Decision

Decision on Coinbase Limited

Published 14 December 2022

Companies Act 2006

In the matter of application No. 3679 by Coinbase, Inc for a change to the company name of COINBASE LIMITED, a company incorporated under number 13237380

Background and pleadings

1. The company name COINBASE LIMITED (“the primary respondent”) has been registered since incorporation on 2 March 2021 under number 13237380. The Companies House website describes the primary respondent’s “Nature of business (SIC)” as “64205 - Activities of financial services holding companies.”

2. By an application filed on 5 November 2021, Coinbase, Inc (“the applicant”) applied under section 69(1) of the Companies Act 2006 (“the Act”) for the primary respondent’s name to be changed.

3. The applicant claims that it is the largest global cryptocurrency platform based in the US. Since its founding in 2012, it has gained 68 million verified users, 9000 institutions and 160,000 ecosystem partners in over 100 countries. It claims that its name, COINBASE, is widely recognised in the UK with vast goodwill and reputation in the name in relation to a wide range of financial services, particularly those relating to cryptoeconomy. The applicant claims to be one of, if not the, leading UK cryptocurrency exchanges, provided throughout the UK via its website and mobile app. It claims that the contested company has been used in relation to fraudulent and/or scammer activity and it believes that the primary respondent was formed for illegitimate purposes, including:

• blocking the applicant from using the same company name;
  
• misleading consumers into believing the applicant and the company are connected;
  
• perpetrating fraud or phishing schemes on the public

4. The applicant claims that it has evidence that those behind the primary respondent are using the fact of its incorporation and the incorporation of similarly named companies as a front for fraudulent activities via at least the website BITCOINBASELIMITED.COM.

5. The applicant stated that it wished to rely on the attachments to its application form as its evidence in chief, the form including a statement of truth signed by Darren Meale, a partner at Simmons & Simmons LLP.^{[footnote 1]} The primary respondent filed a notice of defence and counterstatement, which was signed with a statement of truth by Mr Stephen Mollah, and attached several documents. Although the primary respondent has not explicitly stated that it wishes to rely on the attachments as its evidence in chief, I propose to treat the attachments as such, given the absence of any other evidence from the primary respondent and the statement of truth provided by Mr Mollah. However, I note that the counterstatement includes the following:

I am Stephen Mollah aka Satoshi Nakamoto.

6. I will treat the real name as Stephen Mollah as the statement begins with “I am Stephen Mollah”. Other parts of the counterstatement refer to Satoshi Nakamoto as Mr Mollah’s pseudonym which he uses in order to remain anonymous. The counterstatement makes a number of points, including:

• the applicant provides a wallet service, known as Coinbase Exchange;
  
• Mr Mollah understands that the applicant has goodwill and reputation but claims that Coinbase, Inc is his stolen company which was hijacked from him by an international group who invaded his house;
  
• Mr Mollah claims that he created the word Coinbase in 2007 and has used it ever since he created it for his Bitcoin and Blockchain technology project, which he planned to launch anonymously. He claims that he designed the Coinbase Exchange to trade his Bitcoin in 2009 and that when he invented the Bitcoin mining technology and the Blockchain Ledger, he created Coinbase to store all his mined Bitcoins;
  
• Mr Mollah claims that the applicant is not the owner of Coinbase Inc. and he has a pending case in the UK High Court against the applicant and the organised international group;
  
• Mr Mollah denies the accusations of fraud and states that his company does not have a website. He claims that a secret group has registered numerous fraudulent web domains using his company’s name and his registered address to create a false image of himself and he suspects that the applicant is behind this

7. The primary respondent relies upon the following defences:

• that the company is operating under the name, or is proposing to do so and has incurred substantial start-up costs in preparation, or was formerly operating under the name and is now dormant;
  
• that the company name was adopted in good faith; and,
  
• that the interests of the applicant are not adversely affected to any significant extent

8. The primary respondent represents itself via its director, Mr Mollah. Mr Mollah was joined as a co-respondent on 18 March 2021, following a request from the applicant. Mr Mollah did not object to being so joined. The parties were asked if they wanted a decision to be made following a hearing or from the papers. None of the parties chose to be heard, and only the applicant filed written submissions in lieu of attendance.^{[footnote 2]} The respondents have not filed any documents other than the defence, counterstatement and attachments thereto. I make this decision having carefully considered all the papers, referring to them where it is relevant and necessary.

Legislation

9. Section 69 of the Act states:

(1) A person (“the applicant”) may object to a company’s registered name on the ground—

(a) that it is the same as a name associated with the applicant in which he has goodwill, or

(b) that it is sufficiently similar to such a name that its use in the United Kingdom would be likely to mislead by suggesting a connection between the company and the applicant.

(2) The objection must be made by application to a company names adjudicator (see section 70).

(3) The company concerned shall be the primary respondent to the application.

Any of its members or directors may be joined as respondents.

(4) If the ground specified in subsection (1)(a) or (b) is established, it is for the respondents to show—

(a) that the name was registered before the commencement of the activities on which the applicant relies to show goodwill; or

(b) that the company—

(i) is operating under the name, or

(ii) is proposing to do so and has incurred substantial start-up costs in preparation, or

(iii) was formerly operating under the name and is now dormant; or

(c) that the name was registered in the ordinary course of a company formation business and the company is available for sale to the applicant on the standard terms of that business; or

(d) that the name was adopted in good faith; or

(e) that the interests of the applicant are not adversely affected to any significant extent.

If none of those is shown, the objection shall be upheld.

(5) If the facts mentioned in subsection (4)(a), (b) or (c) are established, the objection shall nevertheless be upheld if the applicant shows that the main purpose of the respondents (or any of them) in registering the name was to obtain money (or other consideration) from the applicant or prevent him from registering the name.

(6) If the objection is not upheld under subsection (4) or (5), it shall be dismissed.

(7) In this section “goodwill” includes reputation of any description.

Goodwill/reputation

10. The applicant must establish that it had, at the relevant date, goodwill or a reputation in relation to a name that is the same, or sufficiently similar, to that of the company name suggesting a connection between the company and the applicant. The relevant date for the purpose of proving goodwill/reputation is the date of the application for a change of the contested company name which, in this case, is 5 November 2021.^{[footnote 3]}

11. Section 69(7) of the Act defines goodwill as a “reputation of any description”. Consequently, in the terms of the Act, goodwill is not limited to Lord Macnaghten’s classic definition in Inland Revenue Commissioners v Muller & Co’s Margerine Ltd [1901] AC 217 at 223:

What is goodwill? It is a thing very easy to describe, very difficult to define. It is the benefit and advantage of the good name, reputation and connection of a business. It is the attractive force which brings in custom. It is the one thing which distinguishes an old-established business from a new business at its first start.

The applicant’s evidence about its business

12. Mr Meale, from Simmons & Simmons LLP, who gives evidence for the applicant as its professional representative, states that the applicant was registered in the State of Delaware, USA, on 14 May 2012, providing company registration documents as Exhibit 02. To support the applicant’s claim to goodwill and/or reputation in the UK, Exhibit 03 includes a screenshot from the BBC’s World Service website, from the World Business Report, which provides a podcast called “Coinbase prepares for $100 billion listing: America’s biggest crypto-currency trading platform, Coinbase, begins trading on the Nasdaq exchange in New York today.” The screenshot shows that the podcast was “last on” on 14 April 2021. Exhibit 03 includes an article from the UK version of the Guardian newspaper, also dated 14 April 2021. The article is entitled “Coinbase, US’s largest cryptocurrency exchange, makes Nasdaq debut: Analysts expect company to be valued $65bn to $100bn, making CEO and co-founder Brian Armstrong’s net worth up to $20bn.” The article states that Brian Armstrong and Fred Ehrsam founded the applicant in 2012 and that the applicant was the first major cryptocurrency business to appear on the US stock market.

13. Exhibit 05 comprises a shareholder letter dated 10 August 2021 which reports that the applicant had generated $2 billion in net revenue, 8.8 million users in “the retail space”, with 68 million verified users globally and a first Sotheby’s auction using cryptocurrency.

14. The primary respondent does not seem to dispute that the applicant has a reputation in the UK; Mr Mollah states that the applicant has “provided a mountain height of good reputation of Coinbase Inc all over the world include UK”. This admission, together with the evidence from the Guardian and the BBC, which refers to flotation on the Nasdaq stock exchange which will be known to UK financial traders, is enough to find that, the relevant date of 5 November 2021, the applicant had a substantial goodwill and/or reputation in the UK, of which COINBASE was distinctive, in relation to its business cryptocurrency exchange.

15. The contested company name is COINBASE LIMITED. The only difference between the company name and the name associated with the applicant is the addition of LIMITED. Limited merely indicates the corporate status of the company and so this element of the company name does not have a bearing upon the comparison of the names.^{[footnote 4]} Consequently, I agree with the applicant that the provisions of section 69(1)(a) are satisfied as the names are identical. In any event, they clearly satisfy the provisions of section 69(1)(b) as being similar (highly so).

Defences

16. As the ground specified in subsection 69(1)(a) is established, the onus switches to the primary respondent to establish whether it can rely on any of the defences pleaded. The primary respondent relies upon the defences identified at sections 69(4)(b), (d) and (e) of the Act:

• that the company is operating under the name, or is proposing to do so and has incurred substantial start-up costs in preparation, or was formerly operating under the name and is now dormant (section 69(4)(b));
  
• that the company name was adopted in good faith (section 69(4)(d)); and,
  
• that the interests of the applicant are not adversely affected to any significant extent (section 69(4)(e))

17. It is for the primary respondent to make good its defences through filing evidence. As said earlier in this decision, I will treat the counterstatement and attachments as the primary respondent’s evidence.

18. The first defence is that the company is operating under the name, is proposing to do so and has incurred substantial start-up costs in preparation, or was formerly operating under the name and is now dormant. The relevant date for this defence is the date on which the application to change the contested company name was made: 5 November 2021.

19. Mr Mollah, for the respondents, says nothing about the company’s trading activities. Most of the documentation refers to his ideas being stolen by the applicant, or a secret organisation that is using the applicant as a front. The applicant has provided evidence which it states shows that the home page of the website bitcoinbaselimited.com includes the heading “Why Choose Us”: UK COMPANY we are a legal company registered in the United Kingdom, providing its services to all members” (Exhibit 07, screenshot 2). The head office is the same as the primary respondent’s address. The “About Us” page of the website displays a certificate of incorporation for a separate but similarly named company, Bitcoinbase Limited, no. 11898815, which was dissolved on 12 January 2021, with its sole director being Mr Mollah. Further companies are mentioned, which are also dissolved or in the process of being struck off.

20. The applicant claims that those behind the primary respondent are behind the website and that the other companies are being used to add false legitimacy to the fraudulent activities being carried out via the website, as follows:

21. Mr Mollah has stated that the website is nothing to do with him or the primary respondent. He has provided no evidence that the primary respondent is operating or has operated in the past. The applicant’s evidence about a website is clearly not trading in the sense envisaged by the defences in section 69(4)(b), which would not cover fraudulent activities. There is no evidence that the primary respondent is operating under the name, is proposing to do so and has incurred substantial start-up costs in preparation, or was formerly operating under the name and is now dormant. The defence under section 69(4)(b) fails.

22. Mr Mollah’s evidence centres on his claim to be a certain Satoshi Nakamoto, who is credited, according to evidence filed by him from Wikipedia, with being the inventor of bitcoin:

23. The evidence indicates that Satoshi Nakamoto invented bitcoin and then disappeared. Nobody appears to know who he is or where he is, and there have been claims by many people to be Satoshi Nakamoto.

24. There is no evidence whatsoever to prove that Mr Mollah is Satoshi Nakamoto. Mr Mollah claims that he intended to hire Brian Armstrong and Fred Ehrsam, the founders of the applicant, to run a company called Coinbase, Inc for him once he had invented bitcoin, but that an international organisation stole his business plans and is behind the applicant, having hired Brian Armstrong and Fred Ehrsam. There is no evidence of this. Further, Mr Mollah’s statements that he would be happy to come to a business arrangement with the applicant - which he claims has stolen his ideas - is not credible. He also states that he has a case in the High Court, but gives no details:

25. The applicant submits that it is unaware of any proceedings filed against it by the respondents in the UK or elsewhere. In addition to there being no evidence that Mr Mollah is Satoshi Nakamoto, it is simply not credible that he would wish to go into business with an entity which he claims stole his business. Rather, his statements in the paragraph quoted above align more with an opportunistic registration of the primary respondent’s name in an attempt to obtain money or other consideration from the applicant. I do not need to make a firm finding about this, however, because the section 69(4)(b) defence has failed and because the onus to make good the good faith defence, under section 69(4)(d), is on the primary respondent. It has not made out the good faith defence; i.e. shown that the name was adopted on 2 March 2021 in good faith. The defence under section 69(4)(d) fails.

26. The final defence is that the interests of the applicant are not adversely affected to any significant extent. The primary respondent has not provided any evidence to support this defence. The listed services in its company registration are financial services, in the same area of business as the applicant. Operating in this field would bring the primary respondent into direct confusion with the applicant, resulting in, for example, loss of trade or damage to the applicant’s reputation. This would adversely affect the interests of the applicant to a significant extent. The defence under section 69(4)(e) of the Act fails.

Outcome

27. The primary respondent cannot rely upon any of its defences. As a consequence, the application is successful. In accordance with section 73(1) of the Act, I make the following order:

(a) Coinbase Limited shall change its name within one month of the date of this order to one that is not an offending name;^{[footnote 5]}

(b) Coinbase Limited and Stephen Mollah each shall:

(i) take such steps as are within their power to make, or facilitate the making, of that change;

(ii) not to cause or permit any steps to be taken calculated to result in another company being registered with a name that is an offending name.

28. In accordance with section 73(3) of the Act, this order may be enforced in the same way as an order of the High Court or, in Scotland, the Court of Session.

29. In any event, if no such change is made within one month of the date of this order, I will determine a new company name as per section 73(4) of the Act and will give notice of that change under section 73(5) of the Act.

30. All respondents, including individual co-respondents, have a legal duty under Section 73(1)(b)(ii) of the Companies Act 2006 not to cause or permit any steps to be taken calculated to result in another company being registered with an offending name; this includes the current company. Non-compliance may result in an action being brought for contempt of court and may result in a custodial sentence.

Costs

31. The Tribunal awards costs from the published scale at paragraph 10 of the Tribunal’s Practice Direction. This is intended to provide a contribution, but not recompense, to the successful party. It is the applicant who has been successful in these proceedings and who is entitled to a contribution towards its costs, which I award as follows:

Statutory fee for filing form CNA1: £400
Preparing the application and considering the defence and counterstatement (form CNA2): £400
Preparing evidence attached to form CNA1: £500
Preparing written submissions in lieu of a hearing: £200

Total £1500

32. I order Coinbase Limited and Stephen Mollah, being jointly and severally liable, to pay Coinbase, Inc the sum of £1500 within twenty-one days of the expiry of the appeal period, or within twenty-one days of the final determination of this case if any appeal against this decision is unsuccessful.

Appeal

33. Any notice of appeal must be given within one month of the date of this decision. Appeal is to the High Court in England & Wales and Northern Ireland, and to the Court of Session in Scotland. The Tribunal must be advised if an appeal is lodged so that implementation of the order is suspended. According to section 74(1) of the Act, there is no separate right of appeal in relation to costs.

Dated 8 December 2022

Judi Pike
Company Names Adjudicator

1. The applicant’s professional representatives. ↩

2. Written submissions dated 25 February 2022 ↩

3. Botanica Agriculture and Extraction Limited v Botanica Limited [2022] EWHC 2957 (Ch) and MB Inspection Ltd v Hi-Rope Ltd [2010] RPC 18. ↩

4. Zurich Insurance Co v Zurich Investments Ltd [2011] RPC 6. ↩

5. An “offending name” means a name that, by reason of its similarity to the name associated with the applicant in which he claims goodwill, would be likely to be the subject of a direction under section 67 (power of Secretary of State to direct change of name), or to give rise to a further application under section 69. ↩