1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9

10 HARRO MOEN, Case No. 25-cv-09145-NC 11 Plaintiff,

ORDER GRANTING

12 v. DEFENDANTS’ MOTION TO

DISMISS WITH LEAVE TO

13 SOCIALCHAIN INC., and others, AMEND IN PART 14 Defendants. Re: ECF 23 15 16 Plaintiff Harro Moen alleges seven causes of action against Defendants SocialChain 17 Inc., Nicolas Kokkalis, Chengdiao Fan, Pi Community Company, and Does 1-50 arising 18 from misrepresentations about the cryptocurrency platform’s governance and Mainnet 19 launch and an unauthorized transfer of Pi tokens from his secured wallet. Defendants 20 move to dismiss Plaintiff’s Complaint or, in the alternative, move for a more definitive 21 statement. For the reasons stated below, this Court GRANTS Defendants’ Motion to 22 Dismiss. 23 I. BACKGROUND 24 A. Factual Background 25 Plaintiff alleges the following. Defendants launched Pi Network, a mobile 26 application cryptocurrency platform, in 2019. ECF 1 (Compl.) at 11. Kokkalis’s 2019 27 whitepaper stated that Pi Network had “decentralized governance,” an “open blockchain,” 1 2025 Mainnet launch, which would open the platform for external wallet transfers, 2 exchange listings, and decentralized applications. Id. These representations were false 3 because Pi Network was a centralized platform controlled by SocialChain Inc. Id. at 11– 4 12. 5 Plaintiff joined Pi Network in 2020 to mine tokens. Id. at 12–13. Over four years, 6 Plaintiff mined 6,541 Pi tokens through clicking on the application’s mining button, 7 recruiting users, and running Pi Node software on his laptop. Id. at 13. Plaintiff incurred 8 electricity and data costs due to his efforts. Id. 9 In 2021, Defendants sold two billion Pi tokens in undisclosed transactions which 10 deprived Plaintiff of material information regarding the Pi Network. Id. at 14–15. In 11 2022, Defendants listed Pi tokens on numerous sites, but denied involvement in a post on 12 X. Id. at 15. 13 In 2023, Defendants approved Plaintiff’s request to migrate his Pi tokens for the 14 Mainnet launch. Id. at 13. However, Defendants did not transfer Plaintiff’s tokens despite 15 repeated notifications within the mobile application promising migration within three to 16 five months. Id. at 15. 17 In 2024, Plaintiff discovered that 5,137 Pi tokens were transferred from his wallet 18 without authorization. Id. at 13. Plaintiff tried to recover his tokens, but Defendants failed 19 to assist his efforts. Id. at 14. Plaintiff’s remaining tokens have not been migrated to the 20 Mainnet. Id. 21 B. Procedural Background 22 On October 24, 2025, Plaintiff filed the Complaint. ECF 1. On December 23, 23 2025, Defendants filed a Motion to Dismiss Plaintiff’s Complaint for failure to state a 24 claim or, in the alternative, for a more definitive statement. ECF 23. Plaintiff opposed. 25 ECF 24. Defendants replied. ECF 28. 26 The parties have consented to magistrate judge jurisdiction. ECF 18, 20. 27 II. LEGAL STANDARD 1 sufficiency of a complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). “To 2 survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as 3 true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 4 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). When 5 reviewing a 12(b)(6) motion, a court “must accept as true all factual allegations in the 6 complaint and draw all reasonable inferences in favor of the non-moving party.” Retail 7 Prop. Trust v. United Bd. of Carpenters & Joiners of Am., 768 F.3d 938, 945 (9th Cir. 8 2014). A court, however, need not accept as true “allegations that are merely conclusory, 9 unwarranted deductions of fact, or unreasonable inferences.” In re Gilead Scis. Secs. 10 Litig., 536 F.3d 1049, 1055 (9th Cir. 2008). A claim is facially plausible when it “allows 11 the court to draw the reasonable inference that the defendant is liable for the misconduct 12 alleged.” Id. If a court grants a motion to dismiss, leave to amend should be granted 13 unless the pleading could not possibly be cured by the allegation of other facts. Lopez v. 14 Smith, 203 F.3d 1122, 1127 (9th Cir. 2000). 15 III. DISCUSSION 16 Plaintiff asserts the following causes of action: (1) violations of sections 5(a) and 17 (c) of the Securities Act; (2) securities fraud under section 10(b); (3) whistleblower 18 retaliation in violation of the Sarbanes-Oxley Act; (4) common law fraud; (5) breach of 19 fiduciary duty; (6) unjust enrichment; and (7) violation of California’s Unfair Competition 20 Law (UCL). See Compl. generally. The Court will analyze each claim below. 21 A. Plaintiff’s First and Second Claims Fail Because Pi Tokens Do Not 22 Constitute a “Security” 23 Defendants argue Plaintiff’s first and second claims for violations of the Securities 24 Act must fail because Pi tokens do not constitute a security and both claims are predicated 25 on the sale of a security. ECF 23 at 14. Plaintiff contends Pi tokens constitute an 26 investment contract because Plaintiff invested “time and data via mobile mining, akin to 27 money.” ECF 24 at 12. 1 documents traded for speculation or investment,” such as “investment contract[s].” SEC v. 2 W.J. Howey Co. (Howey), 328 U.S. 293, 297 (1946). “The Ninth Circuit has ‘distilled 3 Howey’s definition into a three-part test requiring (1) an investment of money (2) in a 4 common enterprise (3) with an expectation of profits produced by the efforts of others.’” 5 Real v. Yuga Labs, Inc., No. cv 22-8909 FMO (BFMX), 2025 WL 3437389, at *4 (C.D. 6 Cal. Sept. 30, 2025) (quoting Warfield v. Alaniz, 569 F.3d 1015, 1020 (9th Cir. 2009)). 7 “The ‘investment of money’ prong of the Howey test requires that the investor 8 commit his assets to the enterprise in such a manner as to subject himself to financial loss.” 9 Warfield v. Alaniz, 569 F.3d 1015, 1021 (9th Cir. 2009) (citations omitted). Plaintiff 10 concedes he has not invested money in Pi tokens but has input time and internet data which 11 he states is “akin to money.” Compl. at 19; ECF 24 at 12. Plaintiff relies on SEC v. 12 Shavers to support the proposition that commitment of time and resources constitutes an 13 investment of money. SEC v. Shavers, No. 4:13-cv-416, 2013 WL 4028182 (E.D. Tex. 14 Aug. 6, 2013). However, Shavers merely states that bitcoin can be considered a security 15 when investors commit money, which is not the case here. Id. at *2. The Court has not 16 located, and Plaintiff has not cited to, any authority suggesting that investments of internet 17 data and time amount to an investment of money or how that would subject Plaintiff to a 18 financial loss. 19 Because Plaintiff has not invested money to satisfy the first prong of the Howey 20 test, the Court finds Plaintiff has failed to allege an investment contract as required to state 21 a claim under the Securities Act. Further, as Plaintiff has conceded that he has not 22 invested money, the pleading cannot possibly be cured so the Court will not grant leave to 23 amend. Lopez, 203 F.3d at 1127. Accordingly, the Court GRANTS Defendants’ motion 24 as to Plaintiff’s first and second claims without leave to amend. 25 B. Plaintiff’s Claim for Whistleblower Retaliation Fails Because He is Not 26 an Employee 27 Defendants argue that Plaintiff’s Sarbanes-Oxley retaliation claim must fail because 1 exhausted his administrative remedies. ECF 24 at 25. Plaintiff argues the Sarbanes-Oxley 2 Act extends protection to whistleblowers in financial markets, such as Plaintiff, who report 3 shareholder-like fraud. ECF 24 at 15–16. 4 The Sarbanes-Oxley Act “prohibits employers of publicly-traded companies from 5 ‘discriminat[ing] against an employee . . . for ‘provid[ing] information . . . regarding any 6 conduct which the employee reasonably believes constitutes a violation of . . . any 7 provision of Federal law relating to fraud against shareholders.’” Van Asdale v. Int’l Game 8 Tech., 577 F.3d 989, 996 (9th Cir. 2009) (quoting 18 U.S.C. § 1514A). 9 The Court agrees with Defendants that Plaintiff cannot state a claim for 10 whistleblower retaliation. The language of the statute makes clear that the Act only 11 applies to employers and their employees. See 18 U.S.C. § 1514A. There is no basis to 12 extend the Act to protect Plaintiff, who is not an employee of Defendants. Compl. at 22; 13 ECF 24 at 15–16. Plaintiff’s reliance on Wiest v. Lynch and Lawson v. FMR LLC is 14 unavailing as both cases pertain to employees suing their employers. Wiest v. Lynch, 710 15 F.3d 121, 124 (3d Cir. 2013); Lawson v. FMR LLC, 571 U.S. 429, 437 (2014). Moreover, 16 Pi is not publicly-traded and Plaintiff did not exhaust administrative remedies. The 17 pleading cannot possibly be cured so the Court will not grant leave to amend. Lopez, 203 18 F.3d at 1127. Accordingly, the Court grants Defendants’ motion to dismiss Plaintiff’s 19 third claim without leave to amend. 20 C. Plaintiff’s Common Law Fraud, Unjust Enrichment, and UCL Claims 21 Fail to Comply with Rule 9(b)’s Heightened Pleading Requirement 22 Defendants argue Plaintiff’s allegations do not meet the heightened pleading 23 requirement to support his common law fraud and UCL claims. ECF 23 at 26–29; ECF 28 24 at 17. Plaintiff argues the Complaint provides specific dates, sources, and transactions to 25 put Defendants on notice and state a fraud claim. ECF 24 at 16–17. 26 Rule 9(b)’s heightened pleading requirement applies to Plaintiff’s fraud, unjust 27 enrichment and UCL claims because all are based on Defendants’ allegedly fraudulent 1 Plaintiff’s Pi tokens. Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1103–4 (9th Cir. 2 2003) (a claim is “grounded in fraud” where “the plaintiff . . . allege[s] a unified course of 3 fraudulent conduct and rel[ies] entirely on that course of conduct as the basis of a claim,” 4 even “where fraud is not a necessary element of a claim”). Plaintiff concedes that both his 5 unjust enrichment and UCL claims sound in fraud. ECF 24 at 18 (unjust enrichment is a 6 basis for restitution “particularly in cases of fraud”), 19 (UCL prohibits fraudulent business 7 acts). 8 “Under the federal rules, a plaintiff alleging fraud ‘must state with particularity the 9 circumstances constituting fraud.’” In re Arris Cable Modem Consumer Litig., 2018 WL 10 288085, at *4 (quoting Fed. R. Civ. P. 9(b)). “To satisfy this standard, the allegations must 11 be ‘specific enough to give defendants notice of the particular misconduct which is alleged 12 to constitute the fraud charged so that they can defend against the charge and not just deny 13 that they have done anything wrong.’” Id. (quoting Semegen v. Weidner, 780 F.2d 727, 14 731 (9th Cir. 1985)). “Thus, claims sounding in fraud must allege ‘an account of the time, 15 place, and specific content of the false representations as well as the identities of the 16 parties to the misrepresentations.’” Id. (quoting Swartz v. KPMG LLP, 476 F.3d 756, 764 17 (9th Cir. 2007)). Specifically, “[a]verments of fraud must be accompanied by ‘the who, 18 what, when, where, and how’ of the misconduct charged.” Id. (quoting Vess, 317 F.3d at 19 1106) (citation omitted). “The plaintiff must also plead facts explaining why the statement 20 was false when it was made.” Id. (citation omitted). 21 The Complaint alleges “Defendants misrepresented the Pi Network as a 22 decentralized platform in the 2019 whitepaper . . . and app notifications (12 instances, 23 2021–2023), while operating three centralized validator nodes (PiScan, 2024)” and that 24 Plaintiff relied on those misrepresentations when mining tokens. Compl. at 23. The 25 Complaint further alleges that Defendants knew of their false statements, as “they 26 controlled validators and profited from undisclosed sales.” Id. 27 Plaintiff’s allegations fall short of Rule 9’s heightened pleading standards. Plaintiff 1 • Specific misleading statements which he saw and relied upon. Mere 2 reference to app notifications and X posts, without including the statements 3 within said notifications or posts, does not put Defendants on notice of the 4 fraud charged; 5 • Information explaining why Defendants’ statements were false when made; 6 • Which of the four Defendants are responsible for what specific alleged 7 misconduct; and 8 • “[T]he who, what, when, where, and how” of the misconduct relating to the 9 transfer of tokens from his wallet. 10 This list is not exhaustive – Plaintiff must set forth more specific facts so 11 Defendants can reasonably be on notice. Accordingly, the Court GRANTS Defendants’ 12 motion to dismiss Plaintiff’s common law fraud, unjust enrichment, and UCL claims. 13 However, because Plaintiff could allege additional facts to satisfy Rule 9(b), the Court 14 grants Plaintiff leave to amend. 15 D. Plaintiff Fails to Allege a Fiduciary Relationship Existed 16 Defendants argue Plaintiff cannot establish the existence of a fiduciary duty 17 between Pi Network and its’ users. ECF 23 at 29. Plaintiff contends courts have 18 recognized fiduciary duties when entities promise to protect user assets, as it creates a 19 relationship where one party reposes trust and confidence in another. ECF 24 at 17. 20 “In California, ‘[t]he elements of a cause of action for breach of fiduciary duty are: 21 (1) existence of a fiduciary duty; (2) breach of the fiduciary duty; and (3) damage 22 proximately caused by the breach.’” Fabian v. LeMahieu, No. 19-cv-00054-YGR, 2019 23 WL 4918431, at *10 (N.D. Cal. Oct. 4, 2019) (quoting Gutierrez v. Girardi, 194 24 Cal.App.4th 925, 932 (Cal. Ct. App. 2011)). “[B]efore a person can be charged with a 25 fiduciary obligation, he must either undertake to act on behalf and for the benefit of 26 another, or must enter into a relationship which imposes that undertaking as a matter of 27 law.” Id. (citation omitted). 1 The Complaint lacks sufficient facts to establish a fiduciary duty between Defendants 2 || and Plaintiff. Plaintiff relies on Bhatia v. Silvergate Bank, 725 F.Supp.3d 1079, 1121 (S.D. 3 || Cal. 2024), to argue that cryptocurrency exchanges generally have fiduciary duties to their 4 || customers. The Bhatia complaint included specific references to clauses within the Terms 5 || of Service, public representations regarding customer assets, and the solicitations of 6 || investments. /d. at 1124. So, the Bhatia court concluded a fiduciary relationship existed 7 based on contract, representations, and the confidential relationship between the exchange 8 and its users. /d. at 1121—22. Here, Plaintiff makes some reference to the Terms of Service 9 || but did not attach the full agreement or provide excerpts of the relevant portions. See Compl. 10 || generally. Plaintiff also does not explain how the Defendants owe fiduciary duties regarding 11 |} migration of Plaintiff's tokens, the undisclosed sale of two billion tokens, or the 2022 Pi 12 || token listings. Without more, the Court cannot find that a fiduciary relationship existed. 13 Accordingly, the Court GRANTS Defendants’ motion to dismiss Plaintiff's breach C 14 || of fiduciary duty claim with leave to amend. 3 15 |} IV. CONCLUSION 16 Accordingly, the Court GRANTS Defendants’ motion to dismiss Plaintiff's first, 5 17 second, and third claims without leave to amend and his fourth, fifth, and sixth claims with 5 18 || leave to amend. Plaintiff must amend the Complaint by February 5, 2026. Plaintiff may 19 |} not add additional parties or claims without leave of the Court. If Plaintiff does not file a 20 || timely amended complaint, the Court will enter Judgment for the Defendants and close the 21 || case. 22 23 IT IS SO ORDERED. 24 25 Dated: January 15, 2026 26 United States Magistrate Judge 27 28