n n o n -bi n d i n g dis c ussi o ns t o e x pl or e p ot e nti al\n\nm er g er o p p ort u niti es, s u bj e ct t o r e g ul at or y a p pr o v al. \u201d I d. \u00b6 4 8.\n\n 23\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 24 of 40\n\n\n\n B e c a us e t h e c h all e n g e d stat e m e nts ar e all f or w ar d -l o o ki n g or c or p or at e p uff er y, Pl ai ntiffs\n\nm ust a d e q u at el y pl ea d t h at D ef e n d a nts h a d \u201ca ct u al k n o wl e d g e t hat [t h e st at e m e nts w er e] f als e or\n\nmisl e a di n g. \u201d I n re Vive n di, S. A. Sec. Litig., 8 3 8 F. 3 d at 2 4 5; see also I n re Virt us I nv. P art ners, I nc. Sec.\n\nLitig. , 1 9 5 F. S u p p. 3 d at 5 3 7.\n\n c. Pl ai ntiff s F ail t o A d e q u at el y Pl e a d S ci e nt er a s t o E a c h S e cti o n\n 1 0( b) D ef e n d a nt\n\n Pl ai ntiffs\u2019 S e cti o n 1 0( b) clai ms ar e dis miss e d b e c a us e Pl ai ntiffs e n g a g e i n gr o u p pl e a di n g a n d\n\nb e c a us e Pl ai ntiffs f ail t o all e g e wit h parti c ul arit y f a cts gi vi n g ris e t o a str o n g i nf er e n c e t h at\n\nD ef e n d a nts or a n y ot h er E q o n e x e m pl o y e e h a d a ct u al k n o wl e d g e t h at t h e Strat e gi c P art n ers hi p\n\nw o ul d n ot s u p p ort E q o n e x or t h at Bifi nit y a n d E q o n e x w o ul d n e v er m er g e.\n\n i. Pl ai ntiff s E n g a g e i n I m p er mi s si bl e Gr o u p Pl e a di n g\n\n Pl ai ntiffs h a v e f ail e d t o a d e q u at el y all e g e s ci e nt er as t o e a c h i n di vi d ual d ef e n d a nt , as is\n\nr e q uir e d u n d er t h e h ei g ht e n e d pl e a di n g st a n dar d of F e d. R. Ci v. P. 9( b) a n d t h e P S L R A. \u201cI n a cas e\n\ni n v ol vi n g m ulti pl e d ef e n da nts, pl ai ntiffs m ust pl e a d cir c u mst a n c es pr o vi di n g a f a ct u al b asis f or\n\ns ci e nt er f or e a c h d ef e n d a nt; g uilt b y ass o ciati o n is i m p er missi bl e. \u201d I n re D D A V P Direct P urc h aser\n\nA ntitr ust L itig., 5 8 5 F. 3 d 6 7 7, 6 9 5 ( 2 d Cir. 2 0 0 9). T h e A m e n d e d C o m pl ai nt fr e q u e ntl y all e g es t h at\n\n\u201c D ef e n d a nts k n e w \u201d or t hat \u201c Pri m ar y Vi ol at ors k n e w. \u201d See A m. C o m pl. \u00b6 \u00b6 3 4, 5 0, 5 4, 8 3, 8 5.\n\nPl ai ntiffs f ail t o e v e n pl ea d e a c h i n di vi d ual D ef e n da nt\u2019s st at e of mi n d , l et al o n e pr o vi d e \u201c a f a ct u al\n\nb asis \u201d f or t he all e gati o n s. I n re D D A V P Direct P urc h aser A ntitr ust Litig., 5 8 5 at 6 9 5. T h e A m e n d e d\n\nC o m pl ai nt t h us s uff ers fr o m t e xt b o o k gr o u p pl e a di n g. See T he Pe n nsylv a ni a Ave. F u n ds v. I ny x I nc. ,\n\n2 0 1 0 W L 7 4 3 5 6 2, at * 1 2 ( S. D. N . Y. M ar. 1, 2 0 1 0) ( \u201c\u2018I n y x D ef e n d a nts\u2019 is a d efi n e d t er m i n t h e\n\n[ a]m e n d e d [ c]o m pl ai nt t h at r ef ers t o d ef e n d a nts K a c h k ar, H a n dl e y, G ol ds c h mi dt, Gr e e n a n d I n y x,\n\nI n c., c oll e cti v el y. T his t y p e of \u2018gr o u p pl e a di n g \u2019 of s ci e nt er . . . r u ns af o ul of t h e P S L R A. \u201d).\n\n W h il e Pl ai ntiffs ar g u e t h at \u201c D ef e n d a nts\u2019 j o b w as t o c arr y o ut Bi n a n c e\u2019s i nt e nti o ns, \u201d w hi c h\n\n\u201cr ais es t h e i nf er e n c e t h at t h e y k n e w t h os e i nt e nti o ns, \u201d Pl ai ntiffs\u2019 O p p. at 1 8, t his all e g ati o n is n ot i n\n 24\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 25 of 40\n\n\n\nt h e pl e a di n gs, n or d o es it d o a n yt hi n g m or e t h a n all e g e \u201c g uilt b y ass o ci ati o n. \u201d I n re D D A V P Direct\n\nP urc h aser A ntitr ust Litig. , 5 8 5 F. 3 d 6 7 7, 6 9 5 ( 2 d Cir. 2 0 0 9).\n\n F urt h er m or e, Pl ai ntiffs\u2019 gr o u p pl e a di n g u n d er mi n es t h eir all e g ati o n t h at E q o n e x w as a\n\npri m ar y vi ol at or of S e cti o n 1 0( b) . T h e P L S R A r e q uir es t h at Pl ai ntiffs pl ea d t h at t h e f or w ar d -l o o ki n g\n\nst at e m e nts w er e \u201c ma d e b y or wit h t h e a p pr o v al of a n offi c er of [ E q o n e x] . . . wit h a ct u al k n o wl e d g e\n\nb y t h at offi c er t h at t h e st at e m e nt w as fals e or misl e a di n g. \u201d 1 5 U. S. C. \u00a7 7 8 u -5( c)( 1)( B)(ii). Pl ai ntiffs\n\nm er el y pl e a d t hat \u201c D ef e n d a nts \u201d k n e w t h e M ar c h 7 a n d 1 7 Pr ess R el e as es p ut o ut b y E q o n e x w er e\n\nf als e. Pl ai ntiffs f ail t o all e g e w hi c h E q o n e x offi c er h a d a ct u al k n o wl e d g e of t h eir f alsit y a n d w h et h er\n\nt h at offi c er ma d e or a p pr o v e d t h e P r ess R el e as es. As dis c uss e d, Pl ai ntiffs d o n ot all e g e t h at F a r n ell\n\nor H ai w er e i n v ol v e d i n \u2018 m a ki n g\u2019 t h e P r ess R el e as es, n or d o Pl ai ntiffs a d e q uat el y all e g e t h at F ar n ell\n\nor H ai i n di vi d u all y ha d a ct u al k n o wl e d g e t h at t h e Pr ess R el e as es w er e f als e . Plai ntiffs\u2019 c l ai m t h at\n\nE q o n e x is a pri m ar y vi ol at or of S e cti o n 1 0( b) t h er ef or e d oes n ot m e et t h e e x c e pti o n t o t h e P S L R A\u2019s\n\ns af e-h ar b or pr o visi o n f or f or w ar d -l o o ki n g st at e m e nts.\n\n ii. Pl ai ntiff s F ail t o Pl e a d F a ct s S u p p orti n g a Str o n g I nf er e n c e t h at\n D ef e n d a nt s H a d A ct u al K n o wl e d g e\n\n Pl ai ntiffs\u2019 h a v e f ail e d t o pl e a d \u201c wit h parti c ul arit y f a cts gi vi n g ris e t o a str o n g i nf er e n c e \u201d t h at\n\nat t h e ti m e of t h e M ar c h Pr ess R el e as es, D ef e n da nts k n e w ( 1) t h at t h e Str at e gi c P art n ers hi p w o ul d\n\nn ot s u p p ort E q o n e x or ( 2) t h at E q o n e x a n d Bifi nit y w o ul d n ot m er g e . 1 5 U. S. C. \u00a7 7 8 u -4( b)( 2)( A).\n\n T h e \u201ct hr e e -p art pr es cri pti o n f or c arr yi n g o ut t his i n q uir y \u201d r e q uir es \u201ca c c e pt[i n g ] all f a ct u al\n\nall e gati o ns i n t h e [ A m e n d e d C o m pl ai nt] as tr u e, \u201d c o nsi d eri n g \u201c w h et h er all of t h e f a cts all e g e d, t a k e n\n\nc oll e cti v el y, gi v e ris e t o a str o n g i nf er e n c e of s ci e nt er, \u201d t h e n \u201ct a k[i n g] i nt o a c c o u nt pl a usi bl e\n\no p p osi n g i nf er e n c es. \u201d Slayto n v. A meric a n E x p. Co. , 6 0 4 F. 3 d 7 5 8, 7 7 4 ( 2 d Cir. 2 0 1 0).\n\n Pl ai ntiffs\u2019 all e gati o ns of s ci e nt er hi n g e o n t h e e xist e n c e of a si nist er s c h e m e b y Bi n a n c e,\n\nBifi nit y, a n d t h eir e x e c uti v es t o us e t h e Str at e gi c P art n ers hi p t o \u201cl et[] E q o n e x c oll a ps e \u201d a n d t h er e b y\n\n\u201c g ai n c o ntr ol of Di gi v a ult \u201d i n or d er \u201c t o r e-e nt er t h e U. K. m ar k et. \u201d Pl ai ntiffs\u2019 O p p. at 1 \u2013 2; see also\n 25\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 26 of 40\n\n\n\nA m. C o m pl. \u00b6 1 0. Plai ntiffs pl e a d t h e f oll o wi n g f a cts i n s u p p ort of its all e g ati o n t h at Bi n a n c e h a d\n\nm oti v e t o us e t h e Str at e gi c P art n ers hi p t o r eg ai n a c c ess t o t h e U. K. m ar k et . I n J u n e 2 0 2 1, Bi na n c e\n\nw as ba n n e d fr o m c o n d u cti n g \u201c all r e g ulat e d a cti vit y i n t h e U. K.. \u201d A m. C o m pl. \u00b6 4 5. Bi na n c e\n\ns u bs e q u e ntl y \u201c p urs u e d a c c ess t o U. K. m ar k ets i n m or e t h a n o n e w a y, \u201d i n cl u di n g a p art n ers hi p wit h\n\na n F C A -a p pr o v e d p a y m e nts pr o vi d er. I d. \u00b6 6 6. \u201c Bi n a n c e a n d its e x e c uti v es h a v e c o nsist e ntl y a ct e d\n\nt o s u b v ert fi n a n ci al r e g ul at ors \u201d i n C hi n a a n d t h e U nit e d St at es i n t h e p ast. I d. \u00b6 \u00b6 6 4 \u2013 6 5. I n M ar c h\n\n2 0 2 2, Bifi nit y e n t er e d i nt o t h e Str at e gi c P art n ers hi p wit h E q o n e x, w hi c h o w n e d a n F C A-a p pr o v e d\n\ndi git al ass et c ust o dia n. I d. \u00b6 4 7.\n\n Pl ai ntiffs pl e a d t h e f oll o wi n g f a cts i n s u p p ort of its all e g ati o n t h at D ef e n da nts e x p e ct e d\n\nE q o n e x t o f ail s o t hat t h e y c o ul d g ai n c o ntr ol of D i gi v a ult. Bifi nit y a n d t h e D ef e n d a nts \u201c k n e w or\n\nr e c kl essl y disr e gar d e d t h at E q o n e x was n ot i n a p ositi o n t o r e p a y \u201d t h e L o a n. Id. \u00b6 6 7. Fi v e m o nt hs\n\naft er t h e Str at e gi c P art n ers hi p c o m m e n c e d, \u201c E q o n e x a n n o u n c e d t h at it pla n n e d t o e xit t h e cr y pt o\n\ne x c h a n g e s p a c e [a n d] cl os e t h e [ E]x c ha n g e, \u201d e v e n t h o u g h \u201ct h e E x c ha n g e a c c o u nt[ e d] f or 7 9. 9 % of\n\nE q o n e x\u2019s r e v e n u es \u201d t h e pri or y e ar. I d. \u00b6 1 1. T h at sa m e d a y, \u201c Bifi nit y gr a nt e d E q o n e x a w ai v er f or\n\nt h e c ess ati o n of a m aj or b usi n ess a n d E q o n e x a gr e e d t o i n cr e as e Bifi nit y\u2019s s har e c h ar g e of Di gi v a ult\n\nu n d er t h e l o a n a gr e e m e nt fr o m 2 4. 9 % t o 1 0 0 %. I n ot h er w or ds, Bifi nit y t o o k o v er Di gi v a ult e ntir el y\n\nas E q o n e x l ost t h e s o ur c e of n e arl y 8 0 % of its r e v e n u e. \u201d I d. \u00b6 1 2.\n\n T h es e f a cts, t a k e n as tr u e, d o n ot gi v e ris e t o a str o n g i nf er e n c e of s ci e nt er u n d er t h e\n\nh ei g ht e n e d F e d. R. Ci v. P. 9( b) a n d P S L R A st a n dar d s. O n e ca n r e as o na bl y i nf er a m oti v e f or\n\nBi n a n c e t o a c c ess t h e U. K. m ar k et fr o m Bi n a n c e\u2019s pr e vi o us o p er ati o ns i n t h e U. K. a n d its att e m pts\n\nt o f or m ot h er p art n ers hi ps aft er t h e b a n. H o w e v er, t his m oti v e t o a c c ess t h e U. K. m ar k et d o es n ot\n\ne q u at e t o a m oti v e t o bri n g d o w n E q o n e x.\n\n T h e r e m ai n d er of t h e all e g e d e v e nts f ail t o pr o vi d e s uffi ci e nt cir c u mst a nti al e vi d e n c e t h at\n\nD ef e n d a nts h a d k n o wl e d g e of a s c h e m e t o c a us e E q o n e x t o c oll a ps e t o all o w Bi n a n c e t o t a k e o v er\n\n\n 26\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 27 of 40\n\n\n\nDi gi v a ult . Pl ai ntiffs m a k e n o all e g ati o ns t h at a n y D ef e n d a nt t o o k a n y a cti o n t o eff e ct u at e t h e\n\nc oll a ps e of E q o n e x. See A T SI Co m m n\u2019cs, I nc. v. S h aar F u n d, Ltd. , 4 9 3 F. 3 d 8 7, 1 0 6 ( 2 d Cir. 2 0 0 7)\n\n( \u201c T h es e all e g ati o ns f ail R ul e 9( b)\u2019s r e q uir e m e nt . . . . [ T h e c o m pl ai nt] fails t o all e g e wit h parti c ul arit y\n\nw h at, if a n yt hi n g, t h e d ef e n d a nts di d t o c a us e t h e d e cli n e; it si m pl y off ers a g e n er ali z e d all e gati o n\n\nt h at t h e d ef e n d a nts e n g a g e d i n d e at h s pir al fi n a n ci n g. \u201d). Pl ai ntiffs m a k e n o all e g ati o n t h at a n y\n\nD ef e n d a nt or E q o n e x e x e c uti v e w as m a d e a war e of a pl a n b y Bi n a n c e or Bifi nit y r e g ar di n g t h e\n\nE x c h a n g e or t h e p ot e nti al m er g er , a n d Pl ai ntiffs h a v e pr o vi d e d n o \u201cf a ct u al basis t o s u p p ort \u201d t h e\n\nall e gati o n t h at D ef e n d a nts n e v er i nt e n d e d t o eff e ct uat e a m er g er. F a ul k ner v. Veri zo n Co m mc\u2019 ns, I nc. ,\n\n1 5 6 F. S u p p. 2 d 3 8 4 , 3 9 6 ( S. D. N. Y. 2 0 0 1) ( \u201cPl ai ntiffs h a v e pr o vi d e d n o fa ct u al b asis t o s u p p ort t h e\n\ncl ai m t h at pri or t o N o v e m b er 1 4, 2 0 0 0, V eri z o n h a d c h a n g e d its mi n d a n d d e ci d e d t o t er mi n at e t h e\n\nm er g er. \u201d). All Pl ai ntiffs pr o vi d e ar e a s eri es of u nf ort u n at e e v e nts f or E q o n e x o v er a p eri o d of fi v e\n\nm o nt hs , w hi c h Pl ai ntiffs fr a m e as t h e c o ns e q u e n c es of t h e all e g e d s c h e m e, a n d \u201c c o n cl us or y \u201d\n\nall e gati o ns of s ci e nt er t h at b or d er o n i m p er missi bl e c o nj e ct ur e . A T SI , 4 9 3 F. 3 d at 9 9 ( \u201cAll e g ati o ns\n\nt h at ar e c o n cl us or y or u ns u p p ort e d b y f a ct u al ass erti o ns ar e i ns uffi ci e nt.\u201d) ; see also C a mpo v. Se ars\n\nHol di ngs Cor p. , 6 3 5 F. S u p p. 2 d 3 2 3, 3 3 6 ( S. D. N. Y. 2 0 0 9), aff\u2019d , 3 7 1 F. A p p\u2019 x 2 1 2 ( 2 d Cir. 2 0 1 0)\n\n( \u201c[ G]e n eri c a n d c o n cl us or y all e gati o ns bas e d u p o n r u m or or c o nj e ct ur e ar e u n dis p ut e dl y\n\ni ns uffi ci e nt. \u201d).\n\n T h e C o urt m ust als o c o nsi d er \u201c pl a usi bl e o p p osi n g i nf er e n c es \u201d i n or d er t o ass ess w h et h er\n\nPl ai ntiffs\u2019 i nf er e n c es ar e \u201cat l e ast as c o m p elli n g \u201d as t h e alt er n ati v es. Tell abs, I nc. v. M a kor Iss ues &\n\nRts., Lt d. , 5 5 1 U. S. 3 0 8, 3 2 3\u2013 2 4 ( 2 0 0 7). A n o p p osi n g i nf er e n c e fr o m t h es e s et of fa cts w o ul d b e t h at\n\nE q o n e x was a c o m p a n y f a ci n g fi n a n cial h ar ds hi p a n d ulti m at el y f ail e d d es pit e g o o d f ait h eff orts b y\n\nBifi nit y t o r e ali z e s y n er gi es b et w e e n t h eir pl atf or ms. T h e f a ct t h at Bi n a n c e p urs u e d ot h er\n\np art n ers hi ps i n t h e U. K. aft er its b a n o n o p er ati o ns, A m. C o m pl. \u00b6 6 6, s u p p orts t h e i nf er e n c e t hat\n\nBi n a n c e w as p urs ui n g a n ot h er g o o d f ait h p art n ers hi p wit h E q o n e x i n or d er t o a c c ess t h e U. K.\n\n\n 27\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 28 of 40\n\n\n\nm ar k et. T h e f a ct t h at Bifi nit y a p p oi nt e d o nl y t w o dir e ct ors t o E q o n e x\u2019s s e v e n-p e rs o n b o ar d, i d. \u00b6 7,\n\ns u p p orts t h e i nf er e n c e t hat Bifi nit y w as n ot i n \u201c c o ntr ol \u201d of E q o n e x as Plai ntiffs cl ai m, id. \u00b6 3, b ut\n\nr at h er t h at Bifi nit y u n d ert o o k a p art n ers hi p. See i d. \u00b6 5 9 ( \u201c T h e d e cisi o n b y t h e E Q O N E X Bo ar d of\n\nDirectors t o a c c el er at e its str at e gi c pl a n a n d cl os e t h e E x c h a n g e is i n ali g n m e nt wit h t his strat e gi c\n\nfra m e w or k. \u201d ( e m p h asis a d d e d)). F urt h er, Pl ai ntiffs\u2019 all e gati o n t h at \u201ct h e L o a n w as n ot s uffi ci e nt t o\n\nst a v e off E q o n e x\u2019s i ns ol v e n c y \u201d s u p p orts t h e i nf er e n c e t h at E q on e x w as h e a d e d f or r ui n r e g ar dl ess\n\nof t h e Str at e gi c P art n ers hi p. I d. \u00b6 1 0 ; see also i d. \u00b6 5 0 ( \u201cE q o n e x h a d n o w a y t o r e p a y Bifi nit y . . . .\u201d);\n\ni d. \u00b6 5 9 ( q u oti n g E q o n e x r e g ar di n g t h e \u201c hi g h -c ost str u ct ur e ass o ci at e d wit h o p er ati n g t h e\n\n[ E]x c h a n g e \u201d). L astl y, Pl ai ntiffs all e g e t hat b y t h e ti m e E q o n e x m a d e t h e d e cisi o n t o cl os e t h e\n\nE x c h a n g e o n A u g ust 1 5, 2 0 2 2, t h e F C A h a d a n n o u n c e d a r ul e r e q uiri n g pri or F C A a p pr o v al\n\nw h e n e v er a p ers o n or e ntit y att e m pts t o \u201c a c q uir e c o ntr ol of a F C A -r e gist er e d cr y pt o ass et b usi n ess,\n\ndir e ctl y or i n dir e ctl y. \u201d Id. \u00b6 5 7. \u201c A c o ntr oll er w o ul d m e a n a p ers o n or e ntit y w h o o w ns m or e t h a n\n\n2 5 % of t h e s h ar es or v oti n g ri g hts i n t h e cr y pt o b usi n ess. \u201d I d. T h e A m e n d e d C o m pl ai nt all e g es t h at\n\nBifi nit y h a d o nl y a 2 4. 9 p er c e nt s h ar e c har g e of Di g i v a ult b ef or e A u g ust 1 5. I d. \u00b6 1 2. Fr o m t h es e\n\nf a cts, o n e c a n r e as o n a bl y i nf er t h at Bifi nit y w o ul d n e e d F C A a p pr o v al t o t a k e o v er Di gi v a ult\n\na n y w a y, w hi c h d o es n ot s u p p ort t h e i nf er e n c e t h at cl osi n g t h e E x c ha n g e was a n \u201c att e m pt e d e n d-r u n\n\nar o u n d t h e F C A\u2019s ba n. \u201d Id. \u00b6 5 4. 1 1\n\n \u201c W hil e [t h e C o urt] fi n d[s] t h e i nf er e n c e of fr a u d ul e nt i nt e nt pl a usi bl e, a n d c o nsi d er[s] t his t o\n\nb e a cl os e c as e , \u201d t h e cir c u mst a nti al e vi d e n c e all e g e d b y Pl ai ntiffs d oes n ot l e n d str o n g s u p p ort f or\n\n\n1 1 O nl y i n t h eir o p p ositi o n bri ef d o Pl ai ntiffs pr o p os e t h at \u201cD ef e n d a nts w er e m oti v at e d t o k e e p u p t h e ill usi o n t hat t h e y\nw er e si m pl y i n a Str at e gi c P ar t n ers hi p wit h E q o n e x wit h t h e p ossi bilit y of a m er g er s o t hat t h e y c o ul d w or k o n\nc o n vi n ci n g t h e F C A t o s a n cti o n a c h a n g e i n c o ntr ol of Di gi v a ult, w hi c h w o ul d t h e n all o w t h e m t o t a k e a 1 0 0 % s h ar e\nc h ar g e i n Di gi v a ult a n d l et E q o n e x its elf c oll a ps e. \u201d Pl ai nti ffs\u2019 O p p. at 1 6 \u2013 1 7. T h es e all e g ati o ns ar e n ot m a d e i n t h e\nA m e n d e d C o m pl ai nt , a n d \u201c a p art y is n ot e ntitl e d t o a m e n d its c o m pl ai nt t hr o u g h st at e m e nts m a d e i n m oti o n p a p ers. \u201d\nWrig ht v. Er nst & Yo u ng L L P , 1 5 2 F. 3 d 1 6 9, 1 7 8 ( 2 d Cir. 1 9 9 8) ( citi n g II T, a n I nt\u2019l I nv. Tr. v. Cor nfel d, 6 1 9 F. 2 d 9 0 9, 9 1 4\nn. 6 ( 2 d Cir. 1 9 8 0), a brog ate d o n ot her gro u n ds by Morriso n v. N at \u2019l A ustr ali a B a n k Lt d., 5 6 1 U. S. 2 4 7 ( 2 0 1 0)). N or d o t h es e\nall e g ati o ns m a k e l o gi c al s e ns e. D ef e n d a nts w o ul d n ot n e e d a s c h e m e \u201ct o cir c u m v e nt t h e F C A\u2019s b a n ,\u201d Pl ai ntiffs\u2019 O p p. at\n1 1, if t h e y ulti m at el y pl a n n e d si m pl y t o c o n vi n c e t h e F C A t o gr a nt t h e m a c c ess a g ai n. S ee D kt. N o. 5 0, D ef e n d a nts\u2019\nR e pl y M e m or a n d u m of L a w i n S u p p o rt of T h eir M oti o n t o Dis miss at 6.\n\n 28\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 29 of 40\n\n\n\nt h e i nf er e n c e t h at D ef e n da nts h a d a ct u al k n o wl e d g e t h at Bifi nit y w o ul d l et E q o n e x f ail a n d w o ul d\n\nt er mi n at e a m er g er. Sl ayto n , 6 0 4 F. 3 d. at 7 7 7. B as e d o n t h e f a cts all e g e d, t h e m or e c o m p elli n g\n\ni nf er e n c e is t hat D ef e n d a nts use d t h e Str at e gi c P art n ers hi p t o g et a c c ess t o t h e U. K. m ar k et i n g o o d\n\nf ait h b ut w er e u n a bl e t o pr e v e nt E q o n e x\u2019s i m p e n di n g c oll a ps e. T h er ef or e, t h e pl e a di n gs f ail t o\n\nall e g e fa cts s uffi ci e nt u n d er F e d. R. Ci v. P. 9( b) a n d t h e P S L R A t o dra w a str o n g i nf er e n c e t h at t h e\n\nM ar c h 7 a n d M ar c h 1 7 Pr ess R el e as es w er e m a d e wit h a ct u al k n o wl e d g e of t h eir falsit y . Slayto n , 6 0 4\n\nF. 3 d at 7 7 7 .\n\n 4. L o s s C a u s ati o n\n\n B e c a us e Plai ntiffs\u2019 S e cti o n 1 0( b) cl ai ms f ail as t o s ci e nt er, t h e C o urt n e e d n ot a d dr ess\n\nD ef e n d a nts\u2019 ar g u m e nt t h at Pl ai ntiffs h a v e f ail e d t o est a blis h l oss c a us ati o n. See S as k atc he w a n\n\nHe alt hc are E m ployee \u2019s Pe nsio n Pl a n v. K E Hol di ngs I nc., 2 0 2 4 W L 7 7 5 1 9 5, at * 3 0 ( S. D. N. Y. F e b. 2 6,\n\n2 0 2 4) ( W o o ds, J.) ( \u201cB e c a us e t h e f ail ur e t o est a blis h a n y el e m e nt is f at al t o a s e ct i o n 1 0( b) / R ul e 1 0 b-\n\n5 cl ai m, t h e C o urt n e e d n ot a d dr ess [ d]ef e n da nts\u2019 ot h er ar g u m e nts f or . . . dis miss al. \u201d).\n\n B. S e cti o n 2 0( a) Li a bilit y\n\n B e c a us e Plai ntiffs f ail t o a d e q u at el y pl e a d a vi ol ati o n of S e cti o n 1 0( b) or R ul e 1 0 b -5, t h eir\n\nS e cti o n 2 0( a) clai ms als o fai l. See A T SI Co m mc\u2019 ns, I nc. v. S h a ar F u n d, Lt d. , 4 9 3 F. 3 d 8 7, 1 0 8 ( 2 d Cir.\n\n2 0 0 7) ( \u201c A T SI f ails t o all e g e a n y pri m ar y vi olati o n; t h us, it c a n n ot est a blis h c o ntr ol p ers o n li a bilit y. \u201d) ;\n\nE C A, Loc. 1 3 4 I B E W Joi nt Pe nsio n Tr. of C hic ago v. J P Morga n C h ase Co. , 5 53 F. 3 d 1 8 7 , 2 0 7 ( 2 d Cir.\n\n2 0 0 9). H o w e v er, e v e n ass u mi n g Pl ai ntiffs a d e q uat el y pl e a d a 1 0( b) cl ai m b y a pri m ar y vi ol at or,\n\nPl ai ntiffs\u2019 2 0( a) cl ai ms s uff er fr o m ot h er d efi ci e n ci es.\n\n 1. L e g al St a n d ar d\n\n U n d er S e cti o n 2 0( a) of t h e S e c uriti es E x c h a n g e A ct, \u201c[ e] v er y p ers o n w h o, dir e ctl y or\n\ni n dir e ctl y, c o ntr ols a n y p ers o n li a bl e u n d er [t h e E x c h a n g e A ct a n d its r e g ulati o ns] s h all als o b e li a bl e\n\nj oi ntl y a n d s e v er all y wit h a n d t o t h e s a m e e xt e nt as s u c h c o ntr oll e d p ers o n t o a n y p ers o n t o w h o m\n\n\n 29\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 30 of 40\n\n\n\ns u c h c o ntr oll e d p ers o n is li a bl e . . . u nl ess t h e c o ntr olli n g p ers o n a ct e d i n g o o d f ait h a n d di d n ot\n\ndir e ctl y or i n dir e ctl y i n d u c e t h e a ct or a cts c o nstit uti n g t h e vi ol ati o n or c a us e of a cti o n. \u201d 1 5 U. S. C.\n\n\u00a7 7 8t( a). \u201c A n y cl ai m f or \u2018 c o ntr ol p ers o n\u2019 li a bilit y u n d er \u00a7 2 0( a) of t h e E x c ha n g e A ct m ust b e\n\npr e di c at e d o n a pri m ar y vi ol ati o n of s e c uriti es l a w. \u201d P ac. I nv. Mg mt. Co. L L C v. M ayer Bro w n L L P ,\n\n6 0 3 F. 3 d 1 4 4, 1 6 0 ( 2 d Cir. 2 0 1 0). T o stat e a cl ai m of c o ntr ol p ers o n li a bilit y, a pl ai ntiff m ust all e g e\n\n\u201c( 1) a pri m ar y vi ol ati o n b y t h e c o ntr oll e d p ers o n, ( 2) c o ntr ol of t h e pri m ar y vi ol at or b y t h e\n\nd ef e n d a nt, a n d ( 3) t h at t h e d ef e n d a nt was, i n s o m e m e a ni n gf ul s e ns e, a c ul pa bl e p arti ci p a nt i n t h e\n\nc o ntr oll e d p ers o n\u2019s fr a u d. \u201d C ar pe nters Pe nsio n Tr. F u n d of St. Lo uis v. B arcl ays P L C , 7 5 0 F. 3 d 2 2 7, 2 3 6\n\n( 2 d Cir. 2 0 1 4).\n\n C o ntr ol p ers o n li a bilit y r e q uir es \u201c a ct u al c o ntr ol \u201d o v er t h e pri m ar y vi ol at or. I n re Bio Scri p, I nc.\n\nSec. Litig. , 9 5 F. S u p p. 3 d 7 1 1, 7 4 0 ( S. D. N. Y. 2 0 1 5). \u201c Co ntr ol i n t his c o nt e xt is n ot t h e m er e a bilit y\n\nt o p ers u a d e, b ut al m ost al w a ys m e a ns t h e pr a cti cal a bilit y t o dir e ct t h e a cti o ns. \u201d I n re Fl ag Teleco m\n\nHol di ngs, Lt d. Sec. Litig. , 3 5 2 F. S u p p. 2 d 4 2 9, 4 5 8 ( S. D. N. Y. 2 0 0 5) (i nt er n al q u ot ati o n m ar ks\n\no mitt e d). As s u c h, \u201c mi n orit y st o c k o w n ers hi p a n d t h e a bilit y t o a p p oi nt a mi n orit y of t h e b o ar d d o\n\nn ot cr e at e p o w er t o dir e ct m a n a g e m e nt a n d p oli ci es, a n d t h us d o n ot c o nstit ut e s uffi ci e nt c o ntr ol\n\nu n d er S e cti o n 2 0( a). \u201d I n re Alsto m S A, 4 0 6 F. S u p p. 2 d 4 3 3, 4 9 2 ( S. D. N. Y. 2 0 0 5); see also I n re Fl ag\n\nTeleco m Hol di ngs, Lt d. Sec. Litig. , 3 5 2 F. S u p p. 2 d 4 2 9, 4 5 8 ( S. D. N. Y. 2 0 0 5) ( \u201cIf t h e [t hr e e] V eri z o n\n\nd esi g n e es c o n vi n c e d e n o u g h of t h e ot h er si x m e m b ers of t h e B o ar d of Dir e ct ors t o all o w Fl a g t o\n\ne nt er i nt o u n d ul y s p e c ul at i v e v e nt ur es t o b e n efit V eri z o n, it w o ul d h a v e b e e n t h e r es ult of t h e\n\ne x er cis e of t h eir p o w ers of p ers u asi o n, n ot t hr o u g h a ct u al c o ntr ol of Fl a g. \u201d); I n re Bio Scri p, I nc. Sec.\n\nLitig. , 9 5 F. S u p p. 3 d 7 1 1 ( S. D. N. Y. 2 0 1 5) ( dis missi n g a S e cti o n 2 0( a) cl ai m a g ainst a d ef e n da nt w h o\n\no w n e d 2 6 p er c e nt of pri m ar y vi ol at or\u2019s st o c k a n d ha d t h e ri g ht t o a p p oi nt t w o dir e ct ors t o a n ei g ht -\n\np ers o n b o ar d).\n\n\n\n\n 30\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 31 of 40\n\n\n\n T h e d et er mi n ati o n of w h et h er a d ef e n d a nt is a \u201c c o ntr olli n g p ers o n \u201d is \u201ca f a ct -i nt e nsi v e\n\ni n q uir y t h at g e n er all y s h o ul d n ot b e r es ol v e d o n a m oti o n t o dis miss. \u201d I d. at 7 4 1 ( cit ati o n a n d\n\nalt er ati o n o mitt e d). N o n et h el ess, \u201cit is n ot s uffi ci e nt f or [ a pl ai nti ff] t o all e g e t h at [ a d ef e n d a nt] h as\n\nc o ntr ol p ers o n st at us; i nst ea d, [t h e pl ai ntiff] m ust ass ert t h at [t h e d ef e n d a nt] e x er cis e d act u al c o ntr ol\n\no v er t h e m att ers at iss u e. \u201d I n re S mit h B ar ney Tr a nsfer Age nt Litig., 8 8 4 F. S u p p. 2 d 1 5 2, 1 6 6 \u2013 6 7\n\n( S. D. N. Y. 2 0 1 2) ( h ol di n g t h at e v e n t h o u g h t h e d ef e n d a nt \u201c w as pr o vi d e d wit h or h a d u nli mit e d\n\na c c ess t o c o pi es of t h e [ vi ol ati n g c o m p a n y\u2019s] p u bli c fili n gs, \u201d t h e pl e a di n gs w er e i ns uffi ci e nt f or\n\nf aili n g t o all e g e t h e d ef e n da nt \u201csi g n e d, dr aft e d, a p pr o v e d, or c o nfir m e d a misl e a di n g st at e m e nt \u201d) ; see\n\nalso I n re Bristol Myers S q ui b b Co. Sec. Litig., 5 8 6 F. S u p p. 2 d 1 4 8, 1 7 0 ( S. D. N. Y. 2 0 0 8). A d diti o n all y,\n\nt his C o urt pr e vi o usl y h el d t h at a n e ntit y\u2019s \u201cst at us as a c or p or at e p ar e nt [] s a ys n ot hi n g r e g ar di n g t h e\n\nc o ntr o l t h at [it] e x erts. \u201d Do u ble Li ne Ca p. L P v. O de brec ht Fi n., Lt d. , 3 2 3 F. S u p p. 3 d 3 9 3, 4 6 0\n\n( S. D. N. Y. 2 0 1 8) ( W o o ds, J.). I n t h at c as e, t h e plai ntiffs\u2019 all e gati o n t h at a p ar e nt c o m p a n y \u201c a ct e d as a\n\nc o ntr olli n g p ers o n . . . a n d h a d t h e p o w er a n d a ut h orit y t o c a us e [t h e pri m ar y vi ol at or] t o e n g a g e i n\n\nt h e wr o n gf ul c o n d u ct \u201d was \u201c n ot hi n g m or e t h a n a c o n cl us or y all e g ati o n of c o ntr ol. \u201d I d. at 4 6 1.\n\n 2. Pl ai ntiff s F ail t o A d e q u at el y All e g e C o ntr ol Li a bilit y Cl ai m s A g ai n st\n Bi n a n c e a n d Z h a o\n\n B e c a us e Plai ntiffs\u2019 S e cti o n 2 0( a) cl ai ms a gai nst Bi n a n c e a n d Z ha o r est s ol el y o n t h eir st at us\n\nas p ar e nt c o m pa n y a n d o w n er of t h e p ar e nt c o m p a n y, r es p e cti v el y, Pl ai ntiffs f ail t o a d e q u at el y pl ea d\n\nBi n a n c e a n d Z ha o\u2019s c o ntr ol.\n\n Pl ai ntiffs all e g e br o a dl y t hat \u201ct h e [ S]trat e gi c [ P]art n ers hi p p ut Bifi nit y ( a n d, t hr o u g h Bifi nit y,\n\nBi n a n c e) i n c o ntr ol of E q o n e x b y t a ki n g o v er its e x e c uti v e m a na g e m e nt. \u201d A m. C o m pl. \u00b6 7.\n\nPl ai ntiffs i m pli citl y all e g e t h at Z h a o t h er e aft er als o c o ntr oll e d E q o n e x b e c a us e \u201c Bifi nit y is w h oll y\n\nc o ntr oll e d b y [ Z h a o] , its s ol e s h ar e h ol d er. \u201d I d. \u00b6 6. Pl ai ntiffs f ail t o pl e a d a n y all e gati o ns t h at eit h er\n\nBi n a n c e or Z h a o e x er cis e d c o ntr ol o v er a n y o n e at Bifi nit y or E q o n e x , l et al o n e a b o ut a n y of t h e\n\nM ar c h 7 a n d 1 7 P r ess R el e as es. See I n re Alsto m S A, 4 0 6 F. S u p p. 2 d 4 3 3, 4 8 7 ( S. D. N. Y. 2 0 0 5) ( \u201c[ A]\n 31\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 32 of 40\n\n\n\nS e cti o n 2 0( a) d ef e n da nt m ust n ot o nl y h a v e a ct u al c o ntr ol o v er t h e pri m ar y vi ol at or, b ut h a v e a ct ual\n\nc o ntr ol o v er t h e tr a ns a cti o n i n q u esti o n. \u201d (i nt er n al q u ot ati o n m ar ks o mitt e d)). Pl ai ntiffs o nl y ass ert\n\nt h at \u201c Bifi nit y is p art of Bi n a n c e \u201d a n d Z h a o is Bifi nit y\u2019s s ol e s har e h ol d er. A m. C o m pl. \u00b6 4 4, 3 2. O n\n\nt his b asis al o n e, Pl ai ntiffs c o n cl u d e t h at t h es e D ef e n d a nts ar e \u201c c o ntr oll er [s] of E q o n e x \u201d wit h t h e\n\n\u201c p o w er t o dir e ct t h e a cti o ns of . . . E q o n e x t o e n g a g e i n t h e u nl a wf ul a cts .\u201d I d. \u00b6 9 5 . T his is\n\n\u201c n ot hi n g m or e t h a n a c o n cl us or y all e g ati o n of c o ntr ol .\u201d Do u ble Li ne , 3 2 3 F. S u p p. 3 d at 4 6 1 .\n\n T h us, e v e n if Pl ai ntiffs a d e q u at el y all e g e d a pri m ar y vi ol ati o n of S e cti o n 1 0( b), Pl ai ntiffs h a v e\n\nf ail e d t o st at e S e cti o n 2 0(a) c o ntr ol-p ers o n cl ai ms a gai nst Bi na n c e a n d Z h a o.\n\n 3. Pl ai ntiff s F ail t o A d e q u at el y All e g e C o ntr ol Li a bilit y Cl ai m s A g ai n st\n Li n g a n d C e m m ell\n\n T h e S e cti o n 2 0( a) clai ms a g ai nst Li n g a n d C e m m ell s h o ul d als o b e dis miss e d r e g ar dl ess of\n\nt h e e xist e n c e of a pri m ar y vi ol ati o n b e c a us e Plai ntiffs f ail t o pl e a d f a cts s u p p orti n g t h eir c o ntr ol o v er\n\na n y p ers o n i n v ol v e d i n pr o d u ci n g t h e M ar c h 7 a n d 1 7 Pr ess R el eas es . T h e A m e n d e d C o m pl ai nt\n\nr ef ers t o Li n g a n d C e m m ell b y n a m e o nl y w h e n e x plai ni n g t h at Bifi nit y a p p oi nt e d Li n g as a dir e ct or\n\na n d C F O a n d C e m m ell as C C A O f or E q o n e x. A m. C o m pl. \u00b6 2 9 \u2013 3 0. Plai ntiffs f ail t o pl e a d s p e cifi c\n\nall e gati o ns r e gar di n g Li n g \u2019s or C e m m el l\u2019s c o ntr ol o v er a n y p ers o n i n v ol v e d i n m a ki n g t h e all e g e d l y\n\nf als e st at e m e nts. I n f a ct, Li n g w as n ot a p p oi nt e d t o E q o n e x as a n offi c er or dir e ct or u ntil A pril 2 8,\n\n2 0 2 2, o v er a m o nt h aft er t h e all e g e d l y f als e st at e m e nts w er e m a d e. A m. C o m pl. \u00b6 2 9. Li k e wi s e,\n\nC e m m ell w as a p p oi nt e d o n M ar c h 3 1, 2 0 2 2, w ell aft er t h e M ar c h P r ess R el eas es w er e p u blis h e d. I d.\n\n\u00b6 3 0. Pl ai ntiffs f ail t o pl ea d t h at Li n g or C e m m ell ha d c o ntr ol pri or t o t h e ir ass u m pti o n of t h eir\n\np ositi o ns at E q o n e x.\n\n T h us, Pl ai ntiffs i nst ea d ar g u e i n t h eir o p p ositi o n bri ef t h at \u201c[t] h e pr e cis e d at es of t h eir\n\noffi ci al a p p oi nt m e nts t o E q o n e x ar e irr el e v a nt \u201d b e ca us e t h e Str at e gi c P art n ers hi p h a d alr e a d y\n\n\u201c est a blis h e d Bifi nit y\u2019s c o ntr ol of t h e C o m p a n y. \u201d Plai ntiffs\u2019 O p p. at 2 1. B y t hat p oi nt, Pl ai n tiffs\n\ncl ai m, \u201c E q o n e x c o ul d n o l o n g er a ct wit h o ut Bifi nit y\u2019s dir e cti o n or a p pr o v al, w hi c h w o ul d i n e vita bl y\n 32\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 33 of 40\n\n\n\nm e a n t h e dir e cti o n or a p pr o v al of Bifi nit y\u2019s C E O ( D ef e n d a nt Far n ell), Dir e ct or of Str at e g y\n\n( D ef e n d a nt Li n g), S p e cial Pr oj e cts L e a d ( D ef e n d a nt C e m m ell), a n d Pr esi d e nt ( D ef e n d a nt H ai). \u201d I d.\n\nH o w e v er , t h e pl e a di n gs d o n ot all e g e wit h p arti c ul arit y t h at t h es e Bifi nit y offi c ers e x er cis e d a n y\n\nc o ntr ol o v er E q o n e x e m pl o y e es r el at e d t o t h e M ar c h Pr ess R el e as es. Pl ai ntiffs a g ai n r el y o n gr o u p\n\npl e a di n g wit h o ut p arti c ul arit y . Pl ai ntiffs\u2019 h a v e f ail e d t o all e g e t h at Li n g or C e m m ell h a d a ct ual\n\nc o ntr ol o v er t h e st at e m e nts at iss u e a n d t h er ef or e f ail t o st at e a cl ai m f or c o ntr ol -p ers o n li a bilit y.\n\n 4. Pl ai ntiff s F ail t o A d e q u at el y All e g e C o ntr ol Li a bilit y Cl ai m s A g ai n st\n F ar n ell a n d H ai\n\n Li k e wis e, Pl ai ntiffs f ail t o all e g e Far n ell\u2019s a n d H ai\u2019s c o ntr ol o v er a n y o n e i n v ol v e d wit h t h e\n\nM ar c h 7 a n d 1 7 Pr ess R el e as es wit h a n y p arti c ularit y. U nli k e Li n g a n d C e m m ell, F ar n ell a n d Hai\n\nw er e dir e ct ors ( a n d F ar n ell w as C E O) at t h e ti m e of t h e M ar c h 1 7 P r ess R el eas e , s o Pl ai ntiffs all e g e\n\nt h at \u201c[ b] e c a us e of t h eir p ositi o ns of c o ntr ol a n d a ut h orit y as s e ni or offi c ers a n d c o ntr oll ers of\n\nE q o n e x, D ef e n da nts w er e a bl e t o, a n d di d, c o ntr ol t h e c o nt e nts of t h e v ari o us r e p orts, pr ess r el e as es\n\na n d p u bli c fili n gs w hi c h E q o n e x diss e mi n at e d i n t h e m ar k et pl a c e. \u201d A m. C o m pl. \u00b6 9 4. Pl ai ntiffs g o\n\no n t o cit e \u201c t h eir s e ni or m a n a g e m e nt p ositi o ns \u201d a n d dir e ct or p ositi o ns as e vi d e n c e of t h eir \u201c p o w er t o\n\ndir e ct t h e a cti o ns \u201d c o m pl ai n e d of. I d. \u00b6 9 5. T h es e a p p e als t o F ar n ell\u2019s a n d Hai\u2019s c o ntr olli n g p ers o n\n\nst at us al o n e ar e i ns uffi ci e nt t o all e g e S e cti o n 2 0( a) lia bilit y. See I n re S mit h B ar ney Tr a nsfer Age nt Litig. ,\n\n8 8 4 F. S u p p. 2 d 1 5 2, 1 6 6 ( S. D. N. Y. 2 0 1 2) ( \u201c[I]t is n ot s uffi ci e nt f or [ p]l ai ntiffs t o all e g e t h at\n\n[ d ef e n d a nt] h as c o ntr ol p ers o n st at us; i nst ea d, [ p]l ai ntiffs m ust ass ert t h at [ d ef e n d a nt ] e x er cis e d act ual\n\nc o ntr ol o v er t h e m att ers at iss u e. \u201d) . E v e n t h o u g h D ef e n d a nts h a d c o ntr ol o v er v ari o us r e p orts a n d\n\npr ess r el eas es p er t h eir p ositi o ns, Pl ai ntiffs \u201cf ail[] t o all e g e [ D ef e n d a nts] si g n e d, dr aft e d, a p pr o v e d,\n\nor c o nfir m e d a misl e a di n g st at e m e nt. \u201d I d. at 1 6 6 \u2013 6 7; see also I n re CI N A R Cor p. Sec. Litig., 1 8 6 F.\n\nS u p p. 2 d 2 7 9, 3 0 9 ( E. D. N. Y. 2 0 0 2) ( \u201cIt is w ell a c c e pt e d t h at m er el y all e gi n g t hat a p arti c ul ar\n\nd ef e n d a nt is a dir e ct or or a n offi c er of a c o m p a n y is n ot s uffi c i e nt t o all e g e c o ntr ol. \u201d).\n\n T h e S e cti o n 2 0( a) clai ms a g ai nst F ar n ell a n d H ai t h us f ail.\n 33\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 34 of 40\n\n\n\n 5. Pl ai ntiff s F ail t o A d e q u at el y All e g e a C o ntr ol Li a bilit y Cl ai m A g ai n st\n Bifi nit y\n\n B e c a us e Plai ntiffs f ail t o a d e q u at el y all e g e c o ntr ol b y a n y of t h e Bifi nit y -a p p oi nt e d offi c ers\n\na n d dir e ct ors, Pl ai ntiffs\u2019 all e g ati o ns of c o ntr ol lia bilit y a g ai nst Bifi nit y als o f ail. Pl ai ntiffs all e g e t h at\n\nBifi nit y e x er cis e d \u201c c o ntr ol of [ E q o n e x] \u201d b e ca us e \u201c[t] h e Str at e gi c P art n ers hi p gr a nt e d Bifi nit y f ull\n\nc o ntr ol o v er E q o n e x\u2019s e x e c uti v e m a n a g e m e nt, as w ell as t w o s e ats o n its [ b] o ar d. \u201d Pl ai ntiffs\u2019 O p p.\n\nat 2 1. H o w e v er, Pl ai ntiffs f ail t o all e g e t hr o u g h w hi c h m a n a g ers or dir e ct ors Bifi nit y c o ntr oll e d t h e\n\nM a r c h Pr ess R el e as es. T h e f a ct t h at Bifi nit y a p p oi nt e d t w o s eats o n a s e v e n-p ers o n b o ar d of\n\ndir e ct ors is n ot , its elf, e n o u g h t o all e g e t h at Bifi nit y e x er cis e d \u201c a ct u al c o ntr ol \u201d o v er E q o n e x or t h e\n\nPr ess R el e as es. See I n re Alsto m S A, 4 0 6 F. S u p p. 2 d 4 3 3, 4 9 2 ( S. D. N. Y. 2 0 0 5) ( \u201c[ T]h e a bilit y t o\n\na p p oi nt a mi n orit y of t h e b o ar d d o [ es] n ot cr e at e p o w er t o dir e ct m a n a g e m e nt a n d p oli ci es, a n d t h us\n\nd o [ es] n ot c o nstit ut e s uffi ci e nt c o ntr ol u n d er S e cti o n 2 0( a) . \u201d). A d diti o n all y, as dis c uss e d a b o v e,\n\nP l ai ntiffs f ail to pl e a d t h at t h e offi c er D ef e n d a nts u n d er Bifi nit y\u2019s \u201c c o ntr ol \u201d e x er cis e d a ct u al c o ntr ol\n\no v er t h e Pr ess R el eas es. T h us, Pl ai ntiffs f ail t o pl e a d wit h p arti c ul arit y t h at Bifi nit y a ct u all y e x ert e d\n\nc o ntr ol o v er \u201ct h e m att ers at iss u e. \u201d See I n re S mit h Bar ney , 8 8 4 F. S u p p. 2 d at 1 6 6 . T h us, t h e S e cti o n\n\n2 0( a) cl ai m a g ai nst Bifi nit y f ails.\n\n C. P er s o n al J uri s di cti o n\n\n T h e A m e n d e d C o m pl ai nt est a blis h es t h e C o urt\u2019s p ers o n al j uris di cti o n o v er F ar n ell a n d H ai\n\nb e c a us e it all e g es t h at t h e y m a d e misl e a di n g st at e m e nts dir e ct e d at i n v est ors i n t h e U nit e d St at es.\n\nH o w e v er, b e c a us e t h e y r el y o n gr o u p pl e a di n g a n d c o n cl us or y all e g ati o ns, Pl ai ntiffs f ail t o pl e a d t h e\n\not h er d ef e n d a nts\u2019 i n v ol v e m e nt i n t h e all e g e d fr a u d s uffi ci e nt t o s atisf y t h e mi ni m u m c o nt a cts\n\nr e q uir e m e nt.\n\n 1. L e g al St a n d ar d\n\n I n d et er mi ni n g w h et h er it m a y e x er cis e p ers o n al j uris di cti o n o v er a d ef e n d a nt, t h e C o urt\n\nm ust c o n d u ct a t w o -st e p i n q uir y. First, t h e C o urt m ust d et er mi n e w h et h er t h er e is a \u201cst at ut or y b asis\n 34\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 35 of 40\n\n\n\nf or e x er cisi n g p ers o n al j uris di cti o n. \u201d M arvel C h ar acters, I nc. v. Kir by , 7 2 6 F. 3 d 1 1 9, 1 2 8 ( 2 d Cir. 2 0 1 3)\n\n( cit ati o n o mitt e d). A f e d er al c o urt a p pli es t h e f or u m st at e\u2019s p ers o n al j uris di cti o n r ul es u nl ess a\n\nf e d er al st at ut e \u201cs p e cifi c all y pr o vi d e[s] f or n ati o n al s er vi c e of pr o c ess. \u201d Bro w n v. Loc k hee d M arti n Cor p. ,\n\n8 1 4 F. 3 d 6 1 9, 6 2 4 ( 2 d Cir. 2 0 1 6) ( q u oti n g P D K L a bs, I nc. v. Frie dl a n der , 1 0 3 F. 3 d 1 1 0 5, 1 1 0 8 ( 2 d Cir.\n\n1 9 9 7)). S e c o n d, t h e C o urt m ust d et er mi n e w h et h er t h e e x er cis e of p ers o n al j uris di cti o n o v er t h e\n\nd ef e n d a nt w o ul d c o m p ort wit h d u e pr o c ess u n d er t h e C o nstit uti o n. Licci e x rel. Licci v. Le b a nese\n\nC a na di a n B a n k, S A L , 6 7 3 F. 3 d 5 0, 5 9\u2013 6 0 ( 2 d Cir. 2 0 1 2).\n\n T h e stat ut or y b asis f or p ers o n al j uris di cti o n i n s e c uriti es cas es i n v ol vi n g s e c uriti es list e d o n\n\nd o m esti c e x c h a n g es is f o u n d i n S e cti o n 2 7 of t h e E x c h a n g e A ct, 1 5 U. S. C. \u00a7 7 8 a a, w hi c h \u201c p er mits\n\nt h e e x er cis e of p ers o n al j uris di cti o n t o t h e li mit of t h e D u e Pr o c ess Cla us e of t h e Fift h\n\nA m e n d m e nt. \u201d S. E. C. v. U nif u nd S A L , 9 1 0 F. 2 d 1 0 2 8, 1 0 3 3 ( 2 d Cir. 1 9 9 0) ( citi n g Le asco D at a\n\nProcessi ng E q ui p. Cor p. v. M a x well , 4 6 8 F. 2 d 1 3 2 6, 1 3 3 9 ( 2 d Cir. 1 9 7 2), abrog ate d o n ot her gro u n ds by\n\nMorriso n v. N at\u2019l A ust. B a n k Lt d. , 5 6 1 U. S. 2 4 7 ( 2 0 1 0); see also S. E. C. v. Str a u b , 9 2 1 F. S u p p. 2 d 2 4 4,\n\n2 5 2 ( S. D. N. Y. 2 0 1 3) ( \u201cI n s e c uriti es cas es li k e t his o n e i n v ol vi n g s e c uriti es list e d o n d o m esti c\n\ne x c h a n g es, S e cti o n 2 7 . . . est a blis h es t h e e x cl usi v e basis f or p ers o n al j uris di cti o n. \u201d); 1 5 U. S. C. \u00a7 \u00a7\n\n7 7 v, 7 8 a a ( pr o vi di n g f or w orl d wi d e s er vi c e of pr o c ess). T h us, t h e s ol e q u esti o n h er e is w h et h er d u e\n\npr o c ess p er mits t h e e x er cis e of j uris di cti o n o v er D ef e n d a nts .\n\n D u e pr o c ess r e q uir es t h at if a d ef e n d a nt is \u201c n ot pr es e nt wit hi n t h e t errit or y of t h e f or u m, h e\n\n[ m ust] h a v e c ert ai n mi ni m u m c o nt a cts wit h it s u c h t h at t h e m ai nt e n a n c e of t h e s uit d o es n ot off e n d\n\ntr a diti o n al n oti o ns of fair pl a y a n d s u bst a ntial j usti c e. \u201d I nt\u2019l S hoe Co. v. W as hi ngto n, 3 2 6 U. S. 3 1 0, 3 1 6\n\n( 1 9 4 5) ( cit ati o n o mitt e d). T h e a nal ysis c o nsists of t w o c o m p o n e nts: t h e \u201c mi ni m u m c o nt a cts \u201d\n\na n al ysis a n d t h e \u201cr e as o n a bl e n ess \u201d i n q uir y. Metro. Life I ns. Co. v. Ro bertso n \u2013 Ceco Cor p. , 8 4 F. 3 d 5 6 0, 5 6 7\n\n( 2 d Cir. 1 9 9 6) ( cit ati o ns o mitt e d).\n\n\n\n\n 35\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 36 of 40\n\n\n\n T o esta blis h t h e mi ni m u m c o nt a cts n e c essar y t o s atisf y d u e pr o c ess wit h r es p e ct t o a\n\nn o nr esi d e nt d ef e n d a nt, t h e pl ai ntiff m ust s h o w t hat its \u201c clai m aris es o ut of, or r el at es t o, t h e\n\nd ef e n d a nt\u2019s c o nt a cts wit h t h e f or u m . . . [ a n d t h at] t h e d ef e n d a nt p ur p os ef ull y a v ail e d its elf of t h e\n\npri vil e g e of d oi n g b usi n ess i n t h e f or u m a n d c o ul d f or es e e b ei n g h al e d i nt o c o urt t h er e. \u201d B a n k\n\nBr ussels L a m bert v. Fi d dler Go n z ale z & Ro drig ue z , 3 0 5 F. 3 d 1 2 0, 1 2 7 ( 2 d Cir. 2 0 0 2) ( cit ati o n o mitt e d).\n\nAlt h o u g h f or es e e a bilit y is a c o m p o n e nt of t h e mi ni m u m c o nt a cts a nal ysis, \u201cf or es e e a bilit y al o n e h as\n\nn e v er b e e n a s uffi ci e nt b e n c h m ar k f or p ers o n al j uris di cti o n u n d er t h e D u e Pr o c ess Cla us e. \u201d Worl d \u2013\n\nWi de Vol ks w age n Cor p. v. Woo dso n , 4 4 4 U. S. 2 8 6, 2 9 5 ( 1 9 8 0). B e c a us e t h e E x c h a n g e A ct a ut h ori z es\n\nw orl d wi d e s er vi c e of pr o c ess, t h e r el e va nt c o nt a cts f or p ur p os es of t h e \u201c mi ni m u m c o nt a cts \u201d a n al ysis\n\nar e t h os e wit h t h e U nit e d St at es as a w h ol e. See, e.g. , Str a u b , 9 2 1 F. S u p p. 2 d at 2 5 3 ( \u201c W h e n t h e\n\nj uris di cti o n al iss u e fl o ws fr o m a f e d er al st at ut or y gr a nt t h at a ut h ori z es s uit u n d er f e d er al-q u esti o n\n\nj uris di cti o n a n d n ati o n wi d e s er vi c e of pr o c ess, . . . t h e Fift h A m e n d m e nt a p pli es, a n d t h e S e c o n d\n\nCir c uit h as c o nsist e ntl y h el d t h at t h e mi ni m u m c o nt a cts t est i n s u c h cir c u msta n c es l o o ks t o c o nt a cts\n\nwi t h t h e e ntir e U nit e d St at es r at h er t h a n wit h t h e f or u m st at e. \u201d ( q u oti n g S E C v. Morto n , N o. 1 0\u2013 c v \u2013\n\n1 7 2 0 ( L A K)( M H D), 2 0 1 1 W L 1 3 4 4 2 5 9 , at * 1 2 ( S. D. N. Y. M ar. 3 1, 2 0 1 1), a do pte d , i d., E C F N o. 1 0 2,\n\n2 0 1 1 W L 1 1 7 6 8 5 0 4 ( S. D. N. Y. N o v. 3, 2 0 1 1)); see I n re M ag netic A u diot a pe A ntitr ust Litig., 3 3 4 F. 3 d\n\n2 0 4, 2 0 7 ( 2 d Cir. 2 0 0 3) ( dis c ussi n g a n al o g o us s er vi c e of pr o c ess pr o visi o n i n t h e Cl a yt o n A ct); C he w\n\nv. Dietric h, 1 4 3 F. 3 d 2 4, 2 8 n. 4 ( 2 d Cir. 1 9 9 8) (st ati n g t h at \u201c u n d er t h e Fift h A m e n d m e nt t h e c o urt c a n\n\nc o nsi d er t h e d ef e n da nt\u2019s c o nt a cts t hr o u g h o ut t h e U nit e d St at es \u201d); accor d I n re Oil S pill by A moco C a di z\n\nOff Co ast of Fr a nce o n M ar. 1 6, 1 9 7 8 , 9 5 4 F. 2 d 1 2 7 9, 1 2 9 4 ( 7t h Cir. 1 9 9 2) ( \u201c W h e n t h e n ati o n al\n\ns o v er ei g n is a p pl yi n g n ati o n al l a w, t h e r el e v a nt c o nt a cts ar e t h e c o nt a cts b et w e e n t h e d ef e n da nt a n d\n\nt h e s o v er ei g n\u2019s n ati o n. [ T] h e d u e pr o c ess cla us e r e q uir es o nl y t h at t h e d ef e n da nt p oss ess s uffi ci e nt\n\nc o nt a cts wit h t h e U nit e d St at es. \u201d).\n\n\n\n\n 36\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 37 of 40\n\n\n\n \u201c T h e s e c o n d part of t h e j uris di cti o n al a nal ysis as ks w h et h er t h e ass erti o n of p ers o n al\n\nj uris dicti o n c o m p orts wit h \u2018tr a diti o n al n oti o ns of fair pl a y a n d s u bst a nti al j usti c e\u2019 \u2014 t h at is, w h et h er it\n\nis r e as o n a bl e u n d er t h e cir c u mst a n c es of t h e p arti c ular c as e. \u201d B a n k Br ussels L a m bert , 3 0 5 F. 3 d at 1 2 9\n\n( cit ati o ns o mitt e d). If t h e d ef e n d a nt\u2019s c o nt a cts wit h t h e f or u m ris e t o t h e l e v el of \u201c mi ni m u m\n\nc o nt a cts, \u201d a d ef e n da nt m a y d ef e at j uris di cti o n o nl y b y pr es e nti n g \u201ca c o m p elli n g c as e t h at t h e\n\npr es e n c e of s o m e ot h er c o nsi d er ati o ns w o ul d r e n d er j uris di cti o n u nr e as o n a bl e. \u201d B urger Ki ng Cor p. v.\n\nR u d ze wic z , 4 7 1 U. S. 4 6 2, 4 7 7 ( 1 9 8 5). I n d et er mi ni n g w h et h er t h e e x er cis e of p ers o n al j uris di cti o n\n\no v er a p arti c ul ar d ef e n da nt w o ul d b e r e as o na bl e, t h e c o urt m ust e v al u at e \u201c( 1) t h e b ur d e n t h at t h e\n\ne x er cis e of j uris di cti o n will i m p os e o n t h e d ef e n da nt; ( 2) t h e i nt er ests of t h e f or u m st at e i n\n\na dj u di c ati n g t h e c as e; ( 3) t h e pl ai ntiff \u2019s i nt er est i n o bt ai ni n g c o n v e ni e nt a n d eff e cti v e r eli ef; ( 4) t h e\n\ni nt erst at e j u di ci al s yst e m\u2019s i nt er est i n o bt ai ni n g t h e m ost effi ci e nt r es ol uti o n of t h e c o ntr o v ers y; a n d\n\n( 5) t h e s h ar e d i nt er est of t he st at es i n f urt h eri n g s u bst a nti v e s o ci al p oli ci es. \u201d Metro. Life I ns. , 8 4 F. 3 d\n\nat 5 6 8 ( citi n g As a hi Met al I n d us. Co. v. S u per. Ct. , 4 8 0 U. S. 1 0 2, 1 1 3\u2013 1 4 ( 1 9 8 7)).\n\n C o urts h a v e f o u n d p ers o nal j uris di cti o n t o e xist w h er e \u201c a n e x e c uti v e of a f or ei g n s e c uriti es\n\niss u er, w h er e v er l o cat e d, parti ci p at es i n a fra u d directe d to d e c ei vi n g U nit e d St at es s h ar e h ol d ers. \u201d I n re\n\nBr as ke m S. A. Sec. Litig. , 2 4 6 F. S u p p. 3 d 7 3 1, 7 6 9 ( S. D.N. Y. 2 0 1 7) ( q u oti n g S. E. C. v. Str a ub , 9 2 1 F.\n\nS u p p. 2 d 2 4 4, 2 5 6 \u2013 5 7 ( S. D. N. Y. 2 0 1 3)); see also J. McI ntyre M ac hi nery, Lt d. v. Nic astro, 5 6 4 U. S. 8 7 3,\n\n8 8 4 ( 2 0 1 1) ( \u201c T h e q u esti o n is w h et h er a d ef e n d a nt h as f oll o w e d a c o urs e of c o n d u ct dir e ct e d at t h e\n\ns o ci et y or e c o n o m y e xisti n g wit hi n t h e j uris di cti o n of a gi v e n s o v er ei g n, s o t h at t h e s o v er ei g n h as t h e\n\np o w er t o s u bj e ct t h e d ef e n d a nt t o j u d g m e nt c o n c er ni n g t h at c o n d u ct. \u201d). \u201c[I]t is b y n o w w ell -\n\nest a blis h e d t h at si g ni n g or dir e ctl y m a ni p ulati n g fi n a n ci al stat e m e nt s t o c o v er u p ill e g al f or ei g n\n\na cti o n, wit h k n o wl e d g e t hat t h os e stat e m e nts will b e r eli e d u p o n b y U nit e d St at es i n v est ors satisfi es\n\nt his t est. \u201d U. S. S. E. C. v. S h aref , 9 2 4 F. S u p p. 2 d 5 3 9, 5 4 7 ( S. D. N. Y. 2 0 1 3).\n\n\n\n\n 37\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 38 of 40\n\n\n\n H o w e v er, \u201c c o n cl us or y all e g ati o ns of p arti ci p at i o n i n t h e fra u d ar e i ns uffi ci e nt \u201d t o est a blis h\n\np ers o n al j uris di cti o n. I n re Astr a Ze nec a Sec. Litig., 5 5 9 F. S u p p. 2 d 4 5 3, 4 6 7 ( S. D. N. Y. 2 0 0 8), aff \u2019d s ub\n\nno m. St ate U niversities Ret. Sys. of Illi nois v. Astr a ze nec a P L C , 3 3 4 F. A p p\u2019x 4 0 4 ( 2 d Cir. 2 0 0 9) ( \u201c[ A]n y\n\nall e gati o ns t h at M o gr e n or B ar n e vi k c a us e d t h e distri b uti o n of fals e a n d misl e a di n g r e p orts a n d\n\nst at e m e nts t o Astra Z e n e ca i n v est ors i n t h e U. S. or t h at t h e y h a d a ct u al k n o wl e d g e t h at ea c h of t h e\n\nr e pr es e nt ati o ns all e g e d h er ei n w er e m at eri all y f als e or misl e a di n g ar e m er el y c o n cl us or y stat e m e nts\n\na p pli c a bl e t o all i n di vi d ual d ef e n d a nts as a r es ult of t h eir p ositi o ns wit hi n t h e C o m p a n y. \u201d). See also\n\nI n re Br as ke m S. A. Sec. Litig., 2 4 6 F. S u p p. 3 d 7 3 1, 7 7 0 ( S. D. N. Y. 2 0 1 7) ( h ol di n g t h at t h e all e g ati o n\n\nt h at \u201cO d e br e c ht h a d t h e p o w er t o i nfl u e n c e a n d c o ntr ol a n d di d i nfl u e n c e a n d c o ntr ol . . . t h e\n\nC o m p a n y, i n cl u di n g t h e diss e mi nati o n of t h e v ari o us st at e m e nts a n d o missi o ns \u201d is \u201c n ot e n o u g h t o\n\ns u p p ort p ers o n al j uris di cti o n \u201d); I n re Aege a n M ari ne Petrole u m Net wor k, I nc. Sec. Litig., 5 2 9 F. S u p p. 3 d\n\n1 1 1, 1 3 6 \u2013 3 7 ( S. D. N. Y. 2 0 2 1) ( h ol di n g t h at s p e cifi c j uris di cti o n is n ot est a blis h e d m er el y b e c a us e t h e\n\n\u201c d ef e n d a nt e x er cis e d c o ntr ol o v er t h e c o m p a n y b e ca us e h e h a d a maj orit y of v oti n g s h ar e ca pit al,\n\nv et o p o w er o v er c or p orat e a cti o ns, t h e a bilit y t o a p p oi nt offi c ers a n d B o ar d m e m b ers, a n d p o w er t o\n\na p pr o v e t h e b usi n ess pl a n \u201d).\n\n M or e o v er, \u201c[t] o all e g e p ers o n al j uris di ctio n o v er a d ef e n d a nt, gr o u p pl e a di n g is n ot\n\np er mitt e d. I n re Aege a n, 5 2 9 F. S u p p. 3 d at 1 3 5. \u201cA pl ai ntiff m ust c arr y his b ur d e n wit h r es p e ct t o\n\ne a c h d ef e n da nt i n di vi d u all y. \u201d Ber de a u x v. O ne Coi n Ltd. , 5 6 1 F. S u p p. 3 d 3 7 9, 3 9 6 ( S. D. N. Y. 2 0 2 1)\n\n( c oll e cti n g cas es).\n\n 2. A p pli c ati o n\n\n T h e A m e n d e d C o m pl ai nt s uffi ci e ntl y pl e a ds t h e C o urt\u2019s p ers o n al j uris di cti o n o v er Far n ell\n\na n d H ai. Pl ai ntiffs pl e a d t h at Far n ell a n d H ai i n di vi d u all y m a d e f als e st at e m e nts i n pr ess r el e as es t o\n\nU nit e d St at es i n v est ors, A m. C o m pl. \u00b6 \u00b6 4 8, 5 3, 7 2, c o n d u ct \u201c d esi g n e d t o vi ol at e U nit e d St at es\n\ns e c uriti es r e g ulati o ns\u201d a n d \u201c n e c essaril y dir e ct e d t o war d t h e U nit e d St at es . \u201d S. E. C. v. Str a ub , 9 2 1 F.\n\n\n 38\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 39 of 40\n\n\n\nS u p p. 2 d 2 4 4, 2 5 5 ( S. D. N. Y. 2 0 1 3) . W hil e t h e C o urt h as f o u n d t h at t h e all e g ati o ns of falsit y a n d\n\ns ci e nt er ar e i ns uffi ci e nt t o est a blis h li a bilit y u n d er t h e h ei g ht e n e d pl e a di n g st a n d ar ds of F e d. R. Ci v.\n\nP. 9( b) a n d t h e P S L R A, t h e pl e a di n gs d o c o nstit ut e a n all e gati o n of p arti ci p ati o n i n fra u d dir e ct e d at\n\nt h e U nite d St at es a n d t h er ef or e est a blis h p ers o nal j uris di cti o n o v er Far n ell a n d H ai . See S h aref , 9 2 4\n\nF. S u p p. 2 d at 5 4 7 ; I n re B a nco Br a desco S. A. Sec. Litig., 2 7 7 F. S u p p. 3 d 6 0 0, 6 4 4 ( S. D. N. Y. 2 0 1 7)\n\n( W o o ds, J.) ( \u201cPl ai ntiff h as a d e q u at el y all e g e d t h at [t h e d ef e n d a nt] si g n e d off o n t h e pr ess r el e as e wit h\n\nk n o wl e d g e t hat it w o ul d b e fil e d wit h t h e S E C a n d b e gi v e n t o pr os p e cti v e A m eri c a n\n\np ur c h as ers . . . , a n d t h at is e n o u g h t o est a blis h mi ni m u m c o nt a cts wit h t h e U nit ed St at es. \u201d).\n\n As f or t h e ot h er d ef e n d a nts, t h e A m e n d e d C o m pl ai nt fails t o esta blis h p ers o nal j uris di cti o n\n\nb e c a us e it r eli es o n gr o u p pl e a di n g a n d c o n cl us or y all e g ati o ns of c o ntr ol . Pl ai ntiffs f ail t o all e g e wit h\n\np arti c ul arit y t h at Bifi nit y, Bi n a n c e, or Z h a o h a d a n y a ct u al c o ntr ol o v er t h e all e g e dl y f als e or\n\nmisl e a di n g st at e m e nts; Pl ai ntiffs si m pl y all e g e t hat t h e y h a d c o ntr ol b y nat ur e of t h eir p ositi o ns,\n\nw hi c h is i ns uffi ci e nt t o c o nf er p ers o n al j uris di cti o n. See I n re Br as ke m S. A. Sec. Litig., 2 4 6 F. S u p p. 3 d\n\nat 7 7 0 ( h ol di n g t h at si m pl y all e gi n g c o ntr ol st at us is i ns uffi ci e nt f or est a blis hi n g p ers o n al\n\nj uris di cti o n); I n re Aege a n, 5 2 9 F. S u p p. 3 d at 1 3 6 \u2013 1 3 7 ( h ol di n g it i ns uffi ci e nt f or p ers o n al j uris di cti o n\n\nm er el y t o all e g e \u201c t h e a bilit y t o a p p oi nt offi c ers a n d B o ar d m e m b ers \u201d). Li k e wis e, Pl ai ntiffs f ail t o\n\nall e g e t hat Li n g or C e m m ell h a d a n y c o ntr ol o v er E q o n e x or its e m pl o y e es at t h e ti m e of t h e M ar c h\n\nPr ess R el e as es, b ef or e t h e y e v e n ass u m e d t h eir p ositi o ns at E q o n e x. T h er ef or e, Pl ai ntiffs h a v e fa il e d\n\nt o all e g e t h eir \u201c p arti ci p ati o n i n t h e fr a u d. \u201d I n re Astr a Ze nec a, 5 5 9 F. S u p p. 2 d at 4 6 7 . As c urr e ntl y\n\npl e a d e d, Pl ai ntiffs\u2019 A m e n d e d C o m pl ai nt d o es n ot s uffi ci e ntl y esta blis h t hat Bifi nit y, Bi n a n c e, Z ha o,\n\nLi n g, or C e m m ell h a d mi ni m u m c o nt a cts r elat e d t o Pl ai ntiffs\u2019 cl ai ms of fr a u d a g ai nst U nit e d St at es\n\ni n v est ors b e c a us e Pl ai ntiffs f ail t o pl e a d, wit h p arti c ul arit y a n d o n a n i n di vi d ual b asis, f a cts\n\nest a blis hi n g t h eir i n v ol v e m e nt i n t h e all e g e d fr a u d.\n\n\n\n\n 39\n\f Case 1:23-cv-03346-GHW Document 52 Filed 09/18/24 Page 40 of 40\n\n\n\n V. C O N C L U SI O N\n\n F or t h e f or e g oi n g r e as o ns, D ef e n d a nts\u2019 m o ti o n t o dis miss is G R A N T E D.\n\n Pl ai ntiffs h a v e f ail e d t o pl e a d a pri m ar y vi olati o n of S e cti o n 1 0( b) of t h e E x c ha n g e A ct b y\n\nD ef e n d a nts F ar n ell a n d Hai or b y E q o n e x. Plai ntiffs h a v e s e par at el y f ail e d t o pl e a d S e cti o n 2 0( a)\n\nc o ntr ol -p ers o n cl ai ms a g ai nst all D ef e n da nts.\n\n B e c a us e t h e C o urt c a n n ot c o n cl u d e t h at f urt h er a m e n d m e nt of t h e c o m pl ai nt w o ul d b e\n\nf util e, t h e C o urt gr a nts Pl ai ntiffs l e a v e t o fil e a s e c o n d a m e n d e d c o m plai nt s ol el y t o c ur e t h e\n\nd efi ci e n ci es i d e ntifi e d i n t his o pi ni o n n o l at er t h a n 3 0 d a ys fr o m t h e d at e of t his or d er. See Loreley\n\nFi n. (Jersey) No. 3 Lt d. v. Wells Fargo Sec., L L C , 7 9 7 F. 3 d 1 6 0, 1 9 1 ( 2 d Cir. 2 0 1 5).\n\n T h e Cl er k of C o urt is dir e ct e d t o t er mi n at e t h e m oti o n p e n di n g at E C F N o. 4 6.\n\nS O O R D E R E D.\n\nD at e d: S e pt e m b er 1 8, 2 0 2 4\n N e w Y or k, N e w Y or k __________________________________\n G R E G O R Y H. W O O D S\n U nit e d St at es Distri ct J u d g e\n\n\n\n\n 40\n\f","ocr_status":2,"date_upload":"2024-11-18T01:26:55.392287-08:00","document_number":"52","attachment_number":null,"pacer_doc_id":"127036184415","is_available":true,"is_free_on_pacer":true,"is_sealed":null,"document_type":1,"description":"Memorandum & Opinion","acms_document_guid":""}],"date_created":"2024-09-19T15:08:48.736861-07:00","date_modified":"2025-01-09T03:52:14.944835-08:00","date_filed":"2024-09-18","time_filed":"16:58:44","entry_number":52,"recap_sequence_number":"2024-09-18.001","pacer_sequence_number":197,"description":"MEMORANDUM OPINION & ORDER re: 46 MOTION to Dismiss . filed by Daniel Ling, Zhao Changpeng, Binance Group, Yu Helen Hai, Almira Cemmell, Bifinity UAB, Jonathan Farnell. For the foregoing reasons, Defendants' motion to dismiss is GRANTED. Plaintiffs have failed to plead a primary violation of Section 10(b) of the Exchange Act by Defendants Farnell and Hai or by Eqonex. Plaintiffs have separately failed to plead Section 20(a) control-person claims against all Defendants. Because the Court cannot conclude that further amendment of the complaint would be futile, the Court grants Plaintiffs leave to file a second amended complaint solely to cure the deficiencies identified in this opinion no later than 30 days from the date of this order. See Lorelry Fin. (!ersry) No. 3 Ltd v. We/Lr Fargo Sec., LLC, 797 F.3d 160, 191 (2d Cir. 2015). The Clerk of Court is directed to terminate the motion pending at ECF No. 46. SO ORDERED. (Signed by Judge Gregory H. Woods on 9/18/2024) (vfr) (Entered: 09/19/2024)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/380206612/","id":380206612,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67233991/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/387971103/","id":387971103,"tags":[],"absolute_url":"/docket/67233991/50/zhao-v-eqonex-limited/","date_created":"2024-03-04T19:09:10.636099-08:00","date_modified":"2026-06-23T03:50:52.714521-07:00","sha1":"cba1e9425c66cb9524bf93c1530dc428595f5f7c","page_count":15,"file_size":256333,"filepath_local":"recap/gov.uscourts.nysd.597576/gov.uscourts.nysd.597576.50.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.597576/gov.uscourts.nysd.597576.50.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":" Case 1:23-cv-03346-GHW Document 50 Filed 03/04/24 Page 1 of 15\n\n\n\n\nUNITED STATES DISTRICT COURT\nSOUTHERN DISTRICT OF NEW YORK\n\n\nBIN LI, Individually and On Behalf of All Others Similarly\nSituated,\n Plaintiff,\n No. 23 Civ. 03346 (GHW)\n v.\n\nEQONEX LIMITED, BINANCE GROUP, BIFINITY\nUAB, JONATHAN FARNELL, DANIEL LING, ALMIRA\nCEMMELL, YU HELEN HAI, and ZHAO CHANGPENG,\n Defendants.\n\n\n\n\n REPLY MEMORANDUM OF LAW\n IN SUPPORT OF DEFENDANTS\u2019 MOTION TO DISMISS\n\n\n CAHILL GORDON & REINDEL LLP\n Samson A. Enzer\n Edward N. Moss\n Victoria H. Yuhas\n 32 Old Slip\n New York, New York 10005\n (212) 701-3000\n\n Counsel for Defendants Binance, Bifinity, Jonathan\n Farnell, Daniel Ling, Almira Cemmell, Yu Helen\n Hai, and Changpeng Zhao\n\f Case 1:23-cv-03346-GHW Document 50 Filed 03/04/24 Page 2 of 15\n\n\n\n\n TABLE OF CONTENTS\n\nPRELIMINARY STATEMENT ................................................................................................. 1\n\nARGUMENT ................................................................................................................................. 1\n\nI. THERE IS NO ACTIONABLE MISSTATEMENT OR OMISSION ............................. 1\n\nII. THE COMPLAINT FAILS TO ADEQUATELY ALLEGE SCIENTER ...................... 5\n\n A. The Complaint Does Not Plead Motive to Commit Fraud............................................ 5\n\n B. The Complaint Fails to Allege Facts That Constitute Strong Circumstantial\n Evidence of Conscious Misbehavior or Recklessness .................................................... 6\n\nIII. THE COMPLAINT FAILS TO ADEQUATELY ALLEGE LOSS CAUSATION.... 8\n\nIV. THE CLAIMS FAIL AGAINST EACH DEFENDANT FOR OTHER REASONS .. 9\n\n A. Plaintiffs Fail to State Section 10(b) Claims Against Hai and Farnell ......................... 9\n\n B. Plaintiffs\u2019 Section 20(a) Claims Fail as to All Defendants........................................... 10\n\nV. THE COMPLAINT FAILS TO ESTABLISH PERSONAL JURISDICTION ............ 10\n\nCONCLUSION ........................................................................................................................... 10\n\n\n\n\n i\n\f Case 1:23-cv-03346-GHW Document 50 Filed 03/04/24 Page 3 of 15\n\n\n\n\n TABLE OF AUTHORITIES\n Page(s)\n\nCases\n\nBerdeaux v. OneCoin Ltd.,\n 561 F. Supp. 3d 379 (S.D.N.Y. 2021)....................................................................................10n\n\nIn re Braskem S.A. Sec. Litig.,\n 246 F. Supp. 3d 731 (S.D.N.Y. 2017)......................................................................................10\n\nCampo v. Sears Holdings Corp.,\n 371 F. App\u2019x 212 (2d Cir. 2010) ........................................................................................... 4-5\n\nIn re Citigroup Sec. Litig.,\n 2023 WL 2632258 (S.D.N.Y. Mar. 24, 2023) ...........................................................................5\n\nIn re Columbia Tuition Refund Action,\n 523 F. Supp. 3d 414 (S.D.N.Y. 2021)........................................................................................4\n\nFaulkner v. Verizon Commc\u2019ns, Inc.,\n 156 F. Supp. 2d 384 (S.D.N.Y. 2001)..................................................................................8, 8n\n\nFelske v. Hirschmann,\n 2012 WL 716632 (S.D.N.Y. Mar. 1, 2012) ...............................................................................2\n\nFurlong Fund LLC v. VBI Vaccines, Inc.,\n 2016 WL 1181710 (S.D.N.Y. Mar. 25, 2016) ...........................................................................3\n\nGreco v. Qudian Inc.,\n 2022 WL 4226022 (S.D.N.Y. Sept. 13, 2022) (Woods, J.) .................................................6, 10\n\nKleinman v. Elan Corp.,\n 706 F.3d 145 (2d Cir. 2013).....................................................................................................3n\n\nLee v. Mikimoto (Am.) Co. Ltd.,\n 2023 WL 2711825 (S.D.N.Y. Mar. 30, 2023) ...............................................................4, 6, 10n\n\nLeykin v. AT&T Corp.,\n 423 F. Supp. 2d 229 (S.D.N.Y. 2006)........................................................................................9\n\nIn re Lululemon Sec. Litig.,\n 14 F. Supp. 3d 553 (S.D.N.Y. 2014)..........................................................................................9\n\nNovak v. Kasaks,\n 216 F.3d 300 (2d Cir. 2000).......................................................................................................3\n\nIn re Pfizer Inc. Sec. Litig.,\n 819 F.3d 642 (2d Cir. 2016).......................................................................................................9\n\n\n ii\n\f Case 1:23-cv-03346-GHW Document 50 Filed 03/04/24 Page 4 of 15\n\n\n\n\nSaraf v. Ebix, Inc.,\n 632 F. Supp. 3d 389 (S.D.N.Y. 2022)........................................................................................5\n\nIn re Symbol Techs., Inc. Sec. Litig.,\n 2013 WL 6330665 (E.D.N.Y. Dec. 5, 2013) .............................................................................7\n\nUnion Cent. Life Ins. Co. v. Ally Fin., Inc.,\n 2013 WL 2154381 (S.D.N.Y. Mar. 29, 2013) ...........................................................................7\n\nStatutes\n\n15 U.S.C. \u00a7 78u-4(b)(2)(A)..............................................................................................................5\n\n\n\n\n iii\n\f Case 1:23-cv-03346-GHW Document 50 Filed 03/04/24 Page 5 of 15\n\n\n\n\n PRELIMINARY STATEMENT\n\n The federal securities laws do not permit class action plaintiffs to sue for damages based\n\non claims of fraud by hindsight, or to cry fraud by inventing \u201cfacts\u201d and then asserting they were\n\nomitted. Yet Plaintiffs\u2019 Opposition confirms that is precisely what they are trying to do here.1\n\n Plaintiffs\u2019 securities fraud claims rest on challenges to (i) heavily caveated statements that\n\ntwo companies had entered into non-binding discussions about a possible merger, and (ii) vague\n\nstatements of corporate optimism about the potential benefits of a strategic partnership. Plaintiffs\u2019\n\npurported basis for claiming these garden-variety statements were fraudulent is that Defendants\n\nsupposedly omitted that the parties never intended to merge, and never intended for the strategic\n\npartnership to work out. The problem, however, is that Plaintiffs have conjured these supposedly\n\nomitted \u201cfacts\u201d out of thin air\u2014based only on the subsequent events that the parties never merged\n\nand the partnership was not as successful as had been hoped. That things did not turn out as\n\nplanned is not securities fraud. Neither are conspiracy theories or conjecture that disappointing\n\noutcomes were actually planned all along. The Court should dismiss the Complaint in its entirety.\n\n ARGUMENT\n\nI. THERE IS NO ACTIONABLE MISSTATEMENT OR OMISSION\n\n Because the Complaint merely copies and pastes large swaths of two press releases and\n\ndoes not specify which statements Plaintiffs claim were false or misleading, Defendants attempted\n\nto decipher and address Plaintiffs\u2019 theory of fraud by grouping the statements in those releases into\n\n\n\n\n1\n Unless otherwise specified, \u201cOpposition\u201d or \u201cOpp.\u201d means Plaintiffs\u2019 opposition (ECF No. 49) to\nDefendants\u2019 motion to dismiss (\u201cMTD\u201d) (ECF No. 47), and all (i) emphasis is added, (ii) internal citations\nand quotations are omitted, and (iii) capitalized terms have the meanings assigned in Defendants\u2019\nmemorandum of law in support of their MTD.\n\n\n\n\n 1\n\f Case 1:23-cv-03346-GHW Document 50 Filed 03/04/24 Page 6 of 15\n\n\n\n\nthree sets: (i) statements about the loan; (ii) statements about the non-binding merger discussions;\n\nand (iii) statements about the strategic partnership. (See MTD at 4-5).\n\n Plaintiffs now claim that they are pursuing only two statements: (i) \u201cthat there was the\n\npossibility of a merger between Eqonex and Bifinity\u201d (the \u201cMerger Statement\u201d), and (ii) \u201cthat the\n\nStrategic Partnership would support Eqonex\u201d (the \u201cStrategic Partnership Statement\u201d). (See Opp.\n\nat 9, 14). Plaintiffs\u2019 failure to respond to Defendants\u2019 arguments about the others is a waiver. See\n\nFelske v. Hirschmann, 2012 WL 716632, at *3 (S.D.N.Y. Mar. 1, 2012) (\u201cA plaintiff effectively\n\nconcedes a defendant\u2019s arguments [in a motion to dismiss] by his failure to respond to them.\u201d).\n\n In any event, neither of the two statements is actionable. As Defendants demonstrated in\n\ntheir MTD, Plaintiffs have failed to plead facts showing that either statement was false, and the\n\nStrategic Partnership Statement is not actionable for the additional reasons that it is mere corporate\n\npuffery and protected by the PSLRA\u2019s safe harbor. (See MTD at 8-15).\n\n Plaintiffs\u2019 Opposition does not meaningfully respond to these arguments. Instead,\n\nPlaintiffs claim that the two statements omitted that \u201cthe Strategic Partnership was simply a means\n\nfor Binance, through Bifinity, to gain control of Eqonex and its FCA-regulated operating unit\n\nDigivault, and Defendants never intended to merge with Eqonex, but only to use it to circumvent\n\nthe FCA.\u201d (Opp. at 9). Plaintiffs plead no facts to support this speculative theory. Instead, they\n\ndivine this implausible conjecture from the following series of unremarkable events, virtually all\n\nof which happened months after the challenged statements were made: (i) Eqonex was ultimately\n\nunable to repay the $36 million loan that Bifinity extended in connection with the strategic\n\npartnership; (ii) Eqonex\u2019s Exchange closed; (iii) Eqonex and Bifinity never merged; (iv) Bifinity\n\nultimately obtained 100% of Digivault; and (v) Binance has allegedly tried to circumvent\n\nregulators before. (Id. at 11-12). None of that is sufficient to sustain a securities fraud claim.\n\n\n\n\n 2\n\f Case 1:23-cv-03346-GHW Document 50 Filed 03/04/24 Page 7 of 15\n\n\n\n\n First, none of these later events demonstrates that there were omissions of material facts\n\nwhen the statements sued upon were made. Although Plaintiffs speculate that Defendants knew\n\nall along that the strategic partnership was a ruse, the loan could never be repaid, and the parties\n\nwould never merge, they allege no facts to support that conjecture. This is classic fraud by\n\nhindsight. See Novak v. Kasaks, 216 F.3d 300, 309 (2d Cir. 2000) (\u201cCorporate officials need not\n\nbe clairvoyant; they are only responsible for revealing those material facts reasonably available to\n\nthem.\u201d).\n\n Second, Defendants expressly warned that the potential merger might never happen.\n\nEqonex disclosed that the parties were in \u201cnon-binding discussions\u201d in order \u201cto explore potential\n\nmerger opportunities,\u201d and that any potential merger would be \u201csubject to regulatory approval.\u201d\n\n(AC \u00b6 48). Similarly, in an April 29, 2022 filing with the SEC,2 Eqonex warned that the loan\n\nagreement \u201c[did] not obligate [the parties] to enter into definitive binding agreements or complete\n\nthe [potential merger] on such terms or at all.\u201d (Yuhas Decl., Ex. 4).\n\n Third, in addition to being entirely speculative, Plaintiffs\u2019 theory is implausible. See\n\nFurlong Fund LLC v. VBI Vaccines, Inc., 2016 WL 1181710, at *4-5 (S.D.N.Y. Mar. 25, 2016)\n\n(dismissing \u201cimplausible\u201d Exchange Act claims).\n\n According to Plaintiffs, Bifinity\u2019s plan was to keep the Exchange open for several months,\n\nthen shutter it to cut off Eqonex\u2019s revenue stream so that it could not repay the loan, and finally\n\nuse the breach of the loan agreement to negotiate a deal to acquire all of Digivault. (See Opp. at\n\n11). But this tale simply does not hang together.\n\n\n\n\n2\n The Court can consider on this motion the SEC filings cited in this brief, including the loan agreement\nreferenced below. See Kleinman v. Elan Corp., 706 F.3d 145, 152 (2d Cir. 2013).\n\n\n\n 3\n\f Case 1:23-cv-03346-GHW Document 50 Filed 03/04/24 Page 8 of 15\n\n\n\n\n As an initial matter, the Complaint has no plausible explanation for why the Exchange was\n\nkept open for several months\u2014which actually demonstrates that the statement that Defendants\n\nintended to \u201cstrengthen\u201d the Exchange was true when made. Now that they have been confronted\n\nwith this hole in their story, Plaintiffs speculate in the Opposition that Defendants only kept the\n\nExchange open for five months because \u201cthey were not yet ready to give up its revenue.\u201d (Opp.\n\nat 13). But that allegation is insufficient to establish falsity because: (i) it does not actually appear\n\nin the Complaint, and Plaintiffs \u201ccannot amend [their] complaint by asserting new facts or theories\n\nfor the first time in opposition to a motion to dismiss,\u201d Lee v. Mikimoto (Am.) Co., 2023 WL\n\n2711825, at *7 (S.D.N.Y. Mar. 30, 2023); and (ii) it is inconsistent with Plaintiffs\u2019 own theory that\n\n\u201call Defendants wanted was Digivault\u201d (Opp. at 1), see In re Columbia Tuition Refund Action, 523\n\nF. Supp. 3d 414, 424 n.1 (S.D.N.Y. 2021).\n\n Moreover, Plaintiffs\u2019 argument that closing Eqonex\u2019s Exchange \u201cenabled [Defendants] to\n\nincrease Bifinity\u2019s share charge of Digivault to 100%\u201d (Opp. at 11) has no basis in the loan\n\nagreement, which was publicly filed with the SEC, see (Yuhas Decl., Ex. 1). That agreement\n\ncontains no promise, nor does it even imply, that Bifinity\u2019s percentage of Digivault would increase\n\nas a result of granting \u201ca waiver for the cessation of a major business.\u201d (AC \u00b6 12).\n\n In addition, the idea that Defendants\u2019 alleged master plan required getting rid of the\n\nExchange to take control of Digivault contradicts Plaintiffs\u2019 own claim that Defendants\n\n\u201caccomplished their goal of taking over Digivault immediately through the initial $36 million\n\npayment and takeover of Eqonex\u2019s executive suite.\u201d (Opp. at 12).\n\n Fourth, Plaintiffs proffer no valid basis for their claim that the strategic partnership was\n\nmerely a way for Binance to evade the FCA. Their only support for this claim are allegations that\n\nBinance has tried to evade regulators in other contexts before. That is not sufficient to plead an\n\n\n\n\n 4\n\f Case 1:23-cv-03346-GHW Document 50 Filed 03/04/24 Page 9 of 15\n\n\n\n\nactionable omission. See Campo v. Sears Holdings Corp., 371 F. App\u2019x 212, 215 (2d Cir. 2010)\n\n(finding that plaintiffs\u2019 references to press articles were insufficient to establish fraud because the\n\narticles amounted to \u201cmere speculation\u201d); see also Saraf v. Ebix, Inc., 632 F. Supp. 3d 389, 400-\n\n01 (S.D.N.Y. 2022) (concluding that \u201cprevious instances in which [defendant] was accused of\n\nmisconduct, including undisclosed tax investigations\u201d did not support the alleged fraud claim).\n\n Having abandoned most of their alleged misstatements, and having conceded that the two\n\nstatements they rely on are actually true, Plaintiffs fall back on the mantra that Defendants are\n\nimpermissibly \u201cparsing\u201d their allegations and refusing to consider \u201ccontext.\u201d (Opp. at 13-14). The\n\nproblem, however, is that the supposed \u201ccontext\u201d is simply the stuff of Plaintiffs\u2019 imagination. See\n\nIn re Citigroup Sec. Litig., 2023 WL 2632258, at *20 (S.D.N.Y. Mar. 24, 2023) (rejecting\n\nmisrepresentation claim because plaintiff \u201coffer[ed] nothing beyond conjecture\u201d).\n\nII. THE COMPLAINT FAILS TO ADEQUATELY ALLEGE SCIENTER\n\n As Defendants demonstrated in their MTD, with no confidential witnesses, no facts\n\nshowing that any statement was false when made, and no motive to commit securities fraud, the\n\nComplaint falls far short of alleging the \u201cstrong inference\u201d of scienter that the PSLRA demands.\n\n15 U.S.C. \u00a7 78u-4(b)(2)(A). Plaintiffs\u2019 Opposition does nothing to rebut this showing.\n\n A. The Complaint Does Not Plead Motive to Commit Fraud\n\n Searching for some motive, Plaintiffs argue that \u201cDefendants were motivated to enter into\n\nthe Strategic Partnership so they could circumvent the FCA ban\u201d and \u201cgain access to the regulated\n\nUK market through Digivault.\u201d (Opp. at 16). Plaintiffs fail to explain how this is a motive to\n\ncommit securities fraud (rather than, for example, a motive to mislead the FCA). In any event,\n\nthis theory is fatally flawed and cannot support an inference of scienter.\n\n To begin, this theory makes no sense. The Complaint alleges that Defendants could have\n\nand did come to control Digivault through the loan agreement alone. (See, e.g., id. at 14 n.8\n\n\n 5\n\f Case 1:23-cv-03346-GHW Document 50 Filed 03/04/24 Page 10 of 15\n\n\n\n\n(\u201cBinance gained control of Digivault through the Strategic Partnership; no additional steps were\n\nnecessary.\u201d)). Thus, by the time the loan agreement was disclosed, Defendants had allegedly\n\nalready achieved their supposed clandestine goal.\n\n Undeterred, Plaintiffs argue that Defendants were \u201cmotivated to keep up the illusion that\n\nthey were simply in a Strategic Partnership with Eqonex with the possibility of a merger so that\n\nthey could work on convincing the FCA to sanction a change in control of Digivault, which would\n\nthen allow them to take a 100% share charge in Digivault.\u201d (Id. at 16-17). This argument is easily\n\nrejected. First, the theory that Defendants were biding time to \u201cconvinc[e] the FCA to sanction a\n\nchange in control of Digivault\u201d (Id. at 16-17) does not appear anywhere in the Complaint, and\n\nPlaintiffs cannot amend the Complaint through an opposition brief. See Mikimoto, 2023 WL\n\n2711825, at *7. Second, even if Plaintiffs had properly raised this theory, they still fail to explain\n\nhow Defendants would have obtained any benefit from increasing their share of Digivault if, as\n\nPlaintiffs allege, Defendants gained control of Digivault \u201cimmediately\u201d and \u201cno additional steps\n\nwere necessary\u201d to capture it. (See Opp. at 12, 14 n.8; see also AC \u00b6 67). Finally, it makes\n\nabsolutely no sense that Defendants were secretly trying to circumvent the FCA ban on Binance\n\nby taking control of Digivault, while at the same time trying to convince the FCA that it should\n\nallow Binance to take control of Digivault. Plaintiffs\u2019 motive theory fails.\n\n B. The Complaint Fails to Allege Facts That Constitute Strong Circumstantial\n Evidence of Conscious Misbehavior or Recklessness\n\n The Opposition also makes plain that the Complaint fails to allege any facts suggesting that\n\nany Defendant knew or recklessly disregarded that any statement was false or misleading.\n\n First, Plaintiffs argue that because \u201cDefendants\u2019 job was to carry out Binance\u2019s intentions,\u201d\n\nthis Court can conclude \u201cthat they knew those intentions.\u201d (Opp. at 18). This is textbook group\n\npleading. See Greco v. Qudian Inc., 2022 WL 4226022, at *26 (S.D.N.Y. Sept. 13, 2022) (Woods,\n\n\n\n 6\n\f Case 1:23-cv-03346-GHW Document 50 Filed 03/04/24 Page 11 of 15\n\n\n\n\nJ.) (\u201cScienter, however, cannot be inferred solely from the fact that, due to the defendants\u2019 board\n\nmembership or executive managerial position, they had access to the company\u2019s internal\n\ndocumentation as well as any adverse information.\u201d).3 Moreover, the only support for Binance\u2019s\n\nsupposed \u201cintentions\u201d is Plaintiffs\u2019 say-so.\n\n Second, Plaintiffs point to a press report and accusations about other matters that have\n\nnothing to do with Eqonex to argue that the Court can infer scienter in this case from Binance\u2019s\n\nsupposed \u201cpattern\u201d of misconduct. (Opp. at 17-18). Defendants demonstrated that this type of\n\nunsubstantiated and unrelated character evidence is not sufficient to allege a strong inference of\n\nscienter. (MTD at 17-18). Plaintiffs try to compare their allegations to those in In re Symbol\n\nTechs., Inc. Sec. Litig., 2013 WL 6330665 (E.D.N.Y. Dec. 5, 2013) (Opp. at 18), but in that case,\n\nthe referenced charges concerned the exact events that formed the basis of the complaint, and\n\nseveral defendants had actually admitted to those charges. Symbol Techs, 2013 WL 6330665, at\n\n*1-2, 10 n.3 (concluding that \u201cthe admitted prior misconduct establishe[d] a pattern of culpable\n\nconduct\u201d). That is far afield from the Complaint\u2019s allegations here, which consist only of (i)\n\nunproven accusations that (ii) do not concern Eqonex or the merger discussions, and (iii) only\n\nconcern two of the seven defendants. (Opp. at 18). These allegations do not support a strong\n\ninference of scienter. See Union Cent. Life Ins. Co. v. Ally Fin., Inc., 2013 WL 2154381, at *1\n\n(S.D.N.Y. Mar. 29, 2013) (\u201cPlaintiffs\u2019 citation to a number of lawsuits and government\n\ninvestigations involving [defendant] provides no evidence of scienter.\u201d).\n\n In sum, Plaintiffs\u2019 theories of fraud rest on implausible speculation. The far more plausible\n\ninference is that the parties simply decided not to merge after engaging in some non-binding\n\n\n3\n Plaintiffs\u2019 related claim that Bifinity was \u201ccreated\u201d on March 7, 2022 to further Binance\u2019s alleged master\nplan of capturing Digivault (Opp. at 17) is refuted by Plaintiffs\u2019 own allegations: the Complaint asserts that\nBifinity existed in 2021 (AC \u00b6 6).\n\n\n\n 7\n\f Case 1:23-cv-03346-GHW Document 50 Filed 03/04/24 Page 12 of 15\n\n\n\n\nexploratory discussions, and the strategic partnership was not as successful as planned. That is not\n\nsecurities fraud. See Faulkner v. Verizon Commc\u2019ns, Inc., 156 F. Supp. 2d 384, 394 (S.D.N.Y.\n\n2001) (rejecting plaintiffs\u2019 theory of liability because they had \u201cconfused an innocent motive to\n\nterminate [the merger] with the requisite motive to defraud\u201d).4\n\nIII. THE COMPLAINT FAILS TO ADEQUATELY ALLEGE LOSS CAUSATION\n\n Defendants demonstrated in their MTD that Plaintiffs cannot adequately allege loss\n\ncausation because there is a fundamental mismatch between the alleged omissions and \u201ccorrective\n\ndisclosures.\u201d Indeed, the supposedly omitted information\u2014that the merger discussions and\n\nstrategic partnership were all part of some ruse\u2014was never even disclosed (because it is made up).\n\n Plaintiffs\u2019 Opposition confirms this. Plaintiffs argue that the following announcements\n\nrevealed to investors that Defendants\u2019 plan all along was to gut Eqonex and run away with\n\nDigivault: (i) Eqonex\u2019s August 15, 2022 announcement that the Exchange was closing; and (ii)\n\nEqonex\u2019s November 21, 2022 announcement5 that it was in breach of the loan agreement and may\n\nnot be able to \u201ccontinue as a going concern.\u201d (Opp. at 19).\n\n But these disclosures said no such thing. In fact, as Plaintiffs note, the August 15 release\n\nactually communicated continued optimism about the strategic partnership\u2014in particular, that\n\nclosing the Exchange \u201cwould \u2018improve the Company\u2019s financial position\u2019 and was \u2018the right\n\n\n4\n Plaintiffs attempt to distinguish Faulkner, where the court held that plaintiffs had not adequately alleged\nsecurities fraud, because Verizon was justified in backing out of a merger since market conditions had\nchanged, see Faulkner, 156 F. Supp. 2d at 400, whereas the parties here supposedly had no legitimate\njustification. (See Opp. at 12-13). Putting aside that Plaintiffs cannot draw a distinction by simply making\nup a reason why the merger here did not happen, Faulkner actually supports Defendants. In Faulkner, the\nparties had entered into a merger agreement and assured investors they would close (and the claim was still\ndismissed), but here, the parties were merely talking about a possible merger and expressly warned (even\nthough that was obvious) that the talks might not result in a deal. (See MTD at 10-11).\n5\n Defendants note that the \u201cNovember 21, 2022\u201d disclosure that the Complaint references appears to have\nactually been filed on November 15, 2022. (See Mar. 4, 2024 Supplementary Declaration of Victoria H.\nYuhas, Ex. 1). For ease of reference, Defendants will refer to the November 15 filing using Plaintiffs\u2019 date.\n\n\n\n 8\n\f Case 1:23-cv-03346-GHW Document 50 Filed 03/04/24 Page 13 of 15\n\n\n\n\ndecision to deliver shareholder value.\u2019\u201d (Id. at 6). Moreover, all the November 21 announcement\n\nrevealed was that Eqonex was having financial trouble. Naturally, a price drop followed this new,\n\nnegative news, but that is not enough to plead loss causation. See Leykin v. AT&T Corp., 423 F.\n\nSupp. 2d 229, 245 (S.D.N.Y. 2006) (\u201c[L]oss causation is not pled upon allegations of drops in\n\nstock price following an announcement of bad news that does not disclose the fraud.\u201d).\n\nIV. THE CLAIMS FAIL AGAINST EACH DEFENDANT FOR OTHER REASONS\n\n A. Plaintiffs Fail to State Section 10(b) Claims Against Hai and Farnell\n\n Defendants Hai and Farnell cannot fairly be said to have \u201cmade\u201d either of the two\n\nstatements on which Plaintiffs rely because (i) neither individual worked for Eqonex on March 7\n\nwhen the statements were issued (AC \u00b6\u00b6 28, 31); (ii) neither individual signed the press release\n\n(see Yuhas Decl., Ex. 6); and (iii) Plaintiffs have not offered any facts to support their conclusory\n\nallegation that Hai and Farnell controlled the alleged misstatements.\n\n Plaintiffs rely on In re Pfizer Inc. Sec. Litig., 819 F.3d 642 (2d Cir. 2016), a summary\n\njudgment case in which the court found that Pfizer might have \u201cmade\u201d other companies\u2019\n\nstatements to the press. Id. at 657-58. But the evidence there included documents and testimony\n\nindicating that the relevant press communications could not go \u201cout the door\u201d without Pfizer\u2019s\n\napproval. Id. That is not even close to the situation here, where Plaintiffs have not offered a single\n\nnon-conclusory allegation of Defendants\u2019 involvement in preparing the press releases. See In re\n\nLululemon Sec. Litig., 14 F. Supp. 3d 553, 576 n.14 (S.D.N.Y. 2014) (concluding that an individual\n\ndirector defendant could not be held liable for alleged misstatements where there were no\n\n\u201cparticularized allegations that he had any role in shaping their content\u201d).\n\n\n\n\n 9\n\f Case 1:23-cv-03346-GHW Document 50 Filed 03/04/24 Page 14 of 15\n\n\n\n\n B. Plaintiffs\u2019 Section 20(a) Claims Fail as to All Defendants\n\n Even if Plaintiffs had adequately alleged a primary violation (they have not), Plaintiffs\u2019\n\nSection 20(a) claims still fail because, as discussed above, the Complaint lacks any substantive\n\nscienter allegations about any specific Defendant. See Greco, 2022 WL 4226022, at *26.\n\n In addition, Plaintiffs\u2019 claims of \u201ccontrol\u201d are boilerplate and conclusory:\n\n \uf0b7 Bifinity supposedly controlled Eqonex\u2019s statements because Bifinity had \u201cfull control over\n Eqonex\u2019s executive management, as well as two seats on its Board.\u201d (Opp. at 21).\n\n \uf0b7 Binance and Zhao allegedly controlled Eqonex because Binance and Zhao controlled\n Bifinity. (Id. at 21-22).\n\n \uf0b7 Farnell, Hai, Ling, and Cemmell\u2014despite not starting their positions with Eqonex until\n March 17, April 28, and March 31 (AC \u00b6\u00b6 28-31)\u2014all supposedly controlled statements\n that Eqonex made on March 7 because \u201cEqonex and Bifinity had already . . . established\n Bifinity\u2019s control of [Eqonex].\u201d (Opp. at 21).\n\n Plaintiffs cannot sufficiently allege that Defendants are control persons simply by claiming\n\nthat they are. See In re Braskem S.A. Sec. Litig., 246 F. Supp. 3d 731, 771 (S.D.N.Y. 2017).\n\nV. THE COMPLAINT FAILS TO ESTABLISH PERSONAL JURISDICTION\n\n Plaintiffs cannot establish personal jurisdiction over Defendants because, as in Braskem,\n\nPlaintiffs do not offer a single non-conclusory allegation of Defendants\u2019 involvement in making\n\nthe two alleged misstatements. See Braskem, 246 F. Supp. 3d at 770 (\u201c[The complaint did] not\n\nallege, concretely, that [defendant] played any role in making, proposing, editing or approving[.]\u201d)\n\nPlaintiffs\u2019 continued reliance on textbook group pleading does not suffice.6 (See Opp. at 23).\n\n CONCLUSION\n\n For the reasons set forth above, the Court should dismiss the Complaint with prejudice.\n\n\n6\n Plaintiffs cannot rely on the criminal case against Binance and Zhao (Opp. at 22-23) to establish personal\njurisdiction over the five remaining Defendants because \u201c[a] plaintiff must carry his burden with respect to\neach defendant individually,\u201d Berdeaux v. OneCoin Ltd., 561 F. Supp. 3d 379, 396 (S.D.N.Y. 2021), and\nbecause it is not referenced in the Complaint. See Mikimoto, 2023 WL 2711825, at *7.\n\n\n\n 10\n\f Case 1:23-cv-03346-GHW Document 50 Filed 03/04/24 Page 15 of 15\n\n\n\n\nDated: March 4, 2024 Respectfully submitted,\n New York, New York\n CAHILL GORDON & REINDEL LLP\n\n By: /s Samson A. Enzer\n Samson A. Enzer\n Edward N. Moss\n Victoria H. Yuhas\n 32 Old Slip\n New York, New York 10005\n (212) 701-3000\n\n Counsel for Defendants Binance, Bifinity,\n Jonathan Farnell, Daniel Ling, Almira Cemmell,\n Yu Helen Hai, and Changpeng Zhao\n\n\n\n\n 11\n\f","ocr_status":2,"date_upload":"2026-06-22T06:14:31.651217-07:00","document_number":"50","attachment_number":null,"pacer_doc_id":"127035039394","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Reply Memorandum of Law in Support of Motion","acms_document_guid":""}],"date_created":"2024-03-04T19:09:10.626213-08:00","date_modified":"2025-01-09T03:52:14.902227-08:00","date_filed":"2024-03-04","time_filed":"20:09:01","entry_number":50,"recap_sequence_number":"2024-03-04.001","pacer_sequence_number":191,"description":"REPLY MEMORANDUM OF LAW in Support re: 46 MOTION to Dismiss . . Document filed by Bifinity UAB, Binance Group, Almira Cemmell, Zhao Changpeng, Jonathan Farnell, Yu Helen Hai, Daniel Ling..(Enzer, Samson) (Entered: 03/04/2024)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/380206610/","id":380206610,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67233991/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/387971101/","id":387971101,"tags":[],"absolute_url":"/docket/67233991/51/zhao-v-eqonex-limited/","date_created":"2024-03-04T19:09:10.520026-08:00","date_modified":"2026-06-23T03:58:51.000683-07:00","sha1":"8ee18aa0c5af6c1b86460cc51d6d6d5bd3c7001f","page_count":2,"file_size":149403,"filepath_local":"recap/gov.uscourts.nysd.597576/gov.uscourts.nysd.597576.51.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.597576/gov.uscourts.nysd.597576.51.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":" Case 1:23-cv-03346-GHW Document 51 Filed 03/04/24 Page 1 of 2\n\n\n\n\nUNITED STATES DISTRICT COURT\nSOUTHERN DISTRICT OF NEW YORK\n\n\nBIN LI, Individually and On Behalf of All Others Similarly\nSituated,\n Plaintiff,\n No. 23 Civ. 03346 (GHW)\n v.\n\nEQONEX LIMITED, BINANCE GROUP, BIFINITY\nUAB, JONATHAN FARNELL, DANIEL LING, ALMIRA\nCEMMELL, YU HELEN HAI, and ZHAO CHANGPENG,\n Defendants.\n\n\n\n SUPPLEMENTARY DECLARATION OF VICTORIA H. YUHAS\n\n I, Victoria H. Yuhas, at 32 Old Slip, New York, NY 10005, state:\n\n 1. I am an associate at Cahill Gordon & Reindel LLP, attorneys for Defendants Binance\n\nGroup, 1 Bifinity UAB, Jonathan Farnell, Daniel Ling, Almira Cemmell, Yu Helen Hai, and\n\nChangpeng Zhao (collectively, the \u201cDefendants\u201d) in the above-captioned action, and am\n\nauthorized to practice law in this Court. I submit this declaration in support of the Defendants\u2019\n\nMarch 4, 2024 reply memorandum of law in support of Defendants\u2019 motion to dismiss the\n\nComplaint. 2\n\n 2. Attached hereto as Exhibit 1 is a true and correct copy of Eqonex\u2019s November 15, 2022\n\nForm 6-K filed with the SEC on the same day and available on the SEC\u2019s online filing system,\n\nEDGAR.\n\n\n1\n Defendants expressly deny the existence of an entity known as \u201cBinance Group.\u201d\n2\n Capitalized terms used herein have the meaning assigned to them in the Defendants\u2019 January 12, 2024\nmemorandum of law (ECF No. 47) or, if not defined therein, in the Amended Class Action Complaint (ECF\nNo. 39).\n\f Case 1:23-cv-03346-GHW Document 51 Filed 03/04/24 Page 2 of 2\n\n\n\n\n I declare under penalty of perjury that the foregoing is true and correct. Executed on this 4th\n\nday of March 2024.\n\n /s Victoria H. Yuhas\n Victoria H. Yuhas\n\f","ocr_status":1,"date_upload":"2026-06-22T06:14:27.605726-07:00","document_number":"51","attachment_number":null,"pacer_doc_id":"127035039400","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Declaration in Support of Motion","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/483517185/","id":483517185,"tags":[],"absolute_url":"/docket/67233991/51/1/zhao-v-eqonex-limited/","date_created":"2026-06-22T06:14:27.038386-07:00","date_modified":"2026-06-23T03:59:41.430518-07:00","sha1":"373bd8e48de78b6a442e4f507419e17b7139d341","page_count":5,"file_size":757607,"filepath_local":"recap/gov.uscourts.nysd.597576/gov.uscourts.nysd.597576.51.1.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.597576/gov.uscourts.nysd.597576.51.1.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"Case 1:23-cv-03346-GHW Document 51-1 Filed 03/04/24 Page 1 of 5\n\n\n\n\n Exhibit 1\n\f Case 1:23-cv-03346-GHW Document 51-1 Filed 03/04/24 Page 2 of 5\n6-K 1 form6-k.htm\n\n\n\n UNITED STATES\n SECURITIES AND EXCHANGE COMMISSION\n Washington, D.C. 20549\n\n FORM 6-K\n REPORT OF FOREIGN PRIVATE ISSUER\n PURSUANT TO RULE 13a-16 OR 15d-16\n UNDER THE SECURITIES EXCHANGE ACT OF 1934\n\n For the month of November 2022\n\n Commission File Number: 001-39600\n\n\n EQONEX LIMITED\n (Translation of registrant\u2019s name into English)\n\n 118 Piccadilly\n Mayfair, London WIJ 7NW\n United Kingdom\n (Address of principal executive offices)\n\nIndicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.\n\n Form 20-F \u2612 Form 40-F \u2610\n\nIndicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): \u2610\n\nIndicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): \u2610\n\f Case 1:23-cv-03346-GHW Document 51-1 Filed 03/04/24 Page 3 of 5\n\n\n INFORMATION CONTAINED IN THIS REPORT ON FORM 6-K\n\n Singapore Statutory Financial Statements\n\nEQONEX LIMITED (the \u201cCompany\u201d) has, in connection with its Annual General Meeting of Shareholders (the \u201cAnnual General\nMeeting\u201d) to be held on November 29, 2022 and in accordance with Singapore law, prepared Singapore statutory financial statements\nfor the Company and its subsidiaries (collectively, the \u201cGroup\u201d) for the year ended March 31, 2022, to be delivered to the Company\u2019s\nshareholders prior to the Annual General Meeting. The Singapore statutory financial statements were prepared in accordance with the\nprovisions of the Singapore Companies Act and the Singapore Financial Reporting Standards (International) issued by the Accounting\nStandards Council which are simultaneously compliant with the International Financial Reporting Standards issued by the International\nAccounting Standards Board.\n\nGoing Concern Assumption\n\nIn preparing the Singapore statutory financial statements, management of the Group has given careful consideration to the going\nconcern status of the Group in light of the fact that the Group has incurred a loss for the year of $75,819,128 and cash outflows from\noperating activities of $42,607,632 for the year ended March 31, 2022, and as of that date, the Group had net current assets of\n$4,155,521 and net assets of $4,098,206, among which the Group had cash and cash equivalents of $4,882,410 and a non-current\nconvertible loan (the \u201cBifinity Loan\u201d) of $2,774,692, which was under a $36 million convertible loan agreement (the \u201cLoan\nAgreement\u201d) with Bifinity UAB (\u201cBifinity\u201d) with details set out in Note 30 to the consolidated financial statements contained in the\nCompany\u2019s annual report for the year ended March 31, 2022 on Form 20-F filed with the Securities and Exchange Commission on\nAugust 15, 2022.\n\nSubsequent to March 31, 2022, the end of the reporting period of the Singapore statutory financial statements, the Group is currently in\nbreach of certain provisions of the Loan Agreement and consequently seeking a waiver from Bifinity on such breaches. Pursuant to a\nthird amendment agreement to the Loan Agreement entered into by the Company and Bifinity on September 30, 2022, the drawdown of\nthe fifth tranche of the Bifinity Loan was postponed from September 15, 2022 to October 27, 2022. Up to the date of this Form 6-K, the\nfifth tranche of the Bifinity Loan has not been drawn down. Based on the working capital forecast prepared by management of the\nGroup, the financial resources available to the Group as of March 31, 2022 and up to the date of this Form-6-K may not be sufficient to\nsatisfy the working capital requirements of the Group for a period of twelve months from the date of this 6-K, which may cast\nsignificant doubt on the Group\u2019s ability to continue as a going concern. The Group is pursuing financing options including, but not\nlimited to, equity financing from the issuance of new shares, where negotiation with potential investors is ongoing as of the date of this\nForm 6-K.\n\n 2\n\f Case 1:23-cv-03346-GHW Document 51-1 Filed 03/04/24 Page 4 of 5\n\n\nThe above conditions indicate the existence of a material uncertainty which may cast significant doubt on the Group\u2019s ability to\ncontinue as a going concern. Management has reviewed the Group\u2019s cash flow projections which cover a period of not less than twelve\nmonths from the date of this Form 6-K, and is of the opinion that the Group will not have sufficient working capital to meet its\nfinancial obligations that will be due in the coming twelve months from the date of this Form 6-K, and the on-going covenants\ncompliance under the Loan Agreement unless one or both of the following efforts are successful or other sources of funding are found:\n(i) agreeing with Bifinity on amendments to the Loan Agreement; and/or (ii) raising equity financing through the issuance of new\nshares. If the Group had sufficient working capital to meet its cash flow requirements in the next twelve months from the date of this\nForm 6-K, then management is of the opinion that it would be appropriate to prepare the Singapore statutory financial statements on a\ngoing concern basis.\n\nNotwithstanding the above, significant uncertainties exist as to whether the Group can achieve the plans and measures described above\nto generate adequate cash inflow as scheduled. Should the Group be unable to operate as a going concern for the next twelve months\nfrom the date of this Form 6-K, adjustments would have to be made to reduce the carrying values of the Group\u2019s assets to their\nrealizable values, to provide for financial liabilities which might arise, and to reclassify non-current assets and non-current liabilities as\ncurrent assets and current liabilities, respectively. The effects of these adjustments have not been reflected in the Singapore statutory\nfinancial statements.\n\nSubsequent Events\n\nSubsequent to March 31, 2022, the end of the reporting period of the Singapore statutory financial statements, the second, third and\nfourth tranches of the Bifinity Loan with an aggregate amount of $15 million have been drawn down by the Group and were paid by\nBifinity. On September 30, 2022, the Company entered into a third amendment agreement to the Loan Agreement with Bifinity,\npursuant to which the drawdown date of the fifth tranche of the Bifinity Loan of $9 million was postponed from September 15, 2022 to\nOctober 27, 2022. Up to the date of this Form 6-K, the fifth tranche of the Bifinity Loan has not been drawn down.\n\nAudit of Singapore Statutory Financial Statements\n\nThe Company engaged an independent accounting firm in Singapore to audit the Singapore statutory financial statements in accordance\nwith Singapore Standards on Auditing and to issue an auditor\u2019s report. In the auditor\u2019s report, the Singapore audit firm did not express\nan opinion on the Singapore statutory financial statements. Because of the significance of the matters described above, the Singapore\naudit firm was not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on the Singapore statutory\nfinancial statements.\n\nThe auditor\u2019s report stated that the conditions mentioned above indicated the existence of material uncertainties which may cast\nsignificant doubts on the ability of the Group and the Company to continue as a going concern.\n\nThe Singapore audit firm was not able to obtain sufficient audit evidence regarding the likely outcome of the Group\u2019s ability to obtain\nthe financing arrangements mentioned above. Accordingly, they are uncertain of the appropriateness of the use of the going concern\nassumption in the preparation of the Singapore statutory financial statements.\n\nIn addition, in view of the significance of the matters referred to above, the Singapore audit firm did not express an opinion on whether\nthe accounting and other records required by the Singapore Companies Act 1967 to be kept by the Company and those subsidiary\ncorporations incorporated in Singapore of which they are the auditors, have been properly kept in accordance with the provisions of\nsuch Act.\n\n 3\n\f Case 1:23-cv-03346-GHW Document 51-1 Filed 03/04/24 Page 5 of 5\n\n\n SIGNATURES\n\n Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on\nits behalf by the undersigned, thereunto duly authorized.\n\n EQONEX LIMITED\n\nDate: November 15, 2022 By: /s/ Daniel Ling\n Name: Daniel Ling\n Title: Chief Financial Officer\n\n 4\n\f","ocr_status":2,"date_upload":"2026-06-22T06:14:31.618139-07:00","document_number":"51","attachment_number":1,"pacer_doc_id":"127035039401","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit 1 - November 15, 2022 Form 6-K","acms_document_guid":""}],"date_created":"2024-03-04T19:09:10.505761-08:00","date_modified":"2025-01-09T03:52:14.929294-08:00","date_filed":"2024-03-04","time_filed":"20:13:42","entry_number":51,"recap_sequence_number":"2024-03-04.002","pacer_sequence_number":194,"description":"DECLARATION of Victoria H. Yuhas in Support re: 46 MOTION to Dismiss .. Document filed by Bifinity UAB, Binance Group, Almira Cemmell, Zhao Changpeng, Jonathan Farnell, Yu Helen Hai, Daniel Ling. (Attachments: # 1 Exhibit 1 - November 15, 2022 Form 6-K).(Yuhas, Victoria) (Entered: 03/04/2024)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/378721334/","id":378721334,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67233991/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/386399791/","id":386399791,"tags":[],"absolute_url":"/docket/67233991/49/zhao-v-eqonex-limited/","date_created":"2024-02-16T15:11:27.042306-08:00","date_modified":"2026-06-23T06:23:24.751452-07:00","sha1":"c431725c82085dc7d738a48459bf5335595e37b7","page_count":30,"file_size":953230,"filepath_local":"recap/gov.uscourts.nysd.597576/gov.uscourts.nysd.597576.49.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.597576/gov.uscourts.nysd.597576.49.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":" Case 1:23-cv-03346-GHW Document 49 Filed 02/16/24 Page 1 of 30\n\n\n\n\nUNITED STATES DISTRICT COURT\nSOUTHERN DISTRICT OF NEW YORK\n\n\n BIN LI, individually and on behalf of all\n others similarly situated,\n\n Plaintiff, Case No. 1:23-CV-03346-GHW\n\n v.\n\n EQONEX LIMITED, BINANCE GROUP,\n BIFINITY UAB, JONATHAN FARNELL,\n DANIEL LING, ALMIRA CEMMELL, YU\n HELEN HAI, and ZHAO CHANGPENG,\n\n Defendants.\n\n\n\n PLAINTIFFS\u2019 MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANTS\u2019\n MOTION TO DISMISS THE AMENDED CLASS ACTION COMPLAINT\n\f Case 1:23-cv-03346-GHW Document 49 Filed 02/16/24 Page 2 of 30\n\n\n\n\n TABLE OF CONTENTS\n\nI. PRELIMINARY STATEMENT ........................................................................................ 1\n\nII. STATEMENT OF FACTS ................................................................................................. 2\n\nIII. ARGUMENT ...................................................................................................................... 7\n\n A. Legal Standard for Evaluating Defendants\u2019 Motion ............................................... 7\n\n B. The Complaint Pleads that Defendants were \u201cMakers\u201d of False and\n Misleading Statements ............................................................................................ 7\n\n C. The Complaint Adequately Pleads Falsity .............................................................. 9\n\n D. The Complaint Adequately Pleads Scienter ......................................................... 14\n\n 1. The Complaint Pleads Defendants\u2019 Motive and Opportunity................... 16\n\n 2. The Complaint Pleads Strong Circumstantial Evidence of\n Recklessness ............................................................................................. 17\n\n E. The Complaint Adequately Pleads Loss Causation .............................................. 18\n\n F. The Complaint Adequately Pleads Control Person Liability................................ 20\n\n G. The Complaint Establishes Personal Jurisdiction Over Each Defendant ............. 22\n\nIV. CONCLUSION ................................................................................................................. 24\n\n\n\n\n i\n\f Case 1:23-cv-03346-GHW Document 49 Filed 02/16/24 Page 3 of 30\n\n\n\n\n TABLE OF AUTHORITIES\n\n Page(s)\n\nCases\n\nAcito v. IMCERA Grp., Inc.,\n 47 F.3d 47 (2d Cir. 1995).......................................................................................................... 24\n\nAltimeo Asset Mgmt. v. Qihoo 360 Tech. Co.,\n 663 F. Supp. 3d 334 (S.D.N.Y. 2023)..................................................................... 10, 11, 12, 13\n\nAltimeo,\n 19 F.4th ..................................................................................................................................... 12\n\nAnderson News, L.L.C. v. Am. Media, Inc.,\n 680 F.3d 162 (2d Cir. 2012)...................................................................................................... 14\n\nAshcroft v. Iqbal,\n 556 U.S. 662 (2009) .................................................................................................................... 7\n\nATSI Commc'ns, Inc. v. Shaar Fund, Ltd.,\n 493 F.3d 87 (2d Cir. 2007)........................................................................................................ 18\n\nBell Atl. Corp. v. Twombly,\n 550 U.S. 544 (2007) .................................................................................................................... 7\n\nBishins v. CleanSpark, Inc.,\n 2023 WL 112558 (S.D.N.Y. Jan. 5, 2023) ......................................................................... 10, 13\n\nBoguslavsky v. Kaplan,\n 159 F.3d 715 (2d Cir. 1998)...................................................................................................... 20\n\nDura Pharms., Inc. v. Broudo,\n 544 U.S. 336 (2005) .................................................................................................................. 18\n\nECA, Loc. 134 IBEW Joint Pension Tr. of Chicago v. JP Morgan Chase Co.,\n 553 F.3d 187 (2d Cir. 2009)...................................................................................................... 16\n\nEmployees' Ret. Sys. of Gov't of the Virgin Islands v. Blanford,\n 794 F.3d 297 (2d Cir. 2015)...................................................................................................... 17\n\nFaulkner v. Verizon Commc'ns, Inc.,\n 156 F. Supp. 2d 384 (S.D.N.Y. 2001)....................................................................................... 12\n\nFresno Cnty. Employees' Ret. Ass'n v. comScore, Inc.,\n 268 F. Supp. 3d 526 (S.D.N.Y. 2017)........................................................................... 15, 16, 20\n\n\n\n ii\n\f Case 1:23-cv-03346-GHW Document 49 Filed 02/16/24 Page 4 of 30\n\n\n\n\nFreudenberg v. E*Trade Fin. Corp.,\n 712 F. Supp. 2d 171 (S.D.N.Y. 2010)....................................................................................... 19\n\nFriedl v. City of New York,\n 210 F.3d 79 (2d Cir. 2000)........................................................................................................ 14\n\nIn re Am. Int'l Grp., Inc. 2008 Sec. Litig.,\n 741 F. Supp. 2d 511 (S.D.N.Y. 2010)................................................................................. 21, 22\n\nIn re AOL Time Warner, Inc. Sec. & \"ERISA\" Litig.,\n 381 F. Supp. 2d 192 (S.D.N.Y. 2004)....................................................................................... 22\n\nIn re Banco Bradesco S.A. Sec. Litig.,\n 277 F. Supp. 3d 600 (S.D.N.Y. 2017)....................................................................................... 22\n\nIn re Braskem S.A. Sec. Litig.,\n 246 F. Supp. 3d 731 (S.D.N.Y. 2017)....................................................................................... 23\n\nIn re DDAVP Direct Purchaser Antitrust Litig.,\n 585 F.3d 677 (2d Cir. 2009)........................................................................................................ 7\n\nIn re Flag Telecom Holdings, Ltd. Sec. Litig.,\n 352 F. Supp. 2d 429 (S.D.N.Y. 2005)................................................................................. 20, 21\n\nIn re Hain Celestial Grp., Inc. Sec. Litig.,\n 20 F.4th 131 (2d Cir. 2021) ................................................................................................ 15, 16\n\nIn re Kirkland Lake Gold Ltd. Sec. Litig.,\n 2021 WL 4482151 (S.D.N.Y. Sept. 30, 2021).......................................................................... 10\n\nIn re Lululemon Sec. Litig.,\n 14 F. Supp. 3d 553 (S.D.N.Y. 2014)........................................................................................... 9\n\nIn re Pfizer Inc. Sec. Litig.,\n 819 F.3d 642 (2d Cir. 2016)........................................................................................................ 8\n\nIn re Symbol Technologies, Inc. Sec. Litig.,\n No. 05-CV-3923, 2013 WL 6330665 n.3 (E.D.N.Y. Dec. 5, 2013) ......................................... 18\n\nIn re Take-Two Interactive Sec. Litig.,\n 551 F. Supp. 2d 247 (S.D.N.Y. 2008)................................................................................. 19, 20\n\nIn re Tronox, Inc. Sec. Litig.,\n 769 F. Supp. 2d 202 (S.D.N.Y. 2011)....................................................................................... 21\n\nIn re Weight Watchers Int'l Inc. Sec. Litig.,\n 504 F. Supp. 3d 224 (S.D.N.Y. 2020)......................................................................................... 8\n\n\n\n iii\n\f Case 1:23-cv-03346-GHW Document 49 Filed 02/16/24 Page 5 of 30\n\n\n\n\nIWA Forest Indus. Pension Plan v. Textron Inc.,\n 14 F.4th 141 (2d Cir. 2021) .................................................................................................. 7, 11\n\nJanus Cap. Grp., Inc. v. First Derivative Traders,\n 564 U.S. 135 (2011) ................................................................................................................ 7, 8\n\nKelleher v. ADVO, INC.,\n 2008 WL 11376597 (D. Conn. Apr. 28, 2008) ........................................................................... 9\n\nKhoja v. Orexigen Therapeutics, Inc.,\n 899 F.3d 988 (9th Cir. 2018) .................................................................................................... 14\n\nKing Cnty., Wash. v. IKB Deutsche Industriebank AG,\n 708 F. Supp. 2d 334 (S.D.N.Y. 2010)....................................................................................... 19\n\nMatrixx Initiatives, Inc. v. Siracusano,\n 563 U.S. 27 (2011) .................................................................................................................... 10\n\nNovak v. Kasaks,\n 216 F.3d 300 (2d Cir. 2000).................................................................................................. 7, 17\n\nRombach v. Chang,\n 355 F.3d 164 (2d Cir. 2004)...................................................................................................... 10\n\nRoth v. Jennings,\n 489 F.3d 499 (2d Cir. 2007)...................................................................................................... 13\n\nS.E.C. v. First Jersey Sec., Inc.,\n 101 F.3d 1450 (2d Cir. 1996).................................................................................................... 20\n\nS.E.C. v. Straub,\n 921 F. Supp. 2d 244 (S.D.N.Y. 2013)....................................................................................... 22\n\nStratte-McClure v. Morgan Stanley,\n 784 F. Supp. 2d 373 (S.D.N.Y. 2011)......................................................................................... 9\n\nTellabs, Inc. v. Makor Issues & Rts., Ltd.,\n 551 U.S. 308 (2007) ............................................................................................................ 15, 18\n\nWaterford Twp. Police & Fire Ret. Sys. v. Smithtown Bancorp ., Inc.,\n 2014 WL 3569338 (E.D.N.Y. July 18, 2014) ........................................................................... 22\n\nStatutes\n\n15 U.S.C. \u00a7 78t(a) ......................................................................................................................... 20\n\n15 U.S.C. \u00a7 78u-4(b)(1) and (b)(2) ................................................................................................. 7\n\n\n\n iv\n\f Case 1:23-cv-03346-GHW Document 49 Filed 02/16/24 Page 6 of 30\n\n\n\n\nRules\n\nFed. R. Civ. P. 15(a) ..................................................................................................................... 24\n\nRegulations\n\n17 C.F.R. \u00a7 240.12b-2................................................................................................................... 20\n\n\n\n\n v\n\f Case 1:23-cv-03346-GHW Document 49 Filed 02/16/24 Page 7 of 30\n\n\n\n\n Lead Plaintiff Bin Li and named plaintiffs Kreig Kinnaman and Jaime Chaves (\u201cPlaintiffs\u201d)\n\noppose Defendants\u2019 motion to dismiss (\u201cMotion\u201d) the Amended Class Action Complaint\n\n(\u201cComplaint\u201d) (Dkt. No. 47).1\n\nI. PRELIMINARY STATEMENT\n\n Banned by United Kingdom (\u201cUK\u201d) authorities from any regulated activity in the UK,\n\nDefendants and Binance sought to return through a back door. They found it by taking control of\n\nEqonex (\u201cEqonex\u201d or \u201cCompany\u201d) in exchange for a $36 million loan, duping investors that\n\nBinance would grow the Company and potentially even merge with it. The truth, however, was\n\nthat all Defendants wanted was Digivault, one of Eqonex\u2019s four operating units, with a license to\n\noperate in the UK. Once in control of Eqonex, Defendants shut down the operating unit earning\n\n79% of Eqonex\u2019s revenue and fully took over control of Digivault, leading the Company towards\n\nbankruptcy.\n\n All of Defendants\u2019 actions were in furtherance of its goal. Bifinity\u2019s $36 million loan to\n\nEqonex and its Strategic Partnership with Eqonex were executed for one reason\u2014to gain control\n\nof Digivault. All of Defendants\u2019 assurances to the market about merging with Eqonex and planning\n\na sustainable, long-term partnership were empty words Defendants never intended to fulfill with\n\n\n\n\n 1\n Defendants Jonathan Farnell (\u201cFarnell\u201d), Daniel Ling (\u201cLing\u201d), Almira Cemmell\n\n(\u201cCemmell\u201d), and Yu Helen Hai (\u201cHai\u201d) are referred to herein as the \u201cEqonex Individual\n\nDefendants,\u201d and, with Defendant Zhao Changpeng (\u201cChangpeng\u201d), the \u201cIndividual Defendants.\u201d\n\nThe Individual Defendants, Binance Group (\u201cBinance\u201d), and Bifinity UAB (\u201cBifinity\u201d) are\n\nreferred to herein collectively as the \u201cDefendants.\u201d Citations to the Complaint are \u201c\u00b6__.\u201d Citation\n\nto Defendants\u2019 Memorandum of Law in support of their Motion are \u201cDBr __.\u201d\n\n\n 1\n\f Case 1:23-cv-03346-GHW Document 49 Filed 02/16/24 Page 8 of 30\n\n\n\n\nactions. Instead, Defendants immediately set out to re-enter the UK market while letting Eqonex\n\ncollapse. When Eqonex revealed that it was in breach of the loan agreement with Bifinity, a breach\n\nthat was inevitable, the die was cast, and Defendants had achieved their goal. Binance got what it\n\nwanted, Eqonex went bankrupt, and investors were damaged by Defendants\u2019 fraud and\n\nmanipulation. The Court should deny Defendants\u2019 Motion in its entirety.\n\nII. STATEMENT OF FACTS\n\n Eqonex, formerly known as Diginex, was listed via a Special Purpose Acquisition\n\nCompany (\u201cSPAC\u201d) on NASDAQ on October 1, 2020. Forbes described Diginex as \u201cThe First\n\nCrypto and Digital Asset Exchange To Go Public In The U.S.\u201d As the first publicly traded crypto\n\nexchange, Diginex could raise transparency and compliance standards in a field often marked by\n\ntroubled relationships with financial regulators. \u00b636. In March 2022, as the Class Period began, 2\n\nEqonex operated four business lines: Custody, Asset Management, Brokerage, and the Exchange.\n\n\u00b637. Eqonex\u2019s Custody business was comprised of Digivault, an institutionally focused, secure\n\ndigital asset custodian. In May 2021, Digivault had received approval from the UK Financial\n\nConduct Authority (\u201cFCA\u201d) to register as a custodian wallet provider under the Money Laundering,\n\nTerrorist Financing and Transfer of Funds (Information of the Payer) Regulations 2017 (MLR\n\n2017), as amended by the Money Laundering and Terrorist Financing (Amendment) Regulations\n\n2019, becoming a regulated digital asset custodian in the UK. \u00b638. Eqonex\u2019s Exchange business\n\noffered the trading of virtual currencies and their respective derivatives. \u00b641.\n\n Binance, founded in 2017, is an online exchange where users can trade\n\ncryptocurrencies. It operates the largest bitcoin exchange and altcoin crypto exchange in the world\n\nby volume. \u00b642. Binance launched Binance Custody in December 2021 to offer storage security\n\n\n 2\n The Class Period is between March 7, 2022 and November 21, 2022, inclusive. \u00b62.\n\n\n 2\n\f Case 1:23-cv-03346-GHW Document 49 Filed 02/16/24 Page 9 of 30\n\n\n\n\nand liquidity solutions for institutions to manage digital assets. \u00b643. On March 7, 2022, it launched\n\nBifinity, which engages in the provision of cryptocurrency-related services and acts as Binance\u2019s\n\nofficial fiat-to-crypto payments provider. \u00b644.\n\n On June 26, 2021, the FCA ordered Binance to stop all regulated activity in the UK over\n\nworries about weak consumer protections, amid a wider crackdown on the cryptocurrency\n\nindustry\u2019s potential role in fraud and money laundering. \u00b645. Other regulators acted as well. Also\n\nin June 2021, Japan\u2019s Financial Services Agency, that country\u2019s financial regulator, warned\n\nconsumers that Binance was not registered to do business in Japan and was operating there without\n\npermission. In August 2021, Binance said it would restrict Hong Kong users from trading\n\nderivative products, in response to regulator pressure there. In April 2021, Germany\u2019s financial\n\nwatchdog, the Federal Financial Supervisory Authority, warned investors that Binance may have\n\nviolated securities rules by allowing non-US users to trade tokenized versions of some US stocks\n\nby failing to issue a prospectus detailing its offering of the assets. Then, in June 2023, the SEC\n\nsued Binance and Defendant Changpeng personally, alleging that for years, the company had\n\nacted in \u201cblatant disregard\u201d of US securities laws. The charges included operating\n\nunregistered exchanges, broker-dealers, and clearing agencies, misrepresenting trading\n\ncontrols and oversight on the Binance US platform, and the unregistered offer and sale of\n\nsecurities. \u00b646.\n\n On March 7, 2022, before markets opened, Eqonex issued a press release announcing a\n\nStrategic Partnership with the newly launched Bifinity, stating that Bifinity would advance a $36\n\nmillion convertible loan to Eqonex, and that the companies would \u201cwork together to maximize\n\nbusiness synergies created by this new strategic relationship and capitalize on opportunities to\n\ncooperate and further expand their business.\u201d \u00b647. The press release disclosed that the Strategic\n\n\n\n 3\n\f Case 1:23-cv-03346-GHW Document 49 Filed 02/16/24 Page 10 of 30\n\n\n\n\nPartnership would \u201cinitially focus on leveraging Digivault as an FCA regulated custodian,\n\nstrengthening the technology supporting the Eqonex Exchange, and expanding Bifinity\u2019s\n\ngeographical footprint through Eqonex\u2019s licensing framework.\u201d \u00b648. Both companies would\n\n\u201ccontinue to engage in non-binding discussions to explore potential merger opportunities, subject\n\nto regulatory approval.\u201d \u00b648. Bifinity would have the right to appoint Eqonex\u2019s Chief Executive\n\nOfficer, Chief Financial Officer, and Chief Legal Officer as well as nominate two seats on Eqonex\u2019s\n\nBoard of Directors (\u201cBoard\u201d). \u00b649. Bifinity also gained over 24.9% of the share charge of\n\nDigivault. \u00b612. On this news, Eqonex\u2019s share price increased over 22%, from a closing price of\n\n$1.46 on March 4, 2022 to a $1.79 closing price on March 9, 2022, over multiple days of trading.\n\n\u00b651.\n\n That same day, March 7, 2022, the FCA issued a statement expressing concern about the\n\nStrategic Partnership between Eqonex and Bifinity. The FCA stated that it was aware of statements\n\nby Eqonex and Binance confirming that a member of the Binance group called Bifinity would\n\nadvance a $36 million loan to Eqonex. It further stated that the FCA did not have powers to assess\n\nthe fitness and propriety of the new beneficial owners or the change in control before the\n\ntransaction was completed, and reiterated that it had previously published information expressing\n\nconcerns about Binance and banned it from undertaking regulated activities without written\n\nconsent of the FCA. The FCA noted that \u201c[t]his requirement was put in place because, in the FCA\u2019s\n\nview, Binance Markets is not capable of being effectively supervised.\u201d \u00b652.\n\n Indeed, Binance and its executives consistently acted to subvert financial regulators. For\n\nexample, in March 2023, CNBC reported that between 2021 and 2023, Binance ran a Discord\n\nserver and a Telegram group in which Binance employees and Binance-trained volunteers shared\n\ntechniques with users in China to evade Binance\u2019s \u201cKnow Your Customer,\u201d residency and\n\n\n\n 4\n\f Case 1:23-cv-03346-GHW Document 49 Filed 02/16/24 Page 11 of 30\n\n\n\n\nverification systems in order to trade cryptocurrency in violation of a 2021 ban by China. \u00b664.\n\nSimilarly, the SEC alleged in its lawsuit against Binance and Defendant Changpeng that for years,\n\nBinance encouraged certain US-based customers to submit false Know Your Customer\n\ninformation so that it could operate as an unlicensed securities exchange in the United States. \u00b665.\n\n Binance\u2019s Strategic Partnership with Eqonex was also not its only attempt to enter UK\n\nmarkets despite the FCA ban. In February 2022, Binance entered a partnership with the FCA-\n\napproved, London-based payments provider Paysafe, which created the potential for Binance users\n\nto deposit pounds sterling via Paysafe through its Faster Payments Service. At the time, the FCA\n\nreiterated its concerns about Binance, but stated it had limited powers to object to the arrangement\n\nwith Paysafe. \u00b666.\n\n On March 17, 2022, Eqonex announced that Bifinity had appointed its new CEO and two\n\nnew members to its Board. Bifinity appointed Defendant Farnell, also CEO of Bifinity and\n\nBinance\u2019s head of operations for the UK as Eqonex\u2019s new CEO, Defendant Ling, Bifinity\u2019s\n\nDirector of Strategy, as Eqonex\u2019s CFO, and Defendant Cemmell, Special Projects Lead for\n\nBifinity, as Eqonex\u2019s Chief Corporate Affairs Officer. Bifinity appointed Defendant Farnell and\n\nDefendant Hai, Bifinity\u2019s President and the head of the NFT and fan token platforms of Binance\n\nand Binance\u2019s Charity Foundation, to the Eqonex board of directors. 3 \u00b653. The press release\n\nannouncing the appointments stated that \u201c[a]s CEO, Jonathan will play an instrumental role in fast-\n\ntracking the collaboration between both businesses\u2026, [and] Bifinity will develop ways to leverage\n\nthe Eqonex Exchange as an alternative trading platform[.]\u201d Id. On this news, Eqonex\u2019s share price\n\n\n\n\n 3\n Ling replaced Hai on the Board on April 28, 2022.\n\n\n 5\n\f Case 1:23-cv-03346-GHW Document 49 Filed 02/16/24 Page 12 of 30\n\n\n\n\nincreased over 32%, from an open of $1.62 on March 17, 2022 to a close of $2.15 on March 21,\n\n2022, over multiple days of trading. \u00b655.\n\n In August 2022, the FCA announced that as of August 11, it had expanded its change in\n\ncontrol regime to include FCA-registered cryptoasset businesses. From August 11, 2022, a person\n\nor entity wishing to acquire \u201ccontrol\u201d of an FCA-registered cryptoasset business, directly or\n\nindirectly, would have to receive prior FCA approval. \u00b657. A \u201ccontroller\u201d would mean a person or\n\nentity who owns more than 25% of the shares or voting rights in the crypto business. Id. This\n\nchange was not a surprise. It was initially laid as a draft statutory instrument in the UK Parliament\n\non June 15, 2022, but had already been anticipated in the industry. \u00b658. As noted above, Bifinity\n\ncontrolled 24.9% of Eqonex\u2019s share charge. \u00b612.\n\n On August 15, 2022, the Company issued a press release announcing the closure of the\n\nExchange, which had accounted for 79.9% of its revenues in the financial year ending March 31,\n\n2022. \u00b6\u00b659, 61. On this news, Eqonex\u2019s share price fell over 18% to close at $0.637 on August 17,\n\n2022. \u00b660. In connection with the closure of the Exchange, in accordance with the loan agreement,\n\nEqonex agreed to increase Bifinity\u2019s share charge of Digivault under the loan agreement from\n\n24.9% to 100%. In other words, Bifinity took over Digivault entirely as Eqonex lost the source of\n\nnearly 80% of its revenue. \u00b612.\n\n Even as Eqonex was closing its Exchange, Defendants assured investors that doing so\n\nwould \u201cimprove the Company\u2019s financial position\u201d and was \u201cthe right decision to deliver\n\nshareholder value\u201d in order for resources to be allocated to the \u201chigh-potential\u201d Asset Management\n\nand Custody businesses. \u00b661. But on November 21, 2022, the Company disclosed that Eqonex was\n\nin breach of the Loan Agreement with Bifinity. It further stated that based on its then-current\n\nworking capital forecast, it may not have sufficient financial resources to satisfy its working capital\n\n\n\n 6\n\f Case 1:23-cv-03346-GHW Document 49 Filed 02/16/24 Page 13 of 30\n\n\n\n\nrequirements for a period of twelve months, casting \u201csignificant doubt\u201d on Eqonex\u2019s ability to\n\ncontinue as a going concern. \u00b662. On this news, Eqonex\u2019s share price plummeted over 48% to\n\nclose at $0.141 on November 22, 2022. \u00b663. Eqonex has since filed for judicial management\n\npursuant to the Insolvency, Restructuring and Dissolution Act 2018 of Singapore. \u00b625.\n\nIII. ARGUMENT\n\n A. Legal Standard for Evaluating Defendants\u2019 Motion\n\n In ruling on a motion to dismiss under Rule 12(b)(6), a court accepts all well-pleaded\n\nallegations as true, drawing reasonable inferences in favor of plaintiffs. In re DDAVP Direct\n\nPurchaser Antitrust Litig., 585 F.3d 677, 692 (2d Cir. 2009); IWA Forest Indus. Pension Plan v.\n\nTextron Inc., 14 F.4th 141, 145, 147 (2d Cir. 2021). A complaint should not be dismissed if the\n\nplaintiffs have stated \u201cenough facts to state a claim to relief that is plausible on its face.\u201d Bell Atl.\n\nCorp. v. Twombly, 550 U.S. 544, 570 (2007). \u201cA claim has facial plausibility when the plaintiffs\n\npleads factual content that allows the court to draw the reasonable inference that the defendant[s]\n\n[are] liable for the misconduct alleged.\u201d Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).\n\n The Private Securities Litigation Reform Act of 1995 (\u201cPSLRA\u201d) further requires that a\n\n\u00a710(b) claim must \u201c\u2018specify\u2019\u201d each false statement, explain \u201c\u2018the reason or reasons why the\n\nstatement [was] misleading,\u2019\u201d and \u201cstate with particularity facts giving rise to a strong inference\u201d\n\nof scienter. Novak v. Kasaks, 216 F.3d 300, 306\u201307 (2d Cir. 2000) (quoting 15 U.S.C. \u00a7 78u-\n\n4(b)(1) and (b)(2)).\n\n B. The Complaint Pleads that Defendants were \u201cMakers\u201d of False and\n Misleading Statements\n\n Defendants\u2019 argument that Plaintiffs are suing the wrong people and entities because they\n\nare not \u201cmakers\u201d of false statements under Janus Cap. Grp., Inc. v. First Derivative Traders, 564\n\nU.S. 135, 142 (2011), DBr 20-22, is without merit.\n\n\n 7\n\f Case 1:23-cv-03346-GHW Document 49 Filed 02/16/24 Page 14 of 30\n\n\n\n\n As Defendants note, Janus holds that \u201cthe maker of a statement is the person or entity with\n\nultimate authority over the statement, including its content and whether and how to communicate\n\nit.\u201d 564 U.S. at 142. In In re Pfizer Inc. Sec. Litig., 819 F.3d 642 (2d Cir. 2016), interpreting Janus,\n\nthe Second Circuit denied summary judgment, holding that there was a material question of fact\n\nregarding whether Pfizer, which participated in a co-promotion agreement with two other\n\ncompanies and worked together with one on preparing a public relations document that directed\n\nemployees regarding how to answer media questions, was a maker with ultimate authority\u2014even\n\nas the document at issue did not come from Pfizer and the persons who actually interacted with\n\nthe media worked for co-promoters, and not for Pfizer. Accordingly, Janus does not mean that\n\nonly the signer or speaker of a statement can be its maker. \u201cWhether a defendant is the \u2018maker\u2019 of\n\nthe misstatement may depend on inferential or circumstantial evidence.\u201d In re Weight Watchers\n\nInt'l Inc. Sec. Litig., 504 F. Supp. 3d 224, 261 (S.D.N.Y. 2020).\n\n In this case, inferential and circumstantial evidence show that Defendants controlled\n\nEqonex\u2019s public statements at all times during the Class Period. Eqonex announced that it had\n\nentered into the Strategic Partnership on March 7, 2022. \u00b647. Under the terms of the Strategic\n\nPartnership, Bifinity would have the right to appoint a new CEO, CFO, and CLO, and nominate\n\ntwo new directors. \u00b649. This meant that by March 7, 2022, Bifinity\u2014and through Bifinity,\n\nBinance\u2014controlled Eqonex. As in Pfizer, the responsibility of Bifinity, its CEO Defendant\n\nFarnell, CFO Defendant Ling, Special Projects Lead Defendant Cemmell, President Defendant\n\nHai, and sole shareholder Defendant Changpeng for the contents of Eqonex\u2019s March 7, 2022\n\nstatement is therefore plausible on its face. Moreover, it is undisputable that after the Eqonex\n\nIndividual Defendants joined Eqonex\u2019s executive team and board, they had a duty not to mislead\n\nthe Company\u2019s shareholders. That included a duty to correct any statements to the market that\n\n\n\n 8\n\f Case 1:23-cv-03346-GHW Document 49 Filed 02/16/24 Page 15 of 30\n\n\n\n\nwere false so that they could not continue to mislead investors.4 They did not, rendering them\n\nliable. See Kelleher v. ADVO, INC., 2008 WL 11376597, at *2 (D. Conn. Apr. 28, 2008)\n\n(defendants were liable for failing to correct prior false statements). 5\n\n C. The Complaint Adequately Pleads Falsity\n\n Defendants made two materially false claims: that the Strategic Partnership would support\n\nEqonex, and that there was the possibility of a merger between Eqonex and Bifinity. In reality, the\n\nStrategic Partnership was simply a means for Binance, through Bifinity, to gain control of Eqonex\n\nand its FCA-regulated operating unit Digivault, and Defendants never intended to merge with\n\nEqonex, but only to use it to circumvent the FCA. \u00b667. Defendants argue that their statements\n\n\n 4\n The June 3, 2022, report from Chardan Research stating that \u201c[i]n our view, the company's\n\nstrategic partnership with Bifinity, a division of Binance, limits potential downside[,]\u201d shows that\n\ninvestors continued to trust and rely upon Defendants\u2019 false and misleading statements from March\n\n7, 2022 and March 17, 2022. \u00b656. As Eqonex executives and directors, the Eqonex Defendants\n\nwere duty-bound to correct those statements.\n 5\n Defendants\u2019 citations to Stratte-McClure v. Morgan Stanley, 784 F. Supp. 2d 373, 384\n\nn.4 (S.D.N.Y. 2011) and In re Lululemon Sec. Litig., 14 F. Supp. 3d 553, 576 n.14 (S.D.N.Y. 2014)\n\nare inapposite. In Stratte-McClure, the Court held that defendants could not be held liable for\n\nstatements that were issued after they left the company. By contrast, Plaintiffs plead claims against\n\nthe Individual Defendants, Bifinity, and Binance for statements that Eqonex made while they\n\ncontrolled Eqonex. In Lululemon, the complaint did not include any allegations concerning one\n\ndefendants\u2019 involvement in certain statements. Here, the Complaint alleges that the Individual\n\nDefendants, Bifinity, and Binance controlled Eqonex and therefore controlled its public\n\nstatements. \u00b667.\n\n\n 9\n\f Case 1:23-cv-03346-GHW Document 49 Filed 02/16/24 Page 16 of 30\n\n\n\n\nabout the Bifinity\u2019s $36 million loan to Eqonex are inactionable because they are literally true, that\n\nthe Complaint does not sufficiently allege the falsity of their statements about Binance and\n\nBifinity\u2019s intentions in connection with Eqonex, and that some of those statements are puffery or\n\nforward-looking. Defendants\u2019 arguments miss the mark, ignoring the well-settled law that context\n\nmatters.\n\n The Court will examine the Complaint\u2019s allegations holistically, in context. See, e.g.,\n\nBishins v. CleanSpark, Inc., 2023 WL 112558, at *8 (S.D.N.Y. Jan. 5, 2023) (denying a motion to\n\ndismiss, noting that the Second Circuit instructs district courts to weigh potentially fraudulent\n\nstatements together and in context, not in isolation); Rombach v. Chang, 355 F.3d 164, 172 n.7 (2d\n\nCir. 2004) (internal quotation omitted) (courts ask if \u201cdefendants\u2019 representations, taken together\n\nand in context, would have misled a reasonable investor\u201d). Omissions are material when \u201cthere is\n\na substantial likelihood that the disclosure of the omitted fact would have been viewed by the\n\nreasonable investor as having significantly altered the total mix of information made\n\navailable.\u201d Matrixx Initiatives, Inc. v. Siracusano, 563 U.S. 27, 38 (2011) (internal quotation\n\nmarks omitted). Taken together, and drawing reasonable inferences in Plaintiffs\u2019 favor, the\n\nComplaint adequately alleges that Defendants misled Eqonex investors about the purpose of the\n\nStrategic Partnership.\n\n Statements concerning the purpose of a merger or similar transaction are actionable. In In\n\nre Kirkland Lake Gold Ltd. Sec. Litig., 2021 WL 4482151, at *3 (S.D.N.Y. Sept. 30, 2021),\n\ndenying dismissal, the court ruled that a defendant\u2019s lies about its present intentions concerning a\n\ncorporate acquisition can be actionably false. In Kirkland the company misled investors by\n\nexplicitly downplaying the possibility of asset acquisitions while it was actively considering\n\nacquiring a company that did not meet its expressed standards for an asset. In Altimeo Asset Mgmt.\n\n\n\n 10\n\f Case 1:23-cv-03346-GHW Document 49 Filed 02/16/24 Page 17 of 30\n\n\n\n\nv. Qihoo 360 Tech. Co., 663 F. Supp. 3d 334, 361\u2013362 (S.D.N.Y. 2023), denying dismissal, the\n\nCourt held that having chosen to disclose the reasons for a merger, defendants were obligated to\n\ndescribe those reasons truthfully and completely, holding that defendants\u2019 omission of a relisting\n\nplan from a list of reasons for a merger rendered that list materially misleading. 663 F.Supp.3d at\n\n362.\n\n The Complaint pleads that Defendants never intended to merge Bifinity with Eqonex or to\n\ncarry on its business as a going concern at all\u2014that the $36 million \u201cloan\u201d and the Strategic\n\nPartnership (with its stated potential for a future merger) were pretext for Binance and Bifinity to\n\ngain access to an FCA regulated custodian, as a way to circumvent the FCA\u2019s ban of Binance.\n\nWhile Defendants call this a conspiracy theory, DBr 2, considering the facts holistically, it is\n\nanything but; rather it is a reasonable inference, one which the Court should draw in Plaintiffs\u2019\n\nfavor. See Textron, 14 F.4th at 147 (reversing dismissal for failure to draw reasonable inference in\n\nplaintiff\u2019s favor on falsity).\n\n The Complaint alleges that, to circumvent its FCA ban, Binance spent $36 million to access\n\nDigivault, which was a UK FCA regulated custodian. \u00b666. It provides, as context, examples of\n\nBinance attempting to circumvent regulators in China and the United States, demonstrating a\n\npattern. \u00b6\u00b664-66. That $36 million payment gave Defendants full control of Eqonex by allowing\n\nthem to take over its executive suite. Having gained access to the regulated UK market through\n\nDigivault, Defendants dismantled Eqonex within months, shutting down the business that had been\n\nresponsible for 79.9% of its revenue in the previous financial year. \u00b659. Defendants\u2019 shutdown of\n\nthe Exchange business also enabled them to increase Bifinity\u2019s share charge of Digivault to 100%.\n\n\u00b612. These facts raise a plausible inference that Defendants had only one purpose for taking control\n\nof Eqonex and had accomplished it: taking control of Digivault and re-entering the UK regulated\n\n\n\n 11\n\f Case 1:23-cv-03346-GHW Document 49 Filed 02/16/24 Page 18 of 30\n\n\n\n\nmarket. If the $36 million payment from Bifinity to Eqonex was a loan that Defendants anticipated\n\nwould be repaid, it would make no sense for them to shut down the Company\u2019s primary source of\n\nrevenue.6 Having accomplished their goal of taking over Digivault immediately through the initial\n\n$36 million payment and takeover of Eqonex\u2019s executive suite, spending more money to carry out\n\na merger was completely unnecessary, raising the plausible inference that Defendants never\n\nintended for a merger to take place. Accordingly, the Complaint sufficiently pleads that\n\nDefendants\u2019 statements concerning the purpose of the Strategic Partnership and the $36 million\n\npayment were materially false. As in Altimeo, Defendants misled concerning the reason for a\n\nmaterial transaction. See Altimeo, 19 F.4th at 145 (inferring falsity from circumstantial evidence,\n\nand explaining that such evidence is sufficient to plead falsity if it explains how and why the\n\nstatement at issue was misleading when made).\n\n Faulkner v. Verizon Commc'ns, Inc., 156 F. Supp. 2d 384 (S.D.N.Y. 2001), see DBr 10, is\n\ndistinguishable. There, Verizon actually committed itself to a merger, with potential financial\n\nconsequences. That fact raises the inference that Verizon actually intended to carry out a merger\n\nand changed their minds because of market conditions. Id. at 399. Here, the Complaint alleges,\n\nnothing changed with respect to market conditions or business strategy. The allegations raise a\n\nreasonable inference that merger discussions (if they ever took place) were a ruse because the\n\nterms of the initial Strategic Partnership immediately, fully accomplished Defendants\u2019 goal, and\n\n\n\n\n6\n Defendants\u2019 argument that Eqonex\u2019s SEC filings gave investors the ability to determine for\nthemselves whether the loan was likely to be repaid or was sufficient for Eqonex to stave off\nbankruptcy is a red herring. See DBr at 7-8. Eqonex\u2019s public financial disclosures did not\ncontemplate its shuttering the operation that yielded nearly 80% of its revenue. Nor did analysts\ncovering the Company. For example, on June 3, 2022, Chardan Research analyst report noted that\n\u201c[i]n our view, the company's strategic partnership with Bifinity, a division of Binance, limits\npotential downside.\u201d \u00b656.\n 12\n\f Case 1:23-cv-03346-GHW Document 49 Filed 02/16/24 Page 19 of 30\n\n\n\n\nthey had no reason to invest any additional resources. \u00b667. As in Kirkland and Altimeo, Defendants\n\nmaterially misled investors concerning their intentions for mergers and acquisitions.\n\n Further, because, in context, Defendants\u2019 statements misled, contrary to Defendants\u2019\n\nassertion, their literal truth is unavailing. See DBr 7 (arguing that the issuance of the $36 million\n\nloan was a true fact); DBr 8 (citing SEC filings to \u201cconfirm\u201d that discussions about a potential\n\nmerger continued for months); DBr 12 (standing by the truth of the statement that the Strategic\n\nPartnership would \u201csupport the Eqonex Exchange,\u201d \u00b648). Courts evaluate material falsity by a\n\nstatement\u2019s \u201cability to accurately inform rather than mislead prospective buyers,\u201d not by its literal\n\ntruth. Altimeo, 663 F.Supp.3d at 361 (it is of no consequence that the stated reasons for the merger,\n\nviewed in isolation, are not pled to have been \u201cuntrue\u201d); Bishins, 2023 WL 112558, at *8 (the\n\nliteral truth of a statement did not cleanse a material omission).\n\n The Complaint does not allege that Bifinity did not lend $36 million to Eqonex. Rather, it\n\nalleges that in the context of disclosing that loan, it was materially misleading to omit that Bifinity\n\nhad no reasonable expectation of repayment or continuing partnership. Rather, Binity sought only\n\nto gain control over Digivault to circumvent the FCA ban. (\u00b650). That Defendants kept the\n\nexchange open for five months does not support that they truthfully intended to \u201cstrengthen\u201d it,\n\nDBr 13, but that they were not yet ready to give up its revenue. Further, Defendants\u2019 reference to\n\nSEC filings to \u201cconfirm\u201d that discussions about a potential merger continued for months, DBr 8,\n\nis entirely improper at the pleadings stage, and the Court should not consider those filings for the\n\ntruth of the matter.7\n\n\n\n\n 7\n Roth v. Jennings, 489 F.3d 499, 509 (2d Cir. 2007) (courts may take judicial notice of\n\npublic records to determine what statements they contained, but not for the truth of the matter\n\n\n 13\n\f Case 1:23-cv-03346-GHW Document 49 Filed 02/16/24 Page 20 of 30\n\n\n\n\n Finally, Defendants\u2019 arguments that statements such as \u201cEqonex would initially focus\n\non\u2026strengthening the technology supporting the Eqonex Exchange\u201d are puffery and forward-\n\nlooking and protected by cautionary language, DBr 14-15, are red herrings. The misstatements\n\nthat Plaintiffs challenge do not depend on parsing statements about \u201cstrengthening [] technology.\u201d\n\nDefendants made two false statements about the Strategic Partnership supporting Eqonex, and\n\nabout the possibility of a merger between Eqonex and Bifinity. In reality, the Strategic Partnership\n\nwas simply a means to circumvent the FCA ban, gaining control of Eqonex and its access to the\n\nUK, and Defendants never intended to merge Eqonex with Bifinity. \u00b667. 8 Accordingly, the\n\nComplaint adequately pleads falsity.\n\n D. The Complaint Adequately Pleads Scienter\n\n A complaint adequately pleads scienter when it alleges (i) facts showing that a defendant\n\n\nasserted); Anderson News, L.L.C. v. Am. Media, Inc., 680 F.3d 162, 185 (2d Cir. 2012) (\u201c[F]act-\n\nspecific question[s] cannot be resolved on the pleadings.\u201d); Friedl v. City of New York, 210 F.3d\n\n79, 83 (2d Cir. 2000) (\u201cWhen matters outside the pleadings are presented [in support of or] in\n\nresponse to a 12(b)(6) motion, a district court must either exclude the additional material and\n\ndecide the motion on the complaint alone or convert the motion to one for summary judgment ...\n\nand afford all parties the opportunity to present supporting material.\u201d) (alteration and internal\n\nquotation marks omitted); see also Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988, 1006 (9th\n\nCir. 2018) (finding an abuse of discretion in allowing SEC filings to contradict allegations)\n 8\n Defendants\u2019 argument that \u201cPlaintiffs fail to explain how not merging would have given\n\nBinance a better chance of controlling Digivault than merging\u201d (DBr 9) makes no sense. Binance\n\ngained control of Digivault through the Strategic Partnership; no additional steps were necessary.\n\nDefendants got everything they wanted in the initial $36 million transaction.\n\n\n 14\n\f Case 1:23-cv-03346-GHW Document 49 Filed 02/16/24 Page 21 of 30\n\n\n\n\nhad \u201cboth motive and opportunity to commit the fraud,\u201d or (ii) facts that constitute \u201cstrong\n\ncircumstantial evidence of conscious misbehavior or recklessness.\u201d Fresno Cnty. Employees' Ret.\n\nAss'n v. comScore, Inc., 268 F. Supp. 3d 526, 550 (S.D.N.Y. 2017) (citation omitted). To determine\n\nthe adequacy of a complaint\u2019s scienter allegations, courts engage in a comparative analysis.\n\nTellabs, Inc. v. Makor Issues & Rts., Ltd., 551 U.S. 308, 323\u201324 (2007) (citation omitted). Courts\n\nconsider \u201cwhether all of the facts alleged, taken collectively, give rise to a strong inference of\n\nscienter, not whether any individual allegation, scrutinized in isolation, meets that standard.\u201d Id.\n\nat 323 (emphasis in original). Considering \u201cplausible, nonculpable explanations for the defendant's\n\nconduct, as well as inferences favoring the plaintiff\u201d courts determine whether \u201ca reasonable\n\nperson would deem the inference of scienter cogent and at least as compelling as any opposing\n\ninference one could draw from the facts alleged.\u201d Id. A strong inference \u201cneed not be irrefutable,\n\ni.e., of the \u201csmoking-gun\u201d genre, or even the \u201cmost plausible of competing inferences. Id. (citations\n\nomitted).\n\n The absence of motive, while relevant, \u201cis not fatal[.]\u201d Tellabs, 551 U.S. at 325 (citation\n\nomitted). Indeed, \u201cthe significance that can be ascribed to an allegation of motive, or lack thereof,\n\ndepends on the entirety of the complaint.\u201d Id. Recently, the Second Circuit clarified that while\n\nindependent bases exist for pleading scienter, it is error not \u201cto assess the total weight of the\n\ncircumstantial allegations together with the allegations of motive and opportunity.\u201d In re Hain\n\nCelestial Grp., Inc. Sec. Litig., 20 F.4th 131, 137\u201338 (2d Cir. 2021) (emphasis in original). Thus,\n\neven if allegations of motive fail, alone, to establish a strong inference, courts must consider those\n\nallegations in their holistic analysis of scienter allegations. Here, the Complaint\u2019s allegations,\n\nconsidered together, support a strong inference of scienter for each defendant.\n\n\n\n\n 15\n\f Case 1:23-cv-03346-GHW Document 49 Filed 02/16/24 Page 22 of 30\n\n\n\n\n 1. The Complaint Pleads Defendants\u2019 Motive and Opportunity\n\n There is no dispute that high-ranking officers have the opportunity to mislead investors.\n\nSee, e.g., comScore, 268 F. Supp. 3d at 553-54. The Complaint pleads that Defendants also had\n\nthe motive to mislead, supporting a cogent and at least equally compelling inference of scienter.\n\n Second Circuit courts must consider scienter allegations holistically and assess the total\n\nweight of circumstantial allegations of scienter together with motive allegations. Hain Celestial\n\nGroup, 20 F.4th 131 at 137-38, citing ECA, Loc. 134 IBEW Joint Pension Tr. of Chicago v. JP\n\nMorgan Chase Co., 553 F.3d 187, 198\u201399 (2d Cir. 2009) (the strength of circumstantial allegations\n\nrequired to plead scienter varies depending on whether there are also allegations of motive and\n\nopportunity). The Complaint pleads that Defendants were motivated to enter into the Strategic\n\nPartnership so they could circumvent the FCA ban and gain access to the regulated UK market\n\nthrough Digivault, which was already an FCA-regulated custodian. \u00b667.\n\n While the Strategic Partnership gave Defendants immediate actual control over 24.9% of\n\nthe share charge of Digivault as well as the practical ability to direct Digivault from Eqonex\u2019s\n\nexecutive suite, that immediate change was not the end of the story. At the time Eqonex and\n\nBifinity announced the Strategic Partnership, it was widely anticipated in the industry that the FCA\n\nwould be expanding its change in control regime to include FCA-registered cryptoasset businesses.\n\nAs a result, even though the FCA did not have the power to assess the Strategic Partnership in\n\nMarch 2022, Defendants knew that they would, and that Defendants would eventually have to\n\nobtain clearance for their takeover of Digivault. \u00b6\u00b657-58. Defendants\u2019 argument that \u201ccommitting\n\nsecurities fraud would have done nothing to advance that supposed objective [of taking control of\n\nDigivault][,]\u201d DBr 16, disregards that because of the anticipated UK regulatory expansion,\n\nDefendants were motivated to keep up the illusion that they were simply in a Strategic Partnership\n\nwith Eqonex with the possibility of a merger so that they could work on convincing the FCA to\n 16\n\f Case 1:23-cv-03346-GHW Document 49 Filed 02/16/24 Page 23 of 30\n\n\n\n\nsanction a change in control of Digivault, which would then allow them to take a 100% share\n\ncharge in Digivault and let Eqonex itself collapse. Such a motive goes well beyond motives\n\npossessed by virtually all corporate insiders. Novak, 216 F.3d at 307. By showing their hand\n\nimmediately, particularly in light of the FCA\u2019s stated skepticism surrounding the transaction, \u00b666,\n\nDefendants would have torpedoed their chances of convincing the FCA to grant clearance. By the\n\ntime that the FCA announced that the long-anticipated regulatory change was effective, as of\n\nAugust 11, 2022, \u00b6\u00b657-58, Defendants had had months to convince the FCA and were ready to\n\nact.\n\n 2. The Complaint Pleads Strong Circumstantial Evidence of\n Recklessness\n\n The Complaint adequately pleads that Defendants acted with recklessness, alleging that\n\nDefendants \u201cknew facts or had access to information suggesting that their public statements were\n\nnot accurate,\u201d Employees' Ret. Sys. of Gov't of the Virgin Islands v. Blanford, 794 F.3d 297, 306\n\n(2d Cir. 2015). The Complaint specifically alleges that Defendants were not trying to acquire or\n\neven engage in a sustainable partnership with Eqonex, but rather using Eqonex to gain access to a\n\nmarket from which Binance had been banned. See, e.g., \u00b667.\n\n Defendants\u2019 argument that \u201c[t]he Complaint is devoid of anything to support Plaintiffs\u2019\n\nfanciful theory that Defendants must have known that Binance had a master plan to use Digivault\n\nfor its own purposes and hang the rest of Eqonex out to dry[,]\u201d DBr 17, ignores that each of the\n\nDefendants were acting on behalf of Binance to carry out its plan for Eqonex. Bifinity was\n\ncreated for that purpose on the same day that Eqonex announced the Strategic Partnership, \u00b627,\n\nand the Eqonex Individual Defendants, who were also Bifinity executives, took active control of\n\nthe Company on behalf of Bifinity, Binance, and Defendant Changpeng. \u00b6\u00b628-32. As discussed\n\nabove in detail, Defendants\u2019 public actions show that what Defendants call a \u201cfanciful theory\u201d is\n\n\n 17\n\f Case 1:23-cv-03346-GHW Document 49 Filed 02/16/24 Page 24 of 30\n\n\n\n\nactually a reasonable inference. Defendants\u2019 job was to carry out Binance\u2019s intentions, and raises\n\nthe inference that they knew those intentions, and that they did not match Eqonex\u2019s public\n\nstatements.\n\n Defendants\u2019 argument that their pattern of subverting regulators that the Complaint alleges\n\ncannot support scienter allegations in this case mischaracterizes it as \u201cunsubstantiated accusations\n\nabout other events[.]\u201d DBr 17. These events, reported by major news organizations and alleged by\n\nthe SEC based on its investigation, \u00b6\u00b664-65, are not separate from Defendants\u2019 actions in this case\n\nbut part of one larger course of conduct. This pattern further supports scienter. See In re Symbol\n\nTechnologies, Inc. Sec. Litig., No. 05-CV-3923, 2013 WL 6330665, at *10 n.3 (E.D.N.Y. Dec. 5,\n\n2013) (a pattern of culpable conduct supports a strong inference of scienter).\n\n Given these allegations, Plaintiffs have alleged the strong inference of scienter required\n\nunder the PSLRA. Considering the allegations holistically, \u201ca reasonable person would deem the\n\ninference of scienter at least as compelling as any opposing inference from the facts alleged.\u201d\n\nTellabs, 551 U.S. at 323.\n\n E. The Complaint Adequately Pleads Loss Causation\n\n Defendants argue that the disclosures at the end of the Class Period are not corrective of\n\nprior misstatements. They are wrong, as those statements revealed Defendants\u2019 misstatements\n\nconcerning their intentions with respect to Eqonex and Digivault.\n\n Loss causation \u201cis the proximate causal link between the alleged misconduct and the\n\nplaintiff's economic harm.\u201d ATSI Commc'ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 106 (2d Cir.\n\n2007). A Complaint must merely provide \u201cnotice of what the relevant economic loss might be\u201d\n\nand \u201cwhat the causal connection might be between that loss\u201d and the alleged misrepresentations.\n\nSee Dura Pharms., Inc. v. Broudo, 544 U.S. 336, 346\u201347 (2005). Thus, the complaint must allege\n\nthat the \u201cmarket reacted negatively to a corrective begin[ning] to leak out.\u201d Dura, 544 U.S. at 342.\n 18\n\f Case 1:23-cv-03346-GHW Document 49 Filed 02/16/24 Page 25 of 30\n\n\n\n\nA corrective disclosure need not be a \u201cmirror image\u201d of the materially false statement.\n\nFreudenberg v. E*Trade Fin. Corp., 712 F. Supp. 2d 171, 202 (S.D.N.Y. 2010). The vast majority\n\nof courts in this district have required that loss causation only meet the notice requirements of Rule\n\n8. See King Cnty., Wash. v. IKB Deutsche Industriebank AG, 708 F. Supp. 2d 334, 339 (S.D.N.Y.\n\n2010) (\u201c[P]laintiffs need only meet the lesser Rule 8(a) standard when pleading loss causation.\u201d).\n\n As discussed in the Falsity section, supra., the Complaint adequately pleads Defendants\u2019\n\ntrue intention, which was not to merge with Eqonex or otherwise to strengthen it or benefit its\n\nshareholders, but to get access to Digivault and through it regain entry into the UK FCA regulated\n\ncustodian business from which it had been banned.\n\n As with falsity, Defendants refuse to consider context, instead arguing, similar to their\n\nfalsity argument, that literally true statements cannot be corrected. See DBR 18-19. But in their\n\nproper context, the corrective disclosures lay bare Defendants\u2019 misstatements about their\n\nintentions. The August 15, 2022 press release, \u00b6\u00b659, 61, that Defendants were closing the source\n\nof 80% of Eqonex\u2019s revenue, relate to and correct Defendants\u2019 earlier misstatements about their\n\nintentions. Having achieved their goal of controlling Digivault, Defendants did not need to pretend\n\nanymore that they had lofty goals. After all, selling 80% of revenue generation rendered it virtually\n\nimpossible to pay back the $36 million loan, and the market reacted accordingly.\n\n The November 21, 2022 disclosure, \u00b662, announcing that Eqonex was in breach of its loan\n\nagreement and might not continue as a going concern, similarly corrected Defendants\u2019 earliest\n\nfailures to disclose their true intentions, and that they never intended to merge Bifinity with Eqonex\n\nor carry on as a going concern at all. These allegations suffice to meet the Rule 8(a) pleading\n\nstandards. Defendants\u2019 reliance on In re Take-Two Interactive Sec. Litig., 551 F. Supp. 2d 247\n\n(S.D.N.Y. 2008) is misplaced. In Take-Two, there was no match in the subject of the false\n\n\n\n 19\n\f Case 1:23-cv-03346-GHW Document 49 Filed 02/16/24 Page 26 of 30\n\n\n\n\nstatements and the alleged corrective disclosures, as the misstatement discusses the company\u2019s\n\noptions grants, while the correction did not correct anything on that subject. Id. at 284. Here, both\n\nthe misstatement and the correction are on the same subject: Bifinity\u2019s intentions with respect to\n\nEqonex. The Complaint adequately pleads loss causation.\n\n F. The Complaint Adequately Pleads Control Person Liability\n\n Because the Complaint adequately alleges a primary violation of \u00a7 10(b) and Rule 10b-5,\n\nand that the Individual Defendants controlled Eqonex, Plaintiffs have adequately alleged a prima\n\nfacie case under \u00a7 20(a). See 15 U.S.C. \u00a7 78t(a); comScore, 268 F.Supp.3d at 556.\n\n In order to establish a prima facie case of liability under Section 20(a), a plaintiff must\n\nshow: \u201c(1) a primary violation by a controlled person; (2) control of the primary violator by the\n\ndefendant; and (3) that the controlling person was in some meaningful sense a culpable participant\u2019\n\nin the primary violation.\u201d Boguslavsky v. Kaplan, 159 F.3d 715, 720 (2d Cir. 1998) (internal\n\nquotation omitted). In addition to pleading a primary violation by Eqonex, described in detail\n\nsupra, the Complaint pleads that each Defendant controlled Eqonex and was a culpable\n\nparticipants in its fraud. Defendants\u2019 arguments that the Complaint does not include particularized\n\nallegations showing that any of the Individual Defendants were culpable participants in the alleged\n\nfraud, or that they controlled Eqonex\u2019s materially false statements, DBr 22-25, fall short because\n\nthe Complaint pleads each of their scienter.\n\n Control over a primary violator may be established by showing that the defendant\n\n\u201cpossessed \u2018the power to direct or cause the direction of the management and policies of a person,\n\nwhether through the ownership of voting securities, by contract, or otherwise.\u2019\u201d S.E.C. v. First\n\nJersey Sec., Inc., 101 F.3d 1450, 1472\u201373 (2d Cir. 1996) (quoting 17 C.F.R. \u00a7 240.12b-2).\n\nDefendants cite In re Flag Telecom Holdings, Ltd. Sec. Litig., 352 F. Supp. 2d 429, 458 (S.D.N.Y.\n\n2005), which dismissed Section 20(a) claims against a company\u2019s largest shareholder, to argue\n 20\n\f Case 1:23-cv-03346-GHW Document 49 Filed 02/16/24 Page 27 of 30\n\n\n\n\nthat a parent company or controlling shareholder cannot be a control person \u201cthrough title alone.\u201d\n\nDBr 24-25. But Defendants misread Flag, which specifically distinguishes between influence (the\n\nrole of a 30% shareholder with the power to appoint three out of nine of the company\u2019s directors,\n\n352 F.Supp.2d 458) and control, which the Court notes requires only the ability to direct the\n\nactions of the controlled person, and not the active exercise thereof. Id. Flag therefore stands for\n\nthe proposition that a parent company or controlling shareholder is a control person, while a large\n\nshareholder may or may not be. Moreover, the determination of whether an individual defendant\n\nwas a controlling person is a \u201cfact-intensive inquiry, and generally should not be resolved on a\n\nmotion to dismiss.\u201d In re Tronox, Inc. Sec. Litig., 769 F. Supp. 2d 202, 208 (S.D.N.Y. 2011). \u201cA\n\nplaintiff must only show some indirect means of discipline \u2026 to plead control.\u201d In re Am. Int'l\n\nGrp., Inc. 2008 Sec. Litig., 741 F. Supp. 2d 511, 535 (S.D.N.Y. 2010).\n\n The Complaint sufficiently pleads that each Defendant had the ability to direct Eqonex\u2019s\n\nactions and therefore actually controlled the Company. The Strategic Partnership granted Bifinity\n\nfull control over Eqonex\u2019s executive management, as well as two seats on its Board. Bifinity\n\nexecutives took over the CEO, CFO, and Chief Corporate Affairs Officer roles. These Bifinity\n\ninsiders had and exercised the power to shut down the business that generated nearly 80% of the\n\nCompany\u2019s revenue. \u00b659. The precise dates of their official appointments to Eqonex are irrelevant\n\nwhere Eqonex and Bifinity had already entered into the Strategic Partnership that established\n\nBifinity\u2019s control of the Company; in reality, Eqonex could no longer act without Bifinity\u2019s\n\ndirection or approval, which would inevitably mean the direction or approval of Bifinity\u2019s CEO\n\n(Defendant Farnell), Director of Strategy (Defendant Ling), Special Projects Lead (Defendant\n\nCemmell), and President (Defendant Hai). \u00b6\u00b647, 28-31. Moreover, Bifinity was created on the\n\nsame day that the Strategic Partnership was announced as an agent of Binance and Defendant\n\n\n\n 21\n\f Case 1:23-cv-03346-GHW Document 49 Filed 02/16/24 Page 28 of 30\n\n\n\n\nChangpeng in connection with the takeover of Eqonex and through it, Digivault, establishing these\n\nDefendants\u2019 control as well. \u00b644.\n\n Moreover, the Complaint sufficiently establishes that Defendants were culpable\n\nparticipants in the primary violation. Waterford Twp. Police & Fire Ret. Sys. v. Smithtown\n\nBancorp ., Inc., 2014 WL 3569338, at *9 (E.D.N.Y. July 18, 2014) (\u201cthe pleading requirements\n\nfor \u2018culpable participation\u2019 are satisfied by the same allegations that satisfy the scienter pleading\n\nrequirements\u201d for the primary violation). American Intern. Group, 741 F.Supp.2d at 535 (same);\n\nsee also In re AOL Time Warner, Inc. Sec. & \"ERISA\" Litig., 381 F. Supp. 2d 192, 235 (S.D.N.Y.\n\n2004) (\u201callegations of scienter necessarily satisfy the [culpable participation] requirement\u201d);\n\nSmithtown Bancorp, 2014 WL 3569338, at *9 (same). Having established each Defendants\u2019\n\nscienter , the Complaint also adequately pleads their culpable participation.\n\n G. The Complaint Establishes Personal Jurisdiction Over Each Defendant\n\n This Court has personal jurisdiction over each of the Defendants. Eqonex was listed on a\n\ndomestic exchange. \u00b625. As officers and directors of a company who knew Eqonex was listed on\n\na domestic exchange, and who in some cases personally contributed to public filings in the United\n\nStates (see, e.g., \u00b6\u00b648, 53, 59), Defendants engaged in fraudulent conduct knowing that prospective\n\npurchasers would likely be influenced by any false statements. Defendants, therefore, have\n\n\u201cminimum contacts\u201d with the United States. S.E.C. v. Straub, 921 F. Supp. 2d 244, 255\u201356\n\n(S.D.N.Y. 2013) (minimum contacts established where Defendants knew or had reason to know\n\nthat false statements would be distributed to purchasers on a US exchange). Because their contacts\n\nwith this forum rise to the level of \u201cminimum contacts,\u201d Defendants have not, and will not in a\n\nmotion to dismiss, defeat jurisdiction by presenting \u201ca compelling case that the presence of some\n\nother considerations would render jurisdiction unreasonable.\u201d See In re Banco Bradesco S.A. Sec.\n\nLitig., 277 F. Supp. 3d 600, 641\u201345 (S.D.N.Y. 2017) (citations and quotations omitted). Further,\n 22\n\f Case 1:23-cv-03346-GHW Document 49 Filed 02/16/24 Page 29 of 30\n\n\n\n\nDefendants Binance and Zhao Changpeng have acknowledged minimum contacts with the U.S.\n\nbecause they did not contest personal jurisdiction in the ongoing SEC case against the two, or in\n\nthe criminal action against them.9\n\n Defendants\u2019 reliance on In re Braskem S.A. Sec. Litig., 246 F. Supp. 3d 731, 770 (S.D.N.Y.\n\n2017) to argue that the Complaint does not sufficiently allege that Defendants engaged in relevant\n\nconduct in the United States, DBr 25, is inapposite. In that case, the Court held that the complaint\n\ndid not allege that the defendant at issue, a major shareholder of Braskem, played a role in making\n\npublic filings. The Complaint\u2019s allegations of Defendants\u2019 takeover of Eqonex far exceeds the\n\nvague, conclusory allegation that the Court found insufficient in Braskem,10 including that\n\nDefendants assumed control of Eqonex to circumvent a regulatory ban, \u00b6\u00b63, 52, 67, and that they\n\ntook over its executive suite, \u00b67.\n\n Defendants had the requisite minimum contacts with the United States to support personal\n\njurisdiction.\n\n\n\n\n 9\n Press Release, U.S. Securities and Exchange Commission, SEC Files 14 Charges Against\n\nBinance Entities and Founder Changpeng Zhao (June 5, 2023), https://www.sec.gov/news/press-\n\nrelease/2023-101; Press Release, U.S. Department of Justice, Binance and CEO Plead Guilty to\n\nFederal Charges in $4B Resolution (Nov. 21, 2023), https://www.justice.gov/opa/pr/binance-and-\n\nceo-plead-guilty-federal-charges-4b-resolution.\n 10\n \u201cOdebrecht had the power to influence and control and did influence and control, directly\n\nor indirectly, the decision-making of the Company, including the dissemination of the various\n\nstatements and omissions which Lead Plaintiff contends are false and misleading.\u201d 246 F.Supp. 3d\n\nat 770.\n\n\n 23\n\f Case 1:23-cv-03346-GHW Document 49 Filed 02/16/24 Page 30 of 30\n\n\n\n\nIV. CONCLUSION\n\n For the foregoing reasons, the Court should deny Defendants\u2019 Motion to Dismiss in its\n\nentirety.11\n\nDated: February 16, 2023 Respectfully submitted,\n\n THE ROSEN LAW FIRM, P.A.\n\n /s/ Jacob A. Goldberg\n Jacob A. Goldberg\n Leah Heifetz-Li\n 101 Greenwood Avenue\n Suite 440\n Jenkintown, PA 19046\n Tel: (215) 600-2817\n Fax: (212) 202-3827\n Email: jgoldberg@rosenlegal.com\n lheifetz@rosenlegal.com\n\n Lead Counsel for Plaintiffs and the Class\n\n\n\n\n 11\n In the event the Court finds that any count of the Complaint fails to state a claim,\n\nPlaintiffs should be granted leave to amend, which, under Fed. R. Civ. P. 15(a), \u201cshall be freely\n\ngiven when justice so requires.\u201d The Second Circuit requires courts to be especially liberal in\n\ngranting leave to amend in cases of dismissed securities fraud claims. See Acito v. IMCERA Grp.,\n\nInc., 47 F.3d 47, 55 (2d Cir. 1995); Luce v. Edelstein, 802 F.2d 49, 56 (2d Cir. 1986) (noting with\n\nregard to dismissal of plaintiffs\u2019 10b-5 claims that \u201c[c]omplaints dismissed under Rule 9(b) [for\n\nfailure to plead with particularity] are \u2018almost always\u2019 dismissed with leave to amend\u201d).\n\n\n 24\n\f","ocr_status":2,"date_upload":"2026-06-22T06:14:33.112836-07:00","document_number":"49","attachment_number":null,"pacer_doc_id":"127034942123","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Memorandum of Law in Opposition to Motion","acms_document_guid":""}],"date_created":"2024-02-16T15:11:27.025661-08:00","date_modified":"2025-01-09T03:52:14.873971-08:00","date_filed":"2024-02-16","time_filed":"17:02:41","entry_number":49,"recap_sequence_number":"2024-02-16.001","pacer_sequence_number":188,"description":"MEMORANDUM OF LAW in Opposition re: 46 MOTION to Dismiss . . Document filed by Jaime Chaves, Kreig Kinnaman, Bin Li..(Goldberg, Jacob) (Entered: 02/16/2024)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/375599191/","id":375599191,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67233991/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/383207216/","id":383207216,"tags":[],"absolute_url":"/docket/67233991/46/zhao-v-eqonex-limited/","date_created":"2024-01-12T18:07:24.264242-08:00","date_modified":"2025-01-09T03:52:14.816872-08:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"46","attachment_number":null,"pacer_doc_id":"127034743897","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Dismiss","acms_document_guid":""}],"date_created":"2024-01-12T18:07:24.253348-08:00","date_modified":"2025-01-09T03:52:14.806050-08:00","date_filed":"2024-01-12","time_filed":"20:04:07","entry_number":46,"recap_sequence_number":"2024-01-12.001","pacer_sequence_number":180,"description":"MOTION to Dismiss . Document filed by Bifinity UAB, Binance Group, Almira Cemmell, Zhao Changpeng, Jonathan Farnell, Yu Helen Hai, Daniel Ling..(Enzer, Samson) (Entered: 01/12/2024)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/375599187/","id":375599187,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67233991/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/383207212/","id":383207212,"tags":[],"absolute_url":"/docket/67233991/47/zhao-v-eqonex-limited/","date_created":"2024-01-12T18:07:24.030396-08:00","date_modified":"2025-01-09T03:52:14.839362-08:00","sha1":"9f6c33da3391761f550703a5404af6ea4b2a0559","page_count":32,"file_size":408166,"filepath_local":"recap/gov.uscourts.nysd.597576/gov.uscourts.nysd.597576.47.0.pdf","filepath_ia":"","ia_upload_failure_count":3,"thumbnail":null,"thumbnail_status":0,"plain_text":" Case 1:23-cv-03346-GHW Document 47 Filed 01/12/24 Page 1 of 32\n\n\n\n\nUNITED STATES DISTRICT COURT\nSOUTHERN DISTRICT OF NEW YORK\n\n\nBIN LI, Individually and On Behalf of All Others Similarly\nSituated,\n Plaintiff,\n No. 23 Civ. 03346 (GHW)\n v.\n\nEQONEX LIMITED, BINANCE GROUP, BIFINITY\nUAB, JONATHAN FARNELL, DANIEL LING, ALMIRA\nCEMMELL, YU HELEN HAI, and ZHAO CHANGPENG,\n Defendants.\n\n\n\n\n DEFENDANTS\u2019 MEMORANDUM OF LAW\n IN SUPPORT OF THEIR MOTION TO DISMISS\n\n\n CAHILL GORDON & REINDEL LLP\n Samson A. Enzer\n Edward N. Moss\n Victoria H. Yuhas\n 32 Old Slip\n New York, New York 10005\n (212) 701-3000\n\n Counsel for Defendants Binance, Bifinity, Jonathan\n Farnell, Daniel Ling, Almira Cemmell, Yu Helen\n Hai, and Changpeng Zhao\n\f Case 1:23-cv-03346-GHW Document 47 Filed 01/12/24 Page 2 of 32\n\n\n\n\n TABLE OF CONTENTS\nPRELIMINARY STATEMENT ................................................................................................. 1\n\nTHE COMPLAINT\u2019S ALLEGATIONS .................................................................................... 3\n\nARGUMENT ................................................................................................................................. 6\n\nI. THE COMPLAINT FAILS TO ADEQUATELY ALLEGE SECURITIES FRAUD.... 6\n\n A. The Complaint Fails to Adequately Allege an Actionable Misstatement .................... 6\n\n 1. The Statements About the Loan Are Not Actionable ..................................................... 7\n\n 2. The Statements About the Merger Discussions Are Not Actionable ............................. 8\n\n 3. The Statements About the Strategic Partnership Are Not Actionable .......................... 11\n\n B. The Complaint Fails to Adequately Allege a Strong Inference of Scienter ............... 15\n\n C. The Complaint Fails to Adequately Allege Loss Causation ........................................ 18\n\nII. THE CLAIMS FAIL AGAINST EACH DEFENDANT FOR OTHER REASONS .... 20\n\n A. Plaintiffs Fail to State Section 10(b) Claims Against Hai and Farnell ....................... 20\n\n B. Plaintiffs\u2019 Section 20(a) Claims Fail as to All Defendants........................................... 22\n\nIII. THE COMPLAINT FAILS TO ESTABLISH PERSONAL JURISDICTION ........ 25\n\nCONCLUSION ........................................................................................................................... 25\n\n\n\n\n i\n\f Case 1:23-cv-03346-GHW Document 47 Filed 01/12/24 Page 3 of 32\n\n\n\n\n TABLE OF AUTHORITIES\n\n Page(s)\n\nCases\n\nAlpha Capital Anstalt v. Schwell Wimpfheimer & Assocs. LLP,\n 2019 WL 1436993 (S.D.N.Y. Mar. 30, 2019) (Woods, J.)........................................................6\n\nAshcroft v. Iqbal,\n 556 U.S. 662 (2009) .................................................................................................................17\n\nATSI Commc\u2019ns, Inc. v. Shaar Fund, Ltd.,\n 493 F.3d 87 (2d Cir. 2007).......................................................................................................17\n\nBerdeaux v. OneCoin Ltd.,\n 561 F. Supp. 3d 379 (S.D.N.Y. 2021)......................................................................................25\n\nBoluka Garment Co., Ltd. v. Canaan Inc.,\n 547 F. Supp. 3d 439 (S.D.N.Y. 2021)......................................................................................18\n\nBorn v. Quad/Graphics, Inc.,\n 521 F. Supp. 3d 469 (S.D.N.Y. 2021)......................................................................................10\n\nIn re Braskem S.A. Sec. Litig.,\n 246 F. Supp. 3d 731 (S.D.N.Y. 2017)......................................................................................25\n\nCampo v. Sears Holdings Corp.,\n 635 F. Supp. 2d 323 (S.D.N.Y. 2009)..................................................................................9, 18\n\nCent. Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A.,\n 511 U.S. 164 (1994) .................................................................................................................20\n\nIn re Citigroup Sec. Litig.,\n 2023 WL 2632258 (S.D.N.Y. Mar. 24, 2023) ...........................................................................9\n\nIn re Diebold Nixdorf, Inc., Sec. Litig.,\n 2021 WL 1226627 (S.D.N.Y. Mar. 30, 2021) ...................................................................13, 14\n\nECA, Local 134 IBEW Joint Pension Trust of Chi. v. JP Morgan Chase Co.,\n 553 F.3d 187 (2d Cir. 2009).....................................................................................................16\n\nIn re Ehang Holdings Ltd. Sec. Litig.,\n 646 F. Supp. 3d 443 (S.D.N.Y. 2022)......................................................................................12\n\nElliott Assocs., L.P. v. Covance, Inc.,\n 2000 WL 1752848 (S.D.N.Y. Nov. 28, 2000) .........................................................................10\n\n\n\n\n ii\n\f Case 1:23-cv-03346-GHW Document 47 Filed 01/12/24 Page 4 of 32\n\n\n\n\nFaulkner v. Verizon Communications, Inc.,\n 156 F. Supp. 2d 384 (S.D.N.Y. 2001).............................................................................. passim\n\nIn re Fed Ex Corp. Sec. Litig.,\n 517 F. Supp. 3d 216 (S.D.N.Y. 2021)......................................................................................16\n\nFila v. Pingtan Marine Enter. Ltd.,\n 195 F. Supp. 3d 489 (S.D.N.Y. 2016)......................................................................................23\n\nIn re Flag Telecom Holdings, Ltd., Sec. Litig.,\n 352 F. Supp. 2d 429 (S.D.N.Y. 2005)......................................................................................25\n\nGreco v. Qudian Inc.,\n 2022 WL 4226022 (S.D.N.Y. Sept. 13, 2022) (Woods, J.) .........................................12, 14, 23\n\nJanbay v. Canadian Solar, Inc.,\n 2012 WL 1080306 (S.D.N.Y. Mar. 30, 2012) ...........................................................................7\n\nJanus Cap. Grp., Inc. v. First Derivative Traders,\n 564 U.S. 135 (2011) .................................................................................................................20\n\nKleinman v. Elan Corp.,\n 706 F.3d 145 (2d Cir. 2013).......................................................................................................4\n\nLentell v. Merrill Lynch & Co., Inc.,\n 396 F.3d 161 (2d Cir. 2005).....................................................................................................18\n\nLeykin v. AT & T Corp.,\n 423 F. Supp. 2d 229 (S.D.N.Y. 2006)......................................................................................19\n\nIn re Lululemon Sec. Litig.,\n 14 F. Supp. 3d 553 (S.D.N.Y. 2014)..................................................................................21, 22\n\nIn re Magnum Hunter Resources Corp. Sec. Litig.,\n 26 F. Supp. 3d 278 (S.D.N.Y. 2014)........................................................................................15\n\nIn re MGT Cap. Invs., Inc. Sec. Litig.,\n 2018 WL 1224945 (S.D.N.Y. Feb. 27, 2018) ............................................................................8\n\nNovak v. Kasaks,\n 216 F.3d 300 (2d Cir. 2000).......................................................................................................8\n\nOmnicare, Inc. v. Laborers District Council Construction Industry Pension Fund,\n 575 U.S. 175 (2015) .................................................................................................................11\n\nPehlivanian v. China Gerui Advanced Materials Grp., Ltd.,\n 153 F. Supp. 3d 628 (S.D.N.Y. 2015)......................................................................................10\n\n\n\n\n iii\n\f Case 1:23-cv-03346-GHW Document 47 Filed 01/12/24 Page 5 of 32\n\n\n\n\nPenguin Grp. (USA) Inc. v. American Buddha,\n 609 F.3d 30 (2d Cir. 2010).......................................................................................................25\n\nIn re PetroChina Co. Ltd. Sec. Litig.,\n 120 F. Supp. 3d 340 (S.D.N.Y. 2015)......................................................................................19\n\nIn re Philip Services Corp. Sec. Litig.,\n 383 F. Supp. 2d 463 (S.D.N.Y. 2004)......................................................................................24\n\nPlumber & Steamfitters Local 773 Pension Fund, Boston Ret. Sys. v. Danske\n Bank A/S,\n 11 F.4th 90 (2d Cir. 2021) .........................................................................................................7\n\nPlumbers, Pipefitters & MES Local Union No. 392 Pension Fund v. Fairfax Fin.\n Holdings, Ltd.,\n 886 F. Supp. 2d 328 (S.D.N.Y. 2012)................................................................................18, 19\n\nRobeco Cap. Growth Funds SICAV \u2013 Robeco Glob. Consumer Trends v. Peloton\n Interactive, Inc.,\n 2023 WL 2711342 (S.D.N.Y. Mar. 30, 2023) ...........................................................................7\n\nSaraf v. Ebix, Inc.,\n 632 F. Supp. 3d 389 (S.D.N.Y. 2022)......................................................................................17\n\nIn re Smith Barney Transfer Agent Litig.,\n 884 F. Supp. 2d 152 (S.D.N.Y. 2012)......................................................................................23\n\nStratte-McClure v. Morgan Stanley,\n 784 F. Supp. 2d 373 (S.D.N.Y. 2011)......................................................................................21\n\nIn re Take-Two Interactive Sec. Litig.,\n 551 F. Supp. 2d 247 (S.D.N.Y. 2008)......................................................................................19\n\nIn re Teladoc Health, Inc. Sec. Litig.,\n 2023 WL 4351455 (S.D.N.Y. July 5, 2023) ............................................................................12\n\nTellabs, Inc. v. Makor Issues & Rts., Ltd.,\n 551 U.S. 308 (2007) .................................................................................................................15\n\nTongue v. Sanofi,\n 816 F.3d 199 (2d Cir. 2016).......................................................................................................8\n\nIn re Weight Watchers Int\u2019l Inc. Sec. Litig.,\n 504 F. Supp. 3d 224 (S.D.N.Y. 2020)................................................................................14, 15\n\nWestchester Teamsters Pension Fund v. UBS AG,\n 604 F. App\u2019x 5 (2d Cir. 2015) ...........................................................................................21, 22\n\n\n\n\n iv\n\f Case 1:23-cv-03346-GHW Document 47 Filed 01/12/24 Page 6 of 32\n\n\n\n\nWilder v. News Corp.,\n 2015 WL 5853763 (S.D.N.Y. Oct. 7, 2015) ............................................................................25\n\nWoodley v. Wood,\n 2022 WL 103563 (S.D.N.Y. Jan. 11, 2022) ............................................................................22\n\nStatutes\n\n15 U.S.C. \u00a7 78u-4 ..........................................................................................................................15\n\n15 U.S.C. \u00a7 78u-5 ..........................................................................................................................14\n\nRules\n\nFed. R. Civ. P. 9(b) ......................................................................................................................6, 7\n\nFed. R. Civ. P. 12(b) ........................................................................................................................1\n\n\n\n\n v\n\f Case 1:23-cv-03346-GHW Document 47 Filed 01/12/24 Page 7 of 32\n\n\n\n\n Defendants respectfully submit this memorandum of law in support of their motion to\n\ndismiss Plaintiffs\u2019 Amended Class Action Complaint (ECF No. 39) (\u201cComplaint\u201d or \u201cAC\u201d) for\n\nfailure to state a claim upon which relief can be granted and lack of personal jurisdiction under\n\nFederal Rules of Civil Procedure 12(b)(6) and 12(b)(2). 1\n\n PRELIMINARY STATEMENT\n\n This is precisely the type of \u201cstrike\u201d suit that the Private Securities Litigation Reform Act\n\n(\u201cPSLRA\u201d) was intended to prevent. The Complaint is fatally flawed and should be dismissed.\n\n We recognize that law requires Defendants and the Court to presume that the allegations\n\nin the Complaint are true, even though the reality is that they are based on so-called \u201cfacts\u201d that\n\nPlaintiffs have simply imagined. But even affording Plaintiffs the benefit of that presumption, the\n\nComplaint is fatally flawed and should be dismissed for several independent reasons.\n\n Plaintiffs are alleged shareholders of Eqonex, a digital-assets company that allegedly\n\noperated several businesses, including an \u201cExchange\u201d on which cryptocurrency could be traded,\n\nand a custody business (\u201cDigivault\u201d), which was regulated by the U.K. Financial Conduct\n\nAuthority (\u201cFCA\u201d) and allowed users to store digital assets. In March 2022, Eqonex allegedly\n\nentered into a strategic partnership with another financial-technology company, Bifinity (which\n\nwas allegedly launched by Binance). As part of the partnership, (i) Bifinity allegedly (a) extended\n\na $36 million convertible loan to Eqonex and (b) obtained the right to appoint a number of Eqonex\n\nofficers and nominate directors; and (ii) both companies allegedly (a) agreed to continue their\n\n\u201cnon-binding\u201d and \u201cexploratory\u201d discussions about a \u201cpotential\u201d merger; and (b) at the same time,\n\nas part of the partnership\u2019s initial phase, disclosed that they would \u201cleverage\u201d Eqonex\u2019s FCA-\n\n\n1\n In this submission, (i) \u201cEqonex\u201d refers to Eqonex Limited; (ii) \u201cBifinity\u201d refers to Bifinity UAB; and (iii)\n\u201cBinance\u201d refers to Binance Group (an entity that is named as a Defendant but does not actually exist).\nUnless otherwise noted, emphasis is added and internal citations and quotations are omitted.\n\n\n\n 1\n\f Case 1:23-cv-03346-GHW Document 47 Filed 01/12/24 Page 8 of 32\n\n\n\n\nregulated custody business, Digivault, and \u201cstrengthen\u201d the Exchange. Plaintiffs allege that,\n\nultimately, Eqonex ended up being unable to repay the loan and became insolvent, the Exchange\n\nwas shut down, and the two companies agreed that Bifinity would acquire 100% of Digivault.\n\n These garden-variety disclosures do not provide a valid basis to sue for securities fraud.\n\nThe Complaint fails to meet the applicable heightened pleading standards for several reasons:\n\n First, the Complaint fails to allege any actionable misstatement or omission. Plaintiffs\n\nhave not pleaded facts establishing that any of the supposed misstatements in the two March 2022\n\npress releases at issue were actually false when made. So, instead, Plaintiffs have just made up\n\n\u201cfacts\u201d and claimed they were omitted. Specifically, they speculate that, at the time of the press\n\nreleases, Defendants must have known that (i) Eqonex could never repay the loan, and (ii) Bifinity\n\nnever intended to merge with Eqonex, but rather this was supposedly all a scheme for Binance to\n\ntake control of Digivault. But the Complaint does not contain a single factual allegation to support\n\nthis wild conspiracy theory. Plaintiffs cannot manufacture a claim by imagining \u201cfacts\u201d and saying\n\nthey were omitted. In any event, the statements are not actionable because they are (i) corporate\n\npuffery and (ii) forward-looking statements protected by the PSLRA\u2019s safe harbor provision.\n\n Second, Plaintiffs do not come close to pleading the requisite \u201cstrong inference of scienter.\u201d\n\nThe Complaint lacks allegations showing that any Defendant had motive or opportunity to commit\n\nfraud. And Plaintiffs barely try to plead conscious misbehavior or recklessness. The Complaint\n\ndoes not allege a single fact establishing that any Defendant knew (or recklessly disregarded) that\n\nany of the challenged statements were false when made. Plaintiffs cite no emails, no text messages,\n\nno internal meetings, and no confidential witnesses. Instead, the Complaint is based exclusively\n\non speculative accusations, as well as unrelated alleged conduct by Binance that has nothing to do\n\nwith Eqonex. Nor are Plaintiffs\u2019 conclusory assertions remotely plausible. If Bifinity really had\n\n\n\n\n 2\n\f Case 1:23-cv-03346-GHW Document 47 Filed 01/12/24 Page 9 of 32\n\n\n\n\nwanted to take over Digivault, then nobody had to commit securities fraud\u2014Bifinity could have\n\njust merged with Eqonex. Plaintiffs\u2019 silence on their theory of fraudulent intent is deafening.\n\n Third, Plaintiffs fail to plead loss causation. Although Plaintiffs point to two supposedly\n\ncorrective disclosures, there is nothing \u201ccorrective\u201d about them (and there was nothing to correct\n\nanyway). As discussed below, there is no nexus between the alleged misstatements and the\n\nsupposed corrective disclosures\u2014which are more accurately described as new, negative news.\n\n Fourth, Plaintiffs fail to state a claim against any Defendant for other reasons, including\n\nthat none of the Defendants accused of violating Section 10(b) were the \u201cmaker\u201d of the claimed\n\nmisstatements, and Plaintiffs\u2019 \u201ccontrol\u201d person allegations are boilerplate, conclusory, and suffer\n\nfrom group pleading\u2014and thus do not state a claim under Exchange Act Section 20(a).\n\n Finally, in addition to failing to state a claim, the Complaint lacks any factual allegations\n\nto support personal jurisdiction.\n\n Plaintiffs cannot plead around these fundamental flaws. For these and the other reasons\n\ndiscussed below, the Court should dismiss the Complaint with prejudice.\n\n THE COMPLAINT\u2019S ALLEGATIONS\n\n Plaintiffs assert claims (i) under Section 10(b) against Defendants Farnell and Hai and (ii)\n\nunder Section 20(a) against every Defendant, based on the following allegations:\n\n The Supposedly \u201cMisleading\u201d Statements\n\n Plaintiffs allege that Eqonex made several misstatements in two March 2022 press releases:\n\n The March 7 Press Release. On March 7, Eqonex announced it had entered into a \u201cstrategic\n\npartnership\u201d with Bifinity and that: (i) Bifinity would \u201cadvance a $36 million convertible loan to\n\nEqonex\u201d; (ii) Bifinity had the right to appoint several Eqonex officers and nominate two directors;\n\n(iii) the strategic partnership would \u201cinitially focus on leveraging Digivault as an FCA regulated\n\ncustodian, strengthening the technology supporting the EQONEX Exchange, and expanding\n\n\n 3\n\f Case 1:23-cv-03346-GHW Document 47 Filed 01/12/24 Page 10 of 32\n\n\n\n\nBifinity\u2019s geographical footprint through EQONEX\u2019s licensing framework\u201d; (iv) the companies\n\nwould \u201cwork together to maximize business synergies created by this new strategic relationship\n\nand capitalize on opportunities to cooperate and further expand their business\u201d; and (v) Bifinity\n\nand Eqonex would \u201ccontinue to engage in non-binding discussions to explore potential merger\n\nopportunities, subject to regulatory approval.\u201d (AC \u00b6\u00b6 47-49). Eqonex later filed the entire loan\n\nagreement with the U.S. Securities and Exchange Commission (\u201cSEC\u201d). See January 12, 2024\n\nDeclaration of Victoria H. Yuhas (\u201cYuhas Decl.\u201d), Ex. 1. 2\n\n The March 17 Press Release. In this press release, Eqonex announced that it and Bifinity\n\nhad taken \u201cthe next step in solidifying their strategic partnership with the appointment of\n\nEQONEX\u2019s new CEO [Farnell] and two new members to the EQONEX Board of Directors\n\n[Farnell and Hai].\u201d (AC \u00b6 53). The release also included the generic, optimistic statements that\n\n(i) Farnell would \u201cplay an instrumental role in fast-tracking the collaboration between both\n\nbusinesses\u201d and was \u201clooking forward to fostering true collaboration and productivity across both\n\nbusinesses across both teams\u201d; (ii) Bifinity \u201cwill develop ways to leverage the EQONEX Exchange\n\nas an alternative trading platform, deploy resources to strengthen the technology, and also explore\n\nopportunities to scale the asset management business\u201d; and (iii) the business as a whole would\n\nhave \u201cthe potential to be transformative for the industry.\u201d (Id. (emphasis omitted)).\n\n Although the Complaint is not a model of clarity, Plaintiffs appear to be alleging that three\n\ncategories of statements within these two press releases were false or misleading:\n\n \u2022 Statements About the Loan. Plaintiffs allege that statements about the loan agreement\n were misleading because \u201cEqonex had no way to repay Bifinity pursuant to the terms of\n the Loan Agreement.\u201d (Id. \u00b6 50).\n\n2\n The Court can consider on this motion the loan agreement and other SEC filings cited in this brief. See\nKleinman v. Elan Corp., 706 F.3d 145, 152 (2d Cir. 2013) (citing ATSI Commc\u2019ns, Inc. v. Shaar Fund,\nLtd., 493 F.3d 87, 98 (2d Cir. 2007)).\n\n\n\n\n 4\n\f Case 1:23-cv-03346-GHW Document 47 Filed 01/12/24 Page 11 of 32\n\n\n\n\n \u2022 Statements About the Non-Binding Merger Discussions. Plaintiffs allege that statements\n concerning the discussions about a potential merger were misleading because \u201cDefendants\n did not intend to consummate a merger between Eqonex and Bifinity (or Binance).\u201d (Id.).\n\n \u2022 Statements About the Strategic Partnership. Plaintiffs allege that Defendants \u201cmaterially\n misled investors concerning the partnership between Eqonex and Bifinity,\u201d because it was\n supposedly \u201csimply an attempted end-run around the FCA\u2019s ban on Binance undertaking\n any regulated activity in the U.K. (Id. \u00b6 54; see also id. \u00b6 50 (similar)).\n\n Plaintiffs also try to recast many of these alleged misstatements as \u201comissions.\u201d (See id. \u00b6\n\n50 (alleging that Defendants \u201cleft out [the] critical context\u201d that they were supposedly using the\n\nstrategic partnership \u201cto get around the FCA\u2019s ban on Binance undertaking any regulated activity\n\nin the U.K.\u201d); id. \u00b6 18 (alleging that Defendants \u201cfail[ed] to disclose that Eqonex had on [sic] way\n\nto pay Bifinity back for the Loan and that there were no plans to work towards a merger\u201d)).\n\n The Supposedly \u201cCorrective\u201d Disclosures\n\n Plaintiffs allege that they suffered losses \u201cwhen the misrepresentations made to the market,\n\nand/or the information alleged herein to have been concealed from the market, and/or the effects\n\nthereof, were revealed[.]\u201d (Id. \u00b6 69). They allege that the \u201ctruth\u201d was revealed in two disclosures:\n\n The August 15 Disclosure. Eqonex announced that it had decided to \u201cstreamline its\n\noperations and focus resources primarily on the businesses that offer the most potential for revenue\n\ngrowth and long-term financial sustainability,\u201d and thus it would be closing its Exchange and\n\nfocusing on, among other things, its custody business (i.e., Digivault). (Id. \u00b6 59). That same day,\n\n\u201cBifinity granted Eqonex a waiver for the cessation of a major business and Eqonex agreed to\n\nincrease Bifinity\u2019s share charge of Digivault under the loan agreement . . . to 100%.\u201d (Id. \u00b6 12).\n\n The November 21, 2022 Disclosure. Eqonex announced that it was \u201ccurrently in breach\u201d\n\nof its loan agreement with Bifinity and that its \u201cfinancial resources . . . may not be sufficient . . .\n\nwhich may cast significant doubt on [Eqonex\u2019s] ability to continue as a going concern.\u201d (Id. \u00b6 62).\n\n\n\n\n 5\n\f Case 1:23-cv-03346-GHW Document 47 Filed 01/12/24 Page 12 of 32\n\n\n\n\n The Threadbare Scienter Allegations\n\n Plaintiffs do not allege a single fact to even try to demonstrate that any Defendant knew\n\n(or recklessly disregarded) that the allegedly misleading statements were false when made. The\n\nComplaint does not, for example, include a single quote from any confidential witness, nor does it\n\nidentify any internal document or meeting to even suggest that any Defendant had knowledge of\n\nany information that actually contradicted any of Eqonex\u2019s public statements.\n\n Instead, Plaintiffs speculate that \u201cDefendants had no intention of actually consummating a\n\nmerger between Eqonex and Binance or Bifinity,\u201d that they somehow knew that the loan \u201cwas not\n\nsufficient to stave off Eqonex\u2019s insolvency,\u201d and that this was all part of some master plan to take\n\ncontrol of Digivault so Binance could \u201cevade\u201d the FCA\u2019s ban. (Id. \u00b6 10). The Complaint includes\n\nthe boilerplate assertions that Defendants \u201cacted with scienter in that they knew that the public\n\ndocuments and statements issued or disseminated in the name of Eqonex were materially false and\n\nmisleading,\u201d received unspecified \u201cinformation reflecting the true facts of Eqonex,\u201d and \u201chad\n\nactual knowledge of the material omissions and/or the falsity of the material statements set forth\n\nabove[.]\u201d (Id. \u00b6\u00b6 85-86). But Plaintiffs\u2019 only attempt to try to support their speculation is to allege\n\nthat \u201cBinance and its executives have consistently acted to subvert financial regulators\u201d (id. \u00b6 64)\n\nand have made other efforts \u201cto undermine rather than comply with the FCA\u201d (id. \u00b6 66).\n\n ARGUMENT\n\n The Complaint fails to state a plausible securities fraud claim against any Defendant. As\n\ndiscussed below, Plaintiffs do not plead fraud with the particularity required by Federal Rule 9(b)\n\nand the PSLRA. See Alpha Capital Anstalt v. Schwell Wimpfheimer & Assocs. LLP, 2019 WL\n\n1436993, at *6 (S.D.N.Y. Mar. 30, 2019) (Woods, J.) (applying heightened pleading standards).\n\nI. THE COMPLAINT FAILS TO ADEQUATELY ALLEGE SECURITIES FRAUD\n\n A. The Complaint Fails to Adequately Allege an Actionable Misstatement\n\n\n 6\n\f Case 1:23-cv-03346-GHW Document 47 Filed 01/12/24 Page 13 of 32\n\n\n\n\n At the outset, Plaintiffs\u2019 claims fail because the Complaint does not allege any actionable\n\nmisstatement or omission. See Robeco Cap. Growth Funds SICAV \u2013 Robeco Glob. Consumer\n\nTrends v. Peloton Interactive, Inc., 2023 WL 2711342, at *15 (S.D.N.Y. Mar. 30, 2023)\n\n(dismissing claim where Plaintiff \u201cfailed to plead any actionable misstatement or omission\u201d).\n\n 1. The Statements About the Loan Are Not Actionable\n\n Plaintiffs allege that Eqonex disclosed in its March 7 press release that \u201cBifinity would\n\nadvance a $36 million convertible loan to Eqonex.\u201d (AC \u00b6 47). They do not allege that this\n\nstatement was false, or that Eqonex made any other false statements about the terms of the loan.\n\nNor could they\u2014because the loan agreement itself was also filed publicly. (Yuhas Decl., Ex. 1).\n\n Unable to allege falsity, Plaintiffs instead attempt to recast their claim as omission-based.\n\nThey allege that the loan-related statements were misleading because they omitted that (i) the loan\n\n\u201cwas not sufficient to stave off Eqonex\u2019s insolvency,\u201d and (ii) \u201cEqonex had no way to repay\n\nBifinity pursuant to the terms of the Loan Agreement.\u201d (AC \u00b6\u00b6 10, 50). But Plaintiffs do not plead\n\nany facts showing that, as of March 7, either of these assertions\u2014which are based only on\n\nPlaintiffs\u2019 say-so\u2014reflect reality. Plaintiffs cannot bootstrap a securities fraud claim by imagining\n\n\u201cfacts\u201d and saying they were omitted. See Janbay v. Canadian Solar, Inc., 2012 WL 1080306, at\n\n*4 (S.D.N.Y. Mar. 30, 2012) (\u201cUnder Rule 9(b), [a plaintiff] must plead specific facts explaining\n\nwhy each alleged misstatement was false at the time it was made.\u201d); Plumber & Steamfitters Local\n\n773 Pension Fund, Boston Ret. Sys. v. Danske Bank A/S, 11 F.4th 90, 103 (2d Cir. 2021) (rejecting\n\nplaintiffs\u2019 attempt to \u201ccircumvent [the] defect\u201d in their misleading statement claim by \u201crecast[ing]\n\nthis claim as one of misstatement by omission\u201d).\n\n Moreover, in addition to disclosing the entire loan agreement, Eqonex\u2019s SEC filings also\n\naccurately disclosed its financial information\u2014meaning that investors could have determined for\n\nthemselves whether the loan was likely to be repaid, or whether it might be sufficient for Eqonex\n\n\n 7\n\f Case 1:23-cv-03346-GHW Document 47 Filed 01/12/24 Page 14 of 32\n\n\n\n\nto stave off bankruptcy. For example, two months before the loan was announced, Eqonex (i)\n\ndisclosed that it had incurred an \u201coperating loss[]\u201d of $64.6 million in 2021; and (ii) specifically\n\nwarned that it was \u201csubject to many of the risks common to early-stage enterprises, including\n\nunder-capitalization [and] cash shortages[.]\u201d (Yuhas Decl., Ex. 2 at 6) (\u201cJanuary Prospectus\u201d).\n\n Having accurately disclosed the objective facts, Defendants had no duty to editorialize or\n\ncharacterize them. See In re MGT Cap. Invs., Inc. Sec. Litig., 2018 WL 1224945, at *11 (S.D.N.Y.\n\nFeb. 27, 2018) (\u201cOnce a company discloses material objective factual matters, it need not\n\ncharacterize or editorialize on those facts in any particular way.\u201d). To the extent Plaintiffs argue\n\nthat Defendants should have predicted that Eqonex would be unable to repay the loan or would\n\nbecome insolvent, that would be inconsistent with the law. See Novak v. Kasaks, 216 F.3d 300,\n\n309 (2d Cir. 2000) (\u201cCorporate officials need not be clairvoyant; they are only responsible for\n\nrevealing those material facts reasonably available to them.\u201d).\n\n 2. The Statements About the Merger Discussions Are Not Actionable\n\n Next, Plaintiffs challenge the March 7 statement that Bifinity and Eqonex would \u201ccontinue\n\nto engage in non-binding discussions to explore potential merger opportunities[.]\u201d (AC \u00b6 48).\n\nAgain, Plaintiffs cannot and do not allege falsity. See Tongue v. Sanofi, 816 F.3d 199, 213-14 (2d\n\nCir. 2016) (affirming lower court holding of failure to plead falsity). The Complaint does not\n\nallege, for example, that Bifinity and Eqonex were not engaged in non-binding discussions as of\n\nMarch 7, nor that they did not plan to continue those discussions after March 7. In fact, SEC\n\nfilings confirm that the discussions about a potential merger did continue for months. For example,\n\nEqonex\u2019s August 2022 Annual Report disclosed that the parties \u201ccontinue to engage in non-\n\nbinding discussions to explore potential merger opportunities.\u201d (Yuhas Decl., Ex. 3 at 9).\n\n Because they cannot plead falsity, Plaintiffs again pivot to an omission theory\u2014alleging\n\nthat the statement was materially misleading because Defendants failed to disclose that they \u201cdid\n\n\n 8\n\f Case 1:23-cv-03346-GHW Document 47 Filed 01/12/24 Page 15 of 32\n\n\n\n\nnot intend to consummate a merger.\u201d (AC \u00b6 50). But Plaintiffs do not plead a single fact to suggest\n\nthat, as of March 7, the parties did not intend to consummate a merger. And Plaintiffs\u2019 speculation\n\nabout the parties\u2019 intent as of March 7 is implausible given that the merger discussions did\n\ncontinue for months. See In re Citigroup Sec. Litig., 2023 WL 2632258, at *20 (S.D.N.Y. Mar.\n\n24, 2023) (rejecting plaintiff\u2019s claims that statements were misleading because plaintiff \u201coffer[ed]\n\nnothing beyond conjecture\u201d); see also Campo v. Sears Holdings Corp., 635 F. Supp. 2d 323, 336\n\n(S.D.N.Y. 2009) (\u201c[G]eneric and conclusory allegations based upon rumor or conjecture are\n\nundisputedly insufficient to satisfy the heightened pleading standard of [the PSLRA].\u201d).\n\n Plaintiffs\u2019 speculation that Bifinity only entered into merger discussions as a ruse because\n\nBinance wanted to control Digivault is also implausible. Based on the logic of Plaintiffs\u2019 own\n\ncorporate-control allegations, a merger would have allowed Binance to control Digivault, which\n\nPlaintiffs speculate was the plan all along. Yet Plaintiffs fail to explain how not merging would\n\nhave given Binance a better chance of controlling Digivault than merging.\n\n Moreover, Plaintiffs fail to explain how investors could have been misled to believe that a\n\nmerger was certain when the disclosure said just the opposite. Eqonex\u2019s press release specifically\n\ndisclosed that the parties were in \u201cnon-binding discussions\u201d in order \u201cto explore potential merger\n\nopportunities,\u201d and that any potential merger would be \u201csubject to regulatory approval.\u201d (AC \u00b6\n\n48). Similarly, in an April 29, 2022 SEC filing, Eqonex warned investors that although the loan\n\nagreement obligated Bifinity to discuss a merger \u201cin good faith,\u201d it \u201c[did] not obligate [the parties]\n\nto enter into definitive binding agreements or complete the [potential merger] on such terms or at\n\nall or to engage in any other transaction.\u201d (Yuhas Decl, Ex. 4). The filing further warned that\n\n\u201c[n]o assurance can be provided as to if or when the parties may enter into any definitive binding\n\nagreements in connection with [a potential merger].\u201d (Id.) Furthermore, Eqonex\u2019s August 2022\n\n\n\n\n 9\n\f Case 1:23-cv-03346-GHW Document 47 Filed 01/12/24 Page 16 of 32\n\n\n\n\nAnnual Report plainly and unambiguously stated that although \u201cnon-binding discussions to\n\nexplore potential merger opportunities\u201d remained ongoing, \u201cit is possible that . . . Eqonex and\n\nBifinity may not ultimately enter into a merger transaction.\u201d (Yuhas Decl., Ex. 3 at 9).\n\n Given these disclosures, no reasonable investor would have believed that the merger talks\n\nwere anything but preliminary. See, e.g., Elliott Assocs., L.P. v. Covance, Inc., 2000 WL 1752848,\n\nat *2, 9 (S.D.N.Y. Nov. 28, 2000) (finding inactionable statements that merger was \u201con track to\n\nclose\u201d given \u201cthe . . . uncertainty as to whether any proposed merger will actually be completed\u201d).\n\n Indeed, courts routinely dismiss securities fraud allegations based on the failure to\n\nconsummate potential mergers that are much further along than the exploratory, non-binding\n\ndiscussions at issue here. For example, Faulkner v. Verizon Communications, Inc. involved a\n\npotential merger between Verizon and NorthPoint. 156 F. Supp. 2d 384 (S.D.N.Y. 2001). 3 The\n\nparties announced in August 2000 that they had signed a merger agreement, which required\n\nVerizon to use \u201ccommercially reasonable efforts\u201d to close. Id. at 388. Two weeks later, Verizon\n\nannounced \u201cthat the Merger was expected to be completed in mid-2001,\u201d and two months after\n\nthat, NorthPoint\u2019s CEO told investors that \u201cthe merger with Verizon continues on schedule.\u201d Id.\n\nat 388-89. Then, another month later, NorthPoint reiterated that \u201cwe continue to be on track with\n\nour prior expectation of closing the Verizon transaction in the first half of 2001.\u201d Id. at 389.\n\n But Verizon terminated the agreement, and then NorthPoint\u2019s noteholders sued, alleging\n\nthat the statements concerning the \u201cstatus\u201d of the merger were misleading because Verizon did not\n\n\n\n3\n See also Born v. Quad/Graphics, Inc., 521 F. Supp. 3d 469, 486-89 (S.D.N.Y. 2021) (dismissing\nstatements describing the Department of Justice\u2019s antitrust review of a potential acquisition as \u201cgoing as\nplanned\u201d and \u201cas expected\u201d absent particularized facts showing \u201ccontemporaneous falsity\u201d); Pehlivanian\nv. China Gerui Advanced Materials Grp., Ltd., 153 F. Supp. 3d 628, 649 (S.D.N.Y. 2015) (dismissing\nstatement that \u201cthe Company was investigating potential accretive acquisitions and potential joint ventures\u201d\nas a non-guarantee that was too broad to be actionable).\n\n\n\n 10\n\f Case 1:23-cv-03346-GHW Document 47 Filed 01/12/24 Page 17 of 32\n\n\n\n\nintend to close. Id. at 390, 397. The court dismissed the claim, holding that the merger-related\n\nstatements were \u201cmerely expressions of optimism concerning an uncertain future event\u201d that were\n\nnot actionable unless \u201cthey are worded as guarantees or are supported by specific statements of\n\nfact, or if the speaker does not genuinely or reasonably believe them.\u201d Id. at 397-98. 4 The court\n\nalso explained that the plaintiffs had failed to allege falsity because \u201cthere are no facts from which\n\nit could be inferred that Verizon had in fact decided to terminate the merger.\u201d Id. at 400.\n\n The case for dismissal here is far stronger. Bifinity and Eqonex never entered into a\n\nbinding merger agreement and never made any statements about when the merger might close.\n\nJust the opposite: Eqonex specifically told the market that the discussions were \u201cnon-binding\u201d and\n\n\u201cexplor[atory],\u201d (AC \u00b6 48), and even expressly warned investors that it was possible no agreement\n\nwould ever be signed (let alone closed) (Yuhas Decl., Ex. 3 at 9). Although Plaintiffs here (like\n\nthe Faulkner plaintiffs) speculate that Bifinity (like Verizon) did not intend to merge, they (again,\n\nlike the Faulkner plaintiffs) do not plead a single fact to support their speculation.\n\n 3. The Statements About the Strategic Partnership Are Not Actionable\n\n Although the Complaint\u2019s muddled allegations are difficult to discern, the third category\n\nof alleged misstatements appears to be those relating to the strategic partnership. (See id. \u00b6\u00b6 50,\n\n54). Just like the other categories, none of these statements are actionable.\n\n First, Plaintiffs point to several statements touting potential benefits of the partnership:\n\n \u2022 the companies would \u201cwork together to maximize business synergies . . . and capitalize on\n opportunities to cooperate and further expand their business\u201d;\n\n\n\n4\n Faulkner\u2019s holding is not undermined by the subsequent decision in Omnicare, Inc. v. Laborers District\nCouncil Construction Industry Pension Fund, 575 U.S. 175 (2015) because the Faulkner court found that\n(i) there were \u201cabsolutely no facts to support an inference that . . . Verizon did not . . . believe any of its\nstatements to be untrue,\u201d 156 F. Supp. 2d at 399, and (ii) plaintiffs failed to allege that the defendant knew\ninformation that was inconsistent with the representation at issue, id. at 396-97, 400. The same is true here.\n\n\n\n 11\n\f Case 1:23-cv-03346-GHW Document 47 Filed 01/12/24 Page 18 of 32\n\n\n\n\n \u2022 as CEO, Defendant Farnell would \u201cplay an instrumental role in fast-tracking the\n collaboration between both businesses\u201d and was \u201clooking forward to fostering true\n collaboration and productivity across both businesses\u201d; and\n\n \u2022 the exchange created an \u201copportunity to create a full ecosystem by harnessing Bifinity\u2019s\n technology, marketing clout and client base,\u201d and had \u201cthe potential to be\n transformative[.]\u201d\n\n(See id. \u00b6\u00b6 47, 53 (emphasis omitted)). But such \u201c[g]eneral statements of optimism and puffery\n\nare non-actionable\u201d because \u201cthey are not sufficiently specific that a reasonable investor could rely\n\non them as a guarantee of some concrete fact or outcome,\u201d and \u201cspeakers are not required to take\n\na gloomy, fearful or defeatist view of the future.\u201d Greco v. Qudian Inc., 2022 WL 4226022, at *9\n\n(S.D.N.Y. Sept. 13, 2022) (Woods, J.). Because Eqonex\u2019s vague and generalized statements are\n\nquintessential examples of puffery, they cannot support a claim for securities fraud. See, e.g., See\n\nIn re Teladoc Health, Inc. Sec. Litig., 2023 WL 4351455, at *7 (S.D.N.Y. July 5, 2023) (dismissing\n\nas puffery statements regarding two companies\u2019 \u201c\u2018aligned\u2019 cultural values, their \u2018shared mission,\u2019\n\nand how they \u2018really do fit together,\u2019\u201d and \u201cthat the merger would create \u2018new opportunities\u2019 and\n\nwas \u2018resonating in the marketplace\u2019\u201d).\n\n Second, Plaintiffs identify statements in which Eqonex set forth its initial business plan for\n\nDigivault and the Exchange:\n\n \u2022 the partnership would \u201cinitially focus on leveraging Digivault as an FCA regulated\n custodian, strengthening the technology supporting the EQONEX Exchange, and\n expanding Bifinity\u2019s geographical footprint\u201d; and\n\n \u2022 \u201c[t]he initial phase of this groundbreaking strategic partnership will put in place a\n framework for Bifinity to safeguard some of its client assets with EQONEX\u2019s FCA\n registered custodian, Digivault, in compliance with all applicable regulatory\n requirements.\u201d\n\n(AC \u00b6\u00b6 48, 53). These statements are not actionable for several reasons.\n\n No Falsity. The statements are not adequately alleged to have been false when made. See\n\nIn re Ehang Holdings Ltd. Sec. Litig., 646 F. Supp. 3d 443, 458 (S.D.N.Y. 2022) (\u201cThe Exchange\n\n\n 12\n\f Case 1:23-cv-03346-GHW Document 47 Filed 01/12/24 Page 19 of 32\n\n\n\n\nAct requires that the complaint shall specify each statement alleged to have been misleading, and\n\nthe reason or reasons why the statement is misleading.\u201d). Plaintiffs do not allege that, as of March\n\n2022, Defendants did not plan to initially \u201cleverage\u201d Digivault and \u201cstrengthen\u201d the Exchange. In\n\nfact, leveraging Digivault is entirely consistent with Plaintiffs\u2019 speculative theory that Binance\n\nwanted to control Digivault. (See AC \u00b6\u00b6 50, 54, 57). Plaintiffs do not even plead facts to show\n\nthat the statements turned out to be false. The Complaint has nothing to suggest that during the\n\n\u201cinitial phase,\u201d Defendants did not leverage Digivault or strengthen the Exchange.\n\n To the contrary, later public filings confirm that the strategic partners did leverage\n\nDigivault. For example, on August 15\u2014five months after the strategic partnership was\n\nannounced\u2014Eqonex disclosed that Digivault and another business line had \u201calready made solid\n\nprogress with the additional resources that we have allocated to them recently, and we are bullish\n\nabout their prospects as we become an organization focused on these high-potential business\n\nareas.\u201d (Id. \u00b6 59). Although Eqonex on that same day announced it would be closing the\n\nExchange, that means that the Exchange had been open for the previous five months. There is\n\nnothing to suggest that Eqonex had not been \u201cstrengthening\u201d it between March and August. Nor\n\ndoes the fact that Eqonex closed the Exchange in August mean that anyone knew in March that\n\nEqonex would do so. The more plausible inference is that the business strategy had changed,\n\nwhich \u201cdoes not, without more, render [a company\u2019s] past disclosures . . . misleading.\u201d In re\n\nDiebold Nixdorf, Inc., Sec. Litig., 2021 WL 1226627, at *11 (S.D.N.Y. Mar. 30, 2021).\n\n Puffery. The statements that the strategic partnership would be \u201cgroundbreaking\u201d (AC\n\n\u00b6 53), \u201cleverag[e] Digivault\u201d (id. \u00b6 48), \u201cstrengthen the technology\u201d (id. \u00b6 53), and \u201cexpand[]\n\nBifinity\u2019s geographical footprint\u201d (id. \u00b6 48), should be dismissed as mere puffery. See Faulkner,\n\n156 F. Supp. at 388, 400 (dismissing fraud claims based on statements that \u201cthe merger was a\n\n\n\n\n 13\n\f Case 1:23-cv-03346-GHW Document 47 Filed 01/12/24 Page 20 of 32\n\n\n\n\ngroundbreaking agreement\u201d and \u201cthis deal combines complementary assets . . . to provide the scale\n\nto fuel growth\u201d); see also Diebold, 2021 WL 1226627, at *9 (holding that statements about\n\n\u201c\u2018confidence\u2019 in [management\u2019s] ability to integrate [the two companies]\u201d and citing \u201cthe\n\n\u2018collaborative\u2019 nature of the business and the \u2018teamwork\u2019 being leveraged to integrate\u201d were\n\n\u201cprecisely the type of puffery that the Second Circuit . . . [has] held to be nonactionable\u201d).\n\n Forward-Looking Statements. As discussed above, the statements that Eqonex would\n\n\u201cinitially focus on . . . strengthening the technology supporting the EQONEX Exchange\u201d \u201d (AC\n\n\u00b6 48) and \u201c[m]oving forward, Bifinity will develop ways to leverage the EQONEX Exchange as\n\nan alternative trading platform\u201d (id. \u00b6 53) are not actionable because they (i) are not adequately\n\nalleged to have been false when made and (ii) are mere corporate puffery. Plaintiffs may be\n\ndisappointed that Eqonex eventually ended up closing its Exchange, but their allegations amount\n\nto nothing more than impermissible claims of fraud by hindsight. See Greco, 2022 WL 4226022,\n\nat *9 (\u201cThe Second Circuit has firmly rejected the \u2018fraud by hindsight\u2019 approach.\u201d).\n\n These forward-looking statements about the Exchange are also protected by the PSLRA\u2019s\n\nsafe harbor. In re Weight Watchers Int\u2019l Inc. Sec. Litig., 504 F. Supp. 3d 224, 252-53 (S.D.N.Y.\n\n2020) (\u201cUnder the PSLRA\u2019s safe harbor, a defendant \u2018shall not be liable with respect to any\n\nforward-looking statement\u2019 if . . . the forward-looking statement is \u2018identified\u2019 as such and\n\n\u2018accompanied by meaningful cautionary statements[.]\u2019\u201d) (quoting 15 U.S.C. \u00a7 78u-5(c)). Eqonex\n\nrepeatedly and specifically warned not only that it might have to exit certain business lines and\n\nstop certain projects, but also that it might stop operating the Exchange itself:\n\n \u2022 \u201cThere are substantial risks and uncertainties\u201d associated with \u201cundertak[ing] . . . strategic\n projects.\u201d (January Prospectus at 6).\n\n \u2022 \u201cThe development of the Exchange requires significant capital funding, expertise on the\n part of Eqonex\u2019s management and time and effort in order to be successful,\u201d and Eqonex\n\n\n\n\n 14\n\f Case 1:23-cv-03346-GHW Document 47 Filed 01/12/24 Page 21 of 32\n\n\n\n\n \u201cmay be unable to develop the Exchange in a way that realizes . . . any form of a\n functioning network.\u201d (Id. at 24).\n\n \u2022 \u201cThe Exchange may face competition from . . . alternative networks, which could\n negatively impact the Exchange and have a material adverse effect on Eqonex\u2019s business,\n financial condition and results of operations,\u201d and \u201c[i]f the Exchange is unable to offer\n features that differentiate it from . . . competitors, or . . . . competitors create pricing\n pressure that results in lower-than-anticipated revenues, the Exchange may not be viable,\n which could have a material adverse effect on Eqonex\u2019s business, financial condition and\n results of operations.\u201d (Id. at 25).\n\n \u2022 \u201cIt is possible that some of Eqonex\u2019s business lines may be difficult to enter and/or it may\n become evident that a particular business line is not a productive use of capital or time,\u201d\n which \u201ccould result in Eqonex modifying its business and focus away from such business\n lines.\u201d (Id. at 6).\n\n(See also Eqonex\u2019s May 2, 2022 prospectus, Yuhas Decl., Ex. 5 at 6, 24-25 (same)). It is difficult\n\nto imagine more particularized warnings. See Weight Watchers, 504 F. Supp. 3d at 255 (applying\n\nsafe harbor where cautionary language \u201cdisclose[d] the exact risk of which [p]laintiffs\n\ncomplain[ed]\u201d) (emphasis in original).\n\n B. The Complaint Fails to Adequately Allege a Strong Inference of Scienter\n\n The PSLRA requires a plaintiff to \u201cstate with particularity facts giving rise to a strong\n\ninference\u201d of scienter. 15 U.S.C. \u00a7 78u-4(b)(2)(A). The word \u201cstrong\u201d means that \u201cthe inference\n\nof scienter must be more than merely reasonable or permissible[.]\u201d Tellabs, Inc. v. Makor Issues\n\n& Rts., Ltd., 551 U.S. 308, 324 (2007). \u201cA complaint will survive . . . only if a reasonable person\n\nwould deem the inference of scienter cogent and at least as compelling as any opposing\n\ninference[.]\u201d Id. The Complaint falls woefully short of meeting this standard. It contains (i) no\n\n\u201cfacts to show that defendants had both motive and opportunity to commit fraud,\u201d and (ii) no \u201cfacts\n\nthat constitute strong circumstantial evidence of conscious misbehavior or recklessness.\u201d In re\n\nMagnum Hunter Resources Corp. Sec. Litig., 26 F. Supp. 3d 278, 292 (S.D.N.Y. 2014).\n\n\n\n\n 15\n\f Case 1:23-cv-03346-GHW Document 47 Filed 01/12/24 Page 22 of 32\n\n\n\n\n First, the Complaint does not allege facts showing \u201cboth motive and opportunity.\u201d \u201cMotive\n\nis established if the plaintiff alleges concrete benefits that could be realized by one or more of the\n\nfalse statements and wrongful nondisclosures alleged,\u201d and \u201c[o]pportunity is the means and likely\n\nprospect of achieving concrete benefits by the means alleged.\u201d Faulkner, 156 F. Supp. 2d at 393.\n\n The word \u201cmotive\u201d does not appear in the Complaint, and so it is unclear whether Plaintiffs\n\nare even attempting to allege scienter through motive and opportunity. To the extent they are\n\nalleging some sort of generic profit motive, that gambit would fail under well-settled law. See\n\nECA, Local 134 IBEW Joint Pension Trust of Chi. v. JP Morgan Chase Co., 553 F.3d 187, 198\n\n(2d Cir. 2009) (\u201cMotives that are common to most corporate officers, such as the desire for the\n\ncorporation to appear profitable and the desire to keep stock prices high to increase officer\n\ncompensation, do not constitute \u2018motive\u2019 for purposes of [the scienter] inquiry.\u201d).\n\n To the extent Plaintiffs are alleging that Defendants had a motive or opportunity to commit\n\nfraud so that Binance (allegedly through Bifinity) could take control of Eqonex\u2019s Digivault (see\n\nAC \u00b6\u00b6 66\u201367), that makes no sense. Eqonex disclosed that (i) Bifinity was (a) entering into a\n\nstrategic partnership with Eqonex that would allow Bifinity to appoint a number of officers and\n\nnominate directors and, thus, make strategic decisions over Eqonex\u2019s business lines including\n\nDigivault, and (b) even discussing whether to potentially merge with Eqonex; and (ii) a key initial\n\npriority of the strategic partnership was to leverage Digivault. (See id. \u00b6\u00b6 47-50). Thus, investors\n\nknew that Bifinity effectively controlled, or was going to control, Digivault anyway\u2014and\n\ncommitting securities fraud would have done nothing to advance that supposed objective. See In\n\nre Fed Ex Corp. Sec. Litig., 517 F. Supp. 3d 216, 237 (S.D.N.Y. 2021) (\u201cTo adequately plead\n\nmotive and opportunity, a plaintiff must allege that the defendant benefitted in some concrete and\n\npersonal way from the purported fraud.\u201d).\n\n\n\n\n 16\n\f Case 1:23-cv-03346-GHW Document 47 Filed 01/12/24 Page 23 of 32\n\n\n\n\n Second, the Complaint contains no facts to even suggest conscious misbehavior or\n\nrecklessness. Plaintiffs do not allege a single fact to show that a single Defendant knew that a\n\nsingle alleged misstatement was false when made (or knew the information that was supposedly\n\nomitted). The Complaint is devoid of anything to support Plaintiffs\u2019 fanciful theory that\n\nDefendants must have known that Binance had a master plan to use Digivault for its own purposes\n\nand hang the rest of Eqonex out to dry. The Complaint does not cite, for example, to a single\n\ndocument, a single meeting, or a single statement from a single confidential witness. Instead,\n\nPlaintiffs support their speculation with only boilerplate allegations. (See, e.g., AC \u00b6 86 (\u201cPrimary\n\nViolators, who were the senior officers and/or directors of Eqonex, had actual knowledge of the\n\nmaterial omissions and/or the falsity of the material statements . . . or, in the alternative, acted with\n\nreckless disregard for the truth[.]\u201d); id. \u00b6 92 (\u201cBecause of their roles, [Defendants] knew the\n\nadverse non-public information regarding Eqonex\u2019s business.\u201d)). That is insufficient. See ATSI\n\nCommc\u2019ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007) (\u201c[T]he plaintiff must provide\n\nthe grounds upon which his claim rests through factual allegations sufficient \u2018to raise a right to\n\nrelief above the speculative level.\u2019\u201d) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555\n\n(2007)); see also Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) (\u201cWhile legal conclusions can\n\nprovide the framework of a complaint, they must be supported by factual allegations.\u201d).\n\n Plaintiffs also insinuate that Defendants must have been using Digivault to circumvent the\n\nFCA\u2019s ban based on generalized assertions that Binance supposedly has \u201cacted to subvert financial\n\nregulators,\u201d including the FCA, in the past. (See AC \u00b6\u00b6 64\u201366). But these unsubstantiated\n\naccusations about other events do nothing to help Plaintiffs allege conscious misbehavior in this\n\ncase. See Saraf v. Ebix, Inc., 632 F. Supp. 3d 389, 400-01 (S.D.N.Y. 2022) (\u201c[P]revious instances\n\nin which [defendant] was accused of misconduct, including undisclosed tax investigations\u201d did not\n\n\n\n\n 17\n\f Case 1:23-cv-03346-GHW Document 47 Filed 01/12/24 Page 24 of 32\n\n\n\n\nsupport scienter); see also Campo, 635 F. Supp. 2d at 336 (\u201c[G]eneric and conclusory allegations\n\nbased upon rumor or conjecture are undisputedly insufficient to satisfy . . . [the PSLRA]\u201d);\n\nFaulkner, 156 F. Supp. 2d at 395-96 (declining to find recklessness where \u201cthe Complaint [was]\n\ndevoid of any facts which would support\u201d the allegation regarding defendant\u2019s state of mind).\n\n C. The Complaint Fails to Adequately Allege Loss Causation\n\n \u201cTo plead loss causation, the complaint[] must allege facts that support an inference that\n\n[the alleged] misstatements and omissions concealed the circumstances that bear upon the loss[.]\u201d\n\nLentell v. Merrill Lynch & Co., Inc., 396 F.3d 161, 175 (2d Cir. 2005). This can be accomplished\n\nwith: (i) a plausible \u201callegation that the market reacted negatively to a corrective disclosure\n\nregarding the falsity\u201d of the alleged misstatements, id. at 175, or (ii) plausible allegations that the\n\n\u201cmisstatements or omissions concealed a risk that later materialized to cause the plaintiff\u2019s loss,\u201d\n\nBoluka Garment Co., Ltd. v. Canaan Inc., 547 F. Supp. 3d 439, 445 (S.D.N.Y. 2021). The\n\nComplaint here has neither.\n\n The Complaint does not allege a materialization-of-risk theory, and so it tries to allege that\n\nthe supposed \u201ctruth\u201d was revealed by allegedly \u201ccorrective\u201d disclosures. (See AC \u00b6\u00b6 59\u201363). But\n\na disclosure can be corrective \u201conly if it possesses a sufficient nexus to a prior misstatement such\n\nthat it reveals at least part of the [alleged] falsity of that misstatement.\u201d Plumbers, Pipefitters &\n\nMES Local Union No. 392 Pension Fund v. Fairfax Fin. Holdings, Ltd., 886 F. Supp. 2d 328, 337-\n\n38 (S.D.N.Y. 2012). Plaintiffs\u2019 two alleged corrective disclosures here do not.\n\n First, Plaintiffs rely on Eqonex\u2019s August 15, 2022 press release, which announced that (i)\n\nEqonex was closing its Exchange (see AC \u00b6 59); and (ii) the parties had agreed to increase\n\nBifinity\u2019s share charge of Digivault under the loan agreement (see id. \u00b6 12). But Eqonex never\n\nsaid it would keep its Exchange open for any specified period of time, nor did the parties ever\n\npromise that they would not modify their relationship with respect to Digivault. To the contrary,\n\n\n 18\n\f Case 1:23-cv-03346-GHW Document 47 Filed 01/12/24 Page 25 of 32\n\n\n\n\nas discussed above, Eqonex expressly disclosed that the Exchange might not be viable, and that it\n\nand Bifinity were engaged only in exploratory discussions that could result in several different\n\ntypes of partnerships (or none) going forward. (January Prospectus at 25; Yuhas Decl., Ex. 4).\n\nThus, because there is no nexus between the alleged misstatements and the allegedly corrective\n\ndisclosures, the Complaint fails to allege loss causation. See Fairfax, 886 F. Supp. 2d at 338\n\n(finding no loss causation where there was \u201cno logical connection\u201d between alleged misstatements\n\nand corrective disclosures). Moreover, if Eqonex\u2019s stock dropped because the market viewed the\n\nclosing of the Exchange as negative news, that would be insufficient. See Leykin v. AT & T Corp.,\n\n423 F. Supp. 2d 229, 245 (S.D.N.Y. 2006) (\u201c[L]oss causation is not pled upon allegations of drops\n\nin stock price following an announcement of bad news that does not disclose the fraud.\u201d).\n\n Second, Plaintiffs rely on Eqonex\u2019s November 21, 2022 disclosures that it was \u201ccurrently\n\nin breach\u201d of its loan agreement with Bifinity and that its \u201cfinancial resources . . . may not be\n\nsufficient to satisfy . . . working capital requirements . . . which may cast significant doubt on\n\n[Eqonex\u2019s] ability to continue as a going concern.\u201d (AC \u00b6 62). But the breach was a new\n\ndevelopment that did not contradict any prior statement\u2014and certainly did not \u201ccorrect\u201d the mere\n\ndisclosure that the parties had entered into a loan agreement. Nor did the statement that there was\n\n\u201cdoubt\u201d about Eqonex\u2019s ability to continue as a going concern correct any prior statement. Thus,\n\nthe November 2022 disclosure \u201cdid not provide investors with enough information to conclude . .\n\n. that [Defendants\u2019] prior statements were in some way false.\u201d In re Take-Two Interactive Sec.\n\nLitig., 551 F. Supp. 2d 247, 284 (S.D.N.Y. 2008); see also In re PetroChina Co. Ltd. Sec. Litig.,\n\n120 F. Supp. 3d 340, 368 (S.D.N.Y. 2015) (finding an article generally touching on allegedly\n\nconcealed issues insufficient where it \u201c[did] not immediately reveal the falsity of any of\n\n[defendant\u2019s] alleged misrepresentations or omissions\u201d).\n\n\n\n\n 19\n\f Case 1:23-cv-03346-GHW Document 47 Filed 01/12/24 Page 26 of 32\n\n\n\n\nII. THE CLAIMS FAIL AGAINST EACH DEFENDANT FOR OTHER REASONS\n\n Plaintiffs\u2019 claims also fail for additional reasons as to each Defendant. These failures\n\nlargely arise from the same problem: Plaintiffs are suing the wrong people and entities. Although\n\nPlaintiffs are Eqonex shareholders complaining about Eqonex\u2019s public disclosures, they are not\n\nsuing Eqonex. 5 Rather, because Eqonex is insolvent, Plaintiffs have tried to manufacture a claim\n\nagainst others who are connected (and many who are quite remotely connected) to Eqonex.\n\n In any event, Plaintiffs fail to allege a primary violation because, among other reasons, they\n\ndo not assert a Section 10(b) claim against any \u201cmaker\u201d of any alleged misstatement. See Janus\n\nCap. Grp., Inc. v. First Derivative Traders, 564 U.S. 135, 142 (2011) (holding that the maker \u201cis\n\nthe person or entity with ultimate authority over the statement, including its content and whether\n\nand how to communicate it\u201d). Their Section 20(a) claims for control-person liability fail because\n\nthe Complaint contains no factual allegations to show that any Defendant (let alone each one)\n\nactually controlled Eqonex\u2019s public statements. This case, then, is largely an improper attempt to\n\nbring \u201caiding and abetting\u201d claims\u2014which are not available for private plaintiffs. See Cent. Bank\n\nof Denver, N.A. v. First Interstate Bank of Denver, N.A., 511 U.S. 164 (1994).\n\n A. Plaintiffs Fail to State Section 10(b) Claims Against Hai and Farnell\n\n Defendant Hai. Defendant Hai is alleged to have been an Eqonex Director from March\n\n17 to April 28, 2022. (AC \u00b6 31). She is alleged to have made only one misstatement, contained\n\nin Eqonex\u2019s March 7 press release, that Eqonex\u2019s \u201cinstitutional approach and ability to utilize\n\nglobal regulatory frameworks to build a compliant business directly complements our retail focus\n\nand will greatly benefit Bifinity over the long-term.\u201d (Id. \u00b6 48). Hai obviously was the \u201cmaker\u201d\n\n\n\n5\n Confusingly (and inconsistently), Plaintiffs name (i) Eqonex in the case caption, (ii) refer to Eqonex as a\n\u201cnon-party defendant\u201d (AC \u00b6 1), and (iii) assert no causes of action against Eqonex.\n\n\n\n 20\n\f Case 1:23-cv-03346-GHW Document 47 Filed 01/12/24 Page 27 of 32\n\n\n\n\nof that statement, but it is paradigmatic\u2014and inactionable\u2014puffery. She, however, cannot fairly\n\nbe said to be the \u201cmaker\u201d of any other statements in Eqonex\u2019s March 7 release: she (i) was not yet\n\nan Eqonex Board member (see id. \u00b6 31); (ii) was identified in that very release only as \u201cPresident\n\nof Bifinity\u201d (Yuhas Decl., Ex. 6); and (iii) did not sign the press release (Eqonex\u2019s CFO did) (see\n\nid.). Thus, Plaintiffs cannot state any claim against her based on the March 7 release. See Stratte-\n\nMcClure v. Morgan Stanley, 784 F. Supp. 2d 373, 384 n.8 (S.D.N.Y. 2011) (noting that\n\n\u201c[o]bviously . . . statements made\u201d when defendants were not working at the relevant company\n\n\u201ccan not be attributed to them\u201d for Section 10(b) purposes); see also In re Lululemon Sec. Litig.,\n\n14 F. Supp. 3d 553, 576 n.14 (S.D.N.Y. 2014) (holding that without any \u201cparticularized allegations\n\nthat he had any role in shaping their content,\u201d a former executive could not be held liable for\n\nstatements he did not sign).\n\n As for the March 17 press release, that was Defendant Hai\u2019s very first day as an Eqonex\n\nDirector, and she did not sign that statement either. Again, Eqonex\u2019s CFO did. (See Yuhas Decl.,\n\nEx. 7) (signed by Paul Ewing)). Plaintiffs allege no facts to tie Defendant Hai to the March 17\n\npress release, so for similar reasons as discussed above, she was not its \u201cmaker.\u201d\n\n Moreover, the claims against Defendant Hai should be dismissed on the independent basis\n\nthat there is not a single substantive allegation about her in the entire Complaint. Thus, in addition\n\nto failing to allege that she made an actionable misstatement, Plaintiffs fail to allege scienter. See\n\nWestchester Teamsters Pension Fund v. UBS AG, 604 F. App\u2019x 5, 7 (2d Cir. 2015) (finding failure\n\nto allege scienter when pleadings included no defendant-specific facts).\n\n Defendant Farnell. Like Defendant Hai, Defendant Farnell is not alleged to have joined\n\nEqonex until March 17, 2022. (See AC \u00b6 28). Thus, for the same reasons discussed above, he did\n\nnot \u201cmake\u201d any statement in the March 7 press release (which he did not sign either).\n\n\n\n\n 21\n\f Case 1:23-cv-03346-GHW Document 47 Filed 01/12/24 Page 28 of 32\n\n\n\n\n As for the March 17 release, Defendant Farnell is quoted only as saying that Eqonex\u2019s\n\nbusiness lines were an \u201copportunity to create a full ecosystem by harnessing Bifinity\u2019s technology,\n\nmarketing clout and client base,\u201d which would have \u201cthe potential to be transformative for the\n\nindustry,\u201d and that he was \u201clooking forward to fostering true collaboration and productivity across\n\nboth businesses across both teams.\u201d (Id. \u00b6 53). Although Defendant Farnell made these\n\nstatements, they are puffery and not adequately alleged to be false. As for the other statements in\n\nthe March 17 release, however, Defendant Farnell was not the \u201cmaker.\u201d He did not sign the\n\nrelease. (See Form 6-K, Yuhas Decl., Ex. 7 (signed by Paul Ewing)). Eqonex issued the release\n\n(which was most likely prepared before March 17) specifically to announce that Defendant Farnell\n\nhad been appointed to serve as the new CEO (it was entitled \u201cEQONEX Appoints New CEO as\n\npart of its Strategic Partnership with Bifinity\u201d \u2014 \u201cFormer Head of Binance UK Jonathan Farnell\n\nappointed CEO of EQONEX\u201d). Courts have dismissed securities fraud claims in similar\n\nsituations. See, e.g., Lululemon, 14 F. Supp.3d at 576 n.14 (finding defendant could only be the\n\n\u201cmaker\u201d for statements that he signed and could \u201cnot be found liable for any other statements,\n\nbecause there [we]re no particularized allegations that he had any role in shaping their content.\u201d).\n\n In addition, as with Defendant Hai, the claims against Defendant Farnell should be\n\ndismissed for the independent reason that the Complaint does not have a single substantive\n\nallegation about him. Thus, besides failing to allege that he made an actionable misstatement,\n\nPlaintiffs fail to allege scienter. See Westchester Teamsters Pension Fund, 604 F. App\u2019x at 7.\n\n B. Plaintiffs\u2019 Section 20(a) Claims Fail as to All Defendants\n\n The Section 20(a) claims should be dismissed because, as discussed above, Plaintiffs have\n\nfailed to plead a primary violation. See Woodley v. Wood, 2022 WL 103563, at *10 (S.D.N.Y.\n\nJan. 11, 2022) (\u201cBecause Plaintiffs have inadequately pled a \u00a7 10(b) violation, they cannot make\n\na successful Section 20(a) claim.\u201d). But even if they had, the control-person claims still fail.\n\n\n 22\n\f Case 1:23-cv-03346-GHW Document 47 Filed 01/12/24 Page 29 of 32\n\n\n\n\n To state a claim under Section 20(a), Plaintiffs must plead facts showing \u201cthat the\n\ncontrolling person was in some meaningful sense a culpable participant in the fraud,\u201d which\n\nrequires \u201cplead[ing] with particularity facts giving rise to a strong inference that the defendant\n\nacted with . . . scienter.\u201d See Fila v. Pingtan Marine Enter. Ltd., 195 F. Supp. 3d 489, 499\n\n(S.D.N.Y. 2016). The Complaint here does not even try. Plaintiffs do not include any substantive\n\nallegations\u2014whether relating to scienter or otherwise\u2014about any specific Defendant. Instead, as\n\ndiscussed above, Plaintiffs merely lob in the boilerplate and conclusory allegations that\n\n\u201cDefendants\u201d as a group knew the supposed misstatements were false (AC \u00b6 34)\u2014without alleging\n\nthe who, what, when, where, why, or how. That is insufficient. See Greco, 2022 WL 4226022, at\n\n*25 (\u201cGroup pleading of scienter runs afoul of the PSLRA\u2019s requirement that a plaintiff state with\n\nparticularity facts giving rise to a strong inference [of scienter].\u201d).\n\n Nor do Plaintiffs allege facts showing that any Defendant\u2014let alone each\u2014controlled the\n\nalleged misstatements at issue. See In re Smith Barney Transfer Agent Litig., 884 F. Supp. 2d 152,\n\n165, 167 (S.D.N.Y. 2012) (explaining that \u201cofficer or director status alone does not constitute\n\ncontrol\u201d and holding that an individual defendant could not be liable as a control person absent\n\nallegations that he \u201csigned, drafted, approved, or confirmed a misleading statement\u201d). Instead,\n\nPlaintiffs again resort to conclusions and group pleading\u2014alleging only that (i) \u201c[t]he Eqonex\n\nIndividual Defendants possessed the power and authority to control the contents of Eqonex\u2019s SEC\n\nfilings, press releases, and other market communications\u201d and \u201cwere provided with copies of the\n\n[sic] Eqonex\u2019s SEC filings alleged herein to be misleading prior to or shortly after their issuance\n\nand had the ability and opportunity to prevent their issuance or to cause them to be corrected\u201d (AC\n\n\u00b6 34); and (ii) \u201c[b]ecause of their positions of control and authority as senior officers and\n\ncontrollers of Eqonex, Defendants were able to, and did, control the contents of the various reports,\n\n\n\n\n 23\n\f Case 1:23-cv-03346-GHW Document 47 Filed 01/12/24 Page 30 of 32\n\n\n\n\npress releases and public filings which Eqonex disseminated in the marketplace during the Class\n\nPeriod\u201d (id. \u00b6 94). These conclusory allegations are insufficient as to all Defendants:\n\n Defendants Hai and Farnell. Plaintiffs fail to allege that either individual \u201csigned,\n\ndrafted, approved, or confirmed\u201d any of the alleged misstatements for the same reasons that\n\nPlaintiffs fail to allege that either was the \u201cmaker\u201d of any of the alleged misstatements (i.e., the\n\ntiming of the individuals\u2019 appointments and the fact neither signed the two press releases as issue).\n\n Defendants Ling and Cemmell. Plaintiffs\u2019 inclusion of these individuals as Defendants\n\nborders on frivolous. The Complaint alleges that (i) Defendant Ling \u201cbecame CFO and a director\n\nof Eqonex on April 28, 2022\u201d (id. \u00b6 29); and (ii) Defendant Cemmell \u201cwas appointed Chief\n\nCorporate Affairs Officer of Eqonex on March 31, 2022\u201d (id. \u00b6 30). Plaintiffs, however, do not\n\neven try to explain how these individuals could have controlled statements made on March 7 and\n\nMarch 17\u2014before either joined Eqonex. That pleading failure requires dismissal. See In re Philip\n\nServices Corp. Sec. Litig., 383 F. Supp. 2d 463, 487 (S.D.N.Y. 2004) (\u201cControl person liability\n\nattaches only to a person who was in control at the time that the liability . . . accrued.\u201d).\n\n Defendants Bifinity, Binance, and Zhao. Plaintiffs\u2019 allegations against these three\n\nDefendants are irresponsible at best. The Complaint does not even try to allege any facts to show\n\n(or even suggest) that any of them controlled Eqonex\u2019s public statements. Instead, Plaintiffs allege\n\nthat they controlled Eqonex generally. Specifically, the Complaint alleges that (i) because of its\n\nright to appoint a number of officers and nominate directors, \u201cBifinity (and, through Bifinity,\n\nBinance)\u201d took \u201ccontrol of Eqonex\u201d (AC \u00b6 7); and (ii) \u201cBifinity is wholly controlled by Defendant\n\nChangpeng\u201d Zhao, who was also \u201cthe co-founder and CEO of Binance\u201d (id. \u00b6\u00b6 6, 32).\n\n But just as an officer or director cannot be a control person through title alone, neither can\n\na parent company or controlling shareholder (let alone a CEO or controlling shareholder of a\n\n\n\n\n 24\n\f Case 1:23-cv-03346-GHW Document 47 Filed 01/12/24 Page 31 of 32\n\n\n\n\ncontrolling shareholder). See In re Flag Telecom Holdings, Ltd., Sec. Litig., 352 F. Supp. 2d 429,\n\n457-59, 469 (S.D.N.Y. 2005) (dismissing Section 20(a) claims against issuer\u2019s largest shareholder\n\nwho had the power to appoint directors). If it were\u2014and Plaintiffs were permitted to state a claim\n\nagainst Bifinity (let alone Binance and Zhao) based only on corporate control\u2014then every parent\n\ncompany and every controlling shareholder (and their owners) of every public company would be\n\nat risk for securities-fraud liability. That is as wrong as it sounds. 6\n\nIII. THE COMPLAINT FAILS TO ESTABLISH PERSONAL JURISDICTION\n\n To sue a defendant before this Court, Plaintiffs must allege \u201cfacts that, if credited, would\n\nsuffice to establish jurisdiction over the defendant.\u201d Penguin Grp. (USA) Inc. v. American\n\nBuddha, 609 F.3d 30, 34-35 (2d Cir. 2010). Group pleading is not permitted; rather, \u201c[a] plaintiff\n\nmust carry his burden with respect to each defendant individually.\u201d Berdeaux v. OneCoin Ltd.,\n\n561 F. Supp. 3d 379, 396 (S.D.N.Y. 2021). Plaintiffs do not even try. The Complaint fails to\n\nallege general jurisdiction because it does not allege the domicile of any individual, nor the\n\nprincipal place of business or state of incorporation of any entity. See Wilder v. News Corp., 2015\n\nWL 5853763, at *5-6 (S.D.N.Y. Oct. 7, 2015). The Complaint does not allege specific jurisdiction\n\nbecause it lacks factual allegations showing that any Defendant engaged in relevant conduct in the\n\nU.S. See, e.g., In re Braskem S.A. Sec. Litig., 246 F. Supp. 3d 731, 770 (S.D.N.Y. 2017) (no\n\njurisdiction where complaint \u201c[did] not allege, concretely, that [defendant] played any role in\n\nmaking, proposing, editing, or approving . . . public filings in the [U.S.]\u201d (emphasis in original)).\n\n CONCLUSION\n\n For the reasons set forth above, the Court should dismiss the Complaint with prejudice.\n\n\n6\n Even if mere ownership or control of the issuer were sufficient (it is not), Plaintiffs would have the same\ntiming problem as to these three that they have as to Defendants Hai and Farnell\u2014the Bifinity appointees\nwho started at Eqonex on March 17 and, thus, could not have controlled the March 7 or 17 statements.\n\n\n\n 25\n\f Case 1:23-cv-03346-GHW Document 47 Filed 01/12/24 Page 32 of 32\n\n\n\n\nDated: New York, New York Respectfully submitted,\nJanuary 12, 2024\n CAHILL GORDON & REINDEL LLP\n\n By: /s Samson A. Enzer\n Samson A. Enzer\n Edward N. Moss\n Victoria H. Yuhas\n 32 Old Slip\n New York, NY 10005\n (212) 701-3000\n\n Counsel for Defendants Binance, Bifinity,\n Jonathan Farnell, Daniel Ling, Almira Cemmell,\n Yu Helen Hai, and Changpeng Zhao\n\n\n\n\n 26\n\f","ocr_status":2,"date_upload":"2024-10-29T15:35:52.446534-07:00","document_number":"47","attachment_number":null,"pacer_doc_id":"127034743914","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Memorandum of Law in Support of Motion","acms_document_guid":""}],"date_created":"2024-01-12T18:07:24.020493-08:00","date_modified":"2025-01-09T03:52:14.831482-08:00","date_filed":"2024-01-12","time_filed":"20:09:12","entry_number":47,"recap_sequence_number":"2024-01-12.002","pacer_sequence_number":182,"description":"MEMORANDUM OF LAW in Support re: 46 MOTION to Dismiss . . Document filed by Bifinity UAB, Binance Group, Almira Cemmell, Zhao Changpeng, Jonathan Farnell, Yu Helen Hai, Daniel Ling..(Enzer, Samson) (Entered: 01/12/2024)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/375599177/","id":375599177,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67233991/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/383207202/","id":383207202,"tags":[],"absolute_url":"/docket/67233991/48/zhao-v-eqonex-limited/","date_created":"2024-01-12T18:07:23.109465-08:00","date_modified":"2026-06-23T03:59:06.791291-07:00","sha1":"43accf4b5941b728a3a10dbcccd48ad44a5d5ced","page_count":2,"file_size":180239,"filepath_local":"recap/gov.uscourts.nysd.597576/gov.uscourts.nysd.597576.48.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.597576/gov.uscourts.nysd.597576.48.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":" Case 1:23-cv-03346-GHW Document 48 Filed 01/12/24 Page 1 of 2\n\n\n\n\nUNITED STATES DISTRICT COURT\nSOUTHERN DISTRICT OF NEW YORK\n\n\nBIN LI, Individually and On Behalf of All Others Similarly\nSituated,\n Plaintiff,\n No. 23 Civ. 03346 (GHW)\n v.\n\nEQONEX LIMITED, BINANCE GROUP, BIFINITY\nUAB, JONATHAN FARNELL, DANIEL LING, ALMIRA\nCEMMELL, YU HELEN HAI, and ZHAO CHANGPENG,\n Defendants.\n\n\n DECLARATION OF VICTORIA H. YUHAS\n\n I, Victoria H. Yuhas, at 32 Old Slip, New York, NY 10005, state:\n\n 1. I am an associate at Cahill Gordon & Reindel LLP, attorneys for Defendants Binance\n\nGroup, 1 Bifinity UAB, Jonathan Farnell, Daniel Ling, Almira Cemmell, Yu Helen Hai, and\n\nChangpeng Zhao (collectively, the \u201cDefendants\u201d) in the above-captioned action, and am\n\nauthorized to practice law in this Court. I submit this declaration in support of the Defendants\u2019\n\nJanuary 12, 2024 motion to dismiss the Complaint. 2\n\n 2. Attached hereto as Exhibit 1 is a true and correct copy of the Convertible Loan Agreement\n\nbetween Eqonex and Bifinity filed with the SEC on April 29, 2022 and available 3 on the SEC\u2019s\n\nonline filing system, EDGAR (\u201cEDGAR\u201d).\n\n\n1\n Defendants expressly deny the existence of an entity known as \u201cBinance Group.\u201d\n2\n Capitalized terms used herein have the meaning assigned to them in the Defendants\u2019 January 12, 2024\nmemorandum of law filed herewith or, if not defined therein, in the Amended Class Action Complaint (ECF\nNo. 39).\n3\n Please note that words in this Declaration that appear in blue, underlined font are hyperlinks to the\nrelevant SEC filings on EDGAR.\n\f Case 1:23-cv-03346-GHW Document 48 Filed 01/12/24 Page 2 of 2\n\n\n\n\n 3. Attached hereto as Exhibit 2 are excerpts from a true and correct copy of Eqonex\u2019s January\n\nProspectus filed with the SEC on January 31, 2022 and available on EDGAR.\n\n 4. Attached hereto as Exhibit 3 are excerpts from a true and correct copy of Eqonex\u2019s 2022\n\nAnnual Report filed with the SEC on August 15, 2022 and available on EDGAR.\n\n 5. Attached hereto as Exhibit 4 are excerpts from a true and correct copy of Eqonex\u2019s\n\nBeneficial Ownership Report filed with the SEC on April 29, 2022 and available on EDGAR.\n\n 6. Attached hereto as Exhibit 5 are excerpts from a true and correct copy of Eqonex\u2019s\n\nAmendment No. 6 to Form F-1 Registration Statement filed with the SEC on May 2, 2022 and\n\navailable on EDGAR.\n\n 7. Attached hereto as Exhibit 6 is a true and correct copy of Eqonex\u2019s March 7, 2022 press\n\nrelease filed with the SEC on the same day and available on EDGAR.\n\n 8. Attached hereto as Exhibit 7 is a true and correct copy of Eqonex\u2019s March 17, 2022 press\n\nrelease filed with the SEC on the same day and available on EDGAR.\n\n I declare under penalty of perjury that the foregoing is true and correct. Executed on this\n\n12th day of January 2024.\n\n\n\n /s Victoria H. Yuhas\n Victoria H. Yuhas\n\n\n\n\n 2\n\f","ocr_status":2,"date_upload":"2026-06-22T06:14:33.004100-07:00","document_number":"48","attachment_number":null,"pacer_doc_id":"127034743953","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Declaration in Support of Motion","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/483517186/","id":483517186,"tags":[],"absolute_url":"/docket/67233991/48/1/zhao-v-eqonex-limited/","date_created":"2026-06-22T06:14:32.273442-07:00","date_modified":"2026-06-23T03:53:10.888356-07:00","sha1":"08f84d91284265df71a4ade7527c5ee5e0be9d40","page_count":20,"file_size":1986923,"filepath_local":"recap/gov.uscourts.nysd.597576/gov.uscourts.nysd.597576.48.1.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.597576/gov.uscourts.nysd.597576.48.1.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"Case 1:23-cv-03346-GHW Document 48-1 Filed 01/12/24 Page 1 of 20\n\n\n\n\n Exhibit 1\n\f Case 1:23-cv-03346-GHW Document 48-1 Filed 01/12/24 Page 2 of 20\nEX-99.1 2 d259398dex991.htm EX-99.1\n Exhibit 99.1\n\n DATED AS OF 7 March 2022\n\n BETWEEN\n\n BIFINITY UAB\n as Lender\n\n AND\n\n EQONEX LIMITED\n as Borrower\n\n CONVERTIBLE LOAN AGREEMENT\n\f Case 1:23-cv-03346-GHW Document 48-1 Filed 01/12/24 Page 3 of 20\n\nThis CONVERTIBLE LOAN AGREEMENT (the \u201cAgreement\u201d) is made as of 7 March 2022\n\n\nBETWEEN\n(1) BIFINITY UAB, a company established under the laws of the Republic of Lithuania and having its registered office at Did\u017eioji st. 18, Vilnius,\n Republic of Lithuania with registration number 305595206 (the \u201cLender\u201d),\n\n\nAND\n(2) EQONEX LIMITED, a limited liability company incorporated under the laws of Singapore, the shares of which are listed on the Nasdaq Stock\n Market (stock code NASDAQ: EQOS) (the \u201cBorrower\u201d),\n (collectively, the \u201cParties\u201d and each a \u201cParty\u201d).\n\n\nNOW IT IS HEREBY AGREED as follows:\n1. Definitions and Interpretation\n1.1 In this Agreement, unless the context otherwise requires, the following words shall have the following meanings:\n \u201cAuthorisation\u201d means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration.\n \u201cBorrower\u2019s Bank Account\u201d means the bank account as nominated by the Borrower and with its details as provided by the Borrower to the\n Lender prior to the first Drawdown Date.\n \u201cBusiness Day\u201d means a day (other than a Saturday or Sunday) on which banks are open for general business in London, Singapore and for the\n purposes of payment in USD, New York.\n \u201cConversion Notice\u201d means a written notice of conversion substantially in the form set out in Schedule 1 hereto.\n \u201cConversion Price\u201d means, with respect to each Tranche, the price per Conversion Share expressed as the 50-day moving average of the\n Borrower\u2019s public share price quoted on the NASDAQ stock market, calculated on the Business Day prior to the date of this Agreement.\n \u201cConversion Right\u201d means the right to convert the Loan into Conversion Shares pursuant to Clause 5 (Conversion);\n \u201cConversion Shares\u201d means the new Ordinary Shares to be issued by the Borrower to the Lender upon the exercise of the Conversion Right;\n \u201cData Room\u201d means the data room established and accessible by the Lender and the Borrower prior to the date of this Agreement for the\n purposes of the transaction contemplated in Clause 14.7 (Future discussions).\n \u201cDefault\u201d means an Event of Default or any event or circumstance specified in Clause 13 (Events of Default) which would (with the expiry of a\n grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be\n an Event of Default.\n \u201cDigivault\u201d means Digivault Limited, a private limited company registered in England and Wales with company number 11722222.\n \u201cDrawdown Date\u201d means, with respect to each Tranche, the date on which the funds of the relevant Tranche are disbursed to the Borrower by\n the Lender as set out in Clause 2.1 (Loan);\n \u201cFCA Registration\u201d means the registration of Digivault Limited by the UK Financial Conduct Authority as a custodian wallet provider under\n The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (as amended).\n \u201cFinance Document\u201d means this Agreement, the Transaction Security Document, any Drawdown Request and any other document designated\n as a \u201cFinance Document\u201d by the Lender and the Borrower.\n\n 2\n\f Case 1:23-cv-03346-GHW Document 48-1 Filed 01/12/24 Page 4 of 20\n\n \u201cGroup\u201d means the Borrower and its subsidiaries from time to time.\n \u201cInitial Drawdown Condition\u201d means the appointment of certain officers to the board of directors of the Borrower by the Lender in accordance\n with Clause 9 (Appointment of Directors and Officers).\n \u201cInitial Drawdown Date\u201d means 15 March 2022.\n \u201cLoan Amount\u201d means USD 36,000,000.\n \u201cMaterial Adverse Effect\u201d means a material adverse effect on:\n (a) the business, operations, property, condition (financial or otherwise) or prospects of the Group taken as a whole; or\n (b) the ability of the Borrower or any member of the Group to perform its obligations under the Finance Documents; or\n (c) the validity or enforceability of, or the effectiveness or ranking of any Security granted or purporting to be granted pursuant to any of,\n the Finance Documents or the rights or remedies of any Finance Party under any of the Finance Documents.\n \u201cMaturity Date\u201d means, with respect to each Tranche, the date that is 18 calendar months from the respective Drawdown Date.\n \u201cNotice of Conversion\u201d means a notice of conversion in respect of all or part of a Tranche, substantially in the form set out in Schedule 1 or any\n other form agreed between the Borrower and the Lender.\n \u201cOrdinary Shares\u201d means the ordinary shares issued by the Borrower from time to time;\n \u201cOriginal Jurisdiction\u201d means, in relation to the Borrower or any member of the Group, the jurisdiction under whose laws such entity is\n incorporated as at the date of this Agreement.\n \u201cRelevant Jurisdiction\u201d means, in relation to the Borrower or any member of the Group:\n (a) its Original Jurisdiction;\n (b) any jurisdiction where any asset subject to or intended to be subject to the Transaction Security to be created by it is situated;\n (c) any jurisdiction where it conducts its business; and\n (d) the jurisdiction whose laws govern the perfection of the Transaction Security Document entered into by it.\n \u201cSecurity\u201d means a mortgage, charge, pledge, lien, hypothec or other security interest securing any obligation of any person or any other\n agreement or arrangement having a similar effect.\n \u201cShares\u201d means any class of shares in the capital of the Borrower.\n \u201cTermination Date\u201d means 31 July 2024.\n \u201cTransaction Security\u201d means the Security created or expressed to be created in favour of the Lender pursuant to the Transaction Security\n Document.\n \u201cTransaction Security Document\u201d means the share charge granted by the Borrower in favour of the Lender over 24.9% of the shares of\n Digivault.\n \u201cUSD\u201d or \u201cUS$\u201d means the lawful currency of the United States of America.\n\n1.2 In this Agreement, unless the context otherwise requires, a reference to:\n (i) \u201cthis Agreement\u201d means this convertible loan agreement and includes all amendments, additions, and variations thereto agreed\n between the Parties;\n (ii) the \u201cBorrower\u201d, the \u201cLender\u201d or any \u201cParty\u201d shall be construed so as to include its successors in title, permitted assigns and permitted\n transferees to, or of, its rights and/or obligations under this Deed;\n\n 3\n\f Case 1:23-cv-03346-GHW Document 48-1 Filed 01/12/24 Page 5 of 20\n\n (iii) \u201cperson\u201d shall include an individual, corporation, partnership, firm, trust, trustee, legal personal representative, unincorporated\n association, joint venture, syndicate or other business enterprise or any governmental, administrative or regulatory authority;\n (iv) \u201cwritten\u201d and \u201cin writing\u201d include any means of visible reproduction;\n (v) a word or phrase that is defined in this Agreement includes its other grammatical forms, which shall be construed accordingly;\n (vi) a gender includes any gender and the singular number includes the plural number, and vice versa;\n (vii) \u201cinclude\u201d or \u201cincluding\u201d is to be construed as incorporating \u201cbut not limited to\u201d or \u201cwithout limitation\u201d;\n (viii) a \u201ccalendar month\u201d means a period starting on one (1) day in a calendar month and ending on the numerically corresponding day in\n the next calendar month, except that: (A) if the numerically corresponding day is not a Business Day, that period shall end on the next\n Business Day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding\n Business Day and (B) if there is no numerically corresponding day in the calendar month in which that period is to end, that period\n shall end on the last Business Day in that calendar month; and\n (ix) \u201cClauses\u201d, and \u201cSchedules\u201d are to the clauses of, and the schedules to, this Agreement (unless the context otherwise requires). The\n Schedules form part of this Agreement and have the same force and effect as if expressly set out in the body of this Agreement.\n1.3 Clause headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this\n Agreement.\n1.4 Any thing or obligation to be done under the Finance Documents which is required or falls to be done on a stipulated day shall be done on the\n next Business Day, if the day upon which that thing or obligation is required or falls to be done falls on a day which is not a Business Day.\n\n\n2. Loan\n2.1 The Lender makes available to the Borrower a convertible loan (the \u201cLoan\u201d) equal to the Loan Amount in six tranches (each a \u201cTranche\u201d) on\n the following dates, subject in all respects to the Initial Drawdown Condition, and in the following amounts:\n (a) 15 March 2022, USD 3,000,000;\n (b) 15 April 2022, USD 3,000,000;\n (c) 15 May 2022, USD 3,000,000;\n (d) 15 June 2022, USD 9,000,000;\n (e) 15 September 2022, USD 9,000,000; and\n (f) 15 December 2022, USD 9,000,000.\n2.2 Each Tranche shall be disbursed by the Lender into the Borrower\u2019s Bank Account on the respective Drawdown Date.\n2.3 Where the Initial Drawdown Condition has not been satisfied on or prior to the Initial Drawdown Date, the Initial Drawdown Date shall be the\n first Business Day following satisfaction of the Initial Drawdown Condition and the subsequent Drawdown Dates shall be amended accordingly.\n\n\n3. Conditions of Loan\n3.1 The obligation of the Lender to make available the Loan to the Borrower on a Drawdown Date shall be conditional upon the following\n (\u201cConditions Precedent\u201d):\n (a) a copy of this Agreement and the Transaction Security Document duly executed by the Borrower;\n\n 4\n\f Case 1:23-cv-03346-GHW Document 48-1 Filed 01/12/24 Page 6 of 20\n\n (b) a formal written request (a \u201cDrawdown Request\u201d) not less than 3 Business Days prior to each Drawdown Date from the Borrower to\n the Lender to borrow an amount not exceeding the amount of the relevant Tranche detailed in Clause 2.1 above;\n\n (c) a copy of a resolution of the board of directors and (if required by applicable law, regulation, listing requirements or the\n constitutional documents of the Borrower) shareholders of the Borrower:\n (A) approving the terms of and the transactions contemplated by the Finance Documents and resolving that it\n execute, deliver and perform the Finance Documents;\n (B) authorising a specified person or persons to execute the Finance Documents on its behalf; and\n (C) authorizing a specified person or persons, on its behalf, to sign and/or despatch all documents and notices\n (including, if relevant, any Drawdown Request) to be signed and/or despatched by it under or in connection\n with the Finance Documents;\n (i) in respect of the Initial Drawdown Date, a copy of the resolution of the shareholders of Digivault Limited amending the articles\n of association of Digivault Limited to remove certain restrictions on the transfer of shares; and\n (d) all the representations and warranties set out in this Agreement being accurate and correct in all material respects at, and as if made on,\n that Drawdown Date.\n3.2 The Borrower undertakes to use the proceeds of the Loan for the purposes of financing the operations and growth of the Borrower and other\n general corporate purposes.\n\n\n4. Interest\n4.1 Subject to Clause 4.4 below, each Tranche of the Loan shall accrue interest at the rate of 4% per annum until such time as the amount\n outstanding under such Tranche is either repaid to the Lender or converted into Ordinary Shares pursuant to this Agreement (\u201cInterest\u201d).\n4.2 The Borrower shall pay accrued interest on a Tranche on the Maturity Date of that Tranche.\n4.3 Any Interest payable under this Agreement shall be calculated according to the actual number of days elapsed and a year of 365 days.\n4.4 Where the Conversion Right attached to all (or a portion) of a Tranche shall have been validly exercised, Interest shall cease to accrue on all (or\n a portion) of such Tranche so converted from and including the relevant Conversion Date.\n4.5 If the Borrower fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the overdue amount\n from the due date up to the date of actual payment (both before and after judgment) at a rate which is two (2) per cent. per annum higher than the\n rate which would have been payable if the overdue amount had, during the period of non-payment, constituted a Loan. Any interest accruing\n under this Clause 4.5 shall be immediately payable by the Borrower on demand by the Lender.\n\n\n5. Tax gross-up and indemnity\n5.1 If the Borrower or any member of the Group is compelled by law to make any deduction or withholding from any sum payable under any\n Finance Document to the Lender, the sum so payable by the Borrower or any member of the Group shall be increased so as to result in the\n receipt by Lender of a net amount equal to the full amount expressed to be payable under the relevant Finance Document.\n\n 5\n\f Case 1:23-cv-03346-GHW Document 48-1 Filed 01/12/24 Page 7 of 20\n\n5.2 The Borrower shall (within three Business Days of demand) pay to the Lender an amount equal to the loss, liability or cost which the Lender\n determines will be or has been (directly or indirectly) suffered for or on account of tax by the Lender in respect of a Finance Document.\n\n\n6. Conversion\n6.1 The Lender may in its sole and absolute discretion, at any time while any part of the Loan remains outstanding, convert all (or a portion) of a\n Tranche (and all accrued but unpaid Interest under this Agreement in connection with all (or a portion) of the relevant Tranche being converted)\n (the \u201cConversion Amount\u201d) into Ordinary Shares. Such conversion right shall be exercised in accordance with Clause 7 (Conversion\n Procedure).\n6.2 Subject to Clause 6.4, the Conversion Amount shall be converted into such number of Ordinary Shares at the Conversion Price (\u201cConversion\n Shares\u201d). The number of Conversion Shares to be issued on a conversion of any portion (or all) of a Tranche pursuant to this Clause 6 shall be\n determined by dividing the amount to be converted by the Conversion Price in effect at the Conversion Date. The Parties hereby agree and\n confirm that in the event that the number of Conversion Shares to be allotted and issued to the Lender pursuant to this Clause 6.2 is not a whole\n number, such number of Conversion Shares to be allotted and issued to the Lender shall be rounded down to the nearest whole number. The\n Parties further agree that fractions of Shares will not be issued on any conversion and no cash adjustments will be made by the Borrower in\n respect thereof.\n6.3 The Conversion Shares shall be credited as fully paid up and free from all encumbrances, and will rank pari passu in all respects with the then\n existing Ordinary Shares.\n6.4 Notwithstanding anything to the contrary set out in this Agreement, the Lender shall not exercise its Conversion Right to the extent that to do so\n would:\n (a) cause any breach by the Borrower of any law or regulation applicable to it; or\n (b) (unless a requisite waiver from the provisions of the Singapore Takeover Code has been obtained) cause the Lender to hold more than\n 29.9% of the entire issued share capital of the Borrower.\n\n\n7. Conversion Procedure\n7.1 Conversion Notice\n To exercise the Conversion Right attaching to a Tranche (including any portion thereof), the Lender shall complete, execute and deliver a Notice\n of Conversion to the Borrower.\n\n\n7.2 Conversion Date\n The conversion date in respect of a Tranche (or any portion thereof) (the \u201cConversion Date\u201d) shall be the next Business Day following the date\n of the relevant Conversion Notice.\n\n\n7.3 Issue of Conversion Shares and Registration\n As soon as practicable on or before the tenth Business Day after the Conversion Date, the Borrower shall (upon exercise by the Lender of the\n Conversion Right and in respect of which a duly completed Conversion Notice has been delivered as required by this Clause 7) issue to the\n Lender (or such other person designated for the purpose in the Conversion Notice) the relevant numbers of Conversion Shares and shall\n immediately upon the issue of those Conversion Shares, file the return of allotment of shares with the Accounting and Corporate Regulatory\n Authority of Singapore in relation to the Lender (or such other person designated for the purpose in the Conversion Notice) in the share register\n of the Borrower as the holder of those Conversion Shares as at the Conversion Date.\n\n 6\n\f Case 1:23-cv-03346-GHW Document 48-1 Filed 01/12/24 Page 8 of 20\n\n8. Repayment of Loan\n Subject to Clause 6, the Borrower shall repay the full outstanding amount of each Tranche (which for the avoidance of doubt, shall not include\n any portion of such Tranche that has been converted into Conversion Shares), together with accrued but unpaid Interest, to the Lender on each\n Maturity Date and, with respect to the final Tranche, on the Termination Date.\n\n\n9. Appointment of Directors and Officers\n9.1 On and from the date of this Agreement and for so long as any amount of the commitment and/or Loan and/or accrued Interest remain\n outstanding under the Finance Documents, the Lender shall have the right (subject to applicable law) to appoint the following officers of the\n Borrower:\n (a) Chief Executive Officer;\n (b) Chief Financial Officer; and\n (c) Chief Legal Officer.\n9.2 On and from the date of this Agreement and for so long as any amount of the commitment and/or Loan and/or accrued Interest remain\n outstanding under the Finance Documents, the Lender shall be entitled to appoint two of the appointees specified in Clause 9.1 above as\n directors of the Borrower, provided that each such appointment shall be made in accordance with the constitutional documents of the Borrower\n and applicable laws, regulations and listing requirements.\n9.3 The Lender shall provide all reasonable assistance and cooperation in the provision of such documents, information, action and other assistance\n that the Borrower may reasonably require to effect any appointment contemplated under Clauses 9.1 and 9.2 above and to maintain the FCA\n Registration of Digivault.\n\n\n10. FCA\n10.1 If the UK Financial Conduct Authority expresses any objection to any shareholder of the Lender becoming a beneficial owner (as such term is\n defined under The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017) of Digivault\n Limited as a result of the entry into the Finance Documents:\n (a) the Lender has the right to propose new prospective investors in the Borrower to the Borrower;\n (b) the Borrower may agree to any investment proposed by any such new investor, with the prior written consent of the Lender; and\n (c) the Lender has the right to:\n (i) sell its shares in the Borrower to any such new investor in priority to any shares held by any other shareholder in the Borrower\n or any new issuance of shares by the Borrower;\n (ii) have any amounts outstanding under the Finance Documents repaid out of the proceeds of such new investment; and\n (iii) cancel any undrawn and outstanding commitments under the Finance Documents, up to the total amount of such new\n investment (after taking into account any amounts of such new investment expended under sub-paragraphs (i) and (ii) above)).\n\n\n11. Company\u2019s Undertakings\n11.1 The Borrower shall, and shall ensure that each member of the Group will, so long as any amount of the Loan and/or accrued Interest remain\n outstanding to the Lender under the Finance Documents:\n (a) promptly obtain, comply with and do all that is necessary to maintain in full force and effect any Authorisation (including the FCA\n Registration) required under any law or regulation of a Relevant Jurisdiction to:\n (i) enable it to perform its obligations under the Finance Documents;\n (ii) ensure the legality, validity, enforceability or admissibility in evidence of any Finance Document; and\n\n 7\n\f Case 1:23-cv-03346-GHW Document 48-1 Filed 01/12/24 Page 9 of 20\n\n (iii) carry on its business as conducted as at the date of this Agreement.\n (b) notify the Lender in writing of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its\n occurrence and promptly following a request from the Lender supply a certificate signed by a director or senior officer on its behalf\n certifying that no Default is continuing (or if a Default is continuing, specifying the Default and the steps, if any, being taken to remedy\n it);\n (c) comply in all material respects with all laws to which it may be subject, if failure so to comply would materially impair its ability to\n perform its obligations under the Finance Documents; and\n (d) ensure that at all times any unsecured and unsubordinated claims of the Lender against it under the Finance Documents rank at least\n pari passu with the claims of all its other unsecured and unsubordinated creditors except those creditors whose claims are mandatorily\n preferred by laws of general application to companies.\n11.2 So long as any amount of the Loan and/or accrued Interest remain outstanding under the Finance Documents, the Borrower shall not, and shall\n ensure that no member of the Group will, (without the Lender\u2019s prior written approval) undertake or incur any of the following:\n (a) any single cost or expense in excess of USD 500,000, or monthly cumulative related costs or expenses in excess of USD 1,000,000;\n (b) capital expenditures in excess of USD 100,000 per month;\n (c) transactions with related parties;\n (d) declare, make or pay any dividend or other distribution (whether in cash or in kind) on or in respect of its share capital;\n (e) financial indebtedness other than any financial indebtedness incurred for the sole purpose of and contemporaneously with repaying a\n Tranche of the Loan on its Maturity Date in an amount not exceeding the amount required to repay such Tranche of the Loan on its\n Maturity Date and (in the case of the repayment of the final Tranche of the Loan) to cover the Borrower\u2019s subsequent working capital\n requirements;\n (f) create or permit to subsist any Security over any of its assets;\n (g)\n (i) sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by the\n Borrower or any other member of the Group;\n (ii) sell, transfer or otherwise dispose of any of its receivables on recourse terms;\n (iii) enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject\n to a combination of accounts; or\n (iv) enter into any other preferential arrangement having a similar effect,\n in circumstances where the arrangement or transaction is entered into primarily as a method of raising financial indebtedness or of\n financing the acquisition of an asset (\u201cQuasi-Security\u201d);\n (h) equity issuances other than (i) market making agreements with GSR Markets Limited, Parallel Management Limited and Kronos Asset\n Management Limited, provided such equity issuances are made in accordance with the terms of the corresponding market making\n agreements disclosed in the Data Room and/or (ii) for the sole purpose of and contemporaneously with repaying a Tranche of the Loan\n in an amount not exceeding the amount required to repay such Tranche of the Loan on its Maturity Date and (in the case of the\n repayment of the final Tranche of the Loan) to cover the Borrower\u2019s subsequent working capital requirements;\n\n 8\n\f Case 1:23-cv-03346-GHW Document 48-1 Filed 01/12/24 Page 10 of 20\n\n (i) payment or award of any bonus to staff or payment of any extraordinary compensation unless recommended to the Borrower\u2019s\n Nomination and Compensation Committee by the Chief Executive Officer and the Chief Financial Officer and subsequently approved\n by such Committee; and\n (j) prepayment of all of any part of the Loan other than as expressly permitted by the terms of this Agreement.\n\n\n12. Representations and Warranties\n12.1 The Borrower makes the representations and warranties set out in this Clause 12.1 in respect of itself and each member of the Group to the\n Lender on the date of this Agreement and on each Drawdown Date:\n (a) it is duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation;\n (b) it has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and\n delivery of, the Finance Documents, and the transactions contemplated by the Finance Documents;\n (c) the obligations expressed to be assumed by it in each Finance Document are legal, valid, binding and enforceable obligations,\n enforceable against it in accordance with its terms;\n (d) the entry into and performance by it of, and the transactions contemplated by, the Finance Documents and the granting of the Security\n do not and will not conflict with its constitutive documents, any agreement or arrangement to which it or its assets are bound, or any\n law, regulation or order to which it or its asset is bound or subject;\n (e) no limits on its powers will be exceeded as a result of the borrowing, grant of security or giving of guarantees or indemnities\n contemplated by the Finance Documents to which it is a party;\n (f) the execution and delivery of, and the performance by it of its obligations under, the Finance Documents to which it is a party and as\n contemplated therein will not require it to obtain any consent or approval of, or give any notice to or make any registration with, any\n governmental, regulatory or other authority which has not been obtained or made at the date hereof both on an unconditional basis and\n on a basis which cannot be revoked (save pursuant to any legal or regulatory entitlement to revoke the same other than by reason of any\n misrepresentation or misstatement);\n (g) all Authorisations required to conduct its business have been obtained and are in full force and effect;\n (h) the FCA Registration is in full force and effect;\n (i) it is in compliance with all listing requirements of any stock exchange or regulatory authority on which its shares are admitted to\n trading;\n (j) no regulatory or governmental authority or any stock exchange has threatened or taken any steps to suspend and/or revoke any\n Authorisations (including, but not limited to, the FCA Registration) or listing;\n (k) the choice of governing law of the Finance Documents will be recognized and enforced in its Relevant Jurisdictions and any judgment\n obtained in relation to a Finance Document in the jurisdiction of the governing law of that Finance Document will be recognized and\n enforced in its Relevant Jurisdiction;\n (l) no corporate action, legal proceeding or other procedure or step described in Clause 13.6 has been taken in relation to any member of\n the Group and none of the circumstances described in Clause 13.5 applies to any member of the Group;\n\n 9\n\f Case 1:23-cv-03346-GHW Document 48-1 Filed 01/12/24 Page 11 of 20\n\n (m) no Default is continuing or is reasonably likely to result from a utilisation of the Loan or the entry into, the performance of, or any\n transaction contemplated by, any Finance Document;\n (n) save as disclosed in writing to the Lender prior to the date of this Agreement, any factual information provided to the Lender was true\n and accurate in all material respects as at the date of the relevant document containing the information (or as the case may be) as at the\n date the information is expressed to be given;\n (o) so far as it is aware, it has conducted its business and affairs and dealt with its assets in all material respects in accordance with all\n applicable laws;\n (p) no Security or Quasi-Security exists over all or any of the present or future assets of any member of the Group;\n (q) the Transaction Security has or will have first ranking priority and is not subject to any prior ranking or pari passu ranking Security;\n (r) the shares which are subject to the Transaction Security are fully paid or credited as fully paid and not subject to any option to purchase\n or similar rights;\n (s) there are no actions, suits, claims or proceedings of material nature, pending or threatened against or affecting it or any of its property\n which, if adversely determined, would materially impair its ability to perform its obligations under the Finance Documents; and\n (t) no order has been made or petition presented or resolution passed for the winding-up or administration of the Borrower or any member\n of the Group, and to the best of the knowledge, information and belief of the Borrower or any member of the Group, there are no\n grounds on which any person would be entitled to have the Borrower or any member of the Group wound-up or placed in\n administration.\n12.2 The Lender makes the representations and warranties set out in this Clause 12 to the Borrower on the date of this Agreement and on each\n Drawdown Date:\n (a) it is duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation;\n (b) it has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and\n delivery of, the Finance Documents,and the transactions contemplated by the Finance Documents;\n (c) the obligations expressed to be assumed by it in each Finance Document are legal, valid, binding and enforceable obligations,\n enforceable against it in accordance with its terms;\n (d) the entry into and performance by it of, and the transactions contemplated by, the Finance Documents do not and will not conflict with\n its constitutive documents, any agreement or arrangement to which it or its assets are bound, or any law, regulation or order to which it\n or its asset is bound or subject; and\n (e) no corporate action, legal proceeding or other procedure or step described in Clause 13.6 has been taken in relation to it and none of the\n circumstances described in Clause 13.5 applies to it.\n\n\n13. Events of Default\n Each of the events or circumstances set out in this Clause 13 is an Event of Default (save for Clause 13.1 (Acceleration)).\n\n\n13.1 Non-payment\n The Borrower or any member of the Group does not pay on the due date any amount payable pursuant to a Finance Document at the place at and\n in the currency in which it is expressed to be payable unless:\n (a) its failure to pay is caused by administrative or technical error; and\n\n 10\n\f Case 1:23-cv-03346-GHW Document 48-1 Filed 01/12/24 Page 12 of 20\n\n (b) payment is made within 3 Business Days of its due date.\n\n\n13.2 Other obligations\n (a) The Borrower or any member of the Group does not comply with any provision of the Finance Documents (other than those referred to\n in Clause 13.1 (Non-payment).\n (b) No Event of Default under paragraph (a) above will occur if the failure to comply is capable of remedy and is remedied within 20\n Business Days of the earlier of (i) the Lender giving notice to the Borrower and (ii) the Borrower becoming aware of the failure to\n comply.\n\n\n13.3 Misrepresentation\n (a) Any representation or statement made or deemed to be made by the Borrower or any member of the Group in the Finance Documents\n or any other document delivered by or on behalf of the Borrower or any member of the Group under or in connection with any Finance\n Document is or proves to have been incorrect or misleading when made or deemed to be made.\n (b) No Event of Default under paragraph (a) above will occur if the failure to comply is capable of remedy and is remedied within 20\n Business Days of the earlier of (i) the Lender giving notice to the Borrower and (ii) the Borrower becoming aware of the failure to\n comply.\n\n\n13.4 Cross default\n (a) Any financial indebtedness of any member of the Group is not paid when due nor within any originally applicable grace period.\n (b) Any financial indebtedness of any member of the Group is declared to be or otherwise becomes due and payable prior to its specified\n maturity as a result of an event of default (however described).\n (c) Any commitment for any financial indebtedness of any member of the Group is cancelled or suspended by a creditor of any member of\n the Group as a result of an event of default (however described).\n (d) Any creditor of any member of the Group becomes entitled to declare any financial indebtedness of any member of the Group due and\n payable prior to its specified maturity as a result of an event of default (however described).\n\n\n13.5 Insolvency\n (a) A member of the Group:\n (i) is unable or admits inability to pay its debts as they fall due;\n (ii) is deemed to, or is declared to, be unable to pay its debts under applicable law;\n (iii) suspends or threatens to suspend making payments on any of its debts; or\n (iv) by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors (excluding the\n Lender in its capacity as such) with a view to rescheduling any of its indebtedness.\n (b) The value of the assets of any member of the Group is less than its liabilities (taking into account contingent and prospective liabilities).\n (c) A moratorium is declared in respect of any indebtedness of any member of the Group. If a moratorium occurs, the ending of the\n moratorium will not remedy any Event of Default caused by that moratorium.\n\n 11\n\f Case 1:23-cv-03346-GHW Document 48-1 Filed 01/12/24 Page 13 of 20\n\n13.6 Insolvency Proceedings\n (a) Any corporate action, legal proceedings or other procedure or step is taken in relation to:\n (i) the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by\n way of voluntary arrangement, scheme of arrangement or otherwise) of any member of the Group;\n (ii) a composition, compromise, assignment or arrangement with any creditor of any member of the Group;\n (iii) the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager or other similar officer in\n respect of any member of the Group or any of their assets; or\n (iv) enforcement of any Security over any assets of any member of the Group,\n or any analogous procedure or step is taken in any jurisdiction.\n (b) Paragraph (a) shall not apply to any winding-up petition which is frivolous or vexatious and is discharged, stayed or dismissed within\n 14 days of commencement.\n\n\n13.7 Creditors\u2019 Process\n Any expropriation, attachment, sequestration, distress or execution or any analogous process in any jurisdiction affects any asset or assets of a\n member of the Group and is not discharged within 30 days.\n\n\n13.8 Cessation of business\n Any member of the Group suspends or ceases to carry on (or threatens to suspend or cease to carry on) all or a material part of its business.\n\n\n13.9 Expropriation\n The authority or ability of any member of the Group to conduct its business is limited or wholly or substantially curtailed by any seizure,\n expropriation, nationalisation, intervention, restriction or other action by or on behalf of any governmental, regulatory or other authority or other\n person in relation to any member of the Group or any of its assets.\n\n\n13.10 Repudiation and rescission of agreements\n Any member of the Group rescinds or purports to rescind or repudiates or purports to repudiate a Finance Document or any of the Transaction\n Security or evidences an intention to rescind or repudiate a Finance Document or any Transaction Security\n\n\n13.11 Acceleration\n On and at any time after the occurrence of an Event of Default, the Lender may:\n (a) by notice to the Borrower:\n (i) cancel the Loan at which time the Loan shall be immediately cancelled any undrawn Tranche shall immediately cease to be\n available for utilisation;\n (ii) declare that all or part of the Loan, together with accrued interest and all other amounts accrued or outstanding under the\n Finance Documents be immediately due and payable, at which time they shall become immediately due and payable; and/or\n (iii) that all or part of the Loan be payable on demand, at which time it shall immediately become payable on demand by the Lender;\n and/or\n (b) exercise any or all of its rights, remedies, powers or discretions under the Finance Documents.\n\n 12\n\f Case 1:23-cv-03346-GHW Document 48-1 Filed 01/12/24 Page 14 of 20\n\n14. General Terms\n14.1 Entire Agreement\n The Parties expressly acknowledge that they have read this Agreement and have understood its provisions. No promise, inducement,\n representation or agreement other than as expressly set forth in this Agreement has been made to or by the Parties. The Parties agree that this\n Agreement, the Schedules hereto and all other documents referred to herein, shall constitute the entire agreement between them with respect to\n the subject matters of this Agreement, and shall supersede all prior or contemporaneous proposals, agreements and all other communications\n (whether written or oral, express or implied) entered into between the Parties in respect of the matters dealt with in it.\n\n\n14.2 Duration and Termination\n This Agreement shall terminate and cease to have any further force or effect upon the full repayment by the Borrower of all amounts due and\n owing to the Lender under the Finance Documents, upon the issuance of Conversion Shares, together with any amounts in excess of the\n Maximum Conversion Amount, in an amount equal to repay the Loan in full (as the case may be), or with the agreement of the Parties hereto in\n writing, whichever is earlier.\n\n\n14.3 Relationship of the Parties\n This Agreement shall not constitute or imply any partnership, joint venture, agency, fiduciary relationship or other relationship among the\n Parties.\n\n\n14.4 Assignment\n (a) The Borrower shall not transfer or assign all or any of its rights, obligations or benefits hereunder in whole or in part to any third party,\n unless with the prior written consent of the Lender.\n (b) The Lender shall be permitted to transfer or assign all or any of its rights, obligations or benefits hereunder in whole or in part to any of\n its affiliates (including but not limited to its holding companies, subsidiaries and persons under common control with it) without the\n consent of the Borrower, provided such transfer or assignment is made to a person that satisfies the \u201cknow your customer\u201d checks\n conducted by the Borrower pursuant to the applicable laws, regulations and listing rules (the \u201cAML Proviso\u201d). The Lender shall be\n permitted to transfer or assign all or any of its rights, obligations or benefits hereunder in whole or in part to any other person, subject to\n the AML Proviso and provided that the Lender\u2019s rights under Clauses 9 and 11.2 shall not be assignable to any such other person\n without the Borrower\u2019s prior written consent and the Conversion Price shall be separately agreed between the Borrower and such other\n person.\n (c) All the terms and conditions of this Agreement shall be binding upon and inure to the benefit of the Parties and their respective\n permitted assigns and successors-in-title.\n\n\n14.5 Severance\n If any term of this Agreement is held by a court of competent jurisdiction to be wholly or partly illegal, invalid or unenforceable, the same shall\n be deemed to be deleted from this Agreement and be of no force and effect, whereas the other terms hereof shall remain in full force and effect.\n In the event of such deletion, and if the commercial basis of this Agreement is, whether by reason of any illegality or change in circumstances,\n substantially altered, the Parties shall review and agree on revisions mutually acceptable to them which shall most closely reflect their original\n intent and purposes in place of the terms so deleted.\n\n\n14.6 Further Assurance\n (a) The Borrower and each member of the Group shall promptly do all such acts or execute all such documents (including assignments,\n transfers, mortgages, charges, notices and instructions) as the Lender may reasonably specify (and in such form as the Lender may\n reasonably require in favour of the Lender or its nominee(s)):\n (i) to perfect the Security created or intended to be created under or evidenced by the Transaction Security Document (which may\n include the execution of a mortgage, charge, assignment or other Security over all or any of the assets which are, or are intended\n to be, the subject of the Transaction Security) or for the exercise of any rights, powers and remedies of the Lender provided by\n or pursuant to the Finance Documents or by law; and/or\n\n 13\n\f Case 1:23-cv-03346-GHW Document 48-1 Filed 01/12/24 Page 15 of 20\n\n (ii) to facilitate the realisation of the assets which are, or are intended to be, the subject of the Transaction Security.\n (b) The Borrower and each member of the Group shall take all such action as is available to it (including making all filings and\n registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Security conferred or\n intended to be conferred on the Lender by or pursuant to the Finance Documents.\n\n\n14.7 Future discussions\n No later than three calendar months following the date of this Agreement, the Parties shall discuss in good faith a merger (or similar process)\n between the Lender and the Borrower such that the shareholders of the Lender shall ultimately own between 98% and 98.5% of the entire issued\n share capital of the Borrower.\n\n\n14.8 Amendments\n No amendment, modification of or addition to any provision of this Agreement shall be effective unless made in writing and signed by the duly\n authorised representatives of the Parties.\n\n\n14.9 Costs\n Each Party shall bear and pay its own costs and expenses in connection with the preparation of this Agreement, including without limitation, the\n fees of legal advisers incurred in connection with the preparation and negotiation of this Agreement.\n\n\n14.10 Notices\n (a) All notices or other communications under or in connection with this Agreement shall be in English and in writing and sent by courier\n or pdf attachment to an e-mail addressed to the intended recipient thereof at its address or e-mail address as notified by each Party to\n the other prior to the first Drawdown Date (or to such other address or e-mail address as any Party may from time to time notify the\n other Party).\n (b) Any such notice or communication shall be deemed to have been served on and received by the addressee:\n (i) if sent by courier, at the time that its receipt is signed for, whether or not the person signing for such receipt has authority to do\n so; and\n (ii) if sent by e-mail, at the time of its transmission, provided that no notification was received by the sender that the e-mail was\n undeliverable and that where transmission occurs after 6:00 p.m. on a working day or on a day which is not a Business Day,\n service shall be deemed to occur at 9:00 a.m. on the next following Business Day.\n\n\n14.11 Third Party Rights\n A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this\n Agreement.\n\n\n14.12 Counterparts\n This Agreement may be entered into in any number of counterparts, all of which taken together shall constitute one and the same instrument.\n Any Party may enter into this Agreement by signing any counterpart and each counterpart may be signed and executed by the Parties and\n transmitted by electronic transmission and shall be valid and effectual as if executed as an original.\n\n\n14.13 Governing Law\n This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.\n\n 14\n\f Case 1:23-cv-03346-GHW Document 48-1 Filed 01/12/24 Page 16 of 20\n\n14.14 Jurisdiction\n (a) The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a\n dispute relating to the existence, validity or termination of this Agreement or any non-contractual obligation arising out of or in\n connection with this Agreement) (a \u201cDispute\u201d).\n (b) The Parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party\n will argue to the contrary.\n (c) Notwithstanding paragraphs (a) and (b) above, the Lender shall not be prevented from taking proceedings relating to a Dispute in any\n other courts with jurisdiction. To the extent allowed by law, the Lender may take concurrent proceedings in any number of jurisdictions.\n (d) Without prejudice to any other mode of service allowed under any relevant law, the Borrower:\n (i) irrevocably appoints Digivault, as its agent for service of process in relation to any proceedings before the English courts in\n connection with any Finance Document; and\n (ii) agrees that failure by an agent for service of process to notify the Borrower of the process will not invalidate the proceedings\n concerned.\n\n (the rest of this page is intentionally left blank)\n\n 15\n\f Case 1:23-cv-03346-GHW Document 48-1 Filed 01/12/24 Page 17 of 20\n\n SCHEDULE 1\n\n FORM OF CONVERSION NOTICE\n\n To: Eqonex Limited as Borrower\n From: Bifinity UAB as Lender\n\n Dated:\n\n Eqonex Limited \u2014 Convertible Loan Agreement dated 7 March 2022 (as amended and/or amended and restated from time to time) (the\n \u201cAgreement\u201d)\n\n1. We refer to the Agreement. This letter shall take effect as a Conversion Notice for the purpose of the Agreement. Terms defined in or construed for\n the purpose of the Deed have the same meaning in this letter unless given a different meaning in this letter.\n2. We refer to clause 6 (Conversion) of the Agreement and hereby irrevocably elect to convert [all or a portion of the outstanding principal amount]\n of the Tranche (the Conversion Tranche) drawn on and all accrued but unpaid Interest outstanding in connection therewith under the\n Agreement specified below into the fully paid Conversion Shares in accordance with terms of the Agreement.\n(a) Total outstanding US$ principal amount of all or a portion of the Conversion Tranche and all accrued but unpaid Interest outstanding in\n connection therewith under the Agreement, that needs to be converted:\n Total outstanding US$ principal amount of all or a portion of the Conversion Tranche: USD\n Accrued but unpaid Interest outstanding amounts:\n(b) Name(s) and address(es) of person(s) and/or their respective nominee(s) in whose name(s) the Conversion Shares required to be delivered on\n exercise of the Conversion Right are to be registered in the Register of Members on the pursuant to the Agreement:\n\n Number of Conversion\n Name of the person and/or Shares to be allotted and\n its nominee Address issued\n\n\n\n\n(c) [We hereby request that the certificates for the Conversion Shares, be dispatched (at our risk and expense) to the person whose name, contact\n person, address, are given below and in the manner specified below:\n [ ]\n3. This letter and any non-contractual obligations arising out of or in connection with it are governed by English law.\n\n 16\n\f Case 1:23-cv-03346-GHW Document 48-1 Filed 01/12/24 Page 18 of 20\n\nfor and on behalf of\nBIFINITY UAB\n\n\nName:\nTitle:\n\n 17\n\f Case 1:23-cv-03346-GHW Document 48-1 Filed 01/12/24 Page 19 of 20\n\n SIGNATURE PAGE\n\nLENDER\n\nSigned by\n\n/s/ Jonathan Farnell\nfor and on behalf of BIFINITY UAB\nName: Jonathan Farnell\nTitle: CEO\n\nBORROWER\n\nSigned by\n\n\nfor and on behalf of EQONEX LIMITED\nName:\nTitle:\n\n 18\n\f Case 1:23-cv-03346-GHW Document 48-1 Filed 01/12/24 Page 20 of 20\n\n SIGNATURE PAGE\n\nLENDER\n\nSigned by\n\n\nfor and on behalf of BIFINITY UAB\nName:\nTitle:\n\nBORROWER\n\nSigned by\n\n/s/ Yoon Chi Won\nfor and on behalf of EQONEX LIMITED\nName: Yoon Chi Won\nTitle: Chairman\n\n 19\n\f","ocr_status":1,"date_upload":"2026-06-22T06:14:38.417523-07:00","document_number":"48","attachment_number":1,"pacer_doc_id":"127034743954","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit 1 - Convertible Loan Agreement","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/483517187/","id":483517187,"tags":[],"absolute_url":"/docket/67233991/48/2/zhao-v-eqonex-limited/","date_created":"2026-06-22T06:14:32.297539-07:00","date_modified":"2026-06-23T03:55:49.596947-07:00","sha1":"db8083cb6d11cccceb5aefaac0580e7fe3ad0cd4","page_count":6,"file_size":10468151,"filepath_local":"recap/gov.uscourts.nysd.597576/gov.uscourts.nysd.597576.48.2.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.597576/gov.uscourts.nysd.597576.48.2.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"Case 1:23-cv-03346-GHW Document 48-2 Filed 01/12/24 Page 1 of 6\n\n\n\n\n Exhibit 2\n\f Case 1:23-cv-03346-GHW Document 48-2 Filed 01/12/24 Page 2 of 6\nF-1/A 1 formf-1a.htm\n\n As filed with the United States Securities and Exchange Commission on January 31, 2022\n\n Registration No. 333-258808\n\n\n\n UNITED STATES\n SECURITIES AND EXCHANGE COMMISSION\n Washington, D.C. 20549\n\n Amendment No. 5 to\n FORM F-1\n REGISTRATION STATEMENT\n UNDER\n THE SECURITIES ACT OF 1933\n\n\n EQONEX LIMITED\n (Exact Name of Registrant as Specified in Its Charter)\n\n Singapore 7389 N/A\n (State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer\n Incorporation or Organization) Classification Code Number) Identification No.)\n\n Suites 1206-1209, Level 12, Three Pacific Place\n 1 Queen\u2019s Road East, Wanchai\n Hong Kong\n\n +852 2248 0600\n (Address and Telephone Number of Registrant\u2019s Principal Executive Offices)\n\n Puglisi & Associates\n 850 Library Avenue, Suite 204\n Newark, Delaware 19711\n 302-738-6680\n (Name, Address, and Telephone Number of Agent for Service)\n\n Copies to:\n\n Jonathan (JD) DeSantis\n Robert D. Giannattasio\n Shearman & Sterling LLP\n 599 Lexington Avenue\n New York, NY 10022-6069\n (212) 848-4000\n\n Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this registration statement.\n\n If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the\nSecurities Act of 1933, check the following box. \u2612\n\n If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the\nfollowing box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. \u2610\n\n If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the\nSecurities Act registration statement number of the earlier effective registration statement for the same offering. \u2610\n\n If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the\nSecurities Act registration statement number of the earlier effective registration statement for the same offering. \u2610\n\n Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.\n\f Case 1:23-cv-03346-GHW Document 48-2 Filed 01/12/24 Page 3 of 6\n\n\n RISK FACTORS\n\n An investment in our securities involves a high degree of risk. Before you invest in our securities you should carefully consider those risk\nfactors hereunder and those risk factors that may be included in any applicable prospectus supplement, together with all of the other information\nincluded in this prospectus and any prospectus supplement, in evaluating an investment in our securities. Our business, prospects, financial\ncondition, or operating results could be harmed by any of these risks, as well as other risks not currently known to us or that we currently consider\nimmaterial. The trading price of our securities could decline due to any of these risks, and, as a result, you may lose all or part of your investment.\nBefore deciding whether to invest in our securities, you should also refer to the other information contained in this prospectus, including the section\nentitled \u201cCautionary Note Regarding Forward-Looking Statements.\u201d\n\nRisks Related to Our Business and Industry\n\nEqonex has a limited operating history and has incurred operating losses since its inception as it has been investing in the build out of its\nbusiness lines. Its business lines are nascent, unproven and subject to material legal, regulatory, operational, reputational, tax and other risks in\nevery jurisdiction and are not assured to be profitable.\n\n Eqonex has a limited operating history on which an investor might evaluate its performance. It is therefore subject to many of the risks\ncommon to early-stage enterprises, including under-capitalization, cash shortages, limitations with respect to personnel and financing sources and\nlack of revenues, any of which could have a material adverse effect on Eqonex and may force it to reduce or curtail its operations. Eqonex is not\ncurrently profitable and has incurred operating losses of $64.6 million, $42.5 million and $17.9 million for the years ended March 31, 2021, 2020\nand 2019 respectively. There is no assurance that Eqonex will achieve a return on shareholders\u2019 investments and the likelihood of success must be\nconsidered in light of the early stage of its operations. Even if Eqonex accomplishes its objectives, it may not generate positive cash flows or profits.\n\n Furthermore, Eqonex\u2019s business lines are nascent, unproven and subject to material legal, regulatory, operational, reputational, tax and\nother risks in every jurisdiction, including those applicable due to its use of distributed ledger technology, and are not assured to be profitable. In the\nyear ended March 31, 2021, the business generated revenue, though not at a material level. Eqonex may fail to develop its business lines or produce\na return for its investors. It is possible that some of Eqonex\u2019s business lines may be difficult to enter and/or it may become evident that a particular\nbusiness line is not a productive use of capital or time. This could result in Eqonex modifying its business and focus away from such business lines.\nFor Eqonex\u2019s business lines that have access to client or counterparty assets, the regulatory requirements associated with shutting down such\nbusinesses may be costly and expose Eqonex to inquiries, investigations, lawsuits and proceedings by clients, counterparties, other third parties and\nregulatory and other governmental agencies.\n\n From time to time, Eqonex has and may continue to launch new business lines, offer new products and services within existing business\nlines or undertake other strategic projects. For example, Eqonex is currently working to launch the investment products business (the \u201cInvestment\nProducts Business\u201d). There are substantial risks and uncertainties associated with these efforts and Eqonex could invest significant capital and\nresources into such efforts. Regulatory requirements can affect whether initiatives are able to be brought to market in a manner that is timely and\nattractive to Eqonex\u2019s customers. Initial timetables for the development and introduction of new business lines or new products or services and price\nand profitability targets may not be met. New products or services may need to be initially launched on a limited basis prior to their full launch. In\naddition, Eqonex\u2019s revenues and costs may fluctuate because new business lines, products and services generally require startup costs while\nrevenues take time to develop, which may adversely impact Eqonex\u2019s results of operations.\n\n If Eqonex is unable to successfully build its business while controlling expenses, its ability to continue in business could depend on the\nability to raise sufficient additional capital, obtain sufficient financing and monetize assets. There can be no guarantee that Eqonex will be able to\nraise funding in sufficient quantity or at acceptable terms to fund the continued development of its business lines.\n\n The occurrence of any of the foregoing risks would have a material adverse effect on Eqonex\u2019s business, financial condition and results of\noperations.\n\n 6\n\f Case 1:23-cv-03346-GHW Document 48-2 Filed 01/12/24 Page 4 of 6\n\n\nOur ordinary shares may be delisted or prohibited from being traded under the Holding Foreign Companies Accountable Act if the PCAOB\nwere unable to fully inspect our auditor. The delisting or the cessation of trading of our ordinary shares, or the threat of them being delisted or\nprohibited from being traded, may materially and adversely affect the value and/or liquidity of your investment. Additionally, if the PCAOB were\nunable to conduct full inspections of our auditor, it would deprive our investors with the benefits of such inspections.\n\n The Holding Foreign Companies Accountable Act, or the HFCAA, was enacted on December 18, 2020. The HFCAA states that if the SEC\ndetermines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB for\nthree consecutive years beginning in 2021, the SEC shall prohibit our shares from being traded on a national securities exchange or in the over-the-\ncounter trading market in the U.S.\n\n Our auditor, the independent registered public accounting firm that has issued the audit report included elsewhere in this prospectus, as an\nauditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States\npursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. Under current\npractice and PRC law, the PCAOB is currently unable to inspect the audit work and practices of PCAOB-registered firms in mainland China. Our\nauditor is located in the United States, with affiliates in Singapore and Hong Kong, and the PCAOB has not been legally restricted from inspecting\nPCAOB audits relating to operations in Hong Kong. As noted above, except for the Basic Law, national laws of the PRC do not apply in Hong\nKong unless they are listed in Annex III of the Basic Law and applied locally by promulgation or local legislation. The Basic Law expressly\nprovides that the national laws of the PRC which may be listed in Annex III of the Basic Law shall be confined to those relating to defense and\nforeign affairs as well as other matters outside the autonomy of Hong Kong. National laws of the PRC relating to PCAOB access to auditor files\nhave not been listed in Annex III and so do not apply directly to Hong Kong. The PRC legal system is evolving rapidly and the PRC laws,\nregulations, and rules may change quickly with little advance notice. To the extent any PRC laws and regulations become applicable to a company\nsuch as us or our auditor, the PCAOB may be unable to inspect our auditor. The lack of inspection could cause trading in your securities to be\nprohibited under the HFCAA and as a result the Nasdaq may determine to delist your ordinary shares.\n\n On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation\nrequirements of the Act. We would be required to comply with these rules if the SEC identifies us as having a \u201cnon-inspection\u201d year under a process\nto be subsequently established by the SEC. The SEC is assessing how to implement other requirements of the HFCAA, including the listing and\ntrading prohibition requirements described above.\n\n In May 2021, the PCAOB issued a proposed rule 6100, Board Determinations Under the Holding Foreign Companies Accountable Act, for\npublic comment. The proposed rule is related to the PCAOB\u2019s responsibilities under the HFCAA, which, according to the PCAOB, would establish\na framework for the PCAOB to use when determining, as contemplated under the HFCAA, whether the PCAOB is unable to inspect or investigate\ncompletely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that\njurisdiction. The proposed rule was adopted by the PCAOB on September 22, 2021 and approved by the SEC on November 5, 2021. On December\n2, 2021, SEC adopted amendments to finalize rules implementing the submission and disclosure requirements in the HFCAA.\n\n On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, which, if passed by the U.S.\nHouse of Representatives and signed into law, would decrease the number of non-inspection years from three years to two, thus reducing the time\nperiod before your securities may be prohibited from trading or delisted.\n\n In December 2021, the SEC adopted rules to implement the HFCAA and pursuant to the HFCAA, the PCAOB issued its report notifying\nthe SEC of its determination that it is unable to inspect or investigate completely accounting firms headquartered in mainland China or Hong Kong.\n\n If for whatever reason the PCAOB is unable to conduct full inspections of our auditor, such uncertainty could cause the market price of our\nordinary shares to be materially and adversely affected, and our securities could be delisted or prohibited from being traded. If our securities were\nunable to be listed on another securities exchange by then, such a delisting would substantially impair your ability to sell or purchase our ordinary\nshares when you wish to do so, and the risk and uncertainty associated with a potential delisting would have a negative impact on the price of our\nordinary shares.\n\n Inspections of other firms that the PCAOB has conducted outside the PRC have identified deficiencies in those firms\u2019 audit procedures and\nquality control procedures, which may be addressed as part of the inspection process to improve future audit quality. If the PCAOB were unable to\nconduct full inspections of our auditor, we and investors in our ordinary shares would be deprived of the benefits of such PCAOB inspections. In\naddition, the inability of the PCAOB to conduct full inspections of auditors would make it more difficult to evaluate the effectiveness of our\nindependent registered public accounting firm\u2019s audit procedures or quality control procedures as compared to auditors that are subject to the\nPCAOB inspections, which could cause investors and potential investors in our securities to lose confidence in our audit procedures and reported\nfinancial information and the quality of our financial statements.\n\n Our independent registered public accounting firm, UHY LLP, is not subject to the determinations announced by the PCAOB on December\n16, 2021. UHY LLP is headquartered in New York, NY. UHY LLP is not headquartered in the PRC or Hong Kong. The PCAOB currently has\naccess to inspect the working papers of UHY LLP. As a result, we do not believe the HFCAA and related regulations will affect our company. If,\nhowever, our independent registered public accounting firm, or its affiliates, were denied, even temporarily, the ability to practice before the SEC\nand PCAOB, and it were determined that our financial statements or audit reports are not in compliance with the requirements of the U.S. Exchange\nAct, we could be at risk of delisting or become subject to other penalties that would adversely affect our ability to remain listed on the Nasdaq.\n\f Case 1:23-cv-03346-GHW Document 48-2 Filed 01/12/24 Page 5 of 6\nRisks Related to the Exchange Business\n\nRegulatory authorities may never permit the Exchange to become operational.\n\n The Exchange is operating under an exemption to provide payment services pursuant to the Payment Services (Exemption for Specified\nPeriod) Regulations 2019. The exemption will remain in effect until MAS make a decision on the license application. If the license is not granted,\nthe Exchange will no longer be able to operate. Singapore and numerous other regulatory authorities may need to permit the Exchange to maintain\nand expand operations. If any regulatory authority objected to the Exchange or to certain aspects of it, such regulatory authority could prevent the\nExchange from ever becoming operational, or continuing to operate, in that jurisdiction. The regulatory landscape that Eqonex needs to navigate is\ncomplex, extensive and changing, and Eqonex may never be able to do so successfully.\n\nThe development of the Exchange poses financial, technological and regulatory challenges and Eqonex may not be able to successfully develop,\nmarket and launch the Exchange.\n\n The Exchange Business intends to ultimately cover two distinct regulatory profiles, Virtual Currency and Digital Securities, with the\nVirtual Currency profile, already launched and operating under the Exemption. The development of the Exchange requires significant capital\nfunding, expertise on the part of Eqonex\u2019s management and time and effort in order to be successful. Eqonex may have to make changes to the\nspecifications for any number of reasons or it may be unable to develop the Exchange in a way that realizes those specifications or any form of a\nfunctioning network. The Exchange, even if successfully developed and maintained, may not meet investor expectations. For example, there can be\nno assurance that the Exchange will provide less expensive or more efficient trading than is possible on currently available trading platforms for\ntraditional assets (or even other Digital Asset exchanges). Furthermore, the Exchange may experience malfunctions or otherwise fail to be\nadequately developed or maintained, which may negatively impact the Exchange and the assets being traded on the Exchange.\n\nRegulatory authorities may not permit the Exchange to list certain products.\n\n Eqonex has, and intends to continue to develop multiple products and to make such products available on the Exchange. Regulatory\nauthorities may not permit the Exchange to list certain products or may restrict the markets or demographics to which products can be offered (e.g.\nto restrict retail customer involvement). Such restrictions may adversely impact future revenues. Additionally, should products be inadvertently\noffered in jurisdictions where regulatory approval is required and where no such approval has been sought or received, regulatory action may be\ntaken against Eqonex.\n\n 24\n\f Case 1:23-cv-03346-GHW Document 48-2 Filed 01/12/24 Page 6 of 6\n\n\nEqonex\u2019s offer of products on its exchange may be subject to substantial risk.\n\n Digital Assets spot, futures, derivatives and securities trading are or may be deemed regulated financial instruments or fall under other\nregulatory frameworks in many jurisdictions. Eqonex may not have applied for appropriate license and may not be able to offer, or continue\noffering, such products.\n\n Due to their novel and specialized nature, Digital Assets futures, derivatives and securities substantially increase the risk of losses for\nEqonex and for Eqonex\u2019s clients and customers which in turn increases the risk of litigation against Eqonex. Eqonex\u2019s risk mitigation strategies, if\nany, may not be adequate or sufficient.\n\nEqonex\u2019s exchange operations may be subject to credit risk.\n\n Credit risk is the risk that a borrower or a counterparty will be unable or unwilling to satisfy payment or delivery obligations when due and\nthe related risk that the transaction may not happen, or the value of a transaction may decline because of concerns about the borrower\u2019s or the\ncounterparty\u2019s ability to make such payments. In addition to the risk of a borrower declining to perform on an obligation under the loan, Eqonex is\nexposed to the risk that third parties, including transaction counterparties, exchanges, custodians, administrators and other financial intermediaries\nthat may owe Eqonex money or other assets will not perform their obligations. Any of these parties might default on their obligations to Eqonex\nbecause of bankruptcy, lack of liquidity, dispute, operational failure or other reasons, in which event Eqonex may suffer unexpected losses. In\naddition to the credit risk on its own exchange, to the extent Eqonex relies on third parties that specialize in Digital Asset futures and derivatives, it\nis exposed to the credit risk of those third parties.\n\nThe Exchange may not be widely adopted and may have limited users.\n\n It is possible that the Exchange will not be used by a large number of market participants or that there will be limited public interest in the\ncontinued creation and development of Digital Asset exchanges. Such a lack of use or interest could negatively impact the volumes of the Exchange.\n\n Alternative Digital Asset exchanges may be established that compete with or are more widely used than the Exchange.\n\n It is possible that Digital Asset exchanges exist or could be established that utilize the same or similar protocols as those underlying the\nExchange or that facilitate services that are materially similar to the services provided by the Exchange. The Exchange may face competition from\nany such alternative networks, which could negatively impact the Exchange and have a material adverse effect on Eqonex\u2019s business, financial\ncondition and results of operations.\n\n There are already multiple Digital Asset exchanges that the Exchange will compete with. If the Exchange is unable to offer features that\ndifferentiate it from such competitors, or such competitors create pricing pressure that results in lower-than-anticipated revenues, the Exchange may\nnot be viable, which could have a material adverse effect on Eqonex\u2019s business, financial condition and results of operations.\n\nThe Exchange, and any distributed ledger technology on which they rely, may be the target of cyber-attacks or may contain exploitable flaws in\nits underlying code, which may result in security breaches and the loss or theft of Digital Assets that trade on the Exchange. If such attacks\noccur or security is compromised, this could expose Eqonex to liability and reputational harm, could seriously curtail the utilization of Digital\nAssets, cause a decline in the market price of the affected Digital Assets and result in claims against Eqonex.\n\n The Exchange, the structural foundation, and the software applications and other interfaces or applications upon which it relies or will rely\n(including distributed ledger technology), are unproven, and there can be no assurances that the Exchange and the creation, transfer or storage of\nDigital Assets will be uninterrupted or fully secure, which may result in impermissible transfers, a complete loss of investors\u2019 Digital Assets on\nthose systems or an unwillingness of market participants to access, adopt and utilize Digital Assets or the Exchange. Further, the Exchange and any\ntechnology, including distributed ledger technology, on which they rely may also be the target of cyber-attacks seeking to identify and exploit\nweaknesses, which may result in the loss or theft of Digital Assets, which, in turn, may materially and adversely affect the adoption and success of\nthe Exchange and Eqonex. Any of these risks could have a material adverse effect on Eqonex\u2019s business, financial condition and results of\noperations.\n\n 25\n\f","ocr_status":2,"date_upload":"2026-06-22T06:14:51.683085-07:00","document_number":"48","attachment_number":2,"pacer_doc_id":"127034743955","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit 2 - Eqonex's January 2022 Prospectus","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/483517188/","id":483517188,"tags":[],"absolute_url":"/docket/67233991/48/3/zhao-v-eqonex-limited/","date_created":"2026-06-22T06:14:32.312306-07:00","date_modified":"2026-06-23T06:23:33.331133-07:00","sha1":"17a567a3adffd7d4e59c77e9d3f0303b7871dba7","page_count":3,"file_size":10168325,"filepath_local":"recap/gov.uscourts.nysd.597576/gov.uscourts.nysd.597576.48.3.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.597576/gov.uscourts.nysd.597576.48.3.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"Case 1:23-cv-03346-GHW Document 48-3 Filed 01/12/24 Page 1 of 3\n\n\n\n\n Exhibit 3\n\f Case 1:23-cv-03346-GHW Document 48-3 Filed 01/12/24 Page 2 of 3\n\n\n\n UNITED STATES\n SECURITIES AND EXCHANGE COMMISSION\n WASHINGTON, D.C. 20549\n\n FORM 20-F\n (Mark One)\n\n\u2610 REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934\n\n OR\n\n\u2612 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934\n\n For the fiscal year ended March 31, 2022\n\n OR\n\n\u2610 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934\n\n For the transition period from ___________ to ___________\n\n OR\n\n\u2610 SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934\n\n Date of event requiring this shell company report ___________\n\n Commission file number: 001-39600\n\n\n EQONEX LIMITED\n (Exact name of Registrant as specified in its charter)\n\n Not Applicable\n (Translation of Registrant\u2019s Name Into English)\n\n Singapore\n (Jurisdiction of incorporation or organization)\n\n 118 Piccadilly\n Mayfair, London W1J 7NW\n United Kingdom\n (Address of principal executive offices)\n\n Jonathan Farnell\n\n Chief Executive Officer\n 118 Piccadilly\n Mayfair, London W1J 7NW\n United Kingdom\n\n Telephone: +44 (0) 2034 050440\n Email: ir@eqonex.com\n\n (Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)\n\nSecurities registered or to be registered pursuant to Section 12(b) of the Act:\n\n Name of each exchange on\n Title of each class Trading Symbol(s) which registered\n Ordinary Shares EQOS The Nasdaq Stock Market LLC\n\f Case 1:23-cv-03346-GHW Document 48-3 Filed 01/12/24 Page 3 of 3\n\n\nOur new strategic direction may not be successful, which may adversely affect our results of operations and cause our share price to decline.\n\n On August 15, 2022, we announced plans to undertake a transformative restructure in which we would cease operations in our Exchange\nbusiness line and associated risk liquidation management desk in order to focus on our Custody, Asset Management, and Brokerage business lines. The\nexchange accounted for 79.9% of our revenues in the financial year ending March 31, 2022.\n\n The changes and potential changes to our operations as a result of the new strategic direction, may introduce uncertainty regarding our\nprospects and may result in disruption of our business. The loss of a material component of our revenues could have a material adverse impact on our\noperations if adequate funding or revenue is not obtained. As a result of these or other similar risks, our business, results of operations and financial\ncondition may be adversely affected.\n\nOur strategic transaction with Bifinity may not achieve the anticipated benefits and we may not complete discussions to explore potential merger\nopportunities.\n\n On March 7, 2022, we announced a strategic partnership with Bifinity, a payments technology company that is part of the wider Binance\nGroup and the official fiat-to-crypto payments provider for Binance. The strategic partnership will initially focus on leveraging Digivault as an FCA\nregulated custodian and expanding Bifinity\u2019s geographical footprint through our licensing framework. Both parties will also explore opportunities to\ngrow Eqonex\u2019s digital asset management solutions business. Both companies will continue to engage in non-binding discussions to explore potential\nmerger opportunities, subject to regulatory approval.\n\n Eqonex may not achieve any benefits from its strategic partnership with Bifinity. While the parties are having ongoing discussions on these\nfronts, it is possible that they may not ultimately achieve any sustainable commercial benefits for Eqonex. Furthermore, Eqonex and Bifinity may not\nultimately enter into a merger transaction in the event that regulatory approvals are not obtained in a timely manner, and/or if the commercial benefits\nto both parties from such a merger transaction are no longer compelling. The strategic partnership and merger discussions could be terminated at any\ntime by either party. Furthermore, even if such merger or other transaction were to occur, there is no certainty that such transaction would be beneficial\nto Eqonex.\n\n Bifinity may not convert its loan to equity and as a result Eqonex may be forced to repay $36 million, which would have an adverse impact\non the Company\u2019s operations and financial position.\n\n Under the terms of the strategic partnership, Bifinity would advance a $36 million convertible loan over a series of drawdowns.\n\n Bifinity is under no obligation to exercise such conversion and Eqonex may have to repay the $36 million loan, with interest. Repayment of\nthe loan would force Eqonex to seek additional funding for the repayment of the loan and continued operations. Eqonex may be forced to obtain\nfunding on unfavorable terms, and may not be able to find funding at all. Should Eqonex be unable to repay the loan, or otherwise find funding, our\nbusiness, results of operations and financial condition may be adversely affected.\n\n 9\n\f","ocr_status":2,"date_upload":"2026-06-22T06:14:50.363246-07:00","document_number":"48","attachment_number":3,"pacer_doc_id":"127034743956","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit 3 - Eqonex's 2022 Annual Report","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/483517189/","id":483517189,"tags":[],"absolute_url":"/docket/67233991/48/4/zhao-v-eqonex-limited/","date_created":"2026-06-22T06:14:32.325730-07:00","date_modified":"2026-06-23T06:23:32.995340-07:00","sha1":"a304ed9630e3953fe2798023e61aad0aada653ef","page_count":5,"file_size":2083544,"filepath_local":"recap/gov.uscourts.nysd.597576/gov.uscourts.nysd.597576.48.4.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.597576/gov.uscourts.nysd.597576.48.4.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"Case 1:23-cv-03346-GHW Document 48-4 Filed 01/12/24 Page 1 of 5\n\n\n\n\n Exhibit 4\n\f Case 1:23-cv-03346-GHW Document 48-4 Filed 01/12/24 Page 2 of 5\nSC 13D 1 d259398dsc13d.htm SCHEDULE 13D\n\n\n SECURITIES AND EXCHANGE COMMISSION\n Washington, D.C. 20549\n\n\n\n\n SCHEDULE 13D\n Under the Securities Exchange Act of 1934\n (Amendment No. )*\n\n\n\n\n EQONEX LIMITED\n (Name of Issuer)\n\n\n Ordinary shares, no par value per share\n (Title of Class of Securities)\n\n\n\n Y2074E109\n (CUSIP Number)\n\n\n\n Yu Helen Hai\n c/o Bifinity UAB\n Technopolis Beta Vilnius Business Centre\n J. Balcikonio str. 3, LT-08247\n Vilnius, Republic of Lithuania\n\n\n Telephone: +370 613 60 184\n (Name, Address, and Telephone Number of Person Authorized to Receive Notices and Communications)\n\n\n\n April 19, 2022\n (Date of Event which Requires Filing of this Statement)\n\n\n\n\nIf the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this\nschedule because of \u00a7\u00a7 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box \u2610.\n\nNote: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See \u00a7 240.13d-7 for other\nparties to whom copies are to be sent.\n\n\n* The remainder of this cover page shall be filled out for a reporting person\u2019s initial filing on this form with respect to the subject class of securities,\n and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.\n\nThe information required on the remainder of this cover page shall not be deemed to be \u201cfiled\u201d for the purpose of Section 18 of the Securities Exchange\nAct of 1934 (\u201cAct\u201d) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see\nthe Notes).\n\f Case 1:23-cv-03346-GHW Document 48-4 Filed 01/12/24 Page 3 of 5\n\n (f) create or permit to subsist any security over any of its assets;\n (g) (i) sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by the Issuer or\n any subsidiary of the Issuer;\n (ii) sell, transfer or otherwise dispose of any of its receivables on recourse terms;\n (iii) enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to\n a combination of accounts; or\n (iv) enter into any other preferential arrangement having a similar effect, in circumstances where the arrangement or transaction is\n entered into primarily as a method of raising financial indebtedness or of financing the acquisition of an asset;\n (h) equity issuances other than in connection with certain existing commitments of the Issuer or for the sole purpose of and\n contemporaneously with repaying a tranche of the Loan in an amount not exceeding the amount required to repay such tranche of the Loan\n on its maturity date and (in the case of the repayment of the final tranche of the Loan) to cover the Issuer\u2019s subsequent working capital\n requirements;\n (i) payment or award of any bonus to staff or payment of any extraordinary compensation unless recommended to the Issuer\u2019s Nomination\n and Compensation Committee by the Issuer\u2019s chief executive officer and chief financial officer and subsequently approved by such\n committee; and\n (j) prepayment of all of any part of the Loan other than as expressly permitted by the terms of the Convertible Loan Agreement.\n\nThe source of the funding for the Loan is cash flow generated by the business of Bifinity UAB.\n\n\nItem 4 Purpose of Transaction\nThe information set forth in Items 3, 5 and 6 of this Schedule 13D is incorporated by reference in its entirety into this Item 4.\n\nCommencing in August 2021, the Reporting Persons, their affiliates and their respective representatives have engaged, and intend to continue to engage\nfrom time to time, in discussions with the Issuer\u2019s management and/or Board, including any committees of the Board, and/or their respective advisors,\nregarding, among other things, the Issuer\u2019s business, strategies, management, governance, operations, performance, financial matters, capital structure,\ncorporate expenses, prospects, status of projects, market positioning and strategic and other transactions. In particular, the Reporting Persons have\nengaged in discussions regarding a potential business combination of Bifinity UAB and the Issuer, including through a merger or the Issuer\u2019s acquisition\nof all of the issued and outstanding share capital of Bifinity UAB in exchange for the issuance of ordinary shares to Changpeng Zhao (\u201cMr. Zhao\u201d) or a\nholding company owned by him (the \u201cProposed Business Combination\u201d). Bifinity UAB engages in the provision of cryptocurrency related services,\nincluding services for the conversion of fiat currencies into cryptocurrencies and vice versa, operation of digital wallets and currency custody and\nstorage services. It is part of the Binance group and the official fiat-to-crypto payments provider for Binance (a leading blockchain ecosystem and\ncryptocurrency infrastructure provider). The Issuer offers regulatory-focused trading services centered around the Eqonex crypto exchange, digital asset\ninvestment solutions including an asset manager together with the pending launch of exchange traded products and structured products, and Digivault\nLimited, an FCA-regulated high security crypto and digital asset custody solution. The Reporting Persons and the Issuer have evaluated and discussed\nthat the businesses of Bifinity UAB and the Issuer are complementary to each other and that combining such businesses could create significant business\nopportunities and enhance shareholder value.\n\f Case 1:23-cv-03346-GHW Document 48-4 Filed 01/12/24 Page 4 of 5\n\nThe Reporting Persons, their affiliates, the Issuer and their respective representatives, including their respective outside legal counsels, have engaged\nand may continue to engage in discussions regarding the commercial and legal terms of the Proposed Business Combination and the terms of the\ndefinitive agreements for such transaction, including the transaction structure, the valuation of the respective parties and other terms and conditions, as\nwell as the nature and scope of any business cooperation between the Issuer and other entities within the Binance group if the Proposed Business\nCombination is completed, but the parties have not reached any definitive binding agreement. The Convertible Loan Agreement provides, however, that\nno later than three calendar months following the date of such agreement, Bifinity UAB and the Issuer shall discuss in good faith a merger (or similar\nprocess) between Bifinity UAB and the Issuer such that the shareholder of Bifinity UAB would ultimately own between 98% and 98.5% of the entire\nissued share capital of the Issuer. Such provision does not obligate Bifinity UAB or the Issuer to enter into definitive binding agreements or complete the\nProposed Business Combination on such terms or at all or to engage in any other transaction. No assurance can be provided as to if or when the parties\nmay enter into any definitive binding agreements in connection with the Proposed Business Combination and, if the parties enter into definitive binding\nagreements, if or when the completion of such transaction will occur. If the parties enter into definitive binding agreements, completion of the Proposed\nBusiness Combination will be subject to obtaining any necessary regulatory approvals and other closing conditions. If the Proposed Business\nCombination is completed, the Reporting Persons intend to maintain the Issuer\u2019s listing on the Nasdaq Stock Market and the registration of its ordinary\nshares under the U.S. Securities Exchange Act of 1934 for the foreseeable future, although the Reporting Persons would in such case continue to\nevaluate their investment in the Issuer and their future plans with respect to the Issuer and reserve the right to change such intention.\n\f Case 1:23-cv-03346-GHW Document 48-4 Filed 01/12/24 Page 5 of 5\n\nThe Loan was provided to the Issuer for working capital purposes and to enhance the management and Board of the Issuer through the right to appoint\nrepresentatives of Bifinity UAB to the positions of chief executive officer, chief financial officer and chief legal officer and to the Board, while the\nparties continue to engage in non-binding discussions regarding the Proposed Business Combination and ways to maximize business synergies between\nthe two businesses and capitalize on opportunities to cooperate and further expand their businesses. In connection with the foregoing, the Reporting\nPersons, their affiliates and their respective representatives have engaged and may, from time to time in the future, engage in discussions with current or\nprospective holders of Ordinary Shares, industry analysts, existing or potential strategic partners, acquirers or competitors, financial sponsors,\ninvestment firms, investment professionals, capital or potential capital sources (including co-investors), operating and other consultants and advisors and\nother third parties regarding such matters (in each case, including with respect to the Proposed Business Combination and providing or potentially\nproviding capital to the Issuer or to existing or potential strategic partners of the Issuer) as well as other matters set forth in clauses (a)-(j) of Item 4 of\nthis Schedule 13D. These discussions have encompassed, and the Reporting Persons expect will encompass, a broad range of matters relating to the\nIssuer, including, among other things, the Issuer\u2019s business, operations, finances, management, organizational documents, ownership, capital and\ncorporate structure, corporate governance, the Board and committees thereof, strategic alternatives and transactions.\n\nGiven that the above-mentioned discussions are non-binding, there can be no assurance that the Proposed Business Combination, any potential\nalternative transaction, any components thereof, or any transaction at all, will be implemented. If the Proposed Business Combination or any similar\ntransaction is not consummated, the Reporting Persons and/or their affiliates may to continue to participate in and influence the affairs of the Issuer,\nincluding as a shareholder of the Issuer if Bifinity UAB converts all or any part of the Loan or otherwise acquires any other Ordinary Shares, and may\ndetermine, from time to time, to engage in any of the events set forth in Items 4(a) through (j) of Schedule 13D.\n\nThe Reporting Persons, their affiliates and their respective representatives have exchanged, and intend to continue to exchange, information with the\nIssuer or other persons or entities pursuant to confidentiality or similar agreements. The Reporting Persons intend to consider, explore and develop\nplans, make proposals and negotiate agreements with respect to or relating to, among other things, the foregoing matters. The Reporting Persons may\nalso take steps to explore or prepare for various plans, proposals or actions, or propose transactions, regarding any of the foregoing matters, before\nforming an intention to engage in any such plans, proposals or actions or proceed with any such transactions.\n\nIf Bifinity UAB converts all or any portion of the Loan into Ordinary Shares or the Reporting Persons acquire any other Ordinary Shares, the Reporting\nPersons intend to review their investment in the Issuer on an ongoing basis. Depending on various factors, including, without limitation, the outcome of\nany discussions referenced above, the Issuer\u2019s business, financial position, results, strategic direction or prospects or any strategic alternatives or\ntransactions, actions taken by the Issuer\u2019s management or the Board, price levels of the Ordinary Shares, other investment opportunities available to the\nReporting Persons, conditions in the securities, loan or bond markets, general economic or industry conditions or any changes in law or regulations, the\nReporting Persons may in the future take such actions with respect to any investment in the Issuer as they deem appropriate, including, without\nlimitation, the actions and matters described in the preceding paragraphs, acquiring, or causing to be acquired, additional Ordinary Shares (including\nthrough conversion of the Loan), including, without limitation, disposing of, or causing to be disposed, some or all of the Ordinary Shares beneficially\nowned by them, in the public market, in privately negotiated transactions or otherwise, providing additional debt financing or other forms of capital to\nthe Issuer or to potential strategic partners or acquirers of the Issuer, pledging their interest in any securities of the Issuer as a means of obtaining\nliquidity or as credit support for loans or other extensions of credit, entering into strategic or other transactions involving the Issuer, its assets or\nsecurities or its subsidiaries and one or more of the Reporting Persons and/or their affiliates and/or other shareholders of the Issuer, or forming, making\nor undertaking other purposes, plans or proposals regarding the Issuer or any of its securities or its subsidiaries, businesses or assets. If the Reporting\nPersons were to acquire equity securities of the Issuer (including through conversion of the Loan) or other instruments convertible into or exercisable for\nequity securities of the Issuer, the Reporting Persons\u2019 ability to influence the Issuer\u2019s management, the Board or the policies of the Issuer may increase.\n\f","ocr_status":2,"date_upload":"2026-06-22T06:14:44.867384-07:00","document_number":"48","attachment_number":4,"pacer_doc_id":"127034743957","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit 4 - Eqonex's Beneficial Ownership Report","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/483517190/","id":483517190,"tags":[],"absolute_url":"/docket/67233991/48/5/zhao-v-eqonex-limited/","date_created":"2026-06-22T06:14:32.339468-07:00","date_modified":"2026-06-23T06:22:49.778538-07:00","sha1":"78a882e6e8b457f73853381bb4edfc52339bcd67","page_count":6,"file_size":15459592,"filepath_local":"recap/gov.uscourts.nysd.597576/gov.uscourts.nysd.597576.48.5.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.597576/gov.uscourts.nysd.597576.48.5.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"Case 1:23-cv-03346-GHW Document 48-5 Filed 01/12/24 Page 1 of 6\n\n\n\n\n Exhibit 5\n\f Case 1:23-cv-03346-GHW Document 48-5 Filed 01/12/24 Page 2 of 6\nF-1/A 1 formf-1a.htm\n\n As filed with the United States Securities and Exchange Commission on May 2, 2022\n\n Registration No. 333-258808\n\n\n\n UNITED STATES\n SECURITIES AND EXCHANGE COMMISSION\n Washington, D.C. 20549\n\n Amendment No. 6 to\n FORM F-1\n REGISTRATION STATEMENT\n UNDER\n THE SECURITIES ACT OF 1933\n\n\n EQONEX LIMITED\n (Exact Name of Registrant as Specified in Its Charter)\n\n Singapore 7389 N/A\n (State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer\n Incorporation or Organization) Classification Code Number) Identification No.)\n\n Suites 1206-1209, Level 12, Three Pacific Place\n 1 Queen\u2019s Road East, Wanchai\n Hong Kong\n\n +852 2248 0600\n (Address and Telephone Number of Registrant\u2019s Principal Executive Offices)\n\n Puglisi & Associates\n 850 Library Avenue, Suite 204\n Newark, Delaware 19711\n 302-738-6680\n (Name, Address, and Telephone Number of Agent for Service)\n\n Copies to:\n\n Jonathan (JD) DeSantis\n Robert D. Giannattasio\n Shearman & Sterling LLP\n 599 Lexington Avenue\n New York, NY 10022-6069\n (212) 848-4000\n\n Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this registration statement.\n\n If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the\nSecurities Act of 1933, check the following box. \u2612\n\n If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the\nfollowing box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. \u2610\n\n If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the\nSecurities Act registration statement number of the earlier effective registration statement for the same offering. \u2610\n\n If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the\nSecurities Act registration statement number of the earlier effective registration statement for the same offering. \u2610\n\n Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.\n\f Case 1:23-cv-03346-GHW Document 48-5 Filed 01/12/24 Page 3 of 6\n\n\n RISK FACTORS\n\n An investment in our securities involves a high degree of risk. Before you invest in our securities you should carefully consider those risk\nfactors hereunder and those risk factors that may be included in any applicable prospectus supplement, together with all of the other information\nincluded in this prospectus and any prospectus supplement, in evaluating an investment in our securities. Our business, prospects, financial\ncondition, or operating results could be harmed by any of these risks, as well as other risks not currently known to us or that we currently consider\nimmaterial. The trading price of our securities could decline due to any of these risks, and, as a result, you may lose all or part of your investment.\nBefore deciding whether to invest in our securities, you should also refer to the other information contained in this prospectus, including the section\nentitled \u201cCautionary Note Regarding Forward-Looking Statements.\u201d\n\nRisks Related to Our Business and Industry\n\nEqonex has a limited operating history and has incurred operating losses since its inception as it has been investing in the build out of its\nbusiness lines. Its business lines are nascent, unproven and subject to material legal, regulatory, operational, reputational, tax and other risks in\nevery jurisdiction and are not assured to be profitable.\n\n Eqonex has a limited operating history on which an investor might evaluate its performance. It is therefore subject to many of the risks\ncommon to early-stage enterprises, including under-capitalization, cash shortages, limitations with respect to personnel and financing sources and\nlack of revenues, any of which could have a material adverse effect on Eqonex and may force it to reduce or curtail its operations. Eqonex is not\ncurrently profitable and has incurred operating losses of $34.8 million for the six months ended September 30, 2021, and $64.6 million, $42.5\nmillion and $17.9 million for the years ended March 31, 2021, 2020 and 2019 respectively. There is no assurance that Eqonex will achieve a return\non shareholders\u2019 investments and the likelihood of success must be considered in light of the early stage of its operations. Even if Eqonex\naccomplishes its objectives, it may not generate positive cash flows or profits.\n\n Furthermore, Eqonex\u2019s business lines are nascent, unproven and subject to material legal, regulatory, operational, reputational, tax and\nother risks in every jurisdiction, including those applicable due to its use of distributed ledger technology, and are not assured to be profitable.\nDuring the six months ended September 30, 2021 and in the year ended March 31, 2021, the business generated revenue, though not at a material\nlevel. Eqonex may fail to develop its business lines or produce a return for its investors. It is possible that some of Eqonex\u2019s business lines may be\ndifficult to enter and/or it may become evident that a particular business line is not a productive use of capital or time. This could result in Eqonex\nmodifying its business and focus away from such business lines. For Eqonex\u2019s business lines that have access to client or counterparty assets, the\nregulatory requirements associated with shutting down such businesses may be costly and expose Eqonex to inquiries, investigations, lawsuits and\nproceedings by clients, counterparties, other third parties and regulatory and other governmental agencies.\n\n From time to time, Eqonex has and may continue to launch new business lines, offer new products and services within existing business\nlines or undertake other strategic projects. For example, Eqonex is currently working to launch the investment products business (the \u201cInvestment\nProducts Business\u201d). There are substantial risks and uncertainties associated with these efforts and Eqonex could invest significant capital and\nresources into such efforts. Regulatory requirements can affect whether initiatives are able to be brought to market in a manner that is timely and\nattractive to Eqonex\u2019s customers. Initial timetables for the development and introduction of new business lines or new products or services and price\nand profitability targets may not be met. New products or services may need to be initially launched on a limited basis prior to their full launch. In\naddition, Eqonex\u2019s revenues and costs may fluctuate because new business lines, products and services generally require startup costs while\nrevenues take time to develop, which may adversely impact Eqonex\u2019s results of operations.\n\n If Eqonex is unable to successfully build its business while controlling expenses, its ability to continue in business could depend on the\nability to raise sufficient additional capital, obtain sufficient financing and monetize assets. There can be no guarantee that Eqonex will be able to\nraise funding in sufficient quantity or at acceptable terms to fund the continued development of its business lines.\n\n The occurrence of any of the foregoing risks would have a material adverse effect on Eqonex\u2019s business, financial condition and results of\noperations.\n\n 6\n\f Case 1:23-cv-03346-GHW Document 48-5 Filed 01/12/24 Page 4 of 6\n\n\nOur ordinary shares may be delisted or prohibited from being traded under the Holding Foreign Companies Accountable Act if the PCAOB\nwere unable to fully inspect our auditor. The delisting or the cessation of trading of our ordinary shares, or the threat of them being delisted or\nprohibited from being traded, may materially and adversely affect the value and/or liquidity of your investment. Additionally, if the PCAOB were\nunable to conduct full inspections of our auditor, it would deprive our investors with the benefits of such inspections.\n\n The Holding Foreign Companies Accountable Act, or the HFCAA, was enacted on December 18, 2020. The HFCAA states that if the SEC\ndetermines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB for\nthree consecutive years beginning in 2021, the SEC shall prohibit our shares from being traded on a national securities exchange or in the over-the-\ncounter trading market in the U.S.\n\n Our auditor, the independent registered public accounting firm that has issued the audit report included elsewhere in this prospectus, as an\nauditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States\npursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. Under current\npractice and PRC law, the PCAOB is currently unable to inspect the audit work and practices of PCAOB-registered firms in mainland China. Our\nauditor is located in the United States, with affiliates in Singapore and Hong Kong, and the PCAOB has not been legally restricted from inspecting\nPCAOB audits relating to operations in Hong Kong. As noted above, except for the Basic Law, national laws of the PRC do not apply in Hong\nKong unless they are listed in Annex III of the Basic Law and applied locally by promulgation or local legislation. The Basic Law expressly\nprovides that the national laws of the PRC which may be listed in Annex III of the Basic Law shall be confined to those relating to defense and\nforeign affairs as well as other matters outside the autonomy of Hong Kong. National laws of the PRC relating to PCAOB access to auditor files\nhave not been listed in Annex III and so do not apply directly to Hong Kong. The PRC legal system is evolving rapidly and the PRC laws,\nregulations, and rules may change quickly with little advance notice. To the extent any PRC laws and regulations become applicable to a company\nsuch as us or our auditor, the PCAOB may be unable to inspect our auditor. The lack of inspection could cause trading in your securities to be\nprohibited under the HFCAA and as a result the Nasdaq may determine to delist your ordinary shares.\n\n On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation\nrequirements of the Act. We would be required to comply with these rules if the SEC identifies us as having a \u201cnon-inspection\u201d year under a process\nto be subsequently established by the SEC. The SEC is assessing how to implement other requirements of the HFCAA, including the listing and\ntrading prohibition requirements described above.\n\n In May 2021, the PCAOB issued a proposed rule 6100, Board Determinations Under the Holding Foreign Companies Accountable Act, for\npublic comment. The proposed rule is related to the PCAOB\u2019s responsibilities under the HFCAA, which, according to the PCAOB, would establish\na framework for the PCAOB to use when determining, as contemplated under the HFCAA, whether the PCAOB is unable to inspect or investigate\ncompletely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that\njurisdiction. The proposed rule was adopted by the PCAOB on September 22, 2021 and approved by the SEC on November 5, 2021. On December\n2, 2021, SEC adopted amendments to finalize rules implementing the submission and disclosure requirements in the HFCAA.\n\n On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, which, if passed by the U.S.\nHouse of Representatives and signed into law, would decrease the number of non-inspection years from three years to two, thus reducing the time\nperiod before your securities may be prohibited from trading or delisted.\n\n In December 2021, the SEC adopted rules to implement the HFCAA and pursuant to the HFCAA, the PCAOB issued its report notifying\nthe SEC of its determination that it is unable to inspect or investigate completely accounting firms headquartered in mainland China or Hong Kong.\n\n If for whatever reason the PCAOB is unable to conduct full inspections of our auditor, such uncertainty could cause the market price of our\nordinary shares to be materially and adversely affected, and our securities could be delisted or prohibited from being traded. If our securities were\nunable to be listed on another securities exchange by then, such a delisting would substantially impair your ability to sell or purchase our ordinary\nshares when you wish to do so, and the risk and uncertainty associated with a potential delisting would have a negative impact on the price of our\nordinary shares.\n\n Inspections of other firms that the PCAOB has conducted outside the PRC have identified deficiencies in those firms\u2019 audit procedures and\nquality control procedures, which may be addressed as part of the inspection process to improve future audit quality. If the PCAOB were unable to\nconduct full inspections of our auditor, we and investors in our ordinary shares would be deprived of the benefits of such PCAOB inspections. In\naddition, the inability of the PCAOB to conduct full inspections of auditors would make it more difficult to evaluate the effectiveness of our\nindependent registered public accounting firm\u2019s audit procedures or quality control procedures as compared to auditors that are subject to the\nPCAOB inspections, which could cause investors and potential investors in our securities to lose confidence in our audit procedures and reported\nfinancial information and the quality of our financial statements.\n\n Our independent registered public accounting firm, UHY LLP, is not subject to the determinations announced by the PCAOB on December\n16, 2021. UHY LLP is headquartered in New York, NY. UHY LLP is not headquartered in the PRC or Hong Kong. The PCAOB currently has\naccess to inspect the working papers of UHY LLP. As a result, we do not believe the HFCAA and related regulations will affect our company. If,\nhowever, our independent registered public accounting firm, or its affiliates, were denied, even temporarily, the ability to practice before the SEC\nand PCAOB, and it were determined that our financial statements or audit reports are not in compliance with the requirements of the U.S. Exchange\nAct, we could be at risk of delisting or become subject to other penalties that would adversely affect our ability to remain listed on the Nasdaq.\n\f Case 1:23-cv-03346-GHW Document 48-5 Filed 01/12/24 Page 5 of 6\nRisks Related to the Exchange Business\n\nRegulatory authorities may never permit the Exchange to become operational.\n\n The Exchange is operating under an exemption to provide payment services pursuant to the Payment Services (Exemption for Specified\nPeriod) Regulations 2019. The exemption will remain in effect until MAS make a decision on the license application. If the license is not granted,\nthe Exchange will no longer be able to operate. Singapore and numerous other regulatory authorities may need to permit the Exchange to maintain\nand expand operations. If any regulatory authority objected to the Exchange or to certain aspects of it, such regulatory authority could prevent the\nExchange from ever becoming operational, or continuing to operate, in that jurisdiction. The regulatory landscape that Eqonex needs to navigate is\ncomplex, extensive and changing, and Eqonex may never be able to do so successfully.\n\nThe development of the Exchange poses financial, technological and regulatory challenges and Eqonex may not be able to successfully develop,\nmarket and launch the Exchange.\n\n The Exchange Business intends to ultimately cover two distinct regulatory profiles, Virtual Currency and Digital Securities, with the\nVirtual Currency profile, already launched and operating under the Exemption. The development of the Exchange requires significant capital\nfunding, expertise on the part of Eqonex\u2019s management and time and effort in order to be successful. Eqonex may have to make changes to the\nspecifications for any number of reasons or it may be unable to develop the Exchange in a way that realizes those specifications or any form of a\nfunctioning network. The Exchange, even if successfully developed and maintained, may not meet investor expectations. For example, there can be\nno assurance that the Exchange will provide less expensive or more efficient trading than is possible on currently available trading platforms for\ntraditional assets (or even other Digital Asset exchanges). Furthermore, the Exchange may experience malfunctions or otherwise fail to be\nadequately developed or maintained, which may negatively impact the Exchange and the assets being traded on the Exchange.\n\nRegulatory authorities may not permit the Exchange to list certain products.\n\n Eqonex has, and intends to continue to develop multiple products and to make such products available on the Exchange. Regulatory\nauthorities may not permit the Exchange to list certain products or may restrict the markets or demographics to which products can be offered (e.g.\nto restrict retail customer involvement). Such restrictions may adversely impact future revenues. Additionally, should products be inadvertently\noffered in jurisdictions where regulatory approval is required and where no such approval has been sought or received, regulatory action may be\ntaken against Eqonex.\n\n 24\n\f Case 1:23-cv-03346-GHW Document 48-5 Filed 01/12/24 Page 6 of 6\n\n\nEqonex\u2019s offer of products on its exchange may be subject to substantial risk.\n\n Digital Assets spot, futures, derivatives and securities trading are or may be deemed regulated financial instruments or fall under other\nregulatory frameworks in many jurisdictions. Eqonex may not have applied for appropriate license and may not be able to offer, or continue\noffering, such products.\n\n Due to their novel and specialized nature, Digital Assets futures, derivatives and securities substantially increase the risk of losses for\nEqonex and for Eqonex\u2019s clients and customers which in turn increases the risk of litigation against Eqonex. Eqonex\u2019s risk mitigation strategies, if\nany, may not be adequate or sufficient.\n\nEqonex\u2019s exchange operations may be subject to credit risk.\n\n Credit risk is the risk that a borrower or a counterparty will be unable or unwilling to satisfy payment or delivery obligations when due and\nthe related risk that the transaction may not happen, or the value of a transaction may decline because of concerns about the borrower\u2019s or the\ncounterparty\u2019s ability to make such payments. In addition to the risk of a borrower declining to perform on an obligation under the loan, Eqonex is\nexposed to the risk that third parties, including transaction counterparties, exchanges, custodians, administrators and other financial intermediaries\nthat may owe Eqonex money or other assets will not perform their obligations. Any of these parties might default on their obligations to Eqonex\nbecause of bankruptcy, lack of liquidity, dispute, operational failure or other reasons, in which event Eqonex may suffer unexpected losses. In\naddition to the credit risk on its own exchange, to the extent Eqonex relies on third parties that specialize in Digital Asset futures and derivatives, it\nis exposed to the credit risk of those third parties.\n\nThe Exchange may not be widely adopted and may have limited users.\n\n It is possible that the Exchange will not be used by a large number of market participants or that there will be limited public interest in the\ncontinued creation and development of Digital Asset exchanges. Such a lack of use or interest could negatively impact the volumes of the Exchange.\n\n Alternative Digital Asset exchanges may be established that compete with or are more widely used than the Exchange.\n\n It is possible that Digital Asset exchanges exist or could be established that utilize the same or similar protocols as those underlying the\nExchange or that facilitate services that are materially similar to the services provided by the Exchange. The Exchange may face competition from\nany such alternative networks, which could negatively impact the Exchange and have a material adverse effect on Eqonex\u2019s business, financial\ncondition and results of operations.\n\n There are already multiple Digital Asset exchanges that the Exchange will compete with. If the Exchange is unable to offer features that\ndifferentiate it from such competitors, or such competitors create pricing pressure that results in lower-than-anticipated revenues, the Exchange may\nnot be viable, which could have a material adverse effect on Eqonex\u2019s business, financial condition and results of operations.\n\nThe Exchange, and any distributed ledger technology on which they rely, may be the target of cyber-attacks or may contain exploitable flaws in\nits underlying code, which may result in security breaches and the loss or theft of Digital Assets that trade on the Exchange. If such attacks\noccur or security is compromised, this could expose Eqonex to liability and reputational harm, could seriously curtail the utilization of Digital\nAssets, cause a decline in the market price of the affected Digital Assets and result in claims against Eqonex.\n\n The Exchange, the structural foundation, and the software applications and other interfaces or applications upon which it relies or will rely\n(including distributed ledger technology), are unproven, and there can be no assurances that the Exchange and the creation, transfer or storage of\nDigital Assets will be uninterrupted or fully secure, which may result in impermissible transfers, a complete loss of investors\u2019 Digital Assets on\nthose systems or an unwillingness of market participants to access, adopt and utilize Digital Assets or the Exchange. Further, the Exchange and any\ntechnology, including distributed ledger technology, on which they rely may also be the target of cyber-attacks seeking to identify and exploit\nweaknesses, which may result in the loss or theft of Digital Assets, which, in turn, may materially and adversely affect the adoption and success of\nthe Exchange and Eqonex. Any of these risks could have a material adverse effect on Eqonex\u2019s business, financial condition and results of\noperations.\n\n 25\n\f","ocr_status":2,"date_upload":"2026-06-22T06:15:00.596152-07:00","document_number":"48","attachment_number":5,"pacer_doc_id":"127034743958","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit 5 - Eqonex's Amendment No. 6 to Form F-1 Registration Statement","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/483517191/","id":483517191,"tags":[],"absolute_url":"/docket/67233991/48/6/zhao-v-eqonex-limited/","date_created":"2026-06-22T06:14:32.352867-07:00","date_modified":"2026-06-23T03:50:56.227031-07:00","sha1":"d5858e4a97b383e9f351ac0502978df41ca829be","page_count":6,"file_size":1961323,"filepath_local":"recap/gov.uscourts.nysd.597576/gov.uscourts.nysd.597576.48.6.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.597576/gov.uscourts.nysd.597576.48.6.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"Case 1:23-cv-03346-GHW Document 48-6 Filed 01/12/24 Page 1 of 6\n\n\n\n\n Exhibit 6\n\f Case 1:23-cv-03346-GHW Document 48-6 Filed 01/12/24 Page 2 of 6\n6-K 1 form6-k.htm\n\n\n\n UNITED STATES\n SECURITIES AND EXCHANGE COMMISSION\n Washington, D.C. 20549\n\n FORM 6-K\n\n REPORT OF FOREIGN PRIVATE ISSUER\n Pursuant to Rule 13a-16 or 15d-16 of the\n Securities Exchange Act of 1934\n\n For the month of March 2022\n\n Commission File Number: 001-39600\n\n\n\n EQONEX LIMITED\n (Translation of registrant\u2019s name into English)\n\n Suites 1206-1209, Level 12\n Three Pacific Place\n 1 Queen\u2019s Road East\n Hong Kong\n (Address of principal executive offices)\n\n\nIndicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.\n\n Form 20-F \u2612 Form 40-F \u2610\n\nIndicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): \u2610\n\nIndicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): \u2610\n\f Case 1:23-cv-03346-GHW Document 48-6 Filed 01/12/24 Page 3 of 6\n\n\n INFORMATION CONTAINED IN THIS REPORT ON FORM 6-K\n\n EQONEX Announces Strategic Partnership with Bifinity, Binance\u2019s Payments Technology Affiliate\n\n -Issuance of US$36 Million Convertible Loan-\n\nSINGAPORE \u2013 March 7, 2022 \u2013 EQONEX Limited (NASDAQ: EQOS) (\u201cEQONEX\u201d or the \u201cCompany\u201d), a digital assets financial\nservices company, today announced that it has entered into a strategic partnership with Bifinity UAB (\u201cBifinity\u201d), a payments\ntechnology company that is part of the wider Binance Group and the official fiat-to-crypto payments provider for Binance, the world\u2019s\nleading blockchain ecosystem and cryptocurrency infrastructure provider.\n\nBifinity was established in 2021 but officially launched to the market today and has been powering Binance\u2019s fiat-to-crypto on and off-\nramps, processing millions in transactions globally for Binance.com users. Bifinity\u2019s leading payment infrastructure connects\ntraditional finance to world-leading and emerging blockchains, transforming how businesses and people send and receive money\naround the world. Bifinity is registered with the Registry of Legal Entities of the Republic of Lithuania as a crypto wallet service\nprovider.\n\nBuilt with a focus on regulation, security and compliance best-practice, EQONEX was the first digital asset firm with an exchange to\nbe publicly listed in the U.S. EQONEX offers regulatory-focused trading services centered around the EQONEX crypto exchange,\ninstitutional-grade digital asset investment solutions including an asset manager together with the pending launch of exchange traded\nproducts and structured products, and Digivault, an FCA-regulated high security crypto and digital asset custody solution.\n\nUnder the terms of the strategic partnership, Bifinity will advance a US$36 million convertible loan to EQONEX and will work\ntogether to maximize business synergies created by this new strategic relationship and capitalize on opportunities to cooperate and\nfurther expand their businesses. In addition, Bifinity will have the right to appoint, from within Bifinity, the Chief Executive Officer,\nChief Financial Officer, and Chief Legal Officer of EQONEX as well as nominate two seats on EQONEX\u2019s Board of Directors. Both\ncompanies will continue to engage in non-binding discussions to explore potential merger opportunities, subject to regulatory approval.\n\nThe strategic partnership will initially focus on leveraging Digivault as an FCA regulated custodian, strengthening the technology\nsupporting EQONEX Exchange, and expanding Bifinity\u2019s geographical footprint through EQONEX\u2019s licensing framework. Both\nparties will also explore opportunities to grow EQONEX\u2019s digital asset investment solutions business.\n\nChi-Won Yoon, Chairman of EQONEX said today, \u201cWe are extremely pleased to team up with Bifinity in a partnership that is likely to\nbe transformational for both companies and for the industry at large. Bifinity shares our strong belief in helping to bridge the world of\ntraditional finance with cryptocurrencies, as well as our conviction to operate to the highest standards of investor protection, regulatory\noversight, security and governance.\u201d\n\n\u201cThis transaction marks the next logical step in our company\u2019s evolution, representing an important opportunity to grow our footprint\nand expand our regulated offerings for the benefit of our customers and shareholders.\u201d\n\n\u201cBifinity\u2019s cutting-edge technology and extensive experience in building, operating, and marketing digital platforms and products will\nhelp drive the growth and scale of our ecosystem, starting with Digivault, our custody solution, our asset management business and\ninstitutionally-focused products on the exchange.\u201d\n\n\u201cI look forward to working closely with the Bifinity team to scale up our platform and drive long-term sustainable growth.\u201d\n\nHelen Hai, President of Bifinity, commented, \u201cIt is with great excitement and enthusiasm that we enter this partnership with EQONEX.\nEQONEX has a unique value proposition and positioning that we are deeply aligned with. EQONEX has already made significant\nprogress in building out the foundational regulated infrastructure for its ecosystem. Their institutional approach and ability to utilize\nglobal regulatory frameworks to build a compliant business directly complements our retail focus and will greatly benefit Bifinity over\nthe long-term.\u201d\n\f Case 1:23-cv-03346-GHW Document 48-6 Filed 01/12/24 Page 4 of 6\n\n\nTransaction Details\n\nUnder the terms of the strategic partnership which has been approved by the Boards of EQONEX and Bifinity, Bifinity has issued\nEQONEX a US$36 million convertible loan facility with an 18-month maturity from each drawdown date. The initial conversion price\nis US$1.89 per share, set with reference to the 50-day average closing-price of EQONEX shares immediately prior to the date of the\nLoan Agreement.\n\nAbout EQONEX\n\nEQONEX Limited (NASDAQ: EQOS) is a technology driven digital assets financial services group that provides institutional grade\ninfrastructure and a full suite of trading, custody and asset management solutions to clients. The Group\u2019s digital assets ecosystem has\nbeen designed to accommodate the needs of institutions and individuals with the same degree of regulatory oversight and security they\nare accustomed to in traditional financial markets. EQONEX\u2019s ecosystem primarily encompasses EQONEX Exchange, a digital asset\nexchange; Digivault, a FCA accredited hot and cold digital assets custodian and Bletchley Park Asset Management, a fund of crypto-\nhedge funds.\n\nFor more information visit: https://group.eqonex.com/\n\nFollow EQONEX on social media on Twitter @eqonex, on Facebook @eqonex, and on LinkedIn.\n\nAbout Bifinity\n\nBifinity, powered by Binance, is a payments technology company that provides an entry point to the new world of digital currency for\nbusinesses. It offers on-and-off-ramp solutions to empower businesses to convert fiat-to-crypto transactions using major payment\nmethods directly.\n\nFor more information, visit: https://www.bifinity.com/.\n\nForward-Looking Information\n\nAny forward-looking statements in this press release are based on available current market material and management\u2019s expectations,\nbeliefs and forecasts concerning future events impacting EQONEX. You are cautioned that any such forward-looking statements are\nnot guarantees of future performance and involve risks and uncertainties, as well as assumptions, which, if they were to ever\nmaterialize or prove incorrect, could cause the results of EQONEX to differ materially from those expressed or implied by such\nforward-looking statements. The forward-looking statements made in this press release speak only as of the date hereof and we\ndisclaim any obligation, except as required by law, to provide updates, revisions or amendments to any forward-looking statements to\nreflect changes in our expectations or future events.\n\nContacts\n\nEQONEX\n\nPress Contact:\n\nKristen Kaus\nkristen.kaus@eqonex.com\n\nInvestor Relations:\n\nChristian Arnell\nir@eqonex.com\n\nGateway Investor Relations:\n\nMatt Glover or John Yi\n -------\neqonex@gatewayir.com\n\nBinance\n\f Case 1:23-cv-03346-GHW Document 48-6 Filed 01/12/24 Page 5 of 6\n\nPress Contact:\npr@binance.com\n\f Case 1:23-cv-03346-GHW Document 48-6 Filed 01/12/24 Page 6 of 6\n\n\n SIGNATURES\n\n Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on\nits behalf by the undersigned, thereunto duly authorized.\n\n EQONEX Limited\n\nDate: March 7, 2022 By: /s/ Paul Ewing\n Name: Paul Ewing\n Title: Chief Financial Officer\n\f","ocr_status":1,"date_upload":"2026-06-22T06:14:48.378430-07:00","document_number":"48","attachment_number":6,"pacer_doc_id":"127034743959","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit 6 - March 7, 2022 Press Release","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/483517192/","id":483517192,"tags":[],"absolute_url":"/docket/67233991/48/7/zhao-v-eqonex-limited/","date_created":"2026-06-22T06:14:32.367227-07:00","date_modified":"2026-06-23T06:23:37.687375-07:00","sha1":"486b3d91e97f099d5c8fbd661b76d218ee9647ac","page_count":6,"file_size":1994664,"filepath_local":"recap/gov.uscourts.nysd.597576/gov.uscourts.nysd.597576.48.7.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.597576/gov.uscourts.nysd.597576.48.7.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"Case 1:23-cv-03346-GHW Document 48-7 Filed 01/12/24 Page 1 of 6\n\n\n\n\n Exhibit 7\n\f Case 1:23-cv-03346-GHW Document 48-7 Filed 01/12/24 Page 2 of 6\n6-K 1 form6-k.htm\n\n\n\n UNITED STATES\n SECURITIES AND EXCHANGE COMMISSION\n Washington, D.C. 20549\n\n FORM 6-K\n\n REPORT OF FOREIGN PRIVATE ISSUER\n Pursuant to Rule 13a-16 or 15d-16 of the\n Securities Exchange Act of 1934\n\n For the month of March 2022\n\n Commission File Number: 001-39600\n\n\n\n EQONEX LIMITED\n (Translation of registrant\u2019s name into English)\n\n Suites 1206-1209, Level 12\n Three Pacific Place\n 1 Queen\u2019s Road East\n Hong Kong\n (Address of principal executive offices)\n\n\nIndicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.\n\n Form 20-F \u2612 Form 40-F \u2610\n\nIndicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): \u2610\n\nIndicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): \u2610\n\f Case 1:23-cv-03346-GHW Document 48-7 Filed 01/12/24 Page 3 of 6\n\n\n INFORMATION CONTAINED IN THIS REPORT ON FORM 6-K\n\n EQONEX Appoints New CEO as part of its Strategic Partnership with Bifinity\n\n Former Head of Binance UK Jonathan Farnell appointed CEO of\n EQONEX\n\nSINGAPORE \u2013 March 17, 2022 \u2013 EQONEX Limited (NASDAQ: EQOS) (\u201cEQONEX\u201d or the \u201cCompany\u201d), a digital assets financial\nservices company, and Bifinity UAB (\u201cBifinity\u201d), a payments technology company that is part of Binance, took the next step in\nsolidifying their strategic partnership with the appointment of EQONEX\u2019s new CEO and two new members to the EQONEX Board of\nDirectors (the \u201cBoard\u201d).\n\nJonathan Farnell, who previously served as Head of Binance UK and CEO of Bifinity, has been appointed as CEO of EQONEX and a\ndirector on the Board. Helen Hai, President of Bifinity, has also been appointed to the Board. Both appointments are effective\nimmediately. The current interim CEO Andrew Eldon will revert back to his primary roles of Chief Operating Officer and interim Chief\nMarketing Officer.\n\nUnder the terms of the strategic partnership announced last week, Bifinity had the right to nominate key appointments, including the\nCEO and two new Board members. Bifinity will also nominate two additional senior leaders in the coming weeks.\n\nAs CEO, Jonathan will play an instrumental role in fast-tracking the collaboration between both businesses. The initial phase of this\ngroundbreaking strategic partnership will put in place a framework for Bifinity to safeguard some of its client assets with EQONEX\u2019s\nFCA registered custodian, Digivault, in compliance with all applicable regulatory requirements. Moving forward, Bifinity will develop\nways to leverage the EQONEX Exchange as an alternative trading platform, deploy resources to strengthen the technology, and also\nexplore opportunities to scale the asset management business.\n\nJonathan is a respected finance and crypto industry leader and most recently held the roles of Head of Binance for the United Kingdom\nand CEO of Bifinity. With a strong compliance pedigree, Jonathan was involved in developing the company\u2019s global regulatory license\nand registration roadmap, which was crucial for the official launch of Bifinity in early March 2022. Prior to that, Jonathan was Director\nof Compliance and Board Member of eToro Money, an FCA-regulated payments firm. He also headed operations and sat on the Board\nat eToroX, the Group\u2019s crypto exchange and custody platform\n\nHelen is President of Bifinity and holds various senior positions within the Binance organization including heading the NFT and fan\ntoken platforms and the Binance Charity Foundation. Helen is a respected global leader and a United Nations Industrial Development\nOrganization (UNIDO) Goodwill Ambassador. Helen founded the Made in Africa Initiative that advised African governments on\nindustrialization and investments. She was also the Co-Founder of C&H Garments, which was a pioneer Pan-Africa export-oriented\ngarments manufacturer. She is also a trained actuary with almost 20 years of experience working with FTSE100 companies.\n\nChi-Won Yoon, EQONEX Chairman said, \u201cWe are delighted to welcome Jonathan to the EQONEX management team and Helen to\nour Board. Their appointments mark the next critical step in developing the Bifinity and EQONEX strategic partnership. I look forward\nto working with them closely to optimize our businesses and fulfil our joint vision to become a bridge between the old world of\ntraditional finance and cryptocurrencies.\u201d\n\f Case 1:23-cv-03346-GHW Document 48-7 Filed 01/12/24 Page 4 of 6\n\n\nJonathan Farnell, CEO of EQONEX said, \u201cEQONEX was one of the crypto industry\u2019s pioneering firms, leading the sector towards\ngreater regulatory compliance and governance as a listed company. Now as we embark on this groundbreaking industry partnership, it\u2019s\nparticularly exciting to join EQONEX as it approaches such an important inflection point in its history.\u201d\n\n\u201cWe can already see the strengths and capabilities that we can harness between the two companies. EQONEX has an outstanding\nregulatory and licensing track record and market-leading expertise at identifying opportunities for institutions, which is most clearly\nevident when looking at the Digivault business that continues to attract institutions and law enforcement agencies. Coupled with its\nasset management business and exchange, the opportunity to create a full ecosystem by harnessing Bifinity\u2019s technology, marketing\nclout and client base has the potential to be transformative for the industry.\u201d\n\nJonathan added, \u201cEQONEX and Bifinity share the same ethos and vision to help create safe and compliant cryptocurrency ecosystems\nfor consumers and institutions across the world. I\u2019m looking forward to fostering true collaboration and productivity across both\nbusinesses across both teams.\u201d\n\nAs part of these organizational changes, current board members Andrew Eldon, EQONEX Chief Operating Officer and interim Chief\nMarketing Officer, and Paul Ewing, EQONEX Chief Financial Officer will step down from the EQONEX Board, effective\nimmediately.\n\nAbout EQONEX\n\nEQONEX Limited (NASDAQ: EQOS) is a technology-driven digital assets financial services group that provides institutional-grade\ninfrastructure and a full suite of trading, custody and asset management solutions to clients. The Group\u2019s digital assets ecosystem has\nbeen designed to accommodate the needs of institutions and individuals with the same degree of regulatory oversight and security they\nare accustomed to in traditional financial markets. EQONEX\u2019s ecosystem primarily encompasses EQONEX Exchange, a digital asset\nexchange; Digivault, a FCA accredited hot and cold digital assets custodian and Bletchley Park Asset Management, a fund of crypto-\nhedge funds.\n\nFor more information visit: -https://group.eqonex.com/\n -- -- -- ------\nFollow EQONEX on social media on Twitter @eqonex, on Facebook @eqonex, and on LinkedIn.\n\nAbout Bifinity\n\nBifinity, powered by Binance, is a payments technology company that provides an entry point to the new world of digital currency for\nbusinesses. It offers on-and-off-ramp solutions to empower businesses to convert fiat-to-crypto transactions using major payment\nmethods directly.\n\nFor more information, visit: https://www.bifinity.com/.\n\f Case 1:23-cv-03346-GHW Document 48-7 Filed 01/12/24 Page 5 of 6\n\n\nForward-Looking Information\n\nAny forward-looking statements in this press release are based on available current market material and management\u2019s expectations,\nbeliefs and forecasts concerning future events impacting EQONEX. You are cautioned that any such forward-looking statements are\nnot guarantees of future performance and involve risks and uncertainties, as well as assumptions, which, if they were to ever\nmaterialize or prove incorrect, could cause the results of EQONEX to differ materially from those expressed or implied by such\nforward-looking statements. The forward-looking statements made in this press release speak only as of the date hereof and we\ndisclaim any obligation, except as required by law, to provide updates, revisions or amendments to any forward-looking statements to\nreflect changes in our expectations or future events.\n\nContacts\n\nEQONEX\nPress Contact:\nKristen Kaus\nkristen.kaus@eqonex.com\n\nInvestor Relations:\nChristian Arnell\nir@eqonex.com\n\nGateway Investor Relations:\nMatt Glover or John Yi\neqonex@gatewayir.com\n\nBinance\nPress Contact:\npr@binance.com\n\f Case 1:23-cv-03346-GHW Document 48-7 Filed 01/12/24 Page 6 of 6\n\n\n SIGNATURES\n\n Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on\nits behalf by the undersigned, thereunto duly authorized.\n\n EQONEX Limited\n\nDate: March 17, 2022 By: /s/ Paul Ewing\n Name: Paul Ewing\n Title: Chief Financial Officer\n\f","ocr_status":2,"date_upload":"2026-06-22T06:14:54.137168-07:00","document_number":"48","attachment_number":7,"pacer_doc_id":"127034743960","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit 7 - March 17, 2022 Press Release","acms_document_guid":""}],"date_created":"2024-01-12T18:07:23.098568-08:00","date_modified":"2025-01-09T03:52:14.854802-08:00","date_filed":"2024-01-12","time_filed":"20:22:10","entry_number":48,"recap_sequence_number":"2024-01-12.003","pacer_sequence_number":185,"description":"DECLARATION of Victoria H. Yuhas in Support re: 46 MOTION to Dismiss .. Document filed by Bifinity UAB, Binance Group, Almira Cemmell, Zhao Changpeng, Jonathan Farnell, Yu Helen Hai, Daniel Ling. (Attachments: # 1 Exhibit 1 - Convertible Loan Agreement, # 2 Exhibit 2 - Eqonex's January 2022 Prospectus, # 3 Exhibit 3 - Eqonex's 2022 Annual Report, # 4 Exhibit 4 - Eqonex's Beneficial Ownership Report, # 5 Exhibit 5 - Eqonex's Amendment No. 6 to Form F-1 Registration Statement, # 6 Exhibit 6 - March 7, 2022 Press Release, # 7 Exhibit 7 - March 17, 2022 Press Release).(Yuhas, Victoria) (Entered: 01/12/2024)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/373378486/","id":373378486,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67233991/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/380929968/","id":380929968,"tags":[],"absolute_url":"","date_created":"2023-12-15T09:07:56.142873-08:00","date_modified":"2023-12-15T09:07:56.147463-08:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"","attachment_number":null,"pacer_doc_id":"","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Telephone Conference","acms_document_guid":""}],"date_created":"2023-12-15T09:07:56.099863-08:00","date_modified":"2023-12-15T09:07:56.099877-08:00","date_filed":"2023-12-15","time_filed":"11:48:05","entry_number":null,"recap_sequence_number":"2023-12-15.001","pacer_sequence_number":null,"description":"","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/372954834/","id":372954834,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67233991/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/380498912/","id":380498912,"tags":[],"absolute_url":"","date_created":"2023-12-11T15:10:23.072820-08:00","date_modified":"2023-12-11T15:10:23.076550-08:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"","attachment_number":null,"pacer_doc_id":"","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Order","acms_document_guid":""}],"date_created":"2023-12-11T15:10:23.064064-08:00","date_modified":"2023-12-11T15:10:23.064076-08:00","date_filed":"2023-12-11","time_filed":"16:20:07","entry_number":null,"recap_sequence_number":"2023-12-11.001","pacer_sequence_number":null,"description":"","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/371860530/","id":371860530,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67233991/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/379354190/","id":379354190,"tags":[],"absolute_url":"/docket/67233991/44/zhao-v-eqonex-limited/","date_created":"2023-11-29T13:08:03.885921-08:00","date_modified":"2025-01-09T03:52:14.757391-08:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"44","attachment_number":null,"pacer_doc_id":"127034502225","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Response to Motion","acms_document_guid":""}],"date_created":"2023-11-29T13:08:03.874106-08:00","date_modified":"2025-01-09T03:52:14.746851-08:00","date_filed":"2023-11-29","time_filed":"15:39:11","entry_number":44,"recap_sequence_number":"2023-11-29.001","pacer_sequence_number":173,"description":"LETTER RESPONSE to Motion addressed to Judge Gregory H. Woods from Jacob A. Goldberg dated November 29, 2023 re: 42 LETTER MOTION for Conference on proposed motion to dismiss Amended Complaint addressed to Judge Gregory H. Woods from Samson A. Enzer dated November 20, 2023. . Document filed by Jaime Chaves, Kreig Kinnaman, Bin Li..(Goldberg, Jacob) (Entered: 11/29/2023)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/371262375/","id":371262375,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67233991/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/378734779/","id":378734779,"tags":[],"absolute_url":"/docket/67233991/43/zhao-v-eqonex-limited/","date_created":"2023-11-21T07:08:06.651953-08:00","date_modified":"2025-01-09T03:52:14.737195-08:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"43","attachment_number":null,"pacer_doc_id":"127034461277","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Order on Motion for Conference","acms_document_guid":""}],"date_created":"2023-11-21T07:08:06.641225-08:00","date_modified":"2025-01-09T03:52:14.726919-08:00","date_filed":"2023-11-20","time_filed":null,"entry_number":43,"recap_sequence_number":"2023-11-20.002","pacer_sequence_number":171,"description":"ORDER granting 42 Letter Motion for Conference re: 42 LETTER MOTION for Conference on proposed motion to dismiss Amended Complaint addressed to Judge Gregory H. Woods from Samson A. Enzer dated November 20, 2023. Defendants' request for a pre-motion conference is granted. Dkt. No. 42. The Court will hold a teleconference regarding Defendants' proposed motion to dismiss on December 8, 2023 at 2:00 p.m. The parties are directed to the Courts Individual Rules of Practice in Civil Cases, which are available on the Courts website. Rule 2 of the Court's Individual Rules contains the dial-in number for the conference and other relevant instructions. The parties are specifically directed to comply with Rule 2(C) of the Courts Individual Rules. Telephone Conference set for 12/8/2023 at 02:00 PM before Judge Gregory H. Woods. (Signed by Judge Gregory H. Woods on 11/20/2023) (rro) (Entered: 11/21/2023)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/371227752/","id":371227752,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67233991/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/378694004/","id":378694004,"tags":[],"absolute_url":"/docket/67233991/42/zhao-v-eqonex-limited/","date_created":"2023-11-20T15:10:58.805131-08:00","date_modified":"2025-01-09T03:52:14.711553-08:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"42","attachment_number":null,"pacer_doc_id":"127034457965","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Conference","acms_document_guid":""}],"date_created":"2023-11-20T15:10:58.776156-08:00","date_modified":"2025-01-09T03:52:14.700914-08:00","date_filed":"2023-11-20","time_filed":"16:49:48","entry_number":42,"recap_sequence_number":"2023-11-20.001","pacer_sequence_number":169,"description":"LETTER MOTION for Conference on proposed motion to dismiss Amended Complaint addressed to Judge Gregory H. Woods from Samson A. Enzer dated November 20, 2023. Document filed by Bifinity UAB, Binance Group, Almira Cemmell, Zhao Changpeng, Jonathan Farnell, Yu Helen Hai, Daniel Ling..(Enzer, Samson) (Entered: 11/20/2023)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/368772013/","id":368772013,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67233991/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/419612816/","id":419612816,"tags":[],"absolute_url":"","date_created":"2024-11-11T21:50:49.181478-08:00","date_modified":"2025-01-09T03:52:14.695075-08:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"","attachment_number":null,"pacer_doc_id":"","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"","acms_document_guid":""}],"date_created":"2023-10-23T20:21:49.524243-07:00","date_modified":"2025-01-09T03:52:14.686606-08:00","date_filed":"2023-10-11","time_filed":null,"entry_number":null,"recap_sequence_number":"2023-10-11.001","pacer_sequence_number":null,"description":"Minute Entry for proceedings held before Judge Gregory H. Woods: Telephone Conference held on 10/11/2023. (Court Reporter present) (wv)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/368772012/","id":368772012,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67233991/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/419612815/","id":419612815,"tags":[],"absolute_url":"","date_created":"2024-11-11T21:50:49.077107-08:00","date_modified":"2025-01-09T03:52:14.585712-08:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"","attachment_number":null,"pacer_doc_id":"","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"","acms_document_guid":""}],"date_created":"2023-10-23T20:21:49.372182-07:00","date_modified":"2025-01-09T03:52:14.573979-08:00","date_filed":"2023-10-02","time_filed":null,"entry_number":null,"recap_sequence_number":"2023-10-02.001","pacer_sequence_number":null,"description":"***NOTICE TO ATTORNEY REGARDING DEFICIENT PLEADING. Notice to Attorney Jacob Alexander Goldberg to RE-FILE Document No. 37 Amended Complaint. The filing is deficient for the following reason(s): the PDF attached to the docket entry for the pleading is not correct. Re-file the pleading using the event type Amended Complaint found under the event list Complaints and Other Initiating Documents - attach the correct signed PDF - select the individually named filer/filers - select the individually named party/parties the pleading is against. (vf)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/367761080/","id":367761080,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67233991/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/375046946/","id":375046946,"tags":[],"absolute_url":"","date_created":"2023-10-12T13:11:42.163127-07:00","date_modified":"2023-10-12T13:11:42.167283-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"","attachment_number":null,"pacer_doc_id":"","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Telephone Conference","acms_document_guid":""}],"date_created":"2023-10-12T13:11:42.157762-07:00","date_modified":"2023-10-12T13:11:42.157777-07:00","date_filed":"2023-10-12","time_filed":"15:41:08","entry_number":null,"recap_sequence_number":"2023-10-12.001","pacer_sequence_number":null,"description":"","tags":[]}],"entries_total":"https://www.courtlistener.com/api/rest/v4/docket-entries/?count=on&docket=67233991&page_size=40"}