A New York Supreme Court judge has ruled on a case involving a cryptocurrency theft that affected plaintiff Tobias Kaplan. The court dismissed claims against Circle Internet Group Inc. and Circle Internet Financial LLC, stating they had no legal obligation to freeze stolen funds from Kaplan's account. However, the court allowed for further investigation into the role of another defendant, Uneven Labs, in the case.

This ruling is significant as it clarifies the responsibilities of cryptocurrency companies in cases of theft and could set a precedent for similar cases in the future. The decision affects not only the parties involved but also the broader cryptocurrency industry as it navigates legal responsibilities and consumer protections.

Background

The case, Kaplan v. Circle Internet Group Inc., was filed in New York County under docket number 650459/2026. The plaintiff, Tobias Kaplan, alleged that an unidentified hacker stole over $13 million worth of USD Coin (USDC) from his cryptocurrency wallet in January 2026. The defendants in the case include Circle Internet Group Inc., Circle Internet Financial LLC, and Uneven Labs, Inc.

Kaplan claimed that Circle should have acted more quickly to freeze the stolen USDC after he reported the theft. He argued that the company had the technical ability to do so but failed to act, allowing the thief to dissipate the funds. Uneven Labs was accused of facilitating the theft through its Relay.Link network, which the thief allegedly used to convert the stolen USDC into other cryptocurrencies.

The case reached the New York Supreme Court after Kaplan filed a summons and complaint on January 27, 2026, seeking a temporary restraining order to freeze the stolen funds. The court granted the order but noted that by the time it was issued, the funds had already been dissipated.

The Ruling

Judge Joel M. Cohen presided over the case and issued a ruling on November 2, 2026. The court dismissed Kaplan's claims against Circle, stating that the company had no legal duty to freeze the stolen USDC without a court order. The judge noted, "Circle was not under a legal duty to freeze the USDC remaining in John Doe's wallet upon request by Plaintiff... absent a court order, which Circle's then-applicable terms of service required."

Furthermore, the court found that Circle's inaction did not amount to aiding and abetting the theft. The judge stated, "Plaintiff fails to plead any facts suggesting that Circle aided and abetted John Doe's conversion of Plaintiff's USDC." On the other hand, the court denied Uneven Labs' motion to dismiss, allowing for jurisdictional discovery to determine if the court had jurisdiction over the company.

Impact

The ruling has significant implications for the cryptocurrency industry, particularly regarding the responsibilities of companies like Circle when it comes to theft and fraud. By establishing that Circle had no duty to intervene without a court order, the court has clarified the limits of liability for cryptocurrency issuers in similar situations.

This decision may influence how cryptocurrency companies structure their terms of service and respond to theft claims in the future. It also highlights the importance of legal frameworks surrounding digital assets, as users may need to rely on law enforcement and courts to address theft rather than expecting immediate action from cryptocurrency platforms.

What's Next

The case against Uneven Labs will proceed with jurisdictional discovery, allowing Kaplan to gather more information about the company's operations and its potential role in the theft. If the court finds sufficient grounds for jurisdiction, Kaplan may amend his complaint against Uneven Labs. The outcome of this case could further shape the legal landscape for cryptocurrency theft and the responsibilities of digital asset companies.