Sirer v. Aksoy

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EMIN GUN SIRER, Plaintiff, v. EMRE AKSOY, Defendant.

No. 21-cv-22280-BLOOM/Otazo-Reyes

United States District Court, S.D. Florida

April 28, 2023

FINDINGS OF FACT AND CONCLUSIONS OF LAW

BETH BLOOM, UNITED STATES DISTRICT JUDGE

THIS CAUSE is before the Court following an evidentiary hearing on damages held on February 13, 2023. Plaintiff appeared with counsel and presented testimony and trial exhibits. ECF No. [96]. Neither Defendant nor counsel for Defendant appeared. Id. The Court has previously entered an order granting Plaintiff's Motion for Default Judgment as to Defendant's liability. ECF No. [67]. Plaintiff filed a redacted version of his Proposed Findings of Fact and Conclusions of Law, with attached exhibits, ECF No. [100]; and an unredacted version under seal of the Proposed Findings of Fact and Conclusions of Law, ECF No [104]. The Court has considered the testimony of the witnesses, the exhibits admitted into evidence Plaintiff's Proposed Findings and Conclusions of Law, the record in this case, the applicable law, and is otherwise fully advised. The Court makes the following findings of fact and conclusions of law.

I. FINDINGS OF FACT

A. Procedural History

On June 22, 2021, Plaintiff Dr. Emin Gun Sirer commenced this action by filing a complaint (the “Complaint”). ECF No. [1]. The Complaint alleges a single cause of action for defamation per se against Defendant Emre Aksoy. Id. On August 17, 2021, Defendant, through counsel, filed his Motion to Dismiss for Failure to State a Claim. ECF No. [16]. On October 22, 2021, the Court denied Defendant's motion in its entirety. ECF No. [23]. Defendant filed his Answer to the Complaint on November 3, 2021. ECF No. [26]. Defendant's counsel subsequently moved to withdraw as attorney for Defendant, and Defendant's counsel's motion was granted. ECF Nos. [44] and [50].

On June 21, 2022, Plaintiff moved for sanctions against Defendant on the grounds that Defendant willfully failed to comply with the Court's Orders and failed to comply with his discovery obligations. ECF No. [53]. On August 8, 2022, the Court granted Plaintiff's motion and directed the Clerk of Court to strike Defendant's Answer and affirmative defenses, and to enter default against Defendant. ECF No. [55]. On the same day, the Clerk of Court entered default against Defendant. ECF No. [57].

On September 9, 2022, Plaintiff moved pursuant to Federal Rule of Civil Procedure 55(b)(2) and Local Rule 7.1(a)(2) for entry of a Default Final Judgment against Defendant. ECF No. [64]. On October 17, 2022, the Court granted Plaintiff's motion as to liability and directed the parties to appear for an evidentiary hearing pursuant to Federal Rule of Civil Procedure 55(b)(2) to determine Plaintiff's damages. ECF No. [67]. On February 13, 2023, the Court held an evidentiary hearing on damages. ECF No. [96].

B. The Parties

Plaintiff is a computer scientist and entrepreneur. February 13, 2023 Hearing Transcript (“Tr.”) at 11:21, 12:10-12, ECF No. [97]. Plaintiff is the co-founder and CEO of AVA Labs, Inc. (“Ava Labs”), a “blockchain software” development company. Tr. at 12:16-18, 13:4-5. Ava Labs develops a variety of blockchain software products, including a blockchain software-based development platform called “Avalanche.” Id. at 13:7. The Avalanche platform has a native “cryptocurrency token” called “AVAX,” which allows users to utilize, secure, and update the blockchain, and may also serve as a store of value. Id. at 16:22-17:9.^[1]Prior to founding Ava Labs, Plaintiff was a professor of computer science at Cornell University for nearly 20 years. Id. at 11:1912:8.

Defendant holds himself out as a “product marketing expert” and “crypto thought leader.” Compl. ¶ 16.^[2]Defendant promotes various cryptocurrency assets and provides cryptocurrency trading advice to his followers through various social media platforms, including YouTube and Telegram. Id. ¶ 17. At the time of the events giving rise to the instant case, Defendant had approximately 180,000 subscribers to his YouTube channel and 100,000 subscribers to his Telegram channel. Id. ¶ 18. Some issuers of cryptocurrency assets pay Defendant to promote their cryptocurrencies on his channel. Id. ¶ 19; see also Tr. at 20:24-21:4.

C. Defendant's Defamatory Statements

On or about February 17, 2021, the Defendant posted a video to his “Kripto Emre” YouTube channel. In this video, Defendant falsely stated that Plaintiff was a member of the Fethullah Terrorist Organization (“FETO”), a group that has been designated as a terrorist organization in Turkey. Id. ¶ 20.

Though Defendant briefly took down the YouTube video containing these defamatory remarks in response to a request from one of the crypto asset companies he was paid to promote, he subsequently re-published the same defamatory statements on his Twitter account on February 19, 2021. Compl. ¶¶ 25, 26; Tr. at 76:2-3. On February 13, 2021 he also tweeted to his followers that they should “short $AVAX.” Compl. ¶ 24; Tr. at 18:19-20. In a Telegram post published March 17, 2021, he again urged his social media followers to short AVAX. Compl. ¶ 29.

D. Effect of Defendant's Defamation on Plaintiff's Reputation

Plaintiff testified that he became aware of the Defendant's YouTube video and its defamatory statements in February 2021, after the statements were brought to Plaintiff's attention by a colleague. Tr. at 18:7-8. Plaintiff testified that the publication of Defendant's remarks had an immediate and significant impact on Ava Labs, particularly amongst its Turkish user base, which made up approximately twenty percent of the Ava Labs user community at the time. Tr. at 16:16-19. Plaintiff testified that Ava Labs' Turkish social media channels were quickly filled with inquiries regarding the Defendant's allegations that Plaintiff was a member of FETO. Tr. at 19:1-2. Plaintiff testified that he had personally continued to receive questions from members of the Avalanche community asking about his alleged membership in FETO for over a year after Defendant made the remarks. Tr. at 19:18-20.

In response to the statements, Plaintiff consulted with other Ava Labs executives concerning inquiries that Ava Labs had received about his alleged terrorist connections. Tr. at 21:15-21. The company ultimately issued a statement denying the allegations. Id.

Plaintiff testified about his experiences traveling to Turkey in the aftermath of Defendant's comments. He testified that he frequently traveled to Turkey in the period after the Defendant's allegations-between ten and twelve times in total-to take care of his ailing father and his sister. Tr. at 26:2-14. Plaintiff testified that this experience was a “nightmare,” and that each time he traveled to Turkey in the wake of Defendant's comments, he feared that he would be questioned, arrested and imprisoned by Turkish security when entering the country. Tr. at 26:9-21.

Plaintiff testified that he had to change his approach to his personal security and privacy in response to Defendant's allegations. Plaintiff deactivated direct messaging on social media. Tr. at 22:9-11. While he had previously enjoyed interacting with the public and discussing his work, he was no longer able to maintain an open channel to the public due to the wave of negative sentiment following Defendant's comments. Tr. at 21:23-22:11. He also took measures to hide his location, including removal of the name plate on his parents' apartment in Istanbul and deletion of all addresses from internet websites and delivery services, out of fear that irate members of the public would track him down where he lived. Tr. at 22:9-23:10. The increased security expenditures incurred in the aftermath of Defendant's comments totaled up to $300,000.00. ECF No. [102] at 3:14-15 (“Sealed Tr.”).^[3]

Plaintiff also testified about the impact Defendant's defamatory statements had on Ava Labs and on the AVAX token, as he noticed a significant drop in the price of AVAX following the defendant's statements. Tr. at 18:13-22. Plaintiff testified that this decline harmed his personal finances because [Redacted] and he had sold [Redacted] AVAX tokens in May and June 2021. Sealed Tr. at 3:21-4:4. Plaintiff testified that the Avalanche community was unhappy with the losses to the value of AVAX following Defendant's statements and the growth of the company slowed. Tr. at 29:25-30:5. Plaintiff had to spend significant effort and energy over a period of months to calm the Avalanche user base's fears that the company was tied to a terrorist organization. Id. The Defendant's remarks led to a “huge change in sentiment” against Ava Labs. Tr. at 18:23. Ava Labs had previously been the “darling of the crypto community” with an up-and-coming AVAX token; after the publication of Defendant's statements, potential users “[took] a step back and [started] to ask questions.” Tr. at 18:24-19:1. Plaintiff testified that fighting those allegations “became an ongoing part of our life.” Tr. at 25:3-8.

Another impact of Defendant's statements on Ava Labs was the company's business dealings. Ava Labs encountered unexplained difficulties and delays in a project it had been negotiating with the Turkish Central Bank. Tr. at 24:10-19. Although Ava Labs eventually managed to repair its relationship with the Turkish Central Bank, it took considerable time and effort to do so. Id. Plaintiff testified that in general, it was difficult to him to estimate the full effect of the Defendant's remarks on his business relationships in Turkey because Turkish counterparties would typically “quietly step back and keep their distance” from someone alleged to be a FETO member, without explicitly tendering the allegations as a reason for their behavior. Tr. at 24:2-6.

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