John Cress v. Nexo Capital Inc.

4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA JOHN CRESS, Case No. 23-cv-00882-TSH 8 Plaintiff, ORDER RE: ADMINISTRATIVE 9 v. MOTIONS TO FILE UNDER SEAL 10 NEXO CAPITAL INC., Re: Dkt. Nos. 75, 79 11 Defendant.

13 I. INTRODUCTION 14 Plaintiff John Cress filed this action against Defendants Nexo Financial LLC, Nexo Financial Services Ltd., Nexo AG, Nexo Capital, Inc., and Antoni Trenchev, Nexo’s CEO, alleging the Nexo parties fraudulently induced him to take out loans collateralized by millions of dollars in digital assets, which were ultimately sold by the Nexo parties. ECF No. 1. Nexo Capital, Inc. (“Nexo”) is the only remaining defendant in the case. ECF No. 37 at 7. Pending before the Court are two Administrative Motions to Consider Whether Another Party’s Material Should Be Sealed, one filed by Cress and one filed by Nexo. ECF Nos. 75, 79. For the reasons stated below, the Court GRANTS IN PART and DENIES IN PART Cress’s Administrative Motion and DENIES Nexo’s Administrative Motion.1 23 II. LEGAL STANDARD 24 “Historically, courts have recognized a ‘general right to inspect and copy public records and documents, including judicial records and documents.’” Kamakana v. City and Cty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (quoting Nixon v. Warner Commc’ns, Inc., 435 1 U.S. 589, 597, n.7 (1978)). Courts generally apply a “compelling reasons” standard when considering motions to seal, recognizing that “a strong presumption in favor of access is the starting point.” Id. (cleaned up). Parties seeking to seal judicial records relating to motions that are “more than tangentially related to the underlying cause of action,” Ctr. for Auto Safety v. Chrysler Grp., LLC, 809 F.3d 1092, 1099 (9th Cir. 2016), bear the burden of overcoming the presumption with “compelling reasons supported by specific factual findings that outweigh the general history of access and the public policies favoring disclosure,” Kamakana, 447 F.3d at 1178–79 (cleaned up). By contrast, a “good cause showing” under Federal Rule of Civil Procedure 26(c) “will suffice to keep sealed records attached to non-dispositive motions.”

10 Kamakana, 447 F.3d at 1180.

11 Here, the documents at issue in Cress’s Administrative Motion (ECF No. 75) and Nexo’s Administrative Motion (ECF No. 79) were filed in connection with Cress’s Motion for Leave to Amend First Amended Complaint (ECF No. 76). When parties seek to seal exhibits offered in support of motions for leave to amend and oppositions thereto, “the parties need only demonstrate ‘good cause’ in order to support their requests to seal.” Dunbar v. Google, Inc., No. 5:12-cv- 003305-LHK, 2012 WL 6202719, at *2 (N.D. Cal. Dec. 12, 2012); see also Pintos v. Pac. Creditors Ass’n, 605 F.3d 665, 678 (9th Cir. 2010) (“Nondispositive motions are often unrelated, or only tangentially related, to the underlying cause of action, and, as a result, the public’s interest in accessing dispositive materials does not apply with equal force to non-dispositive materials.”)

20 (cleaned up). Accordingly, the good cause standard applies to both Administrative Motions.

21 Civil Local Rule 79-5 supplements the “compelling reasons” standard. Exeltis USA Inc. v. First Databank, Inc., No. 17-cv-04810-HSG, 2020 WL 2838812, at *1 (N.D. Cal. June 1, 2020).

23 Where, as here, a filing party (the “Filing Party”) seeks to seal a filed document because that document has been designated as confidential by another party (the “Designating Party”), the Filing Party must file an Administrative Motion to Consider Whether Another Party’s Material Should Be Sealed. Civ. L.R. 79-5(f). This motion must identify each document or portions thereof for which sealing is sought. Id. “Within 7 days of the motion's filing, the Designating legal standard and the reasons for keeping a document under seal.” Id. at 79-5(c)(1), (f). That statement must include (i) the legitimate private or public interests that warrant sealing; (ii) the injury that will result if sealing is denied; and (iii) why a less restrictive alternative to sealing is not sufficient. Id. at 79-5(c)(1). A failure to file a statement or declaration may result in the unsealing of the provisionally sealed document without notice to the Designating Party. Id. 6 III. DISCUSSION A. ECF No. 75 8 On September 30, 2025, Cress filed an Administrative Motion to Consider Whether Another Party’s Material Should Be Sealed, pursuant to Civil Local Rule 79-5, in connection with his Motion for Leave to Amend First Amended Complaint. ECF Nos. 75, 76. Cress requests that sixteen documents be filed under seal: 12 • Declaration of James Taylor-Copeland (“Taylor-Copeland Decl.”) (ECF No. 76-1), 13 Ex. 2 (ECF No. 75-4) 14 • Taylor-Copeland Decl., Ex. 3 (ECF No. 75-5) 15 • Taylor-Copeland Decl., Ex. 4 (ECF No. 75-6) 16 • Taylor-Copeland Decl., Ex. 5 (ECF No. 75-7) 17 • Taylor-Copeland Decl., Ex. 6 (ECF No. 75-8) 18 • Taylor-Copeland Decl., Ex. 7 (ECF No. 75-9) 19 • Taylor-Copeland Decl., Ex. 8 (ECF No. 75-10) 20 • Taylor-Copeland Decl., Ex. 9 (ECF No. 75-11) 21 • Taylor-Copeland Decl., Ex. 10 (ECF No. 75-12) 22 • Taylor-Copeland Decl., Ex. 11 (ECF No. 75-13) 23 • Taylor-Copeland Decl., Ex. 12 (ECF No. 75-14) 24 • Taylor-Copeland Decl., Ex. 13 (ECF No. 75-15) 25 • Taylor-Copeland Decl., Ex. 14 (ECF No. 75-16) 26 • Taylor-Copeland Decl., Ex. 15 (ECF No. 75-17) 27 • Taylor-Copeland Decl., Ex. 16 (ECF No. 75-18) ECF No. 75.

2 On October 7, 2025, Nexo responded to Cress’s Administrative Motion requesting sealing of eight documents: Taylor-Copeland Decl., Exs. 2, 9, 10, 11, 12, 13, 16, 17. ECF No. 78. Nexo also requests “the redaction of the third-party email addresses of Nexo customers in Exhibits 4 and 15” to the Taylor-Copeland Declaration. Id. In support of its request, Nexo submits a declaration from Antoni Trenchev setting forth the bases for sealing each document. See Declaration of Antoni Trenchev (“Trenchev Decl.”) (ECF No. 78-1).

8 Overall, Nexo argues that the documents at issue “disclose its proprietary and confidential business and financial information,” and “disclose its commercially sensitive and non-public correspondence with U.S. regulators.” ECF No. 78 at 2. Exhibit 2 purportedly describes “retail OTC execution procedures, potential alternative procedures, and historic customer and financial data and transaction volumes.” Id. at 4 (citing Trenchev Decl. ¶ 5). Exhibit 9 purportedly describes “a collateral liquidation transaction and provides various calculations, formulas, and screenshots from internal systems reflecting system architecture.” Id. (citing Trenchev Decl. ¶ 7).

15 “Exhibit 10 is a spreadsheet summarizing non-public historical financial performance and revenues from various sources.” Id. at 5 (citing Trenchev Decl. ¶ 8). Exhibit 13 purportedly describes “the ‘flow’ for customer service outreach regarding certain Nexo services, including examples, templates, and internal Nexo email addresses.” Id. (citing Trenchev Decl. ¶ 10).

19 “Exhibit 11 and 12 are Nexo’s responses to regulatory inquiries sent by Nexo’s external legal counsel.” Id. at 6 (citing Trenchev Decl. ¶¶ 9, 12). “Exhibits 16 and 17 are additional responses to regulatory inquiries.” Id. (citing Trenchev Decl. ¶ 12). Finally, Exhibits 4 and 15 disclose email addresses of Nexo customers who are not parties to this litigation. Id. at 4 (citing Trenchev Decl. ¶¶ 6, 11).

24 The Court has reviewed the requested documents to be sealed and finds that good cause exists to seal the documents as they relate to Nexo’s confidential business information and non- public correspondence with regulators. See Regis Metro Associates, Inc. v. NBR Co., LLC, No. 20-cv-02309-DMR, 2022 WL 267443, at *14 (N.D. Cal. Jan. 28, 2022) (granting motion to seal confidentiality agreements”); LaBarge v. Elutia, Inc., No. 24-cv-1857-MMA-DEB, 2025 WL 2 1296700, at *2 (S.D. Cal. May 5, 2025) (finding good cause exits to seal exhibits containing “material resulting from government inspection, both conclusions and responses”). The Court also finds that good cause exists to redact email addresses of Nexo customers from Exhibits 4 and 15 to the Taylor-Copeland Declaration. See Doe v. City of San Diego, No. 12-cv-689-MMA- DHB, 2014 WL 1921742, at *4 (S.D. Cal. May 14, 2014) (finding compelling reasons exist to seal documents containing personal information that is irrelevant to the matter).

8 Accordingly, the Court GRANTS Cress’s Administrative Motion to seal Taylor-Copeland Decl., Ex. 2 (ECF No. 75-4), Taylor-Copeland Decl., Ex. 9 (ECF No. 75-11), Taylor-Copeland Decl., Ex. 10 (ECF No. 75-12), Taylor-Copeland Decl., Ex. 11 (ECF No. 75-13), Taylor-Copeland Decl., Ex. 12 (ECF No. 75-14), Taylor-Copeland Decl., Ex. 13 (ECF No. 75-15), Taylor-Copeland Decl., Ex. 16 (ECF No. 75-18), and Taylor-Copeland Decl., Ex. 17 (ECF No. 75-19). Nexo is hereby DIRECTED to file Taylor-Copeland Decl., Ex. 4 (ECF No. 75-6), and Taylor-Copeland Decl., Ex. 15 (ECF No. 75-17) in the public record with the email addresses of Nexo customers redacted within four days from the date of this order.

16 Nexo states that it does not request sealing of Exhibits 3, 5, 6, 7, 8, and 14 to the Taylor- Copeland Declaration. ECF No. 78. Accordingly, the Court DENIES Cress’s Administrative Motion to seal Taylor-Copeland Decl., Ex. 3 (ECF No. 75-5), Taylor-Copeland Decl., Ex. 5 (ECF No. 75-7), Taylor-Copeland Decl., Ex. 6 (ECF No. 75-8), Taylor-Copeland Decl., Ex. 7 (ECF No. 75-9), Taylor-Copeland Decl., Ex. 8 (ECF No. 75-10), and Taylor-Copeland Decl., Ex. 14 (ECF No. 75-16), and Cress is hereby DIRECTED to file these items in the public record within four days from the date of this order.

23 B. ECF No. 79 24 On October 14, 2025, Nexo filed an Administrative Motion to Consider Whether Another Party’s Material Should Be Sealed, pursuant to Civil Local Rule 79-5, in connection with its Opposition to Cress’s Motion for Leave to Amend. ECF Nos. 79, 80. Nexo requests that four documents be filed under seal: 1 79-4) 2 e Shelton Decl., Ex. 9 (ECF No. 79-5) 3 e Shelton Decl., Ex. 10 (ECF No. 79-6) 4 e Shelton Decl., Ex. 11 CECF No. 79-7) || ECF No. 79.”

6 Under Civil Local Rule 79-5(f)(3), Cress had seven days to file a statement or declaration || justifying the sealing. Cress did not do so. Accordingly, the Court DENIES Nexo’s Administrative Motion to seal Shelton Decl., Ex. 8 (ECF No. 79-4), Shelton Decl., Ex. 9 ECF No. 79-5), Shelton Decl., Ex. 10 CECF No. 79-6), and Shelton Decl., Ex. 11 CECF No. 79-7), and Nexo || is hereby DIRECTED to file these items in the public record within four days from the date of ll this order.

12 IV. CONCLUSION 13 For the reasons stated above, the Court GRANTS IN PART and DENIES IN PART v 14 Cress’s Administrative Motion and DENIES Nexo’s Administrative Motion. © IT IS SO ORDERED. = 17 Dated: October 30, 2025 □ Z 18 AY \ - Lj, — THOMAS S. HIXSON 19 United States Magistrate Judge 28 > Nexo filed redacted versions of these exhibits to the Shelton Declaration on the public docket.

See ECF Nos. 80-9 (Ex. 8), 80-10 (Ex. 9), 80-11 (Ex. 10), 80-12 (Ex. 11).