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 Case 3:17-cv-06779-RS Document 187 Filed 01/09/19 Page 1 of 3

1
LTL ATTORNEYS LLP
2 Enoch H. Liang (SBN 212324)

3 601 Gateway Boulevard, Suite 1010

South San Francisco, California 94080
4 Tel: 650-422-2130
Fax: 213-612-3773
5 [email protected]

6 James M. Lee (SBN 192301)

7 Caleb H. Liang (Bar No. 261920)

300 S. Grand Ave., 14th Floor
8 Los Angeles, California 90071
Tel: 213-612-8900
9 Fax: 213-612-3773
[email protected]
10 [email protected]

11
HUNG G. TA, ESQ. PLLC
12 Hung G. Ta
JooYun Kim
13 250 Park Avenue, 7th Floor
New York, New York 10177
14
Tel: 646-453-7288
15 [email protected]
[email protected]
16
Lead Counsel for Court-Appointed Lead Plaintiff and the Class
17
[Additional Counsel Listed on Signature Page]
18

19 UNITED STATES DISTRICT COURT

20 NORTHERN DISTRICT OF CALIFORNIA

21 Master File No. 17-cv-06779-RS

IN RE TEZOS SECURITIES LITIGATION
22 CLASS ACTION
23 This document relates to: PLAINTIFFS’ ADMINISTRATIVE
MOTION TO FILE UNDER SEAL
24
ALL ACTIONS.
25 Judge: Hon. Richard Seeborg

26

27

28

PLAINTIFFS’ ADMINISTATIVE MOTION TO FILE CLASS CERTIFICATION MOTION UNDER SEAL

NO. 3:17-CV-06779-RS
 Case 3:17-cv-06779-RS Document 187 Filed 01/09/19 Page 2 of 3

1 Pursuant to Civil Local Rules 7-11 and 79-5(e), named plaintiffs Artiom Frunze and Pumaro
2 LLC (collectively, “Plaintiffs”) hereby submit this administrative motion (“Administrative Motion”)

3 for an order permitting Plaintiffs to file under seal the following materials filed in connection with

4 Plaintiffs’ Motion for Class Certification: (1) Plaintiffs’ Memorandum of Law in Support of their

5 Motion for Class Certification (the “Motion”); and (2) Exhibits J, M, O, R, and W to the Declaration

6 of Hung G. Ta in Support of Plaintiffs’ Motion for Class Certification (collectively, the “Exhibits”).

7 The basis of the Administrative Motion is that the Exhibits consist of documents designated
8 “Confidential” by Defendant Dynamic Ledger Solutions, Inc. pursuant to the Stipulated Protective

9 Order, so ordered by this Court on October 22, 2018 (Dkt. No. 178), and the Motion discusses those

10 designated materials in support thereof.

11 Local Rule 79-5(e) provides: “If the Submitting Party [i.e., a party seeking to file a document,
12 or portions thereof, under seal] is seeking to file under seal a document designated as confidential by

13 the opposing party or a non-party pursuant to a protective order, or a document containing information

14 so designated by an opposing party or a non-party, the Submitting Party’s declaration in support of

15 the Administrative Motion to File Under Seal must identify the document or portions thereof which

16 contain the designated confidential material and identify the party that has designated the material as

17 confidential (‘the Designating Party’).” Plaintiffs identify in the accompanying declaration the

18 materials at issue that have been designated as “Confidential” in this action. However, this
19 Administrative Motion should not be construed as Plaintiffs’ agreement that the documents marked

20 “Confidential” are confidential or that such documents should be filed under seal.

21

22 Date: January 9, 2019 LTL ATTORNEYS LLP

23
By: s/ Enoch H. Liang
24 Enoch H. Liang
LTL ATTORNEYS LLP
25 601 Gatewa y Boulevard, Suite 1010
South San Francisco, California 94080
26 Tel: 650-422-2130
27 Fax: 213-612-3773
[email protected]
28

1
PLAINTIFFS’ ADMINISTATIVE MOTION TO FILE CLASS CERTIFICATION MOTION UNDER SEAL
NO. 3:17-CV-06779-RS
 Case 3:17-cv-06779-RS Document 187 Filed 01/09/19 Page 3 of 3

1 James M. Lee
Caleb H. Liang
2 LTL ATTORNEYS LLP
3 300 S. Grand Ave., 14th Floor
Los Angeles, California 90071
4 Tel: 213-612-8900
Fax: 213-612-3773
5 [email protected]
[email protected]
6

7 Hung G. Ta
JooYun Kim
8 HUNG G. TA, ESQ., PLLC
250 Park Avenue, 7th Floor
9 New York, New York 10177
Tel: 646-453-7288
10 Fax: 646-453-7289
11 [email protected]
[email protected]
12
Lead Counsel for Court-Appointed Lead
13 Plaintiff and the Class
14
William R. Restis
15 THE RESTIS LAW FIRM, P.C.
550 West C Street, Suite 1760
16 San Diego, California 92101
Tel: 619.270.8383
17 [email protected]
18
Joe J. DePalma
19 Bruce D. Greenberg
LITE DEPALMA GREENBERG,
20 LLC
570 Broad Street, Suite 1201
21 Newark, NJ 07102
Tel: (973) 623-3000
22
Fax: (973) 623-0858
23 [email protected]
[email protected]
24
Additional Counsel for the Class
25

26

27

28

2
PLAINTIFFS’ ADMINISTATIVE MOTION TO FILE CLASS CERTIFICATION MOTION UNDER SEAL
NO. 3:17-CV-06779-RS
 Case 3:17-cv-06779-RS Document 187-1 Filed 01/09/19 Page 1 of 2

1 LTL ATTORNEYS LLP

Enoch H. Liang (SBN 212324)
2 601 Gateway Boulevard, Suite 1010

3 South San Francisco, California 94080

Tel: 650-422-2130
4 Fax: 213-612-3773
[email protected]
5
James M. Lee (SBN 192301)
6 Caleb H. Liang (Bar No. 261920)

7 300 S. Grand Ave., 14th Floor

Los Angeles, California 90071
8 Tel: 213-612-8900
Fax: 213-612-3773
9 [email protected]
[email protected]
10

11 HUNG G. TA, ESQ. PLLC

Hung G. Ta
12 JooYun Kim
250 Park Avenue, 7th Floor
13 New York, New York 10177
Tel: 646-453-7288
14
[email protected]
15 [email protected]

16 Lead Counsel for Court-Appointed Lead Plaintiff and the Class

17
UNITED STATES DISTRICT COURT
18
NORTHERN DISTRICT OF CALIFORNIA
19
Master File No. 17-cv-06779-RS
20
IN RE TEZOS SECURITIES LITIGATION
21 CLASS ACTION

22 This document relates to: DECLARATION OF HUNG G. TA IN

SUPPORT OF PLAINTIFFS’
23 ALL ACTIONS. ADMINISTRATIVE MOTION TO FILE
UNDER SEAL
24

25 Judge: Hon. Richard Seeborg

26

27

28

DECLARATION OF HUNG G. TA IN SUPPORT OF ADMINISTRATIVE MOTION TO FILE UNDER SEAL

3:17-CV-06779-RS
 Case 3:17-cv-06779-RS Document 187-1 Filed 01/09/19 Page 2 of 2

1 I, HUNG G. TA, declare under penalty of perjury as follows:

2 1. I am the principal of the law firm Hung G. Ta, Esq. PLLC (“HGT Law”), counsel for
3 named plaintiffs Pumaro LLC and Artiom Frunze (“Plaintiffs”). I am an active member in good

4 standing of the bar of the State of New York and have been admitted pro hac vice in this matter. I

5 submit this declaration in support of Plaintiffs’ Administrative Motion to File their Motion for Class

6 Certification Under Seal (“Administrative Motion”).

7 2. Counsel for Plaintiffs and the Class, and counsel for Defendants Tezos Stiftung,
8 Dynamic Ledger Solutions, Inc. (“DLS”), Kathleen Breitman and Arthur Breitman, entered into a

9 Stipulated Protective Order, so ordered by this Court on October 22, 2018 (Dkt. No. 178) (“Protective

10 Order”).

11 3. DLS produced documents in this action, designating certain documents as

12 “Confidential” pursuant to the Protective Order.

13 4. As part of Plaintiffs’ Motion for Class Certification, Plaintiffs are relying on certain
14 documents produced by DLS and designated as “Confidential.” These documents are Exhibits J, M,

15 O, R and W to the Declaration of Hung G. Ta in Support of Plaintiffs’ Motion for Class Certification,

16 dated January 9, 2019 (collectively, the “Exhibits”). Plaintiffs also refer to and quote from the

17 Exhibits in Plaintiffs’ Memorandum of Law in Support of their Motion for Class Certification (the

18 “Motion”).

19 5. Accordingly, pursuant to the Protective Order, Plaintiffs seek to file under seal the
20 Exhibits and the redacted portions of the Motion.

21 6. By making this Administrative Motion, Plaintiffs do not necessarily agree to the

22 “Confidential” designation of DLS’ documents or to the filing of these documents under seal.

23

24 I declare under penalty of perjury that the foregoing is true and correct, this 9th day of January,
25 2019.

26

27 /s/ Hung G. Ta
Hung G. Ta
28

1
DECLARATION OF HUNG G. TA IN SUPPORT OF ADMINISTRATIVE MOTION TO FILE UNDER SEAL
3:17-CV-06779-RS
 Case 3:17-cv-06779-RS Document 187-2 Filed 01/09/19 Page 1 of 2

8
UNITED STATES DISTRICT COURT
9
NORTHERN DISTRICT OF CALIFORNIA
10
Master File No. 17-cv-06779-RS
11 IN RE TEZOS SECURITIES LITIGATION
CLASS ACTION
12

13 This document relates to: [PROPOSED] ORDER GRANTING

PLAINTIFFS’ ADMINISTATIVE
14 ALL ACTIONS. MOTION TO FILE UNDER SEAL

15

16

17

18

19

20

21

22

23

24

25

26

27

28

[PROPOSED] ORDER GRANTING PLAINTIFFS’ ADMINISTRATIVE MOTION TO FILE UNDER SEAL

3:17-CV-06779-RS
 Case 3:17-cv-06779-RS Document 187-2 Filed 01/09/19 Page 2 of 2

1 Named Plaintiffs Pumaro LLC and Artiom Frunze (“Plaintiffs”) have submitted an
2 Administrative Motion to File their Motion for Class Certification Under Seal (the “Administrative

3 Motion”).

4 Having considered Plaintiffs’ Administrative Motion, and good cause having been shown, the
5 Court GRANTS Plaintiffs’ Administrative Motion and ORDERS that the documents listed below be

6 sealed:

7 Document Portions to be Filed Under Seal

8 Memorandum of Law in Support of Plaintiffs’ The portions highlighted in the version of the
Motion for Class Certification document filed with the Court indicating the
9
portions that Defendant Dynamic Ledger
10 Solutions, Inc. (“DLS”) claims are confidential.

11 Exhibit J to the Declaration of Hung G. Ta in Entirety.

Support of Plaintiffs’ Motion for Class
12 Certification
13 Exhibit M to the Declaration of Hung G. Ta in Entirety.
14 Support of Plaintiffs’ Motion for Class
Certification
15
Exhibit O to the Declaration of Hung G. Ta in Entirety.
16 Support of Plaintiffs’ Motion for Class
Certification
17
Exhibit R to the Declaration of Hung G. Ta in Entirety.
18
Support of Plaintiffs’ Motion for Class
19 Certification

20 Exhibit W to the Declaration of Hung G. Ta in Entirety.

Support of Plaintiffs’ Motion for Class
21 Certification
22

23 IT IS SO ORDERED.
24 Dated: ________________________________ ___________________________________
25 The Honorable Richard Seeborg
United States District Judge
26

27

28

1
[PROPOSED] ORDER GRANTING PLAINTIFFS’ ADMINISTRATIVE MOTION TO FILE UNDER SEAL
3:17-CV-06779-RS
 Case 3:17-cv-06779-RS Document 187-3 Filed 01/09/19 Page 1 of 36

1 LTL ATTORNEYS LLP

Enoch H. Liang (SBN 212324)
2 601 Gateway Boulevard, Suite 1010

3 South San Francisco, California 94080

Tel: 650-422-2130
4 Fax: 213-612-3773
[email protected]
5
James M. Lee (SBN 192301)
6 Caleb H. Liang (Bar No. 261920)

7 300 S. Grand Ave., 14th Floor

Los Angeles, California 90071
8 Tel: 213-612-8900
Fax: 213-612-3773
9 [email protected]
[email protected]
10

11 HUNG G. TA, ESQ. PLLC

Hung G. Ta
12 JooYun Kim
250 Park Avenue, 7th Floor
13 New York, New York 10177
Tel: 646-453-7288
14
[email protected]
15 [email protected]

16 Lead Counsel for Court-Appointed Lead Plaintiff and the Class

17 [Additional Counsel Listed on Signature Page]

18
UNITED STATES DISTRICT COURT
19
NORTHERN DISTRICT OF CALIFORNIA
20
Master File No. 17-cv-06779-RS
21 IN RE TEZOS SECURITIES LITIGATION
CLASS ACTION
22
This document relates to: MEMORANDUM OF LAW IN SUPPORT
23 OF PLAINTIFFS’ MOTION FOR CLASS
ALL ACTIONS. CERTIFICATION
24

25 Date: April 24, 2019

Time: 1:30 p.m.
26 Crtrm: 3
Judge: Hon. Richard Seeborg
27

28

MEMORANDUM OF LAW IN SUPPORT OF

PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION
NO. 3:17-CV-06779-RS
 Case 3:17-cv-06779-RS Document 187-3 Filed 01/09/19 Page 2 of 36

1 TABLE OF CONTENTS
2 Page No.
3 TABLE OF AUTHORITIES .............................................................................................................. iii 

4 TABLE OF ABBREVIATIONS ...................................................................................................... viii 

5 PRELIMINARY STATEMENT ..........................................................................................................1 

6
STATEMENT OF FACTS COMMON TO THE CLASS ...................................................................1 
7
ARGUMENT ........................................................................................................................................3 
8
I.  THE PROPOSED CLASS REPRESENTATIVES ..................................................................3 
9
II.  THE PROPOSED CLASS SATISFIES THE STANDARDS FOR CLASS
10 CERTIFICATION UNDER RULE 23 .....................................................................................3 
11 A.  The Proposed Class Satisfies Rule 23(a) ......................................................................4 
12 1.  The Proposed Class Is So Numerous That Joinder Is Impracticable ................4 
13
2.  There Are Common Questions Of Law And Fact ............................................5 
14
3.  The Proposed Class Representatives’ Claims Are Typical Of Those Of
15 the Class ............................................................................................................5 

16 4.  The Proposed Class Representatives Will Fairly And Adequately

Protect The Interests Of The Class ...................................................................6 
17
B.  The Proposed Class Satisfies The “Predominance” Requirement For Class
18 Certification Under Rule 23(b)(3) ................................................................................7 
19
1.  Whether The Tezos Tokens Are Securities ......................................................8 
20
2.  Whether Defendants Are “Sellers” Under Section 12(a)(1) ...........................11 
21
3.  Whether The Breitmans Are Controlling Persons Under Section 15 .............13 
22
4.  The Contribution Terms Do Not Raise Individual Issues ..............................14 
23
5.  Whether The Securities Act Applies Under Morrison Raises Common
24 Questions ........................................................................................................17 
25
6.  The Class’s Remedies Of Rescission And Damages Do Not Present
26 Any Individualized Issues...............................................................................20 

27 C.  The Proposed Class Satisfies The “Superiority” Requirement For Class
Certification Under Rule 23(b)(3) ..............................................................................22 
28
i
MEMORANDUM OF LAW IN SUPPORT OF
PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION
NO. 3:17-CV-06779-RS
 Case 3:17-cv-06779-RS Document 187-3 Filed 01/09/19 Page 3 of 36

1 III.  LTL AND HGT LAW SHOULD BE APPOINTED AS CLASS COUNSEL ......................25 
2 CONCLUSION...................................................................................................................................25 

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28
ii
MEMORANDUM OF LAW IN SUPPORT OF
PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION
NO. 3:17-CV-06779-RS
 Case 3:17-cv-06779-RS Document 187-3 Filed 01/09/19 Page 4 of 36

1 TABLE OF AUTHORITIES
2 Page No(s).
3 CASES 
4
Absolute Activist Value Master Fund Ltd. v. Ficeto,
5 677 F.3d 60 (2d Cir. 2012) ............................................................................................................ 18

6 Amchem Prods. v. Windsor,

521 U.S. 591 (1997) ........................................................................................................................ 7
7
Amgen Inc. v. Conn. Ret. Plans & Tr. Funds,
8 568 U.S. 455 (2013) .................................................................................................................... 4, 8
9 Amtower v. Photon Dynamics, Inc.,

10 158 Cal. App. 4th 1582 (2008) ...................................................................................................... 15

11 Arellano v. Kellermeyer Bldg. Servs., LLC,

2014 U.S. Dist. LEXIS 168986 (S.D. Cal. Dec. 5, 2014) ............................................................. 24
12
Basile v. Valeant Pharm. Int’l., Inc.,
13 2017 U.S. Dist. LEXIS 37400 (C.D. Cal. Mar. 15, 2017) ............................................................... 5
14 Bowerman v. Field Asset Servs., Inc.,
242 F. Supp. 3d 910 (N.D. Cal. 2017) ........................................................................................... 24
15

16 Briseno v. ConAgra Foods, Inc.,

844 F.3d 1121 (9th Cir. 2017) ....................................................................................................... 24
17
Brodt v. Bache & Co., Inc.,
18 595 F.2d 459 (9th Cir. 1978) ........................................................................................................... 9
19 Chan v. Drexel Burnham Lambert, Inc.,
178 Cal. App. 3d 632 (1986) ......................................................................................................... 14
20

21 Conmar Corp. v. Mitsui & Co. (U.S.A.),

858 F.2d 499 (9th Cir. 1988) ......................................................................................................... 17
22
Datta v. Asset Recovery Sols., LLC,
23 2016 U.S. Dist. LEXIS 36446 (N.D. Cal. Mar. 18, 2016) ............................................................ 24

24 Erica P. John Fund, Inc., v. Halliburton Co.,

563 U.S. 804 (2011) ........................................................................................................................ 7
25
Hanlon v. Chrysler Corp.,
26
150 F.3d 1011 (9th Cir. 1998) ..................................................................................................... 6, 8
27
Hatamian v. Advanced Micro Devices, Inc.,
28 2016 U.S. Dist. LEXIS 34150 (N.D. Cal. Mar. 16, 2016) ........................................................ 4, 24
iii
MEMORANDUM OF LAW IN SUPPORT OF
PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION
NO. 3:17-CV-06779-RS
 Case 3:17-cv-06779-RS Document 187-3 Filed 01/09/19 Page 5 of 36

1 Hocking v. Dubois,
885 F.2d 1449 (9th Cir. 1989) (en banc), cert. denied, 494 U.S. 1078 (1990) ............................... 9
2
Howard v. Everex Sys.,
3
228 F.3d 1057 (9th Cir. 2000) ....................................................................................................... 13
4
In re Celera Corp. Sec. Litig.,
5 2014 U.S. Dist. LEXIS 25098 (N.D. Cal. Feb. 25, 2014) ............................................................... 6

6 In re China Intelligent Lighting & Elecs., Inc. Sec. Litig.,

2013 U.S. Dist. LEXIS 155091 (C.D. Cal. Oct. 25, 2013)............................................................ 22
7
In re Cooper Cos. Sec. Litig,
8 254 F.R.D. 628 (C.D. Cal. 2009) ................................................................................................... 22
9
In re Facebook Biometric Info. Privacy Litig.,
10 185 F. Supp. 3d 1155 (N.D. Cal. 2016) ......................................................................................... 14

11 In re LendingClub Secs. Litig.,

282 F. Supp. 3d 1171 (N.D. Cal. 2017) ................................................................................. 6, 7, 23
12
In re LIBOR-Based Fin. Instruments Antitrust Litig.,
13 299 F. Supp. 3d 430 (S.D.N.Y. 2018) ........................................................................................... 23
14 In re Montage Tech. Grp. Ltd. Sec. Litig.,

15 2016 U.S. Dist. LEXIS 53734 (N.D. Cal. Apr. 21, 2016) ............................................................... 7

16 In re Monumental Life Ins. Co.,

365 F.3d 408 (5th Cir. 2004) ......................................................................................................... 17
17
In re NYSE Specialists Sec. Litig.,
18 260 F.R.D. 55 (S.D.N.Y. 2009) ..................................................................................................... 22
19 In re Petrobras Sec. Litig.,

20 862 F.3d 250 (2d Cir. 2017) .......................................................................................................... 17

21 In re Phenylpropanolamine (PPA) Prods. Liab. Litig.,

214 F.R.D. 614 (W.D. Wash. 2003) .............................................................................................. 23
22
In re Portal Software Sec. Litig.,
23 2007 U.S. Dist. LEXIS 51794 (N.D. Cal. June 30, 2007) ............................................................... 5
24 In re Verisign Inc. Sec. Litig.,
2005 U.S. Dist. LEXIS 10438 (N.D. Cal. Jan. 13, 2005) .............................................................. 22
25

26 Just Film, Inc. v. Buono,

847 F.3d 1108 (9th Cir. 2017) ..................................................................................................... 4, 6
27
McLaughlin v. Am. Tobacco Co.,
28 522 F.3d 215 (2d Cir. 2008) .......................................................................................................... 17
iv
MEMORANDUM OF LAW IN SUPPORT OF
PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION
NO. 3:17-CV-06779-RS
 Case 3:17-cv-06779-RS Document 187-3 Filed 01/09/19 Page 6 of 36

1 Meyer v. Uber Techs., Inc.,

868 F.3d 66 (2d Cir. 2017) ............................................................................................................ 17
2
Morrison v. Nat’l Austl. Bank Ltd.,
3
561 U.S. 247 (2010) ...................................................................................................................... 17
4
Nguyen v. Barnes & Noble Inc.,
5 763 F.3d 1171 (9th Cir. 2014) ........................................................................................... 14, 16, 17

6 Nguyen v. Radient Pharm. Corp.,

287 F.R.D. 563 (C.D. Cal. 2012) ..................................................................................................... 4
7
Nitsch v. Dreamworks Animation SKG Inc.,
8 315 F.R.D. 270 (N.D. Cal. 2016) .................................................................................................. 17
9
Parra v. Bashas’, Inc.,
10 291 F.R.D. 360 (D. Ariz. 2013) ..................................................................................................... 23

11 Parsons v. Ryan,
754 F.3d 657 (9th Cir. 2014) ....................................................................................................... 5, 6
12
Phillips Petroleum Co. v. Shutts,
13 472 U.S. 797 (1985) .................................................................................................................. 4, 23
14 Pinter v. Dahl,

15 486 U.S. 622 (1988) .......................................................................................................... 11, 12, 21

16 Rodman v. Safeway Inc.,

2015 U.S. Dist. LEXIS 17523 (N.D. Cal. Feb. 12, 2015) ............................................................. 15
17
S.E.C. v. W.J. Howey Co.,
18 328 U.S. 293 (1946) ................................................................................................................ 2, 8, 9
19 SEC v. Glenn W. Turner Enters., Inc.,

20 474 F.2d 476 (9th Cir. 1973) ......................................................................................................... 10

21 SEC v. R.G. Reynolds Enters.,

952 F.2d 1125 (9th Cir. 1991) ............................................................................................... 8, 9, 10
22
SEC v. Shavers,
23 2013 U.S. Dist. LEXIS 110018 (E.D. Tex. Aug. 6, 2013) .............................................................. 9
24 SEC v. Straub,
2016 U.S. Dist. LEXIS 136841 (S.D.N.Y. Sep. 30, 2016)............................................................ 13
25

26 Solis v. Latium Network, Inc.,

2018 U.S. Dist. LEXIS 207781 (D. N.J. Dec. 10, 2018) ............................................................. 2, 9
27
Speaks v. U.S. Tobacco Coop., Inc.,
28 324 F.R.D. 112 (E.D.N.C. 2018) ................................................................................................... 24
v
MEMORANDUM OF LAW IN SUPPORT OF
PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION
NO. 3:17-CV-06779-RS
 Case 3:17-cv-06779-RS Document 187-3 Filed 01/09/19 Page 7 of 36

1 Specht v. Netscape Communs. Corp.,

306 F.3d 17 (2d Cir. 2002) ...................................................................................................... 16, 17
2
St. Paul Mercury Ins. Co. v. Am. Safety Indem. Co.,
3
2014 U.S. Dist. LEXIS 70785 (N.D. Cal. May 21, 2014) ............................................................. 15
4
Stafford v. Brink’s, Inc.,
5 2015 U.S. Dist. LEXIS 191825 (C.D. Cal. Dec. 1, 2015) ............................................................. 11

6 Stoyas v. Toshiba Corp,

896 F.3d 933 (9th Cir. 2018) ................................................................................................... 17, 18
7
Toney v. Quality Res., Inc.,
8 323 F.R.D. 567 (N.D. Ill. 2018) .................................................................................................... 16
9
Tyson Foods, Inc. v. Bouaphakeo,
10 136 S. Ct. 1036 (2016)................................................................................................................. 7, 8

11 U.S. v. Zaslavskiy,
2018 U.S. Dist. LEXIS 156574 (E.D.N.Y. Sep. 11, 2018) ............................................................. 9
12
U.S. v. Zaslavskiy,
13 2018 U.S. Dist. LEXIS 156574 (E.D.N.Y. Sep. 11, 2018) ............................................................. 2
14 United Housing Foundation, Inc. v. Forman,

15 421 U.S. 837 (1975) .................................................................................................................. 9, 10

16 Uselton v. Comm. Lovelace Motor Freight, Inc.,

940 F.2d 564 (10th Cir. 1991) ......................................................................................................... 9
17
Valentino v. Carter-Wallace, Inc.,
18 97 F.3d 1227 (9th Cir. 1996) ......................................................................................................... 23
19 Vaquero v. Ashley Furniture Indus., Inc.,

20 824 F.3d 1150 (9th Cir. 2016) ....................................................................................................... 21

21 Wal-Mart Stores, Inc. v. Dukes,

564 U.S. 338 (2011) .................................................................................................................. 7, 22
22
Warfield v. Alaniz,
23 569 F.3d 1015 (9th Cir. 2009) ....................................................................................................... 10
24 Zinser v. Accufix Research Inst., Inc.,
253 F.3d 1180 (9th Cir. 2001) ....................................................................................................... 23
25

26 STATUTES 

27 15 U.S.C. § 77b(a)(1) .......................................................................................................................... 8

28 15 U.S.C. § 77l(a)(1) ............................................................................................................. 11, 20, 21

vi
MEMORANDUM OF LAW IN SUPPORT OF
PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION
NO. 3:17-CV-06779-RS
 Case 3:17-cv-06779-RS Document 187-3 Filed 01/09/19 Page 8 of 36

1 15 U.S.C. §77o................................................................................................................................... 13

2 OTHER AUTHORITIES 
3 Committee Notes 2018 Amendment Fed. R. Civ. P. 23 .................................................................... 25

4
In the Matter of CarrierEQ, Inc., d/b/a AirFox,
5 Order Instituting Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities
Act of 1933, Making Findings, And Imposing Penalties and a Cease-and-Desist Order,
6 SEC Release No. 10575, November 16, 2018 ................................................................................. 2

7 In the Matter of Paragon Coin, Inc.,

Order Instituting Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities
8 Act of 1933, Making Findings, And Imposing Penalties and a Cease-and-Desist Order,
9 SEC Release No. 10574, November 16, 2018 ................................................................................. 2

10 Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934: The
DAO, SEC (July 25, 2017) .............................................................................................................. 2
11
RULES 
12
Fed. R. Civ. P. 23(a)(1)........................................................................................................................ 4
13
Fed. R. Civ. P. 23(a)(2)........................................................................................................................ 5
14
Fed. R. Civ. P. 23(a)(3)........................................................................................................................ 5
15

16 Fed. R. Civ. P. 23(a)(4)........................................................................................................................ 6

17 Fed. R. Civ. P. 23(b)(3) ....................................................................................................... 1, 4, 22, 23

18 Fed. R. Civ. P. 23(c)(2)(B) ................................................................................................................ 25

19 Fed. R. Civ. P. 23(g)(1) ..................................................................................................................... 25

20 Fed. R. Civ. P. 23(g)(1)(A) ................................................................................................................ 25

21 REGULATIONS 
22
17 C.F.R. § 230.405 ........................................................................................................................... 13
23

24

25

26

27

28
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1 TABLE OF ABBREVIATIONS
2 Abbreviation Definition
3 “¶ [No.]” Paragraph references to Lead Plaintiff’s Consolidated Complaint,
filed April 3, 2018 (Dkt. No. 108) as amended pursuant to
4 stipulation and order, entered November 21, 2018 (Dkt. No. 183)
and stipulation and order, entered January 7, 2019 (Dkt. No. 186)
5
“Bitcoin Suisse” Bitcoin Suisse AG
6
“Breitmans” Defendants Arthur Breitman and Kathleen Breitman
7 “Class” All persons and entities who, directly or indirectly, contributed
8 Bitcoin or Ethereum to the Tezos Initial Coin Offering conducted in
July 2017. Excluded from the Class are Defendants, and any
9 person, firm, trust, corporation, or other entity related to or affiliated
with any Defendant.
10
“Complaint” Lead Plaintiff’s Consolidated Complaint, filed April 3, 2018 (Dkt.
11 No. 108) as amended pursuant to stipulation and order, entered
November 21, 2018 (Dkt. No. 183) and stipulation and order,
12 entered January 7, 2019 (Dkt. No. 186)
13 “Defendants” Defendants Tezos Foundation, DLS and the Breitmans

14 “DLS” Defendant Dynamic Ledger Solutions, Inc.

“Draper” Timothy C. Draper
15
“Draper Associates Crypto” Draper Associates V Crypto LLC
16
“Ex. ___” All “Ex. __” citations refer to exhibits to the Declaration of Hung
17 G. Ta, dated January 9, 2019, unless stated otherwise.

18 “Frunze” Plaintiff Artiom Frunze

“MTD Decision” Court’s Order on Defendants’ Motions to Dismiss, filed August 8,
19 2018 (Dkt. No. 148)
20 “Plaintiffs” Plaintiffs Frunze and Pumaro
21 “Pumaro” Plaintiff Pumaro LLC
“SEC” U.S. Securities and Exchange Commission
22
“Securities Act” Securities Act of 1933, 15 U.S.C. § 77a, et seq.
23
“Ta Decl.” Declaration of Hung G. Ta, dated January 9, 2019.
24
“Tezos Foundation” or Defendant Tezos Stiftung
25 “Foundation”
“Tezos ICO” Tezos Initial Coin Offering conducted in July 2017
26
“Tezos MTD Br.” Defendant Tezos Foundation’s Motion to Dismiss the Consolidated
27 Complaint, filed May 15, 2018 (Dkt. No. 119)
28
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1 Named plaintiffs Artiom Frunze and Pumaro LLC (collectively, “Plaintiffs”) respectfully
2 submit this memorandum of law in support of their Motion for Class Certification and request that,

3 pursuant to Fed. R. Civ. P. 23(a) and 23(b)(3), the Court certify this case as a class action, appoint

4 Plaintiffs as Class Representatives, and appoint LTL Attorneys LLP (“LTL”) and Hung G. Ta, Esq.

5 PLLC (“HGT Law”) as Class Counsel pursuant to Fed. R. Civ. P. 23(g).

6 PRELIMINARY STATEMENT
7 Plaintiffs seek certification of this action as a class action on behalf of the following Class:
8 All persons and entities who, directly or indirectly, contributed Bitcoin or
Ethereum to the Tezos Initial Coin Offering conducted in July 2017. Excluded
9
from the Class are Defendants, and any person, firm, trust, corporation, or other
10 entity related to or affiliated with any Defendant.

11 As set forth below, certification is appropriate because the requirements of Rule 23(a) are satisfied,

12 common issues of law or fact predominate over any questions affecting only individual members, and

13 a class action is superior to other methods of adjudication. Fed. R. Civ. P. 23(b)(3). Accordingly,

14 Plaintiffs respectfully request appointment of Plaintiffs as Class Representatives, and LTL and HGT

15 Law as Class Counsel.

16 STATEMENT OF FACTS COMMON TO THE CLASS

17 This is a securities class action brought on behalf of all investors who invested Bitcoin or

18 Ethereum in the Tezos ICO conducted in July 2017. ¶ 1. The Complaint asserts claims against

19 Defendants Tezos Foundation, Arthur Breitman, Kathleen Breitman and DLS for violations of

20 Sections 5, 12(a)(1) and 15 of the Securities Act.

21 From July 1, 2017 through July 14, 2017, Defendants jointly conducted the Tezos ICO for

22 Tezos tokens. While the Tezos Foundation issued the Tezos tokens to investors, the marketing and

23 execution of the Tezos ICO was performed almost entirely by the Breitmans. ¶¶ 48-58.

24 To make their investments, investors accessed a portal that was part of the tezos.com website

25 – crowdfund.tezos.com – and input the amount of Bitcoin and Ethereum that they sought to invest.

26 That amount was deducted from investors’ digital wallets and sent to the digital addresses for the

27

28
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1 Tezos Foundation’s Bitcoin and Ethereum wallets. ¶¶ 71-73. In this manner, the investments were

2 effectuated and recorded on the blockchain networks underlying Bitcoin and Ethereum.

3 The Bitcoin and Ethereum blockchains are maintained by various participants on a network
4 of computers (“nodes”) spread around the globe. ¶¶ 27-28. According to publicly available data, the

5 U.S. has the most Bitcoin and Ethereum nodes of any country. ¶ 29.1 For a transaction to occur and

6 be valid on the blockchain, all network participants must first reach a “distributed consensus” on the

7 validity of the transaction. Once a transaction is validated on the blockchain, the transaction (such as

8 the payments made by investors to the Tezos Foundation in the Tezos ICO) cannot be canceled,

9 reversed, or altered in any way. ¶ 30.

10 The Tezos ICO attracted 30,317 investors, who contributed 65,681 Bitcoin (62.5% of total
11 contributions) and 361,122 Ethereum (37.5% of total). Ex. A, July 24, 2017 Tezos Foundation Update

12 at 2. The value of the funds raised was approximately $232 million as of July 2017. ¶¶ 2, 39-45.

13 The Tezos ICO was an illegal, unregistered offering and sale of a security – specifically, an
14 “investment contract” as defined under Section 2(a)(1) of the Securities Act. 15 U.S.C. § 77b(a)(1).

15 An investment contract is “an investment of money in a common enterprise with profits to come

16 solely from the efforts of others.” S.E.C. v. W.J. Howey Co., 328 U.S. 293, 301 (1946). Here, like

17 other offerings that have been held by the SEC and federal courts to constitute the sale of securities,2

18 the Tezos tokens had all the hallmarks of a security:

19 Defendants made clear that the Tezos ICO was intended to raise capital to finance the
development of the Tezos project. See Ex. B, Tezos Overview, at 13-19.
20

21 Defendants made numerous statements in which they conceded that they were actually

22
1
See https://bitnodes.earn.com/ and https://www.ethernodes.org/network/1. These sites show
23 that as of January 8, 2019, the U.S. is the country with the most Bitcoin nodes (24.37%) and Ethereum
nodes (40.62%).
24 2
See Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934:
25 The DAO, SEC (July 25, 2017) (“DAO Report”); In the Matter of CarrierEQ, Inc., d/b/a AirFox,
Order Instituting Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933,
26 SEC Release No. 10575, November 16, 2018; In the Matter of Paragon Coin, Inc., Order Instituting
Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933, SEC Release
27
No. 10574, November 16, 2018 ; U.S. v. Zaslavskiy, 2018 U.S. Dist. LEXIS 156574 (E.D.N.Y. Sep.
28 11, 2018); Solis v. Latium Network, Inc., 2018 U.S. Dist. LEXIS 207781 (D. N.J. Dec. 10, 2018).
2
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1 selling the Tezos tokens to investors as an investment. ¶¶ 87-93. For example, Kathleen
Breitman referred to the “anticipated appreciation of our token.” ¶¶ 88, 104.
2
Defendants marketed the Tezos tokens not to potential users of the Tezos ecosystem
3
(which did not exist at the time of the Tezos ICO and was still under development), but to
4 cryptocurrency speculators and investors. For example, between September 2016 and
March 2017, DLS conducted a private pre-sale of the Tezos tokens to three crypto-token
5 focused hedge funds and seven high net worth individuals, raising approximately
$612,000. According to Kathleen Breitman, these early investors got a slight discount.
6 See May 2017 Reddit Thread, Ex. C at DLS00000413.
7
The Tezos ICO incentivized investors by rewarding them with more bonus tokens the
8 earlier they committed their investment in the Tezos ICO. ¶ 43. Such bonuses would have
been unnecessary if investors were not meant to profit from the Tezos tokens.
9
Through their conduct and marketing materials, Defendants repeatedly represented that
10 they and their agents would provide the significant managerial efforts required to make
Tezos a success. For example, the Tezos Overview identifies a set of “Development
11
Goals,” involving security, scaling, privacy, usability, and features. The Tezos Overview
12 states that it is the “development team [who] will pursue all five goals.”3 The Tezos
Overview describes how the Tezos Foundation will hire employees to develop, complete,
13 maintain, and promote the Tezos network, including employees in the fields of
engineering, research, marketing, legal, business development, and education.
14
ARGUMENT
15
I. THE PROPOSED CLASS REPRESENTATIVES
16

17 Plaintiff Artiom Frunze (“Frunze”) is an individual who invested 238 Ethereum in the Tezos

18 ICO and was promised delivery of 165,607.39 Tezos tokens. ¶ 14b; Ex. D, Declaration of Artiom

19 Frunze.

20 Plaintiff Pumaro LLC (“Pumaro”) is a Texas limited liability company that invested 1.9

21 Bitcoin in the Tezos ICO. Pumaro was promised delivery of 11,400 Tezos tokens. ¶ 14a; Ex. E,

22 Declaration of Pumaro LLC.

23 II. THE PROPOSED CLASS SATISFIES THE STANDARDS FOR CLASS

CERTIFICATION UNDER RULE 23
24
Class actions promote judicial economy by aggregating small claims into one lawsuit. They
25
“permit the plaintiffs to pool claims which would be uneconomical to litigate individually. … [M]ost
26

27
3
28 Ex. B, Tezos Overview, at Section 6.2, Development Goals.
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1 of the plaintiffs would have no realistic day in court if a class action were not available.” Phillips

2 Petroleum Co. v. Shutts, 472 U.S. 797, 809 (1985).

3 Rule 23(a) sets four threshold requirements for class certification: (1) the class must be so
4 numerous that joinder of all members is impractical (“numerosity”); (2) there must be questions of

5 law or fact common to the class (“commonality”); (3) the claims of the representative parties must be

6 typical of the claims of the class (“typicality”); and (4) the representative parties must fairly and

7 adequately protect the interests of the class (“adequacy”). Fed. R. Civ. P. 23(a).

8 In addition to the requirements of Rule 23(a), a court must determine whether the action can
9 be maintained under one of the three subsections of Rule 23(b). Here, Plaintiffs seek certification

10 under Rule 23(b)(3) because “questions of law or fact common to class members predominate over

11 any questions affecting only individual members” and “a class action is superior to other available

12 methods for fairly and efficiently adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3).

13 At the class certification stage, a plaintiff is only required to demonstrate that the requirements
14 of Rule 23 are met, not that the plaintiff will ultimately prevail on the merits. Amgen Inc. v. Conn.

15 Ret. Plans & Tr. Funds, 568 U.S. 455, 466 (2013) (Rule 23 is not a “license to engage in free-ranging

16 merits inquiries at the certification stage”); Just Film, Inc. v. Buono, 847 F.3d 1108, 1122 (9th Cir.

17 2017) (merits questions are “not appropriately addressed at the class certification stage”).

18 A. The Proposed Class Satisfies Rule 23(a)

19 1. The Proposed Class Is So Numerous That Joinder Is Impracticable
20 Rule 23(a)(1) permits class certification if “the class is so numerous that joinder of all
21 members is impracticable.” “While no specific minimum number of potential class members exists,

22 a ‘proposed class of at least forty members presumptively satisfies the numerosity requirement.’”

23 Hatamian v. Advanced Micro Devices, Inc., 2016 U.S. Dist. LEXIS 34150, at *11 (N.D. Cal. Mar.

24 16, 2016) (quoting Nguyen v. Radient Pharm. Corp., 287 F.R.D. 563, 569 (C.D. Cal. 2012)).

25 In this case, there were 30,317 investors (or wallets that were funded) in the Tezos ICO during
26 the two week period in July 2017. ¶¶ 78, 131; Ex. A, July 24, 2017 Tezos Update at 2. Accordingly,

27 the numerosity requirement is satisfied.

28
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1 2. There Are Common Questions Of Law And Fact

2 Rule 23(a)(2) requires a showing that “questions of law or fact” are common to the class.
3 However, this does not require that “every question in the case, or even a preponderance of questions,

4 is capable of class wide resolution.” Parsons v. Ryan, 754 F.3d 657, 675 (9th Cir. 2014) (internal

5 quotation marks and citation omitted). “So long as there is even a single common question, a would-

6 be class can satisfy the commonality requirement of Rule 23(a)(2).” Id. (internal quotation marks

7 and citation omitted).

8 Here, the questions of law and fact common to the Class include:
9 (a) Whether the offer of the Tezos tokens through the Tezos ICO constituted the offer and
sale of “securities”;
10

11 (b) Whether Defendants were required to file a registration statement for the Tezos ICO;

12 (c) Whether Defendants are sellers under Section 12(a)(1) of the Securities Act;

13 (d) Whether the Breitmans are “controlling persons” under the Securities Act; and

14 (e) Whether Plaintiffs and the Class are entitled to rescission, or damages, and the proper
calculation and amount of those damages.
15
Each of these questions focuses on Defendants’ conduct and their Class-wide impact, making
16
the core factual and legal issues subject to common proof. In re Portal Software Sec. Litig., 2007
17
U.S. Dist. LEXIS 51794, at *8 (N.D. Cal. June 30, 2007) (commonality found where “[a]ll class
18
members’ claims share[d] … common questions of law and fact”); Basile v. Valeant Pharm. Int’l.,
19
Inc., 2017 U.S. Dist. LEXIS 37400, at *36 (C.D. Cal. Mar. 15, 2017). The commonality requirement
20
is therefore satisfied.
21
3. The Proposed Class Representatives’ Claims Are Typical Of Those
22 Of the Class
23
Rule 23(a)(3) requires that the class representative’s claims or defenses must be “typical” of
24
the claims or defenses of the prospective class. “The test of typicality is ‘whether other members
25
have the same or similar injury, whether the action is based on conduct which is not unique to the
26
named plaintiffs, and whether other class members have been injured by the same course of conduct.’”
27
Parsons, 754 F.3d at 685. “‘Under the rule’s permissive standards, representative claims are “typical”
28
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1 if they are reasonably co-extensive with those of absent class members; they need not be substantially

2 identical.’” Id. (quoting Hanlon v. Chrysler Corp., 150 F.3d 1011, 1020 (9th Cir. 1998)). And, where

3 a “[p]laintiff’s claims are based upon the same course of events as the claims of all class members,

4 and all claims are based on the same theories and will be proven by the same evidence,” they are

5 typical of the class. In re Celera Corp. Sec. Litig., 2014 U.S. Dist. LEXIS 25098, at *9 (N.D. Cal.

6 Feb. 25, 2014). Even if a class representative’s “damages differ from the damages of some class

7 members, typicality is not defeated.” Just Film, 847 F.3d at 1118.

8 Here, Plaintiffs’ claims, like the claims of the rest of the Class, are all based on Defendants’
9 sale of unregistered securities, and Plaintiffs’ purchases of Tezos tokens, in the July 2017 Tezos ICO.

10 The legal and factual arguments that Plaintiffs advance regarding Defendants’ liability are the same

11 as the arguments that other Class members would advance in support of their claims. Thus, the

12 typicality requirement is satisfied.

13 4. The Proposed Class Representatives Will Fairly And Adequately

Protect The Interests Of The Class
14
Rule 23(a)(4) requires that “the representative parties will fairly and adequately protect the
15
interests of the class.” In the Ninth Circuit, resolution of “two questions” determines legal adequacy:
16
“‘(1) do the named plaintiffs and their counsel have any conflicts of interest with other class members
17
and (2) will the named plaintiffs and their counsel prosecute the action vigorously on behalf of the
18
class?’” In re LendingClub Secs. Litig., 282 F. Supp. 3d 1171, 1182 (N.D. Cal. 2017) (quoting
19
Hanlon, 150 F.3d at 1020). The adequacy requirement is satisfied here.
20
As set forth herein, Frunze invested 238 Ethereum in the Tezos ICO and was promised
21
delivery of 165,607.39 Tezos tokens. Pumaro invested 1.9 Bitcoin and was promised delivery of
22
11,400 Tezos tokens. The other members of the Class also contributed either Bitcoin or Ethereum,
23
and were promised corresponding amounts of Tezos tokens. Plaintiffs and the proposed Class
24
members were all sold unregistered securities in violation of the Securities Act. Thus, Plaintiffs’
25
interest in establishing Defendants’ liability and obtaining appropriate relief is aligned with the
26
interests of absent Class members.
27

28
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1 Plaintiffs have also demonstrated their willingness and ability to serve as Class
2 Representatives. Among other responsibilities during the litigation so far, both Frunze and Pumaro

3 have: (1) reviewed the Complaint, and approved their addition as named plaintiffs to this litigation;

4 (2) participated in numerous discussions with Co-Lead Counsel; and (3) supervised and monitored

5 the progress of court proceedings, including providing input as to strategy. See Exs. D and E. In

6 short, as reflected in their declarations, Plaintiffs have demonstrated that they are “‘familiar with the

7 basis for the suit and their responsibilities,’” and Plaintiffs’ willingness and ability to perform these

8 duties satisfies the “modest burden” of Rule 23(a)(4). In re LendingClub, 282 F. Supp. at 1182.

9 Plaintiffs have also engaged LTL and HGT Law to represent them in this litigation. As
10 described more fully in Section III, infra, both firms are experienced in the areas of class actions and

11 securities litigation, and have successfully prosecuted numerous securities litigations and class

12 actions, as detailed in the firms’ respective resumes. Dkt. Nos. 70-5, 70-6. Plaintiffs’ counsel have

13 the skill and knowledge that will enable them to prosecute this action effectively and expeditiously.

14 B. The Proposed Class Satisfies The “Predominance” Requirement For

Class Certification Under Rule 23(b)(3)
15
The issue of whether common questions of law or fact predominate “begins, of course, with
16
the elements of the underlying cause of action.” In re Montage Tech. Grp. Ltd. Sec. Litig., 2016 U.S.
17
Dist. LEXIS 53734, at *16 (N.D. Cal. Apr. 21, 2016) (citing Erica P. John Fund, Inc., v. Halliburton
18
Co., 563 U.S. 804, 809 (2011)) (internal quotations omitted). “[A] common question is one where
19
the same evidence will suffice for each member to make a prima facie showing or the issue is
20
susceptible to generalized class-wide proof.” Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036,
21
1045 (2016) (internal quotations, alteration and citation omitted); see also Wal-Mart Stores, Inc. v.
22
Dukes, 564 U.S. 338, 350 (2011) (a “common contention” is “capable of classwide resolution” if
23
“determination of its truth or falsity will resolve an issue that is central to the validity of each one of
24
the claims in one stroke.”); Amchem Prods. v. Windsor, 521 U.S. 591, 625 (1997) (“[p]redominance
25
is a test readily met in certain cases alleging consumer or securities fraud”). In contrast, “[a]n
26
individual question is one where members of a proposed class will need to present evidence that varies
27
from member to member.” Tyson Foods, 136 S. Ct. at 1045 (internal quotations and citation omitted).
28
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1 Importantly, Rule 23(b)(3) does not require a plaintiff to establish that “each element of her
2 claim is susceptible to classwide proof.” Amgen, 568 U.S. at 469 (internal quotations omitted,

3 alteration brackets omitted). Instead, “[w]hat the Rule does require is that common questions

4 ‘predominate over any questions affecting only individual [class] members.’” Id. (italics emphasis

5 in original). “The predominance inquiry asks whether the common, aggregation-enabling, issues in

6 the case are more prevalent or important than the non-common, aggregation-defeating, individual

7 issues. … When one or more of the central issues in the action are common to the class and can be

8 said to predominate, the action may be considered proper under Rule 23(b)(3) even though other

9 important matters will have to be tried separately, such as damages or some affirmative defenses

10 peculiar to some individual class members.” Tyson Foods, 136 S. Ct. at 1045 (internal quotations and

11 citation omitted); see also Hanlon, 150 F.3d at 1022 (predominance satisfied “[w]hen common

12 questions present a significant aspect of the case and they can be resolved for all members of the class

13 in a single adjudication”) (internal quotations and citation omitted).

14 Furthermore, a plaintiff need not prove the elements of her or his claim on class certification.
15 “[P]roof is not a prerequisite to class certification. Rule 23(b)(3) requires a showing that questions

16 common to the class predominate, not that those questions will be answered, on the merits, in favor

17 of the class.” Amgen, 568 U.S. at 459 (emphasis in original).

18 Here, there is a clear predominance of common questions over individual issues because all
19 elements of Plaintiffs’ claims present questions that are susceptible to class-wide resolution.

20 1. Whether The Tezos Tokens Are Securities

21 Under Section 2(a)(1) of the Securities Act, a “security” includes an “investment contract.”
22 15 U.S.C. § 77b(a)(1). An investment contract is “an investment of money in a common enterprise

23 with profits to come solely from the efforts of others.” Howey, 328 U.S. at 301. Specifically, a

24 transaction qualifies as an investment contract and, thus, a security if it is: (1) an investment of money;

25 (2) in a common enterprise; (3) with a reasonable expectation of profits to be derived from the

26 entrepreneurial or managerial efforts of others. SEC v. R.G. Reynolds Enters., 952 F.2d 1125, 1130

27 (9th Cir. 1991) (citing Hocking v. Dubois, 885 F.2d 1449, 1455 (9th Cir. 1989) (en banc), cert. denied,

28
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1 494 U.S. 1078 (1990)). This definition embodies a “flexible rather than a static principle, one that is

2 capable of adaptation to meet the countless and variable schemes devised by those who seek the use

3 of the money of others on the promise of profits.” Howey, 328 U.S. at 299. Accordingly, in analyzing

4 whether an instrument is a security, “form should be disregarded for substance,” and “the emphasis

5 should be on economic realities underlying a transaction, and not on the name appended thereto.”

6 United Housing Foundation, Inc. v. Forman, 421 U.S. 837, 849 (1975).

7 Under the Howey test, whether the sale of Tezos tokens in the Tezos ICO constituted
8 “investment contracts,” and thus securities, will undoubtedly raise common, class-wide questions.

9 First, in the Tezos ICO, Class members invested either Bitcoin or Ethereum into the Tezos
10 ICO. Ex. A, July 24, 2017 Tezos Foundation Update at 2. Whether the investment of Bitcoin and

11 Ethereum constitutes an “investment of money” will raise a class-wide question. Under established

12 law, an investment of cryptocurrency constitutes an “investment of money” sufficient to satisfy the

13 Howey test. SEC DAO Report, at 11 (concluding that investment of Ethereum constitutes an

14 investment of money and stating that “cash is not the only form of contribution or investment that

15 will create an investment contract.”) (citing Uselton v. Comm. Lovelace Motor Freight, Inc., 940 F.2d

16 564, 574 (10th Cir. 1991)); U.S. v. Zaslavskiy, 2018 U.S. Dist. LEXIS 156574, at *15-16 (E.D.N.Y.

17 Sep. 11, 2018) (holding that investment of virtual currency constitutes an investment of money under

18 first prong of Howey); SEC v. Shavers, 2013 U.S. Dist. LEXIS 110018, at *4-5 (E.D. Tex. Aug. 6,

19 2013) (holding that an investment of Bitcoin meets the first prong of Howey); Solis, 2018 U.S. Dist.

20 LEXIS 207781, at *5 (holding that an investment of Ethereum meets the first prong of Howey).

21 Second, the Howey inquiry will focus on whether investors were investing in a “common
22 enterprise.” A common enterprise can be established by showing that there was either “vertical”

23 commonality or “horizontal” commonality. R.G. Reynolds, 952 F.2d at 1130. Vertical commonality

24 is the dependence of the investors’ fortunes on the success or expertise of the promoter. Horizontal

25 commonality is the pooling of investor funds and interests. Id.; Brodt v. Bache & Co., Inc., 595 F.2d

26 459, 460-61 (9th Cir. 1978). Whether there was vertical or horizontal commonality is clearly an

27 objective, class-wide question.

28
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1 Here, Plaintiffs have alleged both vertical and horizontal commonality. The Tezos ICO
2 pooled investor funds to complete the development of the Tezos blockchain. Ex. B, Tezos Overview,

3 at 13-19; Tezos MTD Br. at 8 (Tezos Foundation’s admission that “the Fundraiser was intended to

4 further the development of the Tezos Network by a team of developers.”). Investors were allocated

5 a pro-rata share of the Tezos project in the form of their Tezos token allocations. In addition, there

6 was an “arrangement to share profits on a percentage basis between the investor and the seller or

7 promoter” (R.G. Reynolds, 952 F.2d at 1130) because the Tezos Foundation and the Breitmans were

8 also allocated a fixed percentage of the Tezos tokens, and thus shared in the prospects of success of

9 the Tezos project. ¶ 79.

10 Third, the Howey test will focus on whether there was a reasonable expectation of profits to
11 be derived from the efforts of others. This inquiry into investors’ expectations is based on an

12 objective, “reasonable investor” standard. Warfield v. Alaniz, 569 F.3d 1015, 1021 (9th Cir. 2009)

13 (“Under Howey, courts conduct an objective inquiry into the character of the instrument or transaction

14 offered based on what the purchasers were ‘led to expect.’”) (emphasis added); SEC DAO Report at

15 12.4 Further, whether profits from the investment in the Tezos ICO were to be derived from the

16 efforts of others raises a class-wide question, because it will focus on the extent and significance of

17 the efforts undertaken by Defendants and additional third parties in creating the financial success of

18 Class members’ investment in the Tezos project. SEC v. Glenn W. Turner Enters., Inc., 474 F.2d

19 476, 482 (9th Cir. 1973) (test is whether “the efforts made by those other than the investor are the

20 undeniably significant ones, [and are] those essential managerial efforts which affect the failure or

21 success of the enterprise.”); R.G. Reynolds, 952 F.2d at 1131 (same).

22 Here, Defendants made numerous material representations that would lead a reasonable
23 investor to expect capital appreciation and participation in future earnings.5 All of these
24
4
25 See Forman, 421 U.S. at 852 (reasonable expectation of profits can be satisfied by the
expectation of “capital appreciation resulting from the development of the initial investment.”).
26 5
For example, in the Tezos Overview, Defendants touted early backing from hedge funds and
27 explained that key features of the Tezos Token were purposefully designed to “favor[ ] decisions that
tend toward increasing the value of the tokens.” Ex. B, § 6.1. In a February 2017 interview, Kathleen
28
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1 representations to the marketplace collectively inform the reasonable expectations of investors, and

2 are susceptible of class-wide resolution.6 Furthermore, because of the unfinished nature of the Tezos

3 project at the time of Tezos ICO, the Class collectively and necessarily relied on Defendants to write

4 the software code, complete development and deliver the tokens. For all these reasons, with “one

5 stroke” the Court can determine whether Class members had a reasonable expectation of profits to be

6 derived from the efforts of the Breitmans, DLS, the Foundation and others.

7 2. Whether Defendants Are “Sellers” Under Section 12(a)(1)

8 Section 12(a)(1) attributes liability to “[a]ny person who offers or sells a security in violation
9 of section 5.” 15 U.S.C. § 77l(a)(1). A defendant is liable if she or he “passed title, or other interest

10 in the security, to the buyer for value” or if the defendant “successfully solicits the purchase [of the

11 security], motivated at least in part by a desire to serve his own financial interests or those of the

12 securities owner. If he had such a motivation, it is fair to say that the buyer ‘purchased’ the security

13 from him and to align him with the owner in a rescission action.” Pinter v. Dahl, 486 U.S. 622, 642,

14 647 (1988). Section 12(a)(1) imposes “strict liability.” Id. at 638 (“The registration requirements are

15 the heart of the Act, and § 12(1) imposes strict liability for violating those requirements.”).

16 Importantly, in Pinter, the Supreme Court expressly rejected causation and reliance as elements of

17

18
Breitman stated: “We think [Polychain Capital’s investment in DLS] is significant because it
19 represents a new business model… We created a product that was purchased by VC investors without
the traditional equity investment model because of the anticipated appreciation of our token.” Ex. F,
20 Campbell, Rebecca, Tezos Receives Funding for Smart Contract System from Polychain Capital’s
Digital Currency Fund, Bitcoin Magazine (Feb. 17, 2017) (emphasis added). In the midst of the ICO,
21
Defendant Kathleen Breitman admitted that “there are a lot of people who are interested in the more
22 speculative aspects” and “there’s a lot of people who are just profit-seeking” from the ICO because
“there’s a lot of fervor and froth in the marketplace right now.” Ex. G. Behind the scenes with
23 blockchain upstart, TechCrunch. See also Ex. H, Chavez-Dreyfuss, Gertrude, Exclusive: Billionaire
Investor Draper to Participate in Blockchain Token Sale for First Time, Reuters (May 5, 2017)
24 (investor explaining “[w]e are looking for a return”); Ex. I, Tim Draper: There Was Nothing Secretive
About Our Purchase of Tezos, Cointelegraph (Oct. 23, 2017) (Draper explaining his hopes to become
25
“rich: from investing in Tezos); ¶¶ 99-115 (Defendants’ representations that the Tezos tokens would
26 generate a return, and statements from investors that they expected to earn a profit).
6
See Stafford v. Brink’s, Inc., 2015 U.S. Dist. LEXIS 191825, at *20-21 (C.D. Cal. Dec. 1,
27
2015) (“Given this clearly objective standard that governs the [ ] analysis, the Court is unconvinced
28 by Defendant’s argument that the question [ ] is somehow inherently individualized”) (citing cases).
11
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1 Section 12 liability, stating that “no congressional intent to incorporate tort law doctrines of reliance

2 and causation into § 12(1) emerges from the language or the legislative history of the statute. Indeed,

3 the strict liability nature of the statutory cause of action suggests the opposite.” 486 U.S. at 652.

4 Thus, whether Defendants were sellers will raise purely common, class-wide questions. The
5 Tezos Foundation has not disputed that it would be a “seller” under Section 12(a)(1), because it passed

6 title in the Tezos tokens to investors. For DLS and the Breitmans, the inquiry will focus on whether

7 these Defendants’ representations and other conduct constituted the solicitation of investments in the

8 Tezos ICO. This is necessarily a common question because it focuses on Defendants’ conduct. See

9 In re Banc of Cal. Secs. Litig., 326 F.R.D. 640, 648 (C.D. Cal. 2018) (“some questions are necessarily

10 common to the class because they depend on defendants’ actions, not those of any class member”).

11 Here, the Breitmans undoubtedly engaged in solicitation.

12

13

14

15 Ex. J, DLS00007715. In a March 10, 2017 email, Kathleen Breitman sought an investment from an

16 individual, asking: “Have you decided if you’d like to invest in the crowdsale?” Ex. K, DLS00007719.

17 In a May 23, 2017 email, Kathleen Breitman stated to an investor: “We recorded a video to walk

18 people through this but are actually re-taping it in NY this weekend. … We strongly recommend

19 buying piecemeal and confirming each transaction. You’ll have 3 days for each discount phase (20%,

20 15%, etc.) so that’s ample time to get comfortable with the system and register a few transactions.”

21 Ex. L, DLS00007231. In the lead-up to the Tezos ICO, Kathleen Breitman admitted she was the “one

22 woman band” responsible for “promoting the protocol.” Ex. C at DLS00000419. In multiple

23 interviews prior to and during the Tezos ICO, Kathleen Breitman stated the uncapped nature of the

24 ICO was intended to “allow as many people who want to buy into the crowdsale” as possible. Ex. H.

25 In the midst of the ICO, Kathleen Breitman admitted “there are a lot of people who are interested in

26 the more speculative aspects of [the Tezos ICO]” because “[u]ltimately, we are appealing to people’s

27 rational self-interest.” Kathleen Breitman - Tezos Unleashed (July 13, 2017),

28
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1 https://www.youtube.com/watch?v=MjW_93sWACs at 18:00.7

2 3. Whether The Breitmans Are Controlling Persons Under Section 15

3 In addition to the direct violations of Section 12(a)(1) described above, Defendants Arthur
4 and Kathleen Breitman are liable as “controlling persons” pursuant to Section 15 of the Securities

5 Act. 15 U.S.C. §77o; ¶¶ 144-50. To allege controlling person liability, the Class must establish that

6 the Breitmans possessed actual power or control over the primary violators the Tezos Foundation and

7 DLS. Howard v. Everex Sys., 228 F.3d 1057, 1065 (9th Cir. 2000). Control may be direct or indirect.

8 See 17 C.F.R. § 230.405 (SEC defining control as the “possession, direct or indirect, of the power to

9 direct or cause the direction of the management and policies of a person, whether through ownership

10 of voting securities, by contract, or otherwise.”). However, “it is not necessary to show actual

11 participation or the exercise of actual power.” Howard, 228 F.3d at 1065.

12 Again, whether the Breitmans are controlling persons is a common question because it will
13 focus on Defendants’ conduct. In re Banc of Cal., 326 F.R.D. at 648. Here, as CEO of DLS, Kathleen

14 Breitman represented that she “take[s] care of all the operational aspects of the Tezos blockchain. I

15 deal with business partners, I deal with attorneys, I deal with our marketing group, all the non-

16 technical things.”8 Also, it was the Breitmans who executed and monitored the Tezos ICO. ¶¶ 57-58.

17

18 ” Ex. M, DLS00007391. During

19 the Tezos ICO, Arthur Breitman responded to numerous technical troubleshooting and other

20 questions from investors. See, e.g., Exs. S and T, infra at 19.

21

22

23 7
The final element of the Class’s Section 12(a)(1) claim is the use of “interstate commerce” in
the unregistered sale of securities. It is undisputed that Defendants conducted the sale of Tezos tokens
24 through the U.S.-based website www.tezos.com. SEC v. Straub, 2016 U.S. Dist. LEXIS 136841, at
*35 (S.D.N.Y. Sep. 30, 2016) (“The Internet unquestionably constitutes an ‘instrumentality of
25
interstate commerce.”). Therefore, proving Defendants utilized the instrumentalities of “interstate
26 commerce” can be accomplished in “one stroke.”
8
Around The Coin, Fintech Podcast, Episode 138: Interview with Kathleen Breitman, CEO of
27
Tezos, YOUTUBE (June 16, 2017),
28 https://www.youtube.com/watch?v=cDIgGYl5krA&feature=youtu.be.
13
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1 4. The Contribution Terms Do Not Raise Individual Issues

2 Defendants have argued that the Tezos ICO was governed by the “Contribution Terms,”
3 which, Defendants contend, form part of a “browsewrap” agreement. Defendants have also
4 contended that whether investors had notice of the Contribution Terms will therefore create

5 individualized questions of actual or constructive notice. Tezos MTD Br. at 17-18. Defendants are

6 incorrect, because whether these terms are legally binding presents common, class-wide questions.

7 As described by the Ninth Circuit in Nguyen v. Barnes & Noble Inc., 763 F.3d 1171, 1176
8 (9th Cir. 2014), in a browsewrap agreement, the “website’s terms and conditions of use are generally

9 posted on the website via a hyperlink at the bottom of the screen” and at a minimum, “the website

10 will contain a notice that … the user is agreeing to and is bound by the site’s terms of service.”

11 (quotation marks and citations omitted) (emphasis added); In re Facebook Biometric Info. Privacy

12 Litig., 185 F. Supp. 3d 1155, 1165 (N.D. Cal. 2016) (noting that a browsewrap agreement requires at

13 least a hyperlink notice on the website).9 “[B]y visiting the website[,] the user agrees to the Terms of

14 Use not listed on the site itself but available only by clicking a hyperlink.” Nguyen, 763 F.3d at 1176

15 (internal quotation marks omitted) (emphasis added).

16 This requirement of a reference or link to the terms and conditions is simply a statement of
17 the fundamental principle of contract law that parties must objectively manifest their assent to those

18 terms and conditions. See Chan v. Drexel Burnham Lambert, Inc., 178 Cal. App. 3d 632, 641 (1986)

19 (“[f]or the terms of another document to be incorporated into the document executed by the parties

20 the reference must be clear and unequivocal, the reference must be called to the attention of the

21 other party and he must consent thereto, and the terms of the incorporated document must be known

22 or easily available to the contracting parties”) (quotation marks and citations omitted) (bold emphasis

23 added); see also Nguyen, 763 F.3d at 1175-76 (“While new commerce on the Internet has exposed

24 courts to many new situations, it has not fundamentally changed the principles of contract. [ ] One

25

26 9
Browsewrap agreements are to be distinguished from “clickwrap” agreements, which “require
a user to click on an ‘I agree’ box after being presented with a list of terms and conditions of use.”
27
Nguyen, 763 F.3d at 1175-76. Because browsewrap agreements require no outward manifestation of
28 assent, courts are traditionally reluctant to enforce them. Id. at 1178-79.
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1 such principle is the requirement that mutual manifestation of assent, whether by written or spoken

2 word or by conduct, is the touchstone of contract.”) (internal citations and quotations omitted).

3 Thus, whether the Contribution Terms are legally binding will turn on whether there was a
4 reference or incorporation on crowdfund.tezos.com sufficient to constitute an objective manifestation

5 of assent. This is an indisputably common question susceptible to class-wide determination. See

6 Rodman v. Safeway Inc., 2015 U.S. Dist. LEXIS 17523 (N.D. Cal. Feb. 12, 2015) (rejecting

7 enforceability of certain, separately-placed “Special Terms” as a matter of law because “Class

8 Members could have completed all their subsequent purchases … without ever visiting the webpage

9 hosting the revised Special Terms which [the defendant] claims governed the sale and without ever

10 clicking anything on the website that would indicate that they have agreed to those terms”). There is

11 no need for individualized inquiries into each investor’s notice. St. Paul Mercury Ins. Co. v. Am.

12 Safety Indem. Co., 2014 U.S. Dist. LEXIS 70785, at *30-31 (N.D. Cal. May 21, 2014) (“Even if the

13 other party is aware of the extrinsic document, an express incorporation is required.”); Amtower v.

14 Photon Dynamics, Inc., 158 Cal. App. 4th 1582, 1608 (2008) (“To impliedly incorporate an external

15 document by reference, the subject document must contain some clear and unequivocal reference to

16 the fact that the terms of the external document are incorporated.”).

17 Here, when accessing the crowdfund.tezos.com portal (a subdomain of tezos.com), investors

18 were never presented with the Contribution Terms. Instead, the Contribution Terms appeared on a

19 completely separate website, www.tezos.ch, that was not referenced on tezos.com or

20 crowdfund.tezos.com, and that investors never had to access in order to make their investments.

21 ¶¶ 71-72, 125-26. Thus, the Contribution Terms were never incorporated by reference or otherwise.

22 Indeed, the Tezos Foundation has expressly disclaimed the enforceability of any external
23 terms, which highlights why determination of assent will focus on the point of contract

24 (crowdfund.tezos.com), and the terms that were referenced/incorporated at that point. In a June 15,

25 2017 email, sent approximately two weeks before the Tezos ICO, the Tezos Foundation expressly

26 instructed investors that, “For technical information on how to participate in the Tezos

27 fundraiser, please always refer exclusively to the Tezos website at https://tezos.com” and that, “If

28
15
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1 you would like to contribute, only do so through our own website https://tezos.com once the

2 fundraiser opens, or through https://www.bitcoinsuisse.ch/tezos starting today. No other websites

3 are authorized to provide information on Tezos or accept contributions to the Tezos

4 fundraiser.” Ex. N. (emphasis in original).

9 See Ex. O, DLS00004804 (uppercase emphasis in

10 original, bold and italics emphasis added). All of this demonstrates precisely why a clear and express

11 incorporation/reference on crowdfund.tezos.com to the Contribution Terms was necessary, if those

12 terms were to be legally binding.

13 Even if the Court were to find a sufficient reference to or incorporation of the Contribution
14 Terms, there still would not be individualized inquiries because the Court would then have to consider

15 whether there was constructive notice of those terms. This determination is an objective test based

16 on reasonable-person standards that apply equally to all members of the Class. In determining

17 whether there is sufficient notice in the context of a “browsewrap” agreement, the Court is required

18 to determine whether the www.tezos.com “website puts a reasonably prudent user on inquiry notice

19 of the terms of the contract.” Nguyen, 763 F.3d at 1177 (citing Specht v. Netscape Communs. Corp.,

20 306 F.3d 17, 30-31 (2d Cir. 2002)) (emphasis added).10 Underscoring the purely objective nature of

21 this test, the Ninth Circuit held that the user’s “familiarity with other websites governed by similar

22 browsewrap terms” and “[w]hether [the plaintiff] has experience with the browsewrap agreements

23 found on other websites” would have “no bearing on whether he had constructive notice.” Id. at 1179.

24 Other courts agree that this reasonable person standard applies. See Toney v. Quality Res.,
25 Inc., 323 F.R.D. 567, 589 (N.D. Ill. 2018) (“The Court could resolve this issue in a class action

26
10
In Nguyen, the Ninth Circuit held that actual notice of the terms of a browsewrap agreement
27
might be relevant to the determination of whether the terms are binding, but ultimately did not decide
28 this question. 763 F.3d at 1176-77.
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1 because constructive notice of a ‘browsewrap’ agreement looks at the conspicuousness of the

2 hyperlink or text constituting the agreement. … All of the proposed class members in this case used

3 the same website, and any inquiry as to constructive knowledge of the privacy policy would be the

4 same across the proposed class.”); Meyer v. Uber Techs., Inc., 868 F.3d 66, 74-80 (2d Cir. 2017)

5 (reasonably conspicuous notice an objective standard, and “[w]hether a reasonably prudent user

6 would be on inquiry notice turns on the ‘clarity and conspicuousness of [contract] terms.’”) (citing

7 Specht, 306 F.3d at 30 and Nguyen, 763 F.3d at 1177).11

8 5. Whether The Securities Act Applies Under Morrison Raises

Common Questions
9
Whether the Securities Act applies to the conduct underlying this dispute is a merits question.
10
Morrison v. Nat’l Austl. Bank Ltd., 561 U.S. 247, 254 (2010). However, because at least one Court
11
of Appeals (the Second Circuit) has held that it is appropriate to assess whether Morrison questions
12
satisfy the predominance requirement in a motion for class certification, Plaintiffs discuss it here. See
13
In re Petrobras Sec. Litig., 862 F.3d 250, 273 (2d Cir. 2017).
14
Under Morrison, the Securities Act applies only to “transactions in securities listed on
15
domestic exchanges, and domestic transactions in other securities.” Morrison, 561 U.S. at 267, 268
16
(the “same focus on domestic transactions is evident in the Securities Act”). In Stoyas v. Toshiba
17
Corp, 896 F.3d 933, 949 (9th Cir. 2018), the Ninth Circuit adopted the “irrevocable liability” test for
18
whether a transaction is “domestic.” Under this test, “in order to adequately allege the existence of a
19
domestic transaction, it is sufficient for a plaintiff to allege facts leading to the plausible inference
20
that the parties incurred irrevocable liability within the United States: that is, that the purchaser
21
incurred irrevocable liability within the United States to take and pay for a security, or that the seller
22

23
11
24 See also In re Monumental Life Ins. Co., 365 F.3d 408, 421 (5th Cir. 2004) (“We therefore
have no difficulty concluding that whether plaintiffs were provided constructive notice is an issue
25 that can be decided on a classwide basis.”); McLaughlin v. Am. Tobacco Co., 522 F.3d 215, 233 n.10
(2d Cir. 2008) (“constructive notice is an issue susceptible to common proof; what a ‘reasonable
26 person’ would have known, and when, can be proven on a class-wide basis.”); cf. Nitsch v.
Dreamworks Animation SKG Inc., 315 F.R.D. 270, 311-13 (N.D. Cal. 2016) (“whether this evidence
27
was sufficient to trigger Plaintiffs’ duty to diligently investigate their claims will raise largely
28 common issues.”) (citing Conmar Corp. v. Mitsui & Co. (U.S.A.), 858 F.2d 499, 504 (9th Cir. 1988)).
17
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1 incurred irrevocable liability within the United States to deliver a security.” Absolute Activist Value

2 Master Fund Ltd. v. Ficeto, 677 F.3d 60, 67 (2d Cir. 2012). In addition, the Ninth Circuit in Stoyas

3 noted an “an alternative means of alleging a domestic transaction: alleging that title to the shares was

4 transferred within the U.S.” 896 F.3d at 948 (citing Absolute Activist, 677 F.3d at 68).

5 In this case, whether under the irrevocable liability test or the transfer-of-title test, the
6 questions will be common and susceptible of class-wide resolution.

7 First, Tezos ICO investors incurred irrevocable liability “to take and pay for” Tezos tokens
8 when they submitted their information on the portal crowdfund.tezos.com, sent their funds to the

9 Tezos Foundation’s Bitcoin and Ethereum wallets, and the transfer of funds was digitally recorded

10 on the Bitcoin and Ethereum blockchains. ¶¶ 71-74. Once an investment was recorded on the

11 blockchains, the investor could not unilaterally cancel or revoke the transaction and demand a refund.

12 The Tezos Foundation has admitted that transactions were digitally recorded on the blockchains. See

13 Ex. P, July 5, 2017 Update (Tezos Foundation stating: “When designing the contribution software,

14 we made sure that all contributions to the Tezos fundraiser are recorded on the Bitcoin and Ethereum

15 blockchains….”) (emphasis added). The Tezos Foundation has also admitted that, once recorded on

16 the Bitcoin and Ethereum blockchains, investments were legally non-refundable.12

17 Reinforcing this conclusion, the Tezos Foundation itself also “incurred irrevocable liability
18 … to deliver” the Tezos tokens when an investor’s investment was recorded on the Bitcoin and

19 Ethereum blockchains. In a number of communications, Arthur Breitman directly assured investors

20 and other individuals that the recording of transactions on the blockchains was determinative of the

21 Tezos Foundation’s obligations. See, e.g., Ex. R, DLS00006989 (

22

23 ) (emphasis added); Ex. S, DLS00005061 (July 1, 2017 email from Arthur

24 Breitman stating: “We had some issue with the DB [database] early in the morning and we are still

25

26 12
See Tezos Foundation September 30, 2017 Update, Ex. Q (“A few weeks ago, we announced
our intention of offering refund options to those who made late or sub-threshold contributions …. We
27
are doing this as a discretionary measure of goodwill towards our supporters, even though we are not
28 legally obliged to do so.”) (emphasis added).
18
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1 trying to reconstruct the missing bit. The good news is that your transactions are clearly on the

2 Ethereum blockchain so we’ll be able to get it in. I’m really sorry for the inconvenience but rest

3 assured that both contributions will be reflected once we manage to resync the db with the Ethereum

4 blockchain.”) (emphasis added); Ex. T, DLS00005395 (July 2, 2017 email from Arthur Breitman

5 stating: “As long as your transactions appear on the blockchain, they are safe”). Also, the Tezos

6 Foundation calculated bonuses for investors based precisely on the timing of when an investor’s

7 investment was recorded on the Bitcoin and Ethereum blockchains. See Ex. U, Contribution Terms,

8 ¶ 26. Under this bonus system, the earlier an investor’s contribution was recorded on the Ethereum

9 and Bitcoin blockchains, the greater the number of bonus tokens received by the investor. Therefore,

10 the Tezos Foundation necessarily incurred liability at the point when investments were recorded on

11 the Bitcoin and Ethereum blockchains.

12 Because transactions on the Bitcoin and Ethereum blockchains are effectuated and recorded
13 over a network of computers (nodes) spread around the globe (¶¶ 27-28), and because the U.S. has

14 the most nodes of any country, the U.S. is essential to the recording of these transactions, and both

15 investors and the Tezos Foundation incurred irrevocable liability in the United States. ¶¶ 29, 75. In

16 the MTD Decision, the Court held that Plaintiffs sufficiently alleged that irrevocable liability was

17 incurred in the U.S., noting among other factual allegations that Lead Plaintiff’s “contribution of

18 Ethereum to the ICO became irrevocable only after it was validated by a network of global ‘nodes’

19 clustered more densely in the United States than in any other country.” MTD Decision at 14.

20 Therefore, under the irrevocable liability test, the issue of where irrevocable liability was
21 incurred will raise common questions, including “where” transactions on the Bitcoin and Ethereum

22 blockchains are located; where the nodes are located; how transactions are recorded on the

23 blockchains; and when the transactions became irrevocable on the blockchains. In addition, other

24 common questions that may be relevant include the location of the server on which the

25 crowdfund.tezos.com website was hosted, and the locus of the Tezos ICO marketing efforts.

26 Defendants have asserted that Class members’ investments became irrevocable as a matter of
27 law in the Channel Island of Alderney, where the so-called “contribution software” used by the Tezos

28
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1 Foundation was purportedly located, but this does not raise individualized questions. Tezos MTD

2 Br. at 24. To the contrary, questions concerning the function and relevance of the Contribution

3 Software, and their relationship to the recording of transactions on the Bitcoin and Ethereum

4 blockchains, are still common questions that are capable of “one stroke” resolution for all Class

5 members.

6 Second, under the alternative transfer-of-title test, the Tezos Foundation transferred title in the
7 Tezos tokens to investors on the Tezos blockchain network. All transfers would have been effectuated

8 and recorded on the nodes constituting the Tezos network, upon the launch of the network. Ex. U,

9 Contribution Terms, ¶ 31 (“the Contributor will have to import his XTZ Wallet into the Tezos Client

10 after the Launch of the Tezos Network, in order to claim his XTZ. The XTZ will then be allocated to

11 this wallet address.”). A majority of nodes on the Tezos network are located in the U.S., so the

12 transfer of title would have occurred in the U.S. See Ex. V (showing the U.S. runs 3606 out of 6428

13 total Tezos nodes). Again, regardless of the merits, where title transferred is a purely common

14 question relating to the Tezos network and the location of Tezos network nodes.

15 6. The Class’s Remedies Of Rescission And Damages Do Not Present

Any Individualized Issues
16
Under Section 12(a)(1) of the Securities Act, a purchaser of an unregistered security may sue
17
for rescission of “the consideration paid for such security with interest thereon, less the amount of
18
any income received thereon,” or for “damages if he no longer owns the security.” 15 U.S.C.
19
§ 77l(a)(1). Under either remedy, the calculations in this case are based on the same class-wide
20
methodology.
21
With respect to rescission, Class members will be refunded, upon the tender of their Tezos
22
tokens, the consideration they paid with interest calculated thereon. In the Tezos ICO, investors paid
23
for their Tezos tokens (XTZ) using either Bitcoin (BTC) or Ethereum (ETH). However, the price of
24
Tezos securities was denominated in Bitcoin. Specifically, Class members were promised between
25
5,000 and 6,000 XTZ per Bitcoin. For Class members who invested using Ethereum, the Tezos
26
Foundation first determined the “BTC equivalent” of that Ethereum investment using the “historical
27

28
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1 exchange rate of BTC/ETH at approximately the time of the ETH Contribution.”13 As the Tezos

2 Foundation has previously confirmed, it then allocated tokens to Ethereum investors using the

3 Bitcoin-equivalent value. Tezos MTD Br. at 24 (“the Foundation’s XTZ recommendation [was]

4 calculated based on a conversion to bitcoin.”).

5 Therefore, the claims for rescission of all investors seeking this remedy – whether that investor
6 invested using Bitcoin or Ethereum or some combination thereof – will be governed by the same

7 class-wide methodology, i.e. the return of the Bitcoin or Bitcoin-equivalent value of their respective

8 investments. Because Tezos allocations were calculated in the first place using the Bitcoin or Bitcoin-

9 equivalent value of an investor’s contribution, using a class-wide methodology of returning the

10 Bitcoin or Bitcoin-equivalent value will ensure that investors receive in proportion to their relative

11 allocation of Tezos tokens, irrespective of whether they invested using Ethereum or Bitcoin. Indeed,

12 the Court has already noted that it does not matter what “currency” investors used to invest in the

13 Tezos ICO. See March 15, 2018 Tr. at 37:13-21 (““Why would the funding source, which is what

14 this is, Bitcoin or Ethereum is in this instance, … Why does that matter? If you pay in euros and

15 somebody paid in dollars, I mean, would you then say: Oh, we need a euro group and we need a

16 dollars group? I can't imagine that you would.”) and 39:21-24 (“If you had a securities case, I can’t

17 imagine that you would make any kind of subclass or distinction between, say, people who use U.S.

18 dollars and people who used some other currency.”).

19 With respect to damages, it is well settled that “the need for individual damages calculations
20 does not, alone, defeat class certification.” Vaquero v. Ashley Furniture Indus., Inc., 824 F.3d 1150,

21 1155 (9th Cir. 2016) (citing cases). Here, for Class members who have already sold their tokens and

22 suffered damages, the calculations are a simple matter of arithmetic that is expressly prescribed by

23 the Securities Act itself, and therefore necessarily class-wide in nature. See 15 U.S.C. § 77l(a)(1);

24 Pinter, 486 U.S. at 641 n.18 (Section 12(a)(1) “permits the buyer who has disposed of the security to

25 sue for damages – ‘the consideration paid for such security with interest thereon, less the amount of

26
13
Ex. U, Contribution Terms ¶ 25; Ex. W, DLS00007116 (
27

28 .
21
MEMORANDUM OF LAW IN SUPPORT OF
PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION
NO. 3:17-CV-06779-RS
 Case 3:17-cv-06779-RS Document 187-3 Filed 01/09/19 Page 31 of 36

1 any income received thereon.’”); In re China Intelligent Lighting & Elecs., Inc. Sec. Litig., 2013 U.S.

2 Dist. LEXIS 155091, at *16 (C.D. Cal. Oct. 25, 2013) (in Section 12(a) claim, finding predominance

3 and superiority because inter alia “the calculation of damages will be governed by statutory

4 formulas.”).14

5 As set forth above, because all of the issues “central to the validity” of Plaintiffs’ claims raise
6 questions fully susceptible to class-wide resolution, common questions of law and fact predominate

7 over any individual questions. Wal-Mart, 564 U.S. at 350.

8 C. The Proposed Class Satisfies The “Superiority” Requirement For Class

Certification Under Rule 23(b)(3)
9
Rule 23(b)(3) also requires a plaintiff to show that the class action is “superior to other
10
available methods for fairly and efficiently adjudicating the controversy.” Courts recognize the class
11
action device as superior to other methods for fairly and efficiently adjudicating large-scale securities
12
claims brought on behalf of numerous individuals. See In re Verisign Inc. Sec. Litig., 2005 U.S. Dist.
13
LEXIS 10438, at *31-32 (N.D. Cal. Jan. 13, 2005) (“Class actions are particularly well-suited in the
14
context of securities litigation, wherein geographically dispersed shareholders with relatively small
15
holdings would otherwise have difficulty in challenging wealthy corporate defendants.”). See also In
16
re Cooper Cos. Sec. Litig., 254 F.R.D. 628, 632 (C.D. Cal. 2009) (“As the Ninth Circuit has so aptly
17
stated, securities [ ] cases fit Rule 23 ‘like a glove.’”); In re NYSE Specialists Sec. Litig., 260 F.R.D.
18
55, 80 (S.D.N.Y. 2009) (“securities cases easily satisfy the superiority requirement of Rule 23”)
19
(internal quotation marks and citation omitted).
20
In assessing the superiority prong, Rule 23(b)(3) sets forth the following four factors: (1) the
21
interests of members of the class in “individually controlling the prosecution or defense of separate
22
actions”; (2) “the extent and nature of any litigation concerning the controversy already begun by or
23
against class members”; (3) “the desirability or undesirability of concentrating the litigation of the
24
claims in the particular forum”; and (4) the difficulties likely to be encountered in the management
25

26
14
See also In re Banc of Cal. Secs. Litig., 326 F.R.D. at 651 (“damages models are only required
27
when they’re necessary to isolate damages by liability theory. … But this case isn’t so complicated
28 as to require damages models to separate liability theories.”).
22
MEMORANDUM OF LAW IN SUPPORT OF
PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION
NO. 3:17-CV-06779-RS
 Case 3:17-cv-06779-RS Document 187-3 Filed 01/09/19 Page 32 of 36

1 of a class action. Fed. R. Civ. P. 23(b)(3). Zinser v. Accufix Research Inst., Inc., 253 F.3d 1180,

2 1190-92 (9th Cir. 2001). Here, each factor weighs strongly in favor of class certification.

3 First, there are more than 30,000 members in the Class, each of whose individual damages
4 likely are small enough to preclude economical, individual litigation. If the Class is not certified, the

5 burden and expense of litigating would not be distributed among the Class, one of the advantages

6 afforded by the class action mechanism. Verisign, 2005 U.S. Dist. LEXIS 10438, at *32; Valentino

7 v. Carter-Wallace, Inc., 97 F.3d 1227, 1234 (9th Cir. 1996) (“class wide litigation of common issues

8 will reduce litigation costs and promote greater efficiency.”); Phillips Petroleum, 472 U.S. at 809

9 (class actions “permit the plaintiffs to pool claims which would be uneconomical to litigate

10 individually,” and noting that in the case before it, “most of the plaintiffs would have no realistic day

11 in court if a class action were not available”). Furthermore, Plaintiffs are unaware of any pending

12 individual cases that have been filed in any court, which confirms the limited interest of individual

13 Class members in prosecuting their own separate actions. See In re Phenylpropanolamine (PPA)

14 Prods. Liab. Litig., 214 F.R.D. 614, 621 (W.D. Wash. 2003) (no superiority where there were “almost

15 900” related individual cases pending in state and federal court).

16 Second, the fact that two related class actions have been filed in the San Francisco Superior
17 Court also supports a finding of superiority. Those state court actions are still in their infancy.

18 Although the state court actions are now coordinated, Defendants the Tezos Foundation and the

19 Breitmans have not even been served with a complaint, and the other Defendants have not answered

20 or demurred. Ex. X (Tezos ICO Cases, Superior Court of California, December 19, 2018 Minutes of

21 Case Management Conference). This weighs in favor of certifying the Class in this action. See In re

22 LendingClub, 282 F. Supp. 3d at 1187 (finding certification of consolidated federal action was

23 superior to parallel state court case); Parra v. Bashas’, Inc., 291 F.R.D. 360, 396 (D. Ariz. 2013)

24 (“Given that [the related] action is in its relative infancy, and the court would have to speculate as to

25 how that action might, at some future date, impact the present case, it finds that the second

26 [superiority] factor also weighs in favor of class certification.”); In re LIBOR-Based Fin. Instruments

27 Antitrust Litig., 299 F. Supp. 3d 430, 607 (S.D.N.Y. 2018) (“This action has progressed further than

28
23
MEMORANDUM OF LAW IN SUPPORT OF
PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION
NO. 3:17-CV-06779-RS
 Case 3:17-cv-06779-RS Document 187-3 Filed 01/09/19 Page 33 of 36

1 the other actions asserting similar claims, thereby supporting superiority under Rule 23(b)(3)(B)”).

2 Third, it is desirable to “concentrate[ ] the litigation of the claims in [this] particular forum.”
3 Fed. R. Civ. P. 23(b)(3)(C). To begin, Defendant DLS is headquartered in this district, and Kathleen

4 and Arthur Breitman reside in it. ¶¶ 15, 20; Hatamian, 2016 U.S. Dist. LEXIS 34150, at *30 (finding

5 superiority met where defendant’s headquarters located in the district). Also, this Federal Court has

6 the expertise to adjudicate a complex class action alleging violations of the federal securities laws.

7 See Speaks v. U.S. Tobacco Coop., Inc., 324 F.R.D. 112, 141 (E.D.N.C. 2018) (finding superiority

8 despite a parallel class action pending in state court because the case involved “a nationwide class of

9 plaintiffs and substantial questions of federal law. Thus, this court is a superior forum for resolving

10 the claims at issue”). In addition, given the pending state court class actions, the likelihood of

11 “additional burdens and expenses on the litigants,” coupled with “a risk of inconsistent rulings” from

12 multiplicity of actions, support a finding of superiority. Arellano v. Kellermeyer Bldg. Servs., LLC,

13 2014 U.S. Dist. LEXIS 168986, at *18 (S.D. Cal. Dec. 5, 2014).

14 Fourth, a class action is manageable and weighs in favor of class certification. Manageability
15 “depends largely on whether Plaintiff’s case rises and falls on common evidence. … This factor thus

16 overlaps with the Court’s commonality, typicality, and predominance analysis.” Datta v. Asset

17 Recovery Sols., LLC, 2016 U.S. Dist. LEXIS 36446, at *30 (N.D. Cal. Mar. 18, 2016) (internal

18 quotation marks and citation omitted). “Manageability concerns must be weighed against the

19 alternatives and will rarely, if ever, be sufficient to prevent certification of a class.” Bowerman v.

20 Field Asset Servs., Inc., 242 F. Supp. 3d 910, 933 (N.D. Cal. 2017) (internal quotation marks and

21 citation omitted); Briseno v. ConAgra Foods, Inc., 844 F.3d 1121, 1128 (9th Cir. 2017) (noting the

22 “well-settled presumption that courts should not refuse to certify a class merely on the basis of

23 manageability concerns”) (internal quotation marks and citation omitted). Here, additional
24 proceedings in this case will focus almost exclusively on the common evidence concerning

25 Defendants’ conduct. See supra, Section II.B. Splintering the case into more than 30,000 individual

26 cases would not make the litigation more manageable. Further, a class action is especially
27 manageable in this case because all Class members were required to provide Defendants with an

28
24
MEMORANDUM OF LAW IN SUPPORT OF
PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION
NO. 3:17-CV-06779-RS
 Case 3:17-cv-06779-RS Document 187-3 Filed 01/09/19 Page 34 of 36

1 email address to invest in the Tezos ICO, thus ensuring ease of notice and communication. See Tezos

2 instruction video, available at https://www.youtube.com/watch?v=Uti8-1Y-Wkk; see also Fed. R.

3 Civ. P. 23(c)(2)(B) (class “notice may be by one or more of the following: United States mail,

4 electronic means, or other appropriate means.”); Committee Notes 2018 Amendment Fed. R. Civ. P.

5 23 (“Subdivision (c)(2) is also amended to recognize contemporary methods of giving notice to class

6 members.”).

7 Accordingly, under the Rule 23(b)(3) factors, the class action mechanism is superior to any
8 other method to secure the just, speedy and efficient resolution of Class members’ claims.

9 III. LTL AND HGT LAW SHOULD BE APPOINTED AS CLASS COUNSEL

10 Rule 23(g)(1) provides that “a court that certifies a class must appoint class counsel.” Plaintiff
11 respectfully requests that the Court appoint Lead Counsel, LTL and HGT Law, as Class Counsel. In

12 appointing class counsel, the Court considers counsel’s work “in identifying or investigating potential

13 claims in the action,” “counsel’s experience in handling class actions,” “counsel’s knowledge of the

14 applicable law” and “the resources that counsel will commit to representing the class.” Fed. R. Civ.

15 P. 23(g)(1)(A)(i)-(iv). As mentioned above, Lead Counsel are well-qualified to prosecute this case

16 on behalf of Plaintiffs and the other members of the Class, and have already undertaken a vigorous

17 prosecution of this action, including filing a consolidated amended complaint, defeating Defendants’

18 recent motion to dismiss (MTD Decision), conducting discovery and pursuing class certification. In

19 addition, the Court has already found LTL and HGT Law adequate during the PSLRA lead plaintiff

20 process. See Dkt. No. 101. Accordingly, LTL and HGT Law satisfy the requirements of Rule 23(g)

21 and should be appointed as Class Counsel. See Exs. Y and Z (firm CVs of LTL and HGT Law).

22 CONCLUSION
23 Plaintiff respectfully requests that the Court: (1) certify this action as a class action pursuant
24 to Rule 23(a) and Rule 23(b)(3); (2) appoint Artiom Frunze and Pumaro LLC as Class

25 Representatives; and (3) appoint LTL and HGT Law as Class Counsel.

26

27

28
25
MEMORANDUM OF LAW IN SUPPORT OF
PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION
NO. 3:17-CV-06779-RS
 Case 3:17-cv-06779-RS Document 187-3 Filed 01/09/19 Page 35 of 36

1 Date: January 9, 2019 LTL ATTORNEYS LLP

2 By: s/ Enoch H. Liang
3 Enoch H. Liang
LTL ATTORNEYS LLP
4 601 Gateway Boulevard, Suite 1010
South San Francisco, California 94080
5 Tel: 650-422-2130
Fax: 213-612-3773
6 [email protected]
7
James M. Lee
8 Caleb H. Liang
LTL ATTORNEYS LLP
9 300 S. Grand Ave., 14th Floor
Los Angeles, California 90071
10 Tel: 213-612-8900
11 Fax: 213-612-3773
[email protected]
12 [email protected]

13 Hung G. Ta
JooYun Kim
14
HUNG G. TA, ESQ., PLLC
15 250 Park Avenue, 7th Floor
New York, New York 10177
16 Tel: 646-453-7288
Fax: 646-453-7289
17 [email protected]
[email protected]
18

19 Lead Counsel for Court-Appointed Lead

Plaintiff and the Class
20
William R. Restis
21 THE RESTIS LAW FIRM, P.C.
402 West Broadway, Suite 1520
22
San Diego, CA 92101
23 Tel: 619.270.8383
[email protected]
24
Joseph J. DePalma
25 Bruce D. Greenberg
26 Jeremy Nash
LITE DEPALMA GREENBERG,
27 LLC
570 Broad Street, Suite 1201
28 Newark, NJ 07102
26
MEMORANDUM OF LAW IN SUPPORT OF
PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION
NO. 3:17-CV-06779-RS
 Case 3:17-cv-06779-RS Document 187-3 Filed 01/09/19 Page 36 of 36

1 Tel: (973) 623-3000

Fax: (973) 623-0858
2 [email protected]
3 [email protected]
[email protected]
4
Additional Counsel for the Class
5

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28
27
MEMORANDUM OF LAW IN SUPPORT OF
PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION
NO. 3:17-CV-06779-RS
 Case 3:17-cv-06779-RS Document 187-5 Filed 01/09/19 Page 1 of 4

1 LTL ATTORNEYS LLP

Enoch H. Liang (SBN 212324)
2 601 Gateway Boulevard, Suite 1010

3 South San Francisco, California 94080

Tel: 650-422-2130
4 Fax: 213-612-3773
[email protected]
5
James M. Lee (SBN 192301)
6 Caleb H. Liang (Bar No. 261920)

7 300 S. Grand Ave., 14th Floor

Los Angeles, California 90071
8 Tel: 213-612-8900
Fax: 213-612-3773
9 [email protected]
[email protected]
10

11 HUNG G. TA, ESQ. PLLC

Hung G. Ta
12 JooYun Kim
250 Park Avenue, 7th Floor
13 New York, New York 10177
Tel: 646-453-7288
14
[email protected]
15 [email protected]

16 Lead Counsel for Court-Appointed Lead Plaintiff and the Class

17
UNITED STATES DISTRICT COURT
18
NORTHERN DISTRICT OF CALIFORNIA
19
Master File No. 17-cv-06779-RS
20
IN RE TEZOS SECURITIES LITIGATION
21 CLASS ACTION

22 This document relates to: DECLARATION OF HUNG G. TA IN

OPPOSITION TO DEFENDANTS’
23 ALL ACTIONS. MOTIONS TO DISMISS
24
Date: April 14, 2019
25 Time: 1:30 p.m.
Crtrm: 3
26 Judge: Hon. Richard Seeborg
27

28

DECLARATION OF HUNG G. TA IN SUPPORT OF MOTION FOR CLASS CERTIFICATION

3:17-CV-06779-RS
 Case 3:17-cv-06779-RS Document 187-5 Filed 01/09/19 Page 2 of 4

1 I, Hung G. Ta, declare under penalty of perjury as follows:

2 1. I am the principal of the law firm Hung G. Ta, Esq. PLLC (“HGT Law”), counsel for
3 named plaintiffs Pumaro LLC and Artiom Frunze (“Plaintiffs”). I am an active member in good

4 standing of the bar of the State of New York and have been admitted pro hac vice in this matter. I

5 submit this declaration in support of Plaintiffs’ motion for class certification.

6 2. Attached hereto as Exhibit A is a true and correct copy of a July 24, 2017 update from
7 the Tezos Foundation.

8 3. Attached hereto as Exhibit B is a true and correct copy of the Tezos Overview.
9 4. Attached hereto as Exhibit C is a true and correct copy of a thread on reddit.com
10 bearing the bates range DLS00000409-DLS00000421, produced by Defendant Dynamic Ledger

11 Solutions, Inc. (“DLS”).

12 5. Attached hereto as Exhibit D is a true and correct copy of the Declaration of Artiom
13 Frunze, dated January 9, 2019.

14 6. Attached hereto as Exhibit E is a true and correct copy of the Declaration of Pumaro
15 LLC, dated January 9, 2019.

16 7. Attached hereto as Exhibit F is a true and correct copy of an article by Rebecca

17 Campbell, entitled Tezos Receives Funding for Smart Contract System from Polychain Capital’s

18 Digital Currency Fund, Bitcoin Magazine (Feb. 17, 2017), available at

19 https://bitcoinmagazine.com/articles/tezos-receives-investment-smart-contact-system-polychain-

20 capitals-digital-currency-fund/.

21 8. Attached hereto as Exhibit G is a true and correct copy of an article entitled Behind
22 the scenes with blockchain upstart, Tech Crunch, available at http://tcrn.ch/2tKD9P3.

23 9. Attached hereto as Exhibit H is a true and correct copy of an article by Gertrude

24 Chavez-Dreyfuss, entitled Exclusive: Billionaire investor Draper to participate in blockchain yoken

25 sale for first time, Reuters (May 5, 2017), available at https://www.reuters.com/article/us-tezos-

26 blockchain-draper/exclusive-billionaire-investor-draper-to-participate-in-blockchain-token-sale-for-

27 first-time-idUSKBN181250.

28 10. Attached hereto as Exhibit I is a true and correct copy of an article entitled Tim Draper:

1
DECLARATION OF HUNG G. TA IN SUPPORT OF MOTION FOR CLASS CERTIFICATION
3:17-CV-06779-RS
 Case 3:17-cv-06779-RS Document 187-5 Filed 01/09/19 Page 3 of 4

1 There Was Nothing Secretive About Our Purchase of Tezos, Cointelegraph (Oct. 23, 2017), available

2 at https://cointelegraph.com/news/tim-draper-there-was-nothing-secretive-about-our-purchase-of-
3 tezos.

4 11. Attached hereto as Exhibit J is a true and correct copy of a January 10, 2017 email
5 from Arthur Breitman bearing the bates number DLS00007715, produced by DLS.

6 12. Attached hereto as Exhibit K is a true and correct copy of a March 10, 2017 email
7 from Kathleen Breitman bearing the bates number DLS00007719, produced by DLS.

8 13. Attached hereto as Exhibit L is a true and correct copy of a May 23, 2017 email from
9 Kathleen Breitman bearing the bates range DLS00007231-DLS00007232, produced by DLS.

10 14. Attached hereto as Exhibit M is a true and correct copy of a July 1, 2017 email from
11 Kathleen Breitman bearing the bates range DLS00007391-DLS00007397, produced by DLS.

12 15. Attached hereto as Exhibit N is a true and correct copy of a June 15, 2017 email from
13 Defendants Tezos Stiftung (“Tezos Foundation”).

14 16. Attached hereto as Exhibit O is a true and correct copy of a June 27, 2017 email from
15 Johann Gevers of the Tezos Foundation bearing the bates range DLS00004804-DLS00004806,

16 produced by DLS.

17 17. Attached hereto as Exhibit P is a true and correct copy of a July 5, 2017 update from
18 the Tezos Foundation.

19 18. Attached hereto as Exhibit Q is a true and correct copy of a September 30, 2017 update
20 from the Tezos Foundation.

21 19. Attached hereto as Exhibit R is a true and correct copy of a January 15, 2017 email
22 from Arthur Breitman bearing the bates range DLS00006989-DLS00006990, produced by DLS.

23 20. Attached hereto as Exhibit S is a true and correct copy of a July 1, 2017 email from
24 Arthur Breitman bearing the bates number DLS00005061, produced by DLS.

25 21. Attached hereto as Exhibit T is a true and correct copy of a July 2, 2017 email from
26 Arthur Breitman bearing the bates number DLS00005395, produced by DLS.

27 22. Attached hereto as Exhibit U is a true and correct copy of a document entitled the
28 Tezos Contribution and XTZ Allocation Terms and Explanatory Notes (“Contribution Terms”).

2
DECLARATION OF HUNG G. TA IN SUPPORT OF MOTION FOR CLASS CERTIFICATION
3:17-CV-06779-RS
 Case 3:17-cv-06779-RS Document 187-5 Filed 01/09/19 Page 4 of 4

1 23. Attached hereto as Exhibit V is a true and correct copy of a December 29, 2018 excerpt
2 from the Tezos Block Explorer, available at https://tzscan.io/network?r=50&state=all, show the

3 number of Tezos nodes run in the United States.

4 24. Attached hereto as Exhibit W is a true and correct copy of an April 13, 2017 email
5 from Arthur Breitman bearing bates range DLS00007116-DLS00007124, produced by DLS.

6 25. Attached hereto as Exhibit X is a true and correct copy of the Minutes of the December
7 19, 2018 case management conference in the state court action, Tezos ICO Cases, No. CJC-18-

8 004978, Superior Court of California, County of San Francisco.

9 26. Attached hereto as Exhibit Y is the Firm Resume for LTL Attorneys.
10 27. Attached hereto as Exhibit Z is the Attorney and Law Firm Resume for Hung G. Ta,
11 Esq. PLLC.

12 I declare under penalty of perjury that the foregoing is true and correct, this 9th day of January,
13 2019.

14

15 /s/ Hung G. Ta
Hung G. Ta
16

17

18

19

20

21

22

23

24

25

26

27

28

3
DECLARATION OF HUNG G. TA IN SUPPORT OF MOTION FOR CLASS CERTIFICATION
3:17-CV-06779-RS
Case 3:17-cv-06779-RS Document 187-6 Filed 01/09/19 Page 1 of 5

EXHIBIT A
6/6/2018 Case 3:17-cv-06779-RS Document 187-6
Tezos Stiftung Filedstatistics
– Fundraiser 01/09/19 Page 2 of 5

contribution terms fundraiser faq tezos main site

HOME ARCHIVES CATEGORIES TAGS ATOM

Fundraiser statistics
Posted on Mon 24 July 2017 in misc

This article presents a short statistical overview of the Tezos fundraiser. The Tezos
Foundation will recommend an allocation of XTZ tokens by publishing the network's
genesis block when the network goes live. No XTZ exist until the genesis block has been
created. The statistics below refer to the recommended allocation of XTZ that are to be
created in the genesis block.

The fundraiser ran from Bitcoin block 473623 to Bitcoin block 475622 (inclusive) and
collected 65,681 bitcoins and 361,122 ethers. Most of the contributions happened in the
first few days. 62.5% of the contributions were in bitcoin, 37.5% in ether. The following
graph recaps the pace of contribution over the fundraiser period.

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Tezos Stiftung Filedstatistics
– Fundraiser 01/09/19 Page 3 of 5

Tezos Contributions

--Toul"'2
600M -kom8TC
--komETH

A bitcoin contribution can only be counted a er a contributor has completed the

contribution process by registering their key online, as instructed by the PDF. A few
participants who contributed within the fundraiser window but had not yet registered their
key contacted us, and we were able to include their contribution a er their key was
registered. However, we will be shutting down registrations before the launch of the genesis
block. We have seen extremely few late registrations (less than 0.07%) but these might still
increase the exact Bitcoin total. (If you can see your contribution at https://check.tezos.com
then you have successfully registered your key.)

Given the current numbers, a total of 607,489,040.89 will be created in the genesis block
for fundraiser participants, a further 3,156,502.85 will be created for early backers and
contractors, and 76,330,692.97 each will be created for the Tezos Foundation and DLS.
The allocations to the Tezos Foundation and DLS will vest monthly over 4 years. This implies
a total initial supply of 763,306,929.69 tokens with 20% locked in vesting contracts.

30,317 wallets were funded. The average contribution will yield a recommended allocation
of 20,035 . The median contribution is smaller at 2,331 . Given the power law
distribution of the data, a more meaningful number is the geometric average: 2,908 .

The Gini coe icient is a measure of statistical dispersion ranging from 0 to 1. A coe icient of
0 would indicate an equal allocation to every wallet, while a coe icient of 1 would describe
a dataset where the entire allocation goes to a single contributor. The Gini coe icient of
contributions is 0.878, which is slightly higher than the Gini coe icient of the Ethereum

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6/6/2018 Case 3:17-cv-06779-RS Document 187-6
Tezos Stiftung Filedstatistics
– Fundraiser 01/09/19 Page 4 of 5
crowdsale (0.832), or wealth in the world (0.804), the United States (0.801), and Switzerland
(0.803).

For the statistically inclined, here's a rough density plot of contributions on a log scale. A
pure Pareto distribution is a shi ed exponential distribution on a log scale. This seems to
have a fatter mode and a thinner tail, indicating that the distribution is more even among
smaller contributions.

0.8

0.6

0.4

0.2

0.0

Everything is linear if plotted log-log with a fat magic marker (Mar's law). A linear regression
of log contribution over log rank suggests a Pareto index of 1.431, though the slope is lower
for large contributions and higher for smaller ones. However, Hill's estimator gives a Pareto
index of 0.408 which shows that trying to quantitatively measure small tail exponents with
"only" 30,000 data points is somewhat futile.

Here are some percentiles of contributions. The fi h percentile (5%) indicates the smallest
contribution in the top 5% of contributions.

Percentile XTZ

5% 44,003

10% 20,414

25% 6,413

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6/6/2018 Case 3:17-cv-06779-RS Document 187-6
Tezos Stiftung Filedstatistics
– Fundraiser 01/09/19 Page 5 of 5
Percentile XTZ

50% 2,332

75% 859

90% 593

95% 528

©
Powered by Pelican - Flex theme by Alexandre Vicenzi

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Case 3:17-cv-06779-RS Document 187-7 Filed 01/09/19 Page 1 of 21

EXHIBIT B
Case 3:17-cv-06779-RS Document 187-7 Filed 01/09/19 Page 2 of 21

The self-amending cryptographic ledger

 Case 3:17-cv-06779-RS Document 187-7 Filed 01/09/19 Page 3 of 21

EXECUTIVE SUMMARY

Tezos is a decentralized blockchain that

governs itself by establishing a true digital
commonwealth.
What’s more, Tezos was built to facilitate formal verification, a technique
STORY which boosts the security of the most sensitive or financially weighted
smart contracts by mathematically proving the correctness of the code
INCIPLES
governing transactions.

The Tezos blockchain will underpin secure, decentralized applications and

NDRAISER smart contracts while avoiding some of the political and technological
problems which earlier efforts such as Bitcoin and Ethereum have faced.
ANNING Tezos was built on the belief that a deep commitment to security, formal
verification, and governance that gives stakeholders the power to
make protocol decisions is the formula for earning trust and generating
widespread adoption on the blockchain.

This document provides a comprehensive overview of Tezos, its

applications and benefits, the developers involved in the project, the
upcoming Tezos fundraiser (sometimes loosely called “ICO” or “crowdsale”),
the Tezos Foundation and the goals the Foundation hopes to achieve.
 Case 3:17-cv-06779-RS Document 187-7 Filed 01/09/19 Page 4 of 21

Work on Tezos began in 2014 by its

THE founding development team, whose December 2013 - Gordon
academic experience spans from suggests NomicCoin on Twi
philosophy to physics, mathematics and January 2014 - Independe
HISTORY formulation of this idea by
computer science, along with professional
Goodman
experience that includes positions at March 2014 - Tezos develo
OF THE Goldman Sachs, Morgan Stanley, The begins self-funded
Wall Street Journal, and Accenture. They August 2014 - Tezos Positi
recognized that decentralized blockchains released
TEZOS September 2014 - Tezos W
share the same challenges that exist in
is released
any commons (the name economists give January 2015 - Zooko bec
BLOCK- to a resource shared by several people), advisor to Tezos
specifically that challenges around August 2015 - Bitcoin XT p
STORY governance and maintenance often lead the “block-size debate” begi
governance on the front st
CHAIN to stagnation, shortages, and political
INCIPLES June 2016 - The DAO is hac
deadlock. a hard-fork of Ethereum is s
decided by the Ethereum F
In the case of pioneers like Bitcoin June 2016 - The pre-fork Et
NDRAISER chain becomes Ethereum C
and Ethereum, those challenges have splits the network
manifested themselves in situations that June 2016 - Andrew Miller
ANNING
put too much power in the hands of core advisor
development teams or miners. In other September 2016 - Arthur
presents Tezos as StrangeL
words, first-generation blockchains have
September 2016 - Polycha
become subject to a form of centralization and several individuals bac
that their developers sought to avoid. help scale up development
February 2017 - Emin Gün
as a technical advisor in an
During three years of development, the capacity
Tezos team sought to address the need
May 2017 - Tezos Foundati
for decentralized innovation in protocol launches in Switzerland
design and emphasized the importance of Summer 2017 - Tezos net
formal verification in its software design launches
philosophy.
 Case 3:17-cv-06779-RS Document 187-7 Filed 01/09/19 Page 5 of 21

THE PRINCIPLES OF THE

TEZOS BLOCKCHAIN

2.1 GOVERNANCE upgrade. This approach provides a a mechanism to enable co

strong incentive to contribute efforts decision making. Tezos to
While all blockchains offer financial towards core development of the Tezos power smart contracts in t
incentives for maintaining consensus blockchain and further decentralizes but also allow votes on pr
STORY on their ledgers, no blockchain has the maintenance of the network. It amendments. The initial T
a robust on-chain mechanism to compensates developers with tokens simple by design, but its s
INCIPLES
seamlessly amend the rules governing that have immediate value rather nature means that the rul
its protocol and explicitly fund than forcing them to seek corporate the network can be impro
protocol development. As a result, sponsorships, foundation salaries, or time.
NDRAISER work for Internet fame alone.
first generation blockchains tend to
ANNING empower, de facto, centralized core
development teams or miners to Tezos instantiates new technical 2.2 CORRECTNE
formulate design choices. innovations but can also enforce types
of constitutionalism through the use Blockchains underpin billi
Tezos takes a fundamentally different of formal proofs to mathematically of value with relatively sm
approach by creating governance verify that key properties are upheld which puts them in the s
rules for stakeholders to approve over time. By allowing stakeholders for formal verification, a p
of protocol upgrades that are then to coordinate on-chain, the network technique that mathemat
automatically deployed on the also allows for the creation of bounties the correctness of compu
network. When a developer proposes to implement specific features or Formal verification has be
a protocol upgrade, they can attach an discover bugs. Collectively, the network aerospace industry, in me
invoice to be paid out to their address maintains the decentralized aspect and other instances wher
upon approval and inclusion of their of blockchains while introducing are too high to fail.
 Case 3:17-cv-06779-RS Document 187-7 Filed 01/09/19 Page 6 of 21

2.2.1 OCAML be possible to automatically extract

IMPLEMENTATION key parts of the protocol’s code from
mathematical proofs of correctness.
Formally verifying a complex piece
of software is a sizable task, so the 2.2.2 MICHELSON
development team sought to simplify
it as much as possible. To that end, The correctness of smart contracts Formally
we implemented Tezos in OCaml, a running on the Tezos blockchain is
functional programming language almost as important as that of the core a comp
that has been developed and protocol itself. Smart contract bugs can of soft
maintained by the INRIA since 1996 taint the reputation of the platform they
(and itself based on earlier efforts). Its operate on. To mitigate that risk, the sizabl
speed is comparable to that of C++ development team designed our smart the deve
STORY and it generally features among the contract language with correctness and
fastest programming languages in formal verification in mind. team s
INCIPLES
benchmark testing. More importantly, simplify it
OCaml is strongly typed and offers Michelson is statically typed and
an impressive type inference system. purely functional. This design largely as
NDRAISER Its expressive syntax and semantics, eliminates large classes of bugs such
including powerful pattern matching as the DAO reentrancy bug or the
ANNING
and higher-order modules, make it easy Solidity ABI vulnerability discovered by
to concisely and correctly describe the the Golem project. The language itself
type of logic underpinning blockchain- looks like a mix between Forth and Lisp
based protocols. OCaml’s semantic is and a reference is available here. The
fairly rigorous and a very large subset Tezos development team has already
has been formalized, which removes successfully proven the correctness of
any ambiguity as to what is the Michelson contracts in Coq, including
intended behavior of amendments. the multisig contract.
In addition, Coq, one of the most
advanced proof-checking software More information about these design
tools, is able to extract OCaml code choices are found in the Tezos position
from proofs. As Tezos matures, it will paper and white paper.
 Case 3:17-cv-06779-RS Document 187-7 Filed 01/09/19 Page 7 of 21

2.3 PROOF OF STAKE The network issues newly minted

tokens as a reward to validators
In its initial incarnation, Tezos is for the service they provide to the
launching with a delegated proof-of- network. These rewards will create
stake consensus algorithm. This choice nominal inflation; holders are free
of consensus algorithm is amendable, to be their own delegate if they
on-chain, by the stakeholders. In so desire and thus to avoid any
The deve
principle, a proof-of-work consensus or dilution. It likely that large delegates
even a federated consensus could take will offer to share some of their profits tea
its place. However, the development in a bid to attract more stakes.
proof-of
team expects proof-of-stake to be an
important part of the Tezos culture The computing requirements to be an i
and thinks it will remain the primary become a validator are relatively
STORY
part of t
consensus method. lightweight (a few hundred watts
at most) but a robust, high-speed culture a
INCIPLES
Tezos’ delegated proof-of-stake system Internet connection is required.
it will re
works by letting every stakeholder Running a proof-of-stake node also
designate one or several delegates requires more operational security primary c
NDRAISER than running a mining operation as it
of their choice to create blocks and
validate transactions on their behalf. involves signing blocks with a private
ANNING
The higher the stake delegated to key on a machine connected to the
a given validator, the more often Internet. This risk can be mitigated
will they be called upon to create by the use of secure hardware
blocks. Though the Tezos system is components, as found in devices like
delegated, every token holder can the Trezor or the Ledger Nano S.
participate as a delegate regardless
of the amount they hold.
 Case 3:17-cv-06779-RS Document 187-7 Filed 01/09/19 Page 8 of 21

PEOPLE AND ORGANIZATIONS

INVOLVED WITH TEZOS

3.1 DYNAMIC LEDGER 3.2 THE DEVELOPME

SOLUTIONS
Tezos is a small team. The philoso
The Tezos blockchain is primarily the Tezos project dictates that the
STORY being developed by Dynamic Ledger should not be the only contributo
Solutions, Inc. (“DLS”) a US-based Tezos project. That being said, the
INCIPLES
company co-founded by Kathleen and will obviously play a critical role i
Arthur Breitman. improving the network in its infa

NDRAISER There are currently ten core deve

Arthur was born in France and educated
at École Polytechnique in math, physics, Breitman, Benjamin Canou, Çağ
ANNING
and computer science. He then went Pierre Chambart, Grégoire Henry,
on to a career in quantitative finance, Iguernlala, Fabrice Le Fessant, Ala
including positions at Goldman Sachs Vincent Bernardoff, and Guillem
and Morgan Stanley. Kathleen holds a
BA from Cornell University and worked Our development team is primari
at The Wall Street Journal, Bridgewater in Paris, France and has been wor
Associates, Accenture, and R3 prior to the Tezos ledger through a partn
Tezos. with OCamlPro, a software comp
deep OCaml expertise founded b
Kathleen met Arthur at a crypto- Le Fessant. Most of our develope
anarchist meetup in New York in 2010 Ph.Ds in Computer Science and e
and they’ve been together ever since. programming language theory.
 Case 3:17-cv-06779-RS Document 187-7 Filed 01/09/19 Page 9 of 21

3.3 THE TEZOS FOUNDATION 3.4 ADVISORS

Tezos’ founders thought it that it would be Tezos advisors currently include:

beneficial for the the Tezos Network if a non-
profit foundation could guide its early steps
and complement the decentralized nature of its
governance model. The Tezos Foundation is an
independent Swiss entity whose goal is to promote
and foster the use of the Tezos blockchain, its
technology and its ongoing development.

Since the early days of the Tezos network are

critical, the Tezos foundation will retain a veto
STORY power over protocol upgrades for a period of one Zooko Wilcox Emin Gün Sirer Andre
INCIPLES year from minting the Genesis block. However, Computer scientist Associate Professor at Assistant
the Foundation does not and will not have any and the leader of the Cornell University. the Univer
privileged power in proposing protocol upgrades. ZCash project. Urbana-C
Any protocol upgrade proposed by the Foundation Gün’s research spans Computer
NDRAISER Additionally, Zooko operating systems,
will need to be vetted and agreed upon by the and Comp
is the designer of networking, and
ANNING stakeholders just as any other proposal would. multiple network distributed systems. Andrew is
protocols and a He is a Co-Director Associate
The members of the Foundation council are member of the of the Initiative for of the Initi
Johann Gevers, Diego Ponz, and Guido Schmitz- development Cryptocurrencies Cryptocur
Krummacher. Johann Gevers is one of the founders team of ZRTP and Contracts (IC3) and Contr
and the BLAKE2 at Cornell. Emin has at Cornell
of the Cryptovalley ecosystem in Zug, Switzerland,
cryptographic hash made enormous advisor to
as well as the CEO of Monetas, a digital payments function. project. H
contributions to the
company based in Zug. Diego Ponz is a computer Bitcoin community interests a
scientist and entrepreneur with an expertise through his work on in compu
in combinatorial optimization. Guido Schmitz- vaults and selfish and focus
Krummacher is a businessman in the Zug area. mining techniques. design of
decentrali
and crypt
 Case 3:17-cv-06779-RS Document 187-7 Filed 01/09/19 Page 10 of 21

3.5 EARLY BACKERS

In order to fund the last phases of

Tezos’ development, the DLS team
received backing from ten entities 24%
from September 2016 through March 28% II
2017. Three of these entities were
hedge funds with a specific focus II
on tokens. The other seven backers 6%
were high net-worth individuals,
or federations thereof, many of
whom were also LPs of the hedge 42%
funds. Total early funding amounts
STORY to $612,000. In order to value the
INCIPLES early participants in this project, the
Tezos Foundation will recommend an
allocation of XTZ tokens equivalent
to $893,200.77 in contributions
NDRAISER
(corresponding to a 31.48% discount).
ANNING No single backer represented more
than 33% of the total amount.

DLS chose these backers strategically,

with an emphasis on people and
entities who were philosophically
in-line with our uncapped fundraising
structure and are long-term believers
in the Tezos protocol, either based on
their technical expertise or familiarity
with the founding team.
 Case 3:17-cv-06779-RS Document 187-7 Filed 01/09/19 Page 11 of 21

FUNDRAISER

The Switzerland-based Tezos genesis block based on special website: https://cr

Tezos Foundation will contributions in bitcoins and tezos.com and through Bi
oversee a fundraiser on Ethers (Please refer to the legal Suisse AG, a Swiss exchan
July 1, 2017. document that will be issued by the has successfully managed
Foundation for more details.) fundraisers.
STORY It will recommend a
token allocation in the The Foundation will receive and
INCIPLES
manage all contributions on a

NDRAISER

ANNING

crowdfund.tezos.com
 Case 3:17-cv-06779-RS Document 187-7 Filed 01/09/19 Page 12 of 21

4.1 SCHEDULE a time dependent bonus. This bonus The average time between
is meant to incentivize contributors is approximately 10 minutes
Following the example set by the not to delay their participation. The fundraiser is expected to las
Ethereum Foundation, there is no cap bonus starts at 20%, meaning that two weeks, and each period
on the amount of contributions that a contribution of 1 XBT will yield an roughly two days and eight
will be accepted by the Foundation. allocation of 5,000 X (1 + 20%) = 6,000
This is done in order to ensure that XTZ and decreases progressively to The Foundation will manag
participation is not limited only to 0% over 5 periods lasting 400 Bitcoin of the fundraiser and sell co
insiders or the “fast-fingered”. The blocks each. progressively throughout th
Tezos development team believes period in order to reduce th
that an un-capped fundraiser will in holding cryptographic to
promote a widespread distribution of
the tokens, a necessary prerequisite
STORY to launching a robust network.
INCIPLES
Though the amount of Tezzies 20%
allocated is denominated in bitcoins,
contributions may be made in ethers,
NDRAISER 15%
that will be implicitely converted at
ANNING the prevailing rate on a best effort
basis. Contributions may also be 10%
made through Bitcoin Suisse AG who
Bonus

accepts fiat currencies and other

electronic tokens and will participate
5%
in the fundraiser on behalf of its
customers. 0
The fundraiser will last for a period of 0-399 400-799 800-1199 1200-1599 1600-
2,000 Bitcoin blocks. Throughout this
period, a contribution of one bitcoin Bitcoin block #
(1 XBT) will lead to an allocation of
five-thousand tezzies (5,000 XTZ) plus
 Case 3:17-cv-06779-RS Document 187-7 Filed 01/09/19 Page 13 of 21

4.2 RECOMMENDED ALLOCATION

The foundation will recommend allocation based on the following pools:

Pool A Pool B Pool C Pool D Poo

The Early Advisors, 10% to the 10% f
fundraiser backers PR, and Foundation, acqui
development vesting over of DL
Pool A will represent As mentioned above,
the contributions DLS accepted a small team bonuses four years vesti
made during the amount of backing to four
fund development, Bonuses totalling An amount equivalent
fundraiser and be
representing $893,201 $317,000 will be to one eighth of the An amou
allocated at a rate of
in promises. These granted to the tokens allocated in to 1/8 of t
STORY 5,000 XTZ / XBT plus
backers are thus development team pools A, B, and C will allocated
a bonus depending on
being allocated a in addition to their be allocated to the and C will
INCIPLES the time at which the
specific number of regular compensation. Foundation. This pool by the Fo
contribution is made.
tokens based on the An additional $75,000 will represent 10% of part of its
initial price (bonus will be granted to the total number of shares of
included), not a fixed advisors, and $30,000 tokens issued during to approv
NDRAISER percentage of the worth of tokens to the fundraiser. The superviso
issued tokens. a communications foundation’s priorities for found
consulting firm. are listed below, in tokens w
ANNING
Section 4. These a period
tokens will vest over and also r
a period of 4 years. of the tot
tokens iss

5,000 XTZ / XBT $893,201 worth $422,000 worth 10% over 4 years 10% ov
+ up to 20% bonus + 20% bonus + 20% early bonus
 Case 3:17-cv-06779-RS Document 187-7 Filed 01/09/19 Page 14 of 21

FOUNDATION PLANNING

A detailed layout based on different fundraising scenarios can be found in THE TABLE.

The Tezos Foundation will manage the 5.1 ENGINEERING 5.2 RESEARCH
contributions according to its purpose.
STORY Initially, the Foundation will budget The primary task of the Foundation The Tezos protocol cur
from four to six years, depending on is to ensure the functionality of the benefits from research
INCIPLES the amount raised. After this period, the network. To this end, the Foundation verification and progra
Foundation will phase itself out unless will, at a minimum, retain the original language communitie
the community votes to keep it in development team at the current The initial developme
NDRAISER existence through funding via tokens. annual cost of $900,000. This will Tezos has a strong phil
cover maintenance, as well as some commitment to formal
ANNING The Foundation will have the discretion integrations and proposals. Over four and a keen interest in r
to pay for services it believes will years, this will cost the Foundation new consensus algorit
benefit the promotion of the Tezos $3.6 million. blockchains. The Foun
protocol, either in tokens or another look to fund research i
currency. This section outlines initial DLS partnered with OCamlPro, a with its endowment fr
team believes the Foundation should company based in Paris with deep fundraiser.
value, as well as the estimated costs for expertise in OCaml. Most of the
servicing each priority based on the developers working on Tezos have
proceeds of a fundraiser. PhDs in formal verification and
programming language theory.
 Case 3:17-cv-06779-RS Document 187-7 Filed 01/09/19 Page 15 of 21

5.3 LEGAL SERVICES running meetups across the world. The

Foundation will target New York, Tokyo,
Currently, Doug Barnes works on and Paris for events and meetups.
behalf of Dynamic Ledger Solutions,
the company developing Tezos, In the spirit of community building, the
through Barnes Legal. In addition Foundation will also provide a forum
to his legal qualifications, Doug was attached to the www.tezos.com domain The Fo
also involved in the cypherpunk that can facilitate debate on proposals.
movement in the early 90s. The Swiss This isn’t meant to be the only forum for exists to
law firm MME represents the Tezos discussion and posts will be moderated ecosyste
Foundation and will continue to do so to weed out abusive actors. Though
after the token generation event. the Tezos community will converge on the Tezos
a place to discuss proposals, it makes It will tar
STORY sense for the Foundation to spend a
5.4 COMMUNICATIONS modest amount to create and moderate a York, T
INCIPLES
potential option. Paris f
AND MARKETING
and
NDRAISER Currently, DLS retains communications
consultancy to support its marketing
5.5 BUSINESS
ANNING efforts. As stated in the original Tezos DEVELOPMENT
whitepaper, DLS believes that the
advocacy and marketing of protocols Non-engineering Tezos protocol efforts
are integral to gaining greater entail managing potential partnerships,
acceptance of them from a wide marketing, financial transactions, and
community. business operations broadly construed.
It will soon be necessary to solicit more
The Foundation exists to drive business development people to interface
an ecosystem around the Tezos with non-technical stakeholders, as
protocol. Similar projects have well as help manage Tezos vendors and
seen extraordinary success from contractors.
 Case 3:17-cv-06779-RS Document 187-7 Filed 01/09/19 Page 16 of 21

LONG-TERM GOALS

Though our philosophy and All protocol changes should go holders, but it also acts a
governance model constrains through the Tezos internal governance the most desirable prope
how prescriptive the Foundation mechanism when possible. If a person security, fairness, or usef
or party introduces a change via a The ideal Tezos communi
and the initial team can act,
hard fork, but that change could easily be intellectually rigorous
we thought it was worth have been instigated inside of Tezos, sacrificing pragmatism a
STORY
documenting the types of the network should reject that change without tolerating bellig
things the Foundation will and treat it as illegitimate. would be a focus on exp
INCIPLES work to realize within the Tezos testing, and folding in th
community. However, some decisions will and innovative technical
inevitably arise at a level that cannot community to use. The F
NDRAISER be fully addressed within the network. does not endorse or look
The founding team would like to have any immoral behavior su
ANNING a certain ethos govern the network. or the instigation of viole
6.1 COMMUNITY beings or entities.
Namely, they believe the central goal
GOALS of the governance mechanism is to
protect the interest of each token Tezos should be compris
Since Tezos has a built-in governance holder, irrespective of their stake, in community of serious thi
mechanism, its protocol can evolve their capacity as a token holder. focused on preparing th
and incorporate new innovations over effective upgrades to inc
time. In other words, stakeholders can Generally speaking, this would mean utility of the Tezos token.
make and enforce decisions about favoring decisions that tend toward will reward these propos
changes to the network using the increasing the value of the tokens. Not them new tokens upon a
network itself. only does this directly benefit token creating a robust pecuni
 Case 3:17-cv-06779-RS Document 187-7 Filed 01/09/19 Page 17 of 21

6.2 DEVELOPMENT 6.2.1 SECURITY 6.2.2 SCALING

GOALS
Tezos is built on a fresh code base. This The Tezos proof-of-stake alg
The development goals let the development team control every us better scalability and tran
of Tezos follow five axes: aspect of the initial design and benefit throughput that can be achi
security, scaling, privacy, from the advanced safety features of Bitcoin style proof-of-work.
usability, and features. OCaml, but it also means that the system the initial parameters are set
The development team hasn’t been battle-tested yet. Both Bitcoin conservatively in order to let
will pursue all five goals and Ethereum successfully recovered performance in the real worl
somewhat in parallel but not from critical bugs in their code base, but the ecosystem of validators
with the same priority. such crises should be avoided as much Once the ledger accumulate
as humanly possible. Therefore, the experience, the developme
development team’s primary focus will be to work towards cranking up t
STORY continuously work to improve the resilience throughput by:
of the network to DDOS attacks or malicious
INCIPLES
fork. Every other effort on the ledger is for • Increasing the block size
naught if the core team fails to properly • Lowering the block time i
secure the network. Concretely, they will: • Packing transactions mor
NDRAISER
• Keep increasing the test coverage of the Note that the consequences
ANNING
code base the blocks’ size in proof-of-st
• Develop formal proofs of correctness for very different from the conse
the most sensitive parts of the code increasing the block size in a
security • Submit security upgrades to the protocol proof-of-work systems. In Na
as needed proof-of-work any increase i
scaling • Improve the randomness generation gives a slight advantage to c
privacy protocol with public verifiable secret miners. This is because proof
sharing requires the block propagati
usability
• Release security upgrades to the block validation time to be very s
features creation software to the block interval. In sync
• Produce recommendations for of-stake protocols like Tezos’,
operational security of block validators to be smaller than the block i
 Case 3:17-cv-06779-RS Document 187-7 Filed 01/09/19 Page 18 of 21

6.2.3 PRIVACY do not make use of the privacy feature. This

mechanism replicates the economic behavior
Privacy preserving transactions and smart of a side chain, but on a single ledger.
contracts are a key feature of modern
blockchains. Not only are they a security In the long run, the team intends to replace
requirement, they ensure censorship all operations on the blockchain with zero-
resistance much more effectively than any knowledge proofs. Instead of downloading
Ini
tweaking of the consensus algorithm. an entire blockchain a client will be able to
download a single proof attesting that the Fo
However no solution is perfect yet. Ring entire blockchain has been validated starting
team’
signatures, as used in Monero, can still leak from the genesis hash. However, to that end,
some information about senders. Zcash they will likely make use of STARKs, zero task
makes an impressive use of zero-knowledge knowledge proofs similar to SNARKs but which
STORY
buil
proofs to provide full, information theoretic, do not require a trusted setup.
anonymity, but the risk – however remote –
INCIPLES
of undetected hyperinflation in the event of an
a bug in the proof circuit makes some users 6.2.4 USABILITY
uncomfortable. infra
NDRAISER Initially, the Foundation team’s primary task
Our initial plan is to strike a compromise will be to build robust, scalable, and secure
ANNING
and integrate Zcash’s proof circuit in the infrastructure. However, the development team
protocol, but restrict its operations to a also needs to make it an attractive platform. In
special token issued on the Tezos blockchain. particular, they will:
This token will be convertible 1 to 1 with
Tezos tokens, but the chain will keep track • Develop light client libraries in most popular
of how many tokens have been converted programming languages to help developers
so that undetected inflation in the privacy integrate with the Tezos network.
preserving token cannot spill over onto the • Develop an IDE to facilitate development and
main token. Users who trust the security formal verification in Michelson.
of the privacy preserving token will have • Develop a certified compiler for a high-
full use of its functionality while those who level language that will compile down to
don’t will remain protected as long as they Michelson.
 Case 3:17-cv-06779-RS Document 187-7 Filed 01/09/19 Page 19 of 21

6.2.5 FEATURES 6.3 RESEARCH GOALS

“Features” are decentralized applications The initial development team’s research goals
supported at the protocol level. In Ethereum, represent longer term developments or ideas to
the prevailing trend is to deploy these “DApps” push out of the lab and deploy.
through App Coins, a way for developers to build
specially marked tokens to power applications on
an existing network which can be converted in- 6.3.1 ZERO-KNOWLEDGE PROOFS OF
and-out of the main network token. KNOWLEDGE

While Tezos permits the creation of App Coins, Right now, the Tezos development team is fascinated
we do not focus on them. If an application is with a new development in zero-knowledge proofs:
particularly valuable to the network, we believe STARKs. Unlike SNARKs, STARKs do not require a
STORY it should be folded into the protocol. Though trusted setup. They also rely on simpler mathematics
we do not know exactly yet which features will and are more efficient to compute. However, the
INCIPLES
be voted into the protocol level by the network, proof time of STARKs is still cumbersome.
some applications seem to have widespread
appeal in similar projects: prediction markets, DNS 6.3.2 PROOF-OF-STAKE
NDRAISER systems, on-chain node identity, debt networks (à
la Stellar), decentralized exchanges, file storage, The team is interested in researching different proof-
ANNING
and cloud computing. More exotic or specialized of-stake consensus algorithms offering stronger
applications, such as the Numéraire project, are guarantees and scalability. This is a burgeoning
probably better fits for App Coins as they have less field and interesting proposals such as Ouroboros,
explicitly general appeal. Algorand, Honey Badger and Snow White have been
appearing at higher frequency.
Unproven systems ought to innovate at the leaves,
while tried-and-true features ought to have a way 6.3.3 INCENTIVE COMPATIBLE
to make the network more valuable by integrating GOVERNANCE
at the protocol level. This is not purely for the sake
of creating more valuable networks but also for Moving beyond technology, the Foundation will also
ensuring consistency of execution. try to sponsor research focusing on decentralized
governance and incentive structures.
 Case 3:17-cv-06779-RS Document 187-7 Filed 01/09/19 Page 20 of 21

IF THE FOUNDATION IS ENDOWED WITH...

ounts
CURRENT $6,000+ $12,000+ $20,000+ MOONSHOT MARS

Engineering Continue development with our Push work on v2 by the Directly hire additional talent Grow the team with other Hire talented teams of engineers and Deploy and silo se
current team. foundation. Attempt a secondary from ETH Zurich for full-time code experienced, academically designers to build direct consumer of engineers to bui
issuance in conjunction with the maintenance in Switzerland. oriented engineers. applications through strategic candidates for upg
release of the new version. acquisition of tech companies. empirically the bes
Headcount merge them.
6 6 10 15
Yearly rate
$900 $900 $1,500 $2,250
Research Offer competitive salaries to attract Sponsor a leading
Continue our use of PhD Keep our current approach, Contract a team of academics In addition, join the IC3 team as a experts on formal verification to work science departme
candidates to work on formal strategically engage the formal to research and help build v2 sponsor. exclusively on the protocol. Set up an professorships and
verification. verification community. consensus algorithm, followed by institution a la IC3 in Europe. to graduate stude
research on zk-STARKs. formal verification.
Yearly rate
$0 $0 $300 $700
unications Sponsor an online magazine to cover Acquire mainstrea
& Marketing Continue working with our Continue working with our Host an annual developer Conduct three annual developer major debates. Pay to publish a hash media outlets to p
communications consultancy. communications consultancy. conference in Europe and conferences (EU, US, Asia), of the Tezos blockchain in a reputable the use of cryptog
retain current communications retain current communications outlet like the Financial Times or The society.
consultancy. consultancy, run ad campaigns. New York times (à la Guardtime).
Yearly rate
$120 $120 $370 $1,000
gal Services Lobby municipalities and local Fund efforts to dig
After the fundraiser, the Retain our counsel and start Retain our counsel and start Retain our counsel and start governments to use formally verified transaction logic fr
Foundation will pay for its own exploring, as a failsafe, alternative exploring, as a failsafe, alternative exploring, as a failsafe, alternative smart contracts as a form of binding legal prose to a Tez
legal expenses through MME. legal structures or advocacy for legal structures or advocacy for legal structures or advocacy for legal contract.
the Foundation beyond the Swiss the Foundation beyond the Swiss the Foundation beyond the Swiss
Cryptovalley. Cryptovalley. Cryptovalley.
Yearly rate
$100 $250 $250 $250
Business Purchase a banking license and Negotiate with a s
evelopment Kathleen Breitman manages all Hire one strong former Hire two seasoned former Hire a blend of junior & senior deploy the Tezos blockchain as a the recognition of T
non-technical efforts. management consultant to assist management consultants and a business development talent, as backbone for business operations. official state curren
in interfacing with vendors and community manager to engage well as a business development Experiment with automation using a immediately give Te
service providers. with token holders. person in China and a community blockchain for basic processes. treatment in terms
manager. regulation. Attempt
Yearly rate purchase or lease s
$0 $250 $450 $750
Education Offer student grants for conducting Run a development
Produce a series of online Produce in addition an OCaml Also run a quaterly Tezos school projects related to the Tezos ecosystem emphasis on functi
Michelson tutorials with videos MOOC geared towards increasing focusing on protocol development and subsidize OCaml education in and safe smart cont
and exercises. our potential developer base. in OCaml and smart contracts. universities.
Yearly rate
$0 $50 $125 $350
Annual Rate $10,000 - 15,000
$1,120 $1,570 $2,995 $5,600
Case 3:17-cv-06779-RS Document 187-7 Filed 01/09/19 Page 21 of 21

Contact
[email protected]
Case 3:17-cv-06779-RS Document 187-8 Filed 01/09/19 Page 1 of 14

EXHIBIT C
 Case 3:17-cv-06779-RS Document 187-8 Filed 01/09/19 Page 2 of 14

•
Welcome to Reddit,
the front page of the internet.

BECOME A REDDITOR

and subscribe to one of thousands of

ArkEcosystem
21,547 readers 'f+i!.!F
AMA with Tezos on ARK slack se11ArkEcosystem
13 Submitted 11 months ago * by Jarunik - Delegate jarunik
Isearch
bold ninja
Submit Link Submit Text
All welcome @breitwoman (Kathleen) and
@rawzeee (Ross) from Tezos.com - today they will
answer any of your questions regarding their This post was submitted on 11 May 2017
upcoming project
13 points (94% upvoted)
breitwoman By way of introduction, I am Kathleen
Breitman, the CEO of the company which created l https://redd.it/6am0d6
Tezos. I am tag teaming this with @rawzeee, who
works for the Swiss Foundation which will be
responsible for running the crowdsale later this
month. Ross will handle crowdsale-specific
username L J
questions. [J remember me reset password
rawzeee Hello! Greetings from Zug!
jamiec79 :wave:
breitwoman Very jealous of Ross right now, Zug is
gorgeous
techbytes Welcome.
rawzeee I saw a man playing an alphorn in front of
UBS today. Most Swiss thing I could've imagined
possible.
arkvader Greetings from far far away ....
tranzer Hi Tezos! I have 1st question, by the looks
of it Tezos will be in OCaml right? Why did you
decide on OCaml? Are there any advantages over
other languages?
mike Hi Kathleen and Ross, good to see you.
moobox hello Tezos people
breitwoman @tranzer great question. we wrote the Subreddit Info
protocol in OCaml. It was a confluence of a few
2,670 currently online
things ... Pragmatically, we found a great team with
an emphasis on OCaml based in France and Arthur Welcome

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(CTO) is a French national so it was possible to
work with them pretty seamlessly. On the technical INTRO and FAQ - Read me!
side, OCaml is a great PL for writing code that can
later be formally verified. Security and consistency
of execution are two principles we tried to optimize Applications
for and OCaml lends itself well to those goals. See
also section 1.4: Ark Wallet
https ://tezos .com/static/papers/position_ paper. pdf
(edited)
drlO hello tezos Ark Explorer

breitwoman howdy all!

drlO How would you shortly & easy-to-understand Rules
sum-up the advantages of TEZOS to magazines
Posts & Comments
and non-crypto people?
• No inappropriate behavior, no begging
tranzer What consensus system will you use? Like • No duplicates, no spam, no referral links
PoS or some hybrid? Will there be any rewards for • No misleading titles, English only
signing blocks?
Posts
breitwoman My TL; DR runs on two talking points -- • No price and market posts
Tezos is a new blockchain that aims to create a • No delegate specific announcements
robust governance model by allowing token-holders • Keep delegate self-marketing at a
minimum for announcements of general
to come to consensus on protocol upgrades but
interest
also preserve rules over time by using
mathematical proofs. Unlike previous blockchains, Details
it can deploy upgrades to the network in an elegant • Reddiquette
and seamless way. • Content Policy
• Detailed Sub Rules
@tranzer we have our own POS algo. We have
nominal inflation in the protocol to incentivize Resources
participation. • Wiki , Guides, Links
• Website , Roadmap, Forum
drlO So in easy words, Tezos is built to easily • Social Media
adapt to any technic innovations? • For Developers
• Explorer & Monitoring
breitwoman @drlO yes, it was borne out of the
• Exchanges
first alt coin craze when everyone deployed a new
token to instantiate even the most marginal Support
improvement • Slack Invite Link
• ArkEcosystem Slack Chat
drlO okay
breitwoman Tezos wants to preserve network More Information
effects while keeping pace with innovation
drlO Your whitepaper has very tech-heavy ArkWiki
language. So I'd like to ask questions that are
stupid and simple. :smile: What are the three Related Subreddits
crypto-currencies that are most similar to yours
• /r/CryptoCurrency
and yet why is Tezos different?
• /r/dpos
breitwoman Yeah, the position paper is more
• /r/ArkDelegates
accessible
• /r/arktrader
drlO yeah i've read them all
• /r/DelOps
breitwoman 1. Decred. Though they don't push
• /r/blockpool
automatic upgrades and they can't introspect on
• /r/kapucoin
the protocol. 2. Dash. Though they also don't push
automatic upgrades, can't introspect, and I think • Ir/Persona Blockchain
their funding model is a little backwards. 3. Transparency
Ethereum has a lot of similar technical goals but no
• Public Moderation Logs
formal, on-chain governance model. We made our
• Unmoderated /r/ArkEcosystem
protocol with a bigger emphasis on formal

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verification and security. created by psirusmojo - Official Team
a community for 1 year
someonesomeone Hi guys!
drlO thank you! and hi someone :smile:
In your position paper you state "Tezos truly aims
to be the last cryptocurrency." No matter what
innovations other protocols produce, it will be
possible for Tezos stakeholders to adopt these
innovations" - Can Tezos implement any future
innovations within its code? Wether its a new
programming code, artificial intelligence or
implementing big data of anything?
i wondered about that
i am a no-coder so I dont grasp everything
tranzer How much do you aim to raise in your ICO
will there be any minimum or maximum? Will it be
normal proportional auction or fixed price per MODERATORS message the moderators
token?
psirusmojo - Official Team
breitwoman @drlO obviously limitations to ArkEcosystem - Official Team
anything that a blockchain can do ... it can't solve Vippero - Official Team
Jarunik - Delegate jarunik
poverty or hunger, but we made the code with a
arklanddelegate - Delegate arkland
very modular design that allows for a lot of Matthew_DC - Official Team
flexibility AutoModerator - Bot
publicmodlogs - Bot
someonesomeone @breitwoman do you plan on
about moderation team »
doing a smartbridge with Ark? Or any other
partnerships with them? :wink:
drlO yeah but I am wondering about future
innovations like artificial intelligence, if that can Subreddit CSS Theme by /r/Naut
somehow be implemented.
breitwoman @smartbridge good question. I like Ark
but I'm not familiar enough with what they're up
to ... open to all sorts of things though!
drlO My theory is that these future innovations will
be interconnected by cryptocurrency
breitwoman @drlO So, our CTO is a bona fide
expert in AI and he doesn't think there are a lot of
synergies with AI and blockchains
drlO What is block target time? What is transaction
speed? How many confirmations are needed?
Couldnt see that/ find that ... maybe I oversaw
:smile:
breitwoman but we'll keep our eyes peeled
drlO okay
someonesomeone @breitwoman cool. Ark is doing
a great job from what I can gather and I am pretty
sure that I will also invest into your ICO, since your
project also looks very interesting
breitwoman @drlO I think that's all referenced in
the white paper, which was recently updated!
soporificprose Can you answer Tanzer ... I have
same questions.
breitwoman That's a good question for @rawzeee

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drlO okay, maybe I oversaw. I have read them all.
no problem
In your Whitepaper you state "Bitcoin, Ethereum,
Cryptonote, etc. can all be represented within
Tezos by implementing the proper interface to the
network layer." Does this mean you try to
interconnect all those cryptocurrencies? (edited)
breitwoman @drlO we're targeting 1 minute
between blocks. We haven't set a blocksize yet, but
we'll her on the side of caution at first. It's better
to raise the blocksize through the amendment
mechanism once we are confident in the network's
throughput.
jakethepanda Will users be able to issue asset
tokens and build on top of Tezos?
breitwoman @drlO no, that's more like Cosmos ... a
different but cool project
drlO ark is doing that too
:smile:
rawzeee There is no minimum or maximum,
though if only a few million were raised
stakeholders would be asked whether or not they
wanted to offer another TGE (Token Generation
Event) to newcomers. Fixed price of 1 BTC to 5000
XTZ (tezzies), plus a descending bonus from 20%
to 0% in 5% intervals every 400 BTC blocks. The
entire TGE lasts 2000 BTC blocks. tranzer How
much do you aim to raise in your ICO will there be
any minimum or maximum? Will it be normal
proportional auction or fixed price per token?
Posted in #trading_altcoinsToday at 7: 12 PM
drlO I didnt find on that one, or didnt look too
deep. What are the references of you and your
team members? On what projects did you work
before?
breitwoman @jakethepanda yes, they will but we
think it's a better idea to propose those features
that you'd find in an appcoin as a first class citizen
rawzeee Yes, was typing the answer up! It's posted
now. soporificprose Can you answer Tanzer ... I
have same questions. Posted in
#trading_altcoinsToday at 7: 15 PM
breitwoman @drlO I'm a pretty open book ... I've
worked in finance at a hedge fund and a VC, then
in consulting ... Arthur worked in high frequency
trading for many years at places like Goldman and
Morgan. Our developers are very academic
dachshund what type of role/influence do your
initial investors (polychain, etc) have in the overall
governance of the network, if any
drlO What is the Payment for ICO? Paying in ETH
or BTC or any other and how much will one Token
cost?

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breitwoman Technically, none. We sold a nominal
amount of tokens to a large group of people. They
have the same status as any other participant but
got a slight discount over the crowdsale price for
tying up their capital for several months.
techbytes that include Tim Draper?
breitwoman I solicit their advice a lot though ... it's
a really savvy bunch and I was a one-woman band
on the operational side.
raolin Hey Kathleen - has your team given
anymore thought to the post ICO mission?
Roadmap? Additional team expansion?
soporificprose Are they restricted from selling for a
certain length of time?
breitwoman no
@raolin check out our outline at the end of our
presentation
https: / /www. tezos. com/ stati c/papers/Tezos_ Overvi
ew .pdf
tranzer How much was sold to those pre-ico
funders?
breitwoman All in here guys:
https: / /www. tezos. com/ stati c/papers/Tezos_ Overvi
ew.pdf 612k at an avg 31% discount
rawzeee I listed the BTC ratio above. It's 1 BTC for
5000 XTZ (tezzies) plus a bonus or lack thereof
based upon time periods. If you choose to use fiat
Bitcoin Suisse AG who is administering the TGE
(check their rates and your jurisdiction) they will
peg it to BTC. Ether is pegged to BTC and will be
accepted at the median (from Poloniex, Kraken,
and GDAX) of the last three trade prices utilizing
the ETH/BTC pair before the timestamp of the
Ethereum block at the time of contribution. It'll be
offered on a best-effort basis and for convenience.
If you want certainty contribute with Bitcoin.
Otherwise you accept the risk that the exchange
rate you'll get may not be precisely what you see
on the screen at the moment of your contribution.
You may also use other coins via ShapeShift.
(edited)
drlO you will hit poloniex, kraken and gdax?
when?
rawzeee That is referring to the peg of ETH to BTC.
all XTZ are pegged to the BTC price for the TGE.
drlO ah ok
rawzeee I'm an acronym storm over here!
drlO Is there already some plan or future business
relationship with merchants, exchanges or anything
that Tezos could be used as a payment method?
Anything you want to share already?
dachshund What were your considerations when

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deciding to make the ICO un-capped? Any concerns
regarding the impact there could be on the price
once this starts trading (i.e. no price discovery)
breitwoman @drlO we've been talking to two
exchanges for several months. I'm pretty confident
Tezos won't have trouble on that front. I have two
partnerships in the works that I'm excited about
but shouldn't discuss yet.
soporificprose Curious whether pre-ICO investors
paid with BTC or fiat?
breitwoman @dachshund it's primarily about
fairness and distribution.
ryano Are you familiar with BOScoin? They once
were also using ocaml not sure if they stuck with
that. Any comments on the benefits relative to
each other
breitwoman @soporificprose fiat
drlO Can everyone that holds a Tezos token vote
on a proposal? Do they have to pay or temporaily
lock in the Tokens? How does it work? It sounds
like everyone can vote directly, right?
ryano Also i thought Tezos was using delegate
proof of stake is this no longer or never was the
case?
breitwoman @ryano that's news to me. I have not
gotten a straight answer from them on any
technical questions
rawzeee The reasoning for the uncapped TGE here
is that the platform is almost entirely done (not an
ICO for a white paper) and it is desired that a
robust network is built rather than a few fast
fingers buying up the entire TGE in minutes or
hours. This is particularly important given how
governance will work on Tezos.
breitwoman @ryano we are using delegated proof
of stake, @drlO that means you can delegate your
responsibilities to someone else if you don't want
to be an active participant
drlO I see
What is the Prediction Market about that you want
to implement regarding "Futarchy"? I didnt get that
right away
mike Tezos form of DPoS looks very similar to
proxy voting, like Liquid Democracy.
breitwoman @mike yes, it is
good catch
soporificprose So their 30% discount was based on
the price of BTC at that point? That would make it
a much bigger actual discount yo current BTC to
5,000 TZE
breitwoman @soporificprose pardon? no, it was all
denominated in dollars

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the sale is denominated in BTC
mike I want to add that to Ark at some point as
well.
drlO What is the practical advantage to
decentralized, atomated upgrades - compared to
lets say Litecoin's Segwit Process?
breitwoman @drlO yeah I'd read this piece from
Robin Hanson first
http://mason .gmu.edu/rvrhanson/futarchy.html ...
but basically you'd run a predicition market with a
prompt like "What do you think would be the best
feature for Tezos" with many choices and whatever
gets the popular vote would be implemented.
drlO And this predicting/voting will happen inside
the wallet?
mike ryano has some very interesting ideas on
ranked voting. Have you looked into ways to
combine ranked with proxy voting?
breitwoman @drlO we think defaults matter.
upgrading protocols is cumbersome in existing
blockchain implementations and it causes stasis
tranzer Is wallet and whole network already
developed (since you said platform is ready) ?
sibars @rawzeee Sorry newbie question: Can you
please explain in details how the TGE will work on
day one? ... I download the wallet fist, send you my
BTC and then you send me the Tezzies?
breitwoman @mike not closely. we think our first
implementation, a straight vanilla two phased vote,
is too simplistic. I'd like to discuss more
sophisticated mechanisms if you've thought them
through!
I know Arthur loves him some futarchy but I'm not
as big of a fan
mike that would be a great discussion, look forward
to exploring voting systems with you. we plan to
try them on bridged chains which can be run as
experiments.
breitwoman @mike that's awesome
drlO xD
Tezos focusses also on faster smart contracts as I
understood, right?
breitwoman @drlO more secure, not necessarily
faster
drlO okay
breitwoman our smart contract language,
Michelson, was created with formal verification in
mind
mike That named after the Michelson of Michelson-
Morley Interferometer? (edited)
drlO And it uses ZeroCash as privacy mechanism?
Or the whitepaper only compared to it and you use

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something different? I couldnt identify that
breitwoman @mike you got it!
https://en. wikipedia .org/wiki/Albert_A. _ Michelson
Wikipedia Albert A. Michelson Albert Abraham
Michelson (surname pronunciation anglicized as
"Michael-son", December 19, 1852 - May 9, 1931)
was an American physicist known for his work on
the measurement of the speed of light and
especially for the Michelson-Morley experiment. In
1907 he received the Nobel Prize in Physics. He
became the first American to receive the Nobel
Prize in sciences. ( 177kB)
dachshund is there something similar to "gas" in
tezos that controls for computation of each
program, or how do you get around that?
rawzeee @sibars No worries at all. There is a
dedicated TGE site (register for updates at
www.tezos.com ). It'll guide you through the
process. You'll generate a paper wallet (easy click
through) with seed words. You can save it to a
drive and/or print it (probably most secure). You'll
verify your wallet number and password you
created to generate it, then make your purchase to
your wallet #. You can then verify it and make sure
it's reflected in the wallet. It'll be simple and easy
with a nice interface.
breitwoman @drlO not yet but Zooko is an advisor
and we have spoken about integration. we are
more interested in STARKs, the next gen of zero-
knowledge
drlO I see
breitwoman @dachshund yes, we have the concept
of gas as well
drlO I guess you already answered that:
In your Whitepaper you say: Crypto-currencies
suffer from the same fate as smartphones which
are incompatible with one another; they derive
their value from a network effect, or the number of
users who have given it value. - ARK will connect
all Crypto-currencies by SMARTBRIDGING. Can you
imagine working with ARK Smartbridge in your
protocol aswell?
yeah you did :smile:
sibars @rawzeee Thanks : )
drlO More secure Smart Contracts, automatic
upgrades in a DPoS model. Any other main
focusses or any other attributes you want to
innovate or improve compared to other cryptos?
tranzer So will Tezos offer assets on their
blockchain like ethereum?
breitwoman @drlO well, I think that covers the
main talking
@tranzer we can, but we think it's more powerful

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to integrate at the protocol level
dachshund how has traction been within the
developer community? I imagine there isn't a
limitless pool of developers with the required
technical expertise, so you must be expecting to
take away from other networks?
mike This is a good overview as well, for those who
haven't seen it,
https ://tezos.com/static/papers/Tezos_Overview. p
df (edited)
geops This all sounds great. The only thing that
bothers me is the lmin block time. That seems like
a step back compared to modern blockchains. Any
goals to improve that?
breitwoman @dachshund we have a very powerful
core team. we think our choice of programming
language was a good magnet and filter effects. we
haven't sourced from other blockchain communities
@geops yeah, that's all pretty flexible
tranzer What is your budgeting plan if you get like
20m how long will that be for? 5 years? More?
geops If you look at integrating with ARK
smartbridge tech, you'll sure get lots of investors
from here :slightly_smiling_face:
breitwoman @tranzer we go over this a bit in our
recent presentation:
https ://tezos.com/static/papers/Tezos_Overview. p
df
check out the second to last page
tranzer Yeah I'd like to see that as well geops,
@fixcrypt is amazing developer from what I have
seen so far
breitwoman @geops yeah, totally something we
should explore. we're a small team so any
partnerships or serious integration have been
tabled for later
But I like the idea of ARK and I like what I've
seen ... so very open to this!
tranzer Must say I like what I'm hearing here will
definately invest a few btc
drlO yes me too
geops definitely good ideas
breitwoman Cool, glad to hear it!
drlO I think the future of blockchains will be in
partnerships too
tranzer drlO I think so as well that is why I
invested in ARK in first place too much competiting
and too little cooperation (in other projects)
(edited)
rawzeee Hooray! Happy y'all may participate in the
TGE.

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geops maybe you guys should sit down with @mike
and @fixcrypt and discuss possible future
collaborations. (edited)
mike Yes, I like the vision laid out by Andreas
Antonopolis of many thousands or more of
specialized tokens and chains for different
applications.
tranzer OK so last question from me that 20%
bonus will be for entire 400 first BTC blocks when
you start?
jacob breitwoman: Quadratic voting might work for
Tezos (http ://ericposner.com/quadratic-voting/)
ERIC POSNER Quadratic voting Glen Weyl has
uploaded a new version of his paper, Quadratic
Voting (written with Steven Lalley), to SSRN, which
now includes the completed proofs. Quadratic
voting is the most important idea for I... Dec 30th,
2014 at 3:57 PM
breitwoman good question for @rawzeee
rawzeee @tranzer yes, indeed!
breitwoman @jacob yes, that's something we've
considered
mike Glad to see you have Johann Gevers on
board, is he active with the foundation?
breitwoman we didn't want to be prescriptive with
vl, so we made it very easy to understand
rawzeee So there is about two days to get that
bonus. Then 15% for the same period and so on.
breitwoman @mike yes, he's the director. and he's
awesome. total mensch and very philosophically
committed to our project
rawzeee I actually had a meeting with Johann
today in Zug.
mike Really like Monetas, glad to see there doing
well, and the creation of the Zug crypto
environment is fantastic.
breitwoman @mike we went through a lot of ups
and downs while developing Tezos. basically
nobody cared about us for a while, until the DAO
basically. Johann always encouraged us to keep
going.
yeah, the crypto valley is a brilliant concept
rawzeee It's pretty magical.
tranzer You living there?
breitwoman @tranzer I'm US-based
rawzeee I'm just here for awhile. Also US-based.
nikandro Hi all, sorry if this has already been
discussed, but have you spoken with any
exchanges about adding Tezos?
breitwoman @nikandro yes, but it's a pretty
convoluted process

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one nice thing about tezos is that exchanges can
act as delegates, which creates great incentives
nikandro Do you expect to have any clarity on that
prior to the ICO?
tranzer How can exchanges act as delegates?
breitwoman not sufficient to make an
announcement but it's really not something I worry
about
techbytes really. Than perhaps Poloniex will add
tezos. :slightly_smiling_face:
breitwoman @tranzer you can assign your
validation to an exchange's address
nikandro While im interested in developing more
than anything, I also understand that trading is a
good tool for price discovery, which is critical.
ryano You shouldn't have any trouble getting on an
exchange and would be a low priority area to spend
your energy while in development
breitwoman they have to volunteer of course
@nikandro of course, completely agree. Arthur was
a market maker on Wall Street for 10 years
he thinks about this ... a lot
@ryano that's what I've heard but people like to be
assured that the token will have a marketplace,
which is reasonable
It does take a lot of energy and I've been lagging
on that front
Security and legal concerns were priority #1, we
can iterate and grow the team pretty rapidly after
the sale
Having the Foundation build out and assume
responsibilities for promoting the protocol will be
much better than my one woman band
: slightly _smiling_face:
mike I'd expect Bittrex no problem.
jakethepanda First alt-coin you bought?
mike mastercoin
nikandro Sorry to push the matter, but does this
mean there will be no marketplace for Tezos after
the ICO?
breitwoman @nikandro apparently there will be a
futures market running
mike they can't announce if they did - exchanges
have NDAs disallowing coins from announcing,
leaving it up to the exchanges.
djselery lol, even if they had an exchange lined up
right now they probly couldnt talk about it
nikandro @djselery , right, and I'm not asking for
specifics, just wondering if implementation is in the
pipeline.
breitwoman @nikandro it is

https ://www.reddit.com/r/ArkEcosystern/cornrnents/6arnOd6/arna_with _tezos _on_ark _slack/[ 4/20/2018 3:30:15 PM]

DLS00000419
 Case 3:17-cv-06779-RS Document 187-8 Filed 01/09/19 Page 13 of 14
insofar as we have had many conversations/back
and forth and its been very positive
I can't say much else other than it's a cumbersome
process
nikandro Okay, thanks @breitwoman
jakethepanda I'm sure Tezos will be on an
exchange. I don't think that's even an issue.
nikandro @jakethepanda I agree, I was just
inquiring about the timeline and I think
@breitwoman cleared that up. Many thanks.
jakethepanda @breitwoman Pizza or Sushi?
breitwoman @jakethepanda that's relative to
location. In NY, I prefer pizza. Everywhere else,
sushi : slightly _smiling_face:
rawzeee A good answer.
jakethepanda Tesla or Mercedes?
mward So @breitwoman 5000 TEZOS = 1 btc?
and 20% discount for firat 400 btc raised
dachshund will you be growing the team in NY, is
mostly based in europe?
nikandro For sure! In brooklyn, I do the dollar slice
ride. Bike around to each vendor that sells dollar
slices. yay, pizza!
breitwoman To drive? Mercedes. Tesla's still don't
have the handle I like :slightly_smiling_face:
@dachshund they're based in Europe, primarily but
I don't have any plans to leave the US
sibars by the way, who designed the Tezos logo?
rawzeee @mward no. 400 is the BTC blocks mined
for the first bonus period; it's a time thing. But the
ratio you've cited is correct. And then the bonus
rate decreases by 5% every 400 blocks until 2000
BTC blocks are mined. (edited)
breitwoman It's a character we found by looking
through some libraries. I think it's a TZ symbol
from a language that uses that combination often
mward @rawzeee when will it start?
rawzeee Though not a discount. It's a bonus.
May 22nd at 6am UTC.
mward thank you
breitwoman Hey guys, I have to hop on a call in a
little. 2 more questions and I'll have to wrap this
up!
moobox I don't have a question but i wish your
group bon chance or however the French say .
tranzer So little women in here stay a little longer
:sob:
ryano Thanks for hanging out and answering
questions!
jakethepanda Thanks @breitwoman

https ://www.reddit.com/r/ArkEcosystern/cornrnents/6arnOd6/arna_with _tezos _on_ark _slack/[ 4/20/2018 3:30:15 PM]

DLS00000420
 Case 3:17-cv-06779-RS Document 187-8 Filed 01/09/19 Page 14 of 14
http://slack.tezos.com/
breitwoman @moobox vielen dank
@tranzer haha, I'll be back!
moobox salutes like Benny Hill
rawzeee The subreddit is where a lot of discussion
happens too: https://reddit.com/r/tezos reddit
tezos.com • r/tezos reddit: the front page of the
internet
techbytes Great AMA session. Thanks for stopping
by and answering all the questions. Good luck on
the project and I look forward to investing.
breitwoman @ryano thanks for having me! and the
very cordial convo
boldninja @breitwoman thank you for taking the
time for this AMA - I was just lurking, but all what I
would ask was answered. I wish you all the best
with ICO and I hope ARK and Tezos cooperate in
the future.
breitwoman Thanks guys! Yeah, feel free to bolster
our Reddit
mward Aurrevoir!
drlO thank you very much :smile:
rawzeee Yes, thanks much everyone! So long!
breitwoman @boldninja great to hear it!
@drlO thanks for the solid qs, really appreciate it
drlO np :smile:
mike Thanks for stopping by, both of you, and
taking the time to chat with us.
look forward to participating in Tezos.
1 comment share save hide report

all 1 comments
sorted by: best D

[-] rawzeee • 2 points 11 months ago

Thanks so much for having us! We had a great time! Feel free to
come over to r/tezos if so inclined.
permalink embed save

https ://www.reddit.com/r/ArkEcosystern/cornrnents/6arnOd6/arna_with _tezos _on_ark _slack/[ 4/20/2018 3:30:15 PM]

DLS00000421
Case 3:17-cv-06779-RS Document 187-9 Filed 01/09/19 Page 1 of 4

EXHIBIT D
 Case 3:17-cv-06779-RS Document 187-9 Filed 01/09/19 Page 2 of 4

1 LTL ATTORNEYS LLP

Enoch H. Liang (SBN 212324)
2 601 Gateway Boulevard, Suite 1010

3 South San Francisco, California 94080

Tel: 650-422-2130
4 Fax: 213-612-3773
[email protected]
5
James M. Lee (SBN 192301)
6 Caleb H. Liang (Bar No. 261920)

7 300 S. Grand Ave., 14th Floor

Los Angeles, California 90071
8 Tel: 213-612-8900
Fax: 213-612-3773
9 [email protected]
[email protected]
10

11 HUNG G. TA, ESQ. PLLC

Hung G. Ta
12 JooYun Kim
250 Park Avenue, 7th Floor
13 New York, New York 10177
Tel: 646-453-7288
14
[email protected]
15 [email protected]

16
UNITED STATES DISTRICT COURT
17
NORTHERN DISTRICT OF CALIFORNIA
18
Master File No. 17-cv-06779-RS
19 IN RE TEZOS SECURITIES LITIGATION
CLASS ACTION
20

21 This document relates to: DECLARATION OF ARTIOM FRUNZE

IN SUPPORT OF PLAINTIFFS’ MOTION
22 ALL ACTIONS. FOR CLASS CERTIFICATION
23 Date: April 24, 2019
Time: 1:30 p.m.
24
Crtrm: 3
25
Judge: Hon. Richard Seeborg
26

27

28

DECLARATION OF ARTIOM FRUNZE IN SUPPORT OF

PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION
NO. 3:17-CV-06779-RS
 Case 3:17-cv-06779-RS Document 187-9 Filed 01/09/19 Page 3 of 4

1 I, ARTIOM FRUNZE, declare as follows pursuant to 28 U.S.C. § 1746:

2 1. I respectfully submit this Declaration in support of Plaintiffs’ motion for class
3 certification, appointment as class representatives and appointment of LTL Attorneys and Hung G.

4 Ta, Esq. PLLC as class counsel in the above-captioned action.

5 2. I have reviewed the Consolidated Class Action Complaint filed in this lawsuit on April
6 3, 2018 (Dkt. No. 108), as amended pursuant to stipulation and order, entered November 21, 2018

7 (Dkt. No. 183).

8 3. I am seeking appointment by this Court as Class Representative for the following

9 Class:

10 All persons and entities who, directly or indirectly, contributed Bitcoin or

Ethereum to the Tezos Initial Coin Offering conducted in July 2017.
11 Excluded from the Class are Defendants, and any person, firm, trust,
12 corporation, or other entity related to or affiliated with any Defendant.

13 4. I invested in the Tezos Initial Coin Offering (the “Tezos ICO”), which was held in

14 July 2017. The dates and amounts of my investments, as well as the number of Tezos tokens (XTZ)

15 that I was promised, were as follows:

16 Investment Trade Date Amount of XTZ Promised

17 20 ETH July 2, 2017 13,953.72

18 98 ETH July 2, 2017 68,716.62
19 120 ETH July 3, 2017 82,937.04
20

21
5. I did not purchase the Tezos tokens at the direction of counsel or in order to participate
22
in this lawsuit.
23
6. I understand that this lawsuit alleges that the Tezos ICO was an unregistered sale of
24
securities, in violation of the U.S. Securities Act of 1933.
25
7. I am willing to serve as a Class Representative on behalf of the Class, including
26
providing testimony at deposition and trial, if necessary. I understand and accept the responsibilities
27

28
1
DECLARATION OF ARTIOM FRUNZE IN SUPPORT OF
PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION
NO. 3:17-CV-06779-RS
 Case 3:17-cv-06779-RS Document 187-9 Filed 01/09/19 Page 4 of 4

1 and obligations of serving as a Class Representative, and am willing to oversee the vigorous

2 prosecution of this litigation.

3 8. I will not, either directly or indirectly, accept any payment for serving as a
4 representative party on behalf of the Class beyond my pro rata share of any recovery, except such

5 reasonable costs and expenses (including lost wages) directly relating to the representation of the

6 Class, as approved or ordered by the Court.

7 9. I have communicated with Ronald Puma, the managing member and authorized
8 representative of the other proposed Class Representative, Pumaro LLC. We communicated via a

9 conference call with counsel to discuss our duties as Class Representatives and the joint prosecution

10 of the litigation.

11 10. Mr. Puma and I intend to oversee this litigation and our counsel to ensure the efficient
12 and zealous prosecution of Class claims. To this end, we have exchanged contact information to

13 enable us to confer, with or without counsel, on short notice to ensure timely decision-making.

14 I declare under penalty of perjury under the laws of the United States of America that the
15 foregoing statements relating to me are true and correct to the best of my knowledge.

16 Executed this ___ day of January, 2018 at Richlands, Australia.

17

18 ___________________________________
19 ARTIOM FRUNZE
20

21

22

23

24

25

26

27

28
2
DECLARATION OF ARTIOM FRUNZE IN SUPPORT OF
PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION
NO. 3:17-CV-06779-RS
Case 3:17-cv-06779-RS Document 187-10 Filed 01/09/19 Page 1 of 6

EXHIBIT E
 Case 3:17-cv-06779-RS Document 187-10 Filed 01/09/19 Page 2 of 6

1 TL ATTORNEYS LLP
Enoch H. Liang (SBN 212324)
2 601 Gateway Boulevard, Suite 1010
3 South San Francisco, California 94080 Tel: 650-
422-2130
4 Fax: 213-612-3773 [email protected]
5
James M. Lee (SBN 192301)
6 CalebH. Liang(BarNo. 261920)
7 300 S. Grand Ave., 14th Floor Los Angeles,
California 90071
8 Tel: 213-612-8900 Fax: 213-612-3773
9 [email protected]
[email protected]
10

11 G G. TA, ESQ. PLLC Hung

G.Ta
12 Joo Yun Kim
250 Park Avenue, 7th Floor
13 New York, New York 10177 Tel: 646-453-7288
14 [email protected]
15 [email protected]

16 Lead Counselfor Court-Appointed Lead Plaintiffand the Class

17
UNITED STATES DISTRICT COURT
18
NORTHERN DISTRICT OF CALIFORNIA
19
 Case 3:17-cv-06779-RS Document 187-10 Filed 01/09/19 Page 3 of 6

Master File No. l 7-cv-06779-RS

IN RE TEZOS SECURITIES LITIGATION
CLASS ACTION

22 This document relates to: DECLARATION OF RONALD R. PUMA

IN SUPPORT OF PLAINTIFFS' MOTION
ALL ACTIONS. FOR CLASS CERTIFICATION

Date: April 24, 2019

Time: 1 :30 p.m.
Crtrm: 3
Judge: Hon. Richard Seeborg

20

21

23
24

25
26
27
28

DECLARATION OF RONALD R. PUMA IN SUPPORT OF

PLAINTIFFS' MOTION FOR CLASS CERTIFICATION
NO. 3:17-CV-06779-RS
1 DECLARATION OF RONALD R. PUMA

2 I, Ronald R. Puma, declare as follows pursuant to 28 U.S.C. § 1746:

3 1. I am a competent adult, over eighteen years of age, and at all times material to this 4 action

I have been a citizen of the United States and a resident of the State of Texas. I make this 5

Declaration in support of Plaintiffs' Motion for Class Certification and for Pumaro, LLC

("Pumaro") 6 to be appointed as a Class Representative in the above-caption action against

1
DECLARATION OF RONALD R. PUMA IN SUPPORT OF
PLAINTIFFS' MOTION FOR CLASS CERTIFICATION
NO. 3:17-CV-06779-RS 759913.1
 Case 3:17-cv-06779-RS Document 187-10 Filed 01/09/19 Page 4 of 6

Dynamic Ledger 7 Solutions, Inc., Tezos Stiftung, Arthur Breitman and Kathleen Breitman

(the "Action").

8 2. Iam the sole and managing member of Pumaro, a Texas Limited Liability Company.

9 3. Pumaro has agreed to act as a Class Representative in this Action, if so appointed by 10

th Court. Pumaro is seeking to be appointed by this Court as a Class Representative for the following

11 Class:

12 All persons and entities who, directly or indirectly through an intermediary,

13 contributed Bitcoin, Ethereum or U.S. dollars to the Tezos Initial Coin
Offering conducted in July 2017. Excluded from the Class are Defendants,
14 and any person, firm, trust, corporation, or other entity related to or affiliated with any
Defendant.
15
4. Like other members of the Class Pumaro seeks to represent, Pumaro invested in the
16
Tezos Initial Coin Offering that occurred between July 1, through July 14, 2017 (the "Tezos ICO").
17
On July l, 2017, in my capacity as managing member of Pumaro, I caused Pumaro to invest 1.9
18
Bitcoin into the Tezos ICO. Pumaro was promised 11.400 XTZ tokens in return. Pumaro did not
19 urchase XTZ tokens in the ICO at the direction of counsel or in order to participate in this Action.
20
5. As I understand it, the lawsuit seeks to remedy violations of the Securities Act of 1933
21
(the "Securities Act") in connection with the Tezos ICO. As I understand it, the lawsuit alleges that
22 e Tezos ICO was an illegal, unregistered sale of securities in violation of the Securities Act.
23
6. I understand that as a Class Representative, Pumaro's responsibilities and duties
24 include periodically monitoring and being familiar with matters occurring during the course of this
25 litigation, which I am able and willing to do on behalf of Pumaro and the Class. I know of no
re on
26 why Pumaro would or could not do so in the future, and as managing member, I intend to vigilantly
27 protect and advance the rights of other members of the Class.
28

2
DECLARATION OF RONALD R. PUMA IN SUPPORT OF
PLAINTIFFS' MOTION FOR CLASS CERTIFICATION
NO. 3:17-CV-06779-RS 759913.1
 Case 3:17-cv-06779-RS Document 187-10 Filed 01/09/19 Page 5 of 6

1 7. Pumaro previously sought to be appointed as Co-Lead Plaintiff over this

2 Action pursuant to the Private Securities Litigation Reform Act. See Dkt No. 53. As part of

3 that process, I received and reviewed a copy of the original complaint filed in this Action by

4 GGCC, LLC. See Dkt. No. I.

5 8. Since Pumaro moved for Co-Lead Plaintiff, I have continued to monitor this

6 litigation through periodic telephone and email communications with counsel. Through this

7 process, I have kept myself apprised of case developments and particular issues in the

8 litigation, such as whether any terms and conditions governed the Tezos ICO.

9 9. Before moving to appoint Pumaro as a Class Representative, I received and

10 reviewed Lead Plaintiff's Consolidated Complaint, filed April 3, 2018 (Dkt. No. 108) as

11 amended pursuant to stipulation and order, entered November 21, 2018 {Dkt. No. 183).

12 10. I have neither been promised, nor have accepted, nor expect to receive, directly

13 or indirectly, any compensation in connection with Pumaro's role as a Class Representative

14 in this Action other than Pumaro' s pro rat a share of any recovery on behalf of the Class, and

15 such reasonable costs and expenses {including lost wages) directly relating to representation

16 of the Class as ordered or approved by the Court.

17 11. I further understand that a class representative is not permitted to compromise,

18 undermine, or dismiss the Action in return for any special consideration not provided to other
19 members of the Class, nor do I intend to do so in this Action.

20 12. Iam aware of no conflicts of interest that would render Pumaro unqualified to
21 carry out its duties and responsibilities as a Class Representative in this Action.

22 13. I have communicated with the other proposed Class Representative Artiom
23 Frunze via conference call to discuss our duties as Class Representatives and the joint

24 prosecution of this litigation. During this discussion, we addressed the ways we can cooperate

25 to oversee this Action and our counsel. To this end, we have exchanged contact information

26 to enable us to confer, with or without counsel, on short notice to ensure timely decision

27 making.

3
DECLARATION OF RONALD R. PUMA IN SUPPORT OF
PLAINTIFFS' MOTION FOR CLASS CERTIFICATION
 Case 3:17-cv-06779-RS Document 187-10 Filed 01/09/19 Page 6 of 6

I I declare under penalty of perjury under the laws of the United States of America that the 2 foregoing

is true and correct.

3 Executed this
Texas.
1,January,

4
By-:-fA'-li.tiib.-f~.---V~,~=::::;;:::~
Ron P as managmg member o
5 Pumaro, LLC
6

8
9

10
11

12

13

14

15
16
17

18

19

20
21

22

23

24
25

26

4
DECLARATION OF RONALD R. PUMA IN SUPPORT OF
PLAINTIFFS' MOTION FOR CLASS CERTIFICATION
Case 3:17-cv-06779-RS Document 187-11 Filed 01/09/19 Page 1 of 7

EXHIBIT F
3/28/2018 Case 3:17-cv-06779-RS Document
Tezos Receives 187-11
Funding for Filed
Smart Contact 01/09/19
System Page
from Polychain ... 2 of 7

SUBSCRIBE

INVESTING

Tezos Receives Funding for Smart Contact System from

Polychain Capital's Digital Currency Fund
by Rebecca Campbell   02.17.17 3:09 PM

Tezos, a network protocol specializing in secure, future-proof smart contract

systems, has been given a share of Polychain Capital’s $10 million digital currency
fund. The fund, whose limited partners include Andreessen Horowitz and Union
Square Ventures, was first announced in December of 2016, and has also backed
MakerDAO and Golem.

Founded by Arthur Breitman and Kathleen Breitman, Tezos is an independent smart

contract platform built as an alternative to Ethereum. It focuses on transparency,
security and governance by consensus as fundamental design goals. As such, all code

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Tezos Receives 187-11
Funding for Filed
Smart Contact 01/09/19
System Page
from Polychain ... 3 of 7

is independently verifiable and includes integrated mechanisms for users to

transparently decide on and implement upgrades to the Tezos system itself. When
protocol changes need to be made, Tezos implements voting rights with its built-in
consensus mechanism. This enables upgrades to be seamlessly integrated into the
protocol with complete transparency.

According to Kathleen Breitman, “Tezos has developed its own smart contract
language, Michelson, which is statically typed, purely functional and designed to
facilitate formal verification. Formal verification is a process which mathematically
guarantees the correctness of some aspects of computer code. It has notably been
used in the aerospace industry where the cost of bugs is particularly high.”

“Tezos has a secure language for smart contracts that supports formal verification.
This means it is possible to mathematically prove the security of a contract,” said Olaf
Carlson-Wee, founder and CEO of Polychain Capital. “It is also self-amending, which
allows it to scale and adapt to user demands through programmatic voting. Tezos is
the first blockchain to formalize governance at the protocol level, which we believe is
a fascinating experiment and potentially massive breakthrough.”

“This backing from Polychain comes at an important moment,” said Arthur Breitman.
“It enables us to move closer to launching a secure, future-proof platform that
incorporates good governance, transparency and adaptability from the start. We
couldn't be happier to have the support of Olaf and his team, who have been
advocating for what we have been doing to a broad range of established
stakeholders.”

A Di erent Funding Model

Traditionally, venture capital firms are bound by a charter that guides the types of
things they can allocate funds toward. Cryptographic tokens are rarely included in
this list; therefore, for VCs who want to make a straight token purchase, this is not a
traditional option.

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Tezos Receives 187-11
Funding for Filed
Smart Contact 01/09/19
System Page
from Polychain ... 4 of 7

Polychain Capital’s digital currency fund provides a way for VCs like Andreessen
Horowitz and Union Square Ventures to participate in the appreciation of these
tokens in the marketplace while staying in line with their charters.

“We think this is significant because it represents a new business model,” said
Kathleen Breitman. “We created a product that was purchased by VC investors
without the traditional equity investment model because of the anticipated
appreciation of our token.”

Tezos is planning to launch its test network in Q1 in advance of a crowd sale of its
tokens. It will launch the production network shortly a er the crowd sale closes.

# T E ZO S # S M A RT CO N T R A C TS # I N V E ST I N G #VENTURE # C A P I TA L # A N D R E E SS E N

R E L AT E D A RT I C L E S :

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Funding for Filed
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Case 3:17-cv-06779-RS Document 187-12 Filed 01/09/19 Page 1 of 26

EXHIBIT G
12/27/2018 Case 3:17-cv-06779-RS Document
Behind the 187-12
scenes with Tezos, a new Filed 01/09/19
blockchain Page 2 of 26
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Behind the 187-12
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Odds are you have at least one buddy who

Alice Lloyd George
bought bitcoin a year or two back. Odds are that
Contributor
they are giddy about their good fortunes. And
they should be–since Satoshi launched the Alice Lloyd George is an investor
at RRE Ventures and the host of
network in 2009 bitcoin has risen to a market cap Flux, a series of podcast
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of $40 billion. The cryptocurrency saw a 200% conversations with leaders in
surge this year to a record high just shy of $3000 frontier technology.

in June. More posts by this contributor

• Thomas Reardon and CTRL-

But beneath these numbers, the feuds among
Labs are building an API for the
core developers over resolving longstanding brain
issues have simmered on, most critically how to • Solving the mystery of sleep

increase block size. Under the current 1MB block

capacity, congestion of the network has put bitcoin under strain, resulting in higher

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Behind the 187-12
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upstart | TechCrunch

transaction times and processing fees. Two of the top scaling proposals are set to
update the network on August 1st, dubbed Bitcoin Independence Day.

The community is bracing itself for the possibility of a chainStartups

split if the proposals end
Apps bitcoins. The players
up being incompatible, an event that would result in two separate
in this drama all have incentives to reach a consensus, which begs the question–how
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In an interview for Flux I sat down with Kathleen Breitman,Google

co-founder and CEO of
Tezos, which is nearing the end of it’s two week fundraise. Asia
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With a whopping $200m raised (at current btc and eth prices) Tezos breaks all Initial
Coin Offering records to date. That’s saying something given over $1 billion dollars has
gone into ICOs (Kickstarters on steroids) in 2017. Exuberance, of the irrational variety,
perhaps–but that doesn’t mean there is no real value underpinning some of the
projects raising funds, or in the underlying crypto-token model.

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participate in their fundraiser, or in any ICO, but hopefully it will take you beyond the
headlines and into the live thinking of a startup on the forefront of this trend. In the
interview Kathleen discusses the rationale around doing an uncapped fundraise, how
the team is navigating a landscape with no existing regulatory framework, why they
chose to set up a non-profit in Switzerland to receive the funds, and how they have
responded to DDOS and phishing attacks. Kathleen also discussed her identification
as an anarchist-capitalist and its roots in cypherpunk, her love of Milton Friedman, and
the quirks of being a husband-wife founding team.

An excerpt of our conversation is published below.

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Tezos is a decentralized blockchain that

governs itself by establishing a true digital
commonwealth. Startups

What's more, Tezos was built to facilitate formal verification,a technique

Apps
which boosts the security of the most sensitive or financially weighted Gadgets
smart contracts by mathematically proving the correctness of the code
governing transactions. Events
The Tezos blockchaln will underpin secure, decentralized applications and Videos
smart contracts while avoiding some of the political and technological
problems which earlier efforts such as Bitcoin and Ethereum have faced. Podcasts
Tezos was built on the belief that a deep commitment to security, formal
verification,and governance that gives stakeholders the power to
—
make protocol decisions is the formula for earning trust and generating Crunchbase
widespread adoption on the blockchain.
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More the origins of Tezos.
AMLG: I guess we should start at the beginning and explain
You’re the CEO and co-founder along with your husband Arthur. Husband-wife
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team and he’s the CTO, the architect. You told me you guys met at a crypto-
2018
anarchist meetup in New York in 2010. What is the story Year and
there in Review
what kind of
Google
pickup lines does one hear at an anarchist meetup?
Asia

KB: It all starts off in a in a bar near NYU in 2010. I was de-briefing
Facebook with my debate

team. We had just lost mightily to a better school in a debate. There was a party going
on at the bar and I was 20 years old and was very tempted at this party by the free-
flowing beer, a hot commodity for 20 year olds. I met this guy named Tennyson.
Tennyson and I got along just fine and he insisted I come with him to a lunch the next
day. He left out a lot of details. The deal-breaker probably would been that it was
crypto anarchist lunch — minor detail. The theme of the lunch was not disclosed.
Login / Sign up

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Startups
Apps
Gadgets
Events
Videos
Podcasts
— AdCholces ll>

Crunchbase
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Arthur and Kathleen Breitman
2018 Year in Review
So I went in and this guy made a bee-line at me. I was a little weirded out but
Google
Tennyson had told Arthur all about me prior to this and I guess
Asia he thought that it would
Facebook
be a good match. So shout out to Tennyson. He said “hello, nice to meet you, welcome
to the media.” He was friendly and gregarious and tried to figure out all the things I
would like and not like. He name-dropped that he knew Milton Friedman’s grandson
when I mentioned I liked Milton Friedman. We just kept on talking and I really enjoyed
speaking to him and he seemed smart and nice and funny. I meandered through the
rest of my Saturday the way I would normally. Then he texted me later and I texted him
and we wound up meeting at another bar. Then we wound up going to dinner —
Login / Sign up

AMLG: And you covered all of Milton Friedman?

KB: Oh yes it was a rich intellectual history of the Friedmans. Basically we just started
talking and we haven’t stopped.

AMLG: And Arthur was a quant right. He was at some high frequency trading
shops, shops being Goldman.

KB: Yes. He studied math and computer science and physics over in France. Then he
wanted to work in finance. France isn’t a great place to make a living if you’re under
the age of like 50. So instead of going to London which he didn’t really care for he
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decided to make his bets on New York. So he went to NYU where he studied under
Nassem Taleb and the financial engineering group. Then he became a quant. So he
was doing high frequency trading and market making for foreign ETFs in particular.
Startups
AMLG: You’ve said that Arthur is the brains and you’reApps
at the brawn. What do
you mean by that? Gadgets
Events
KB: Arthur is really the technical architect, he came up with the structure. Tezos has
gone in and out of fashion — the ideas — over the last threeVideos
or four years. People really
Podcasts
took interest in it last year when the DAO occurred. This was a fantastic heist of sorts.
A digital heist. — AdCholces [l>

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ALMG: Could you explain what happened there, with the DAO hack?
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Look how mucll I -

C...lhold II?
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Asia
Facebook

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crypto-comics.com

14% of all Ether was deposited into the DAO, a smart contract (computer program) running on Ethereum. It
became at risk due to a flaw in the contract

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KB: There was a project that aspired to be a decentralized venture capital organization
on the Ethereum blockchain called the DAO. They had about $150 million dollars
worth of Ether pledged to the contract. This was an ambitious undertaking and the
Startups
people who created the DAO didn’t do a super thorough job of security audits and
Apps
wondering if they could actually mobilize this vision they had created. So a clever
Gadgets
hacker gave himself some of the Ether out of this contract to the tune of $50 million
dollars out of the $150 million. Events
Videos
AMLG: That’s a good steal.
Podcasts
KB: Not bad if you can get it. So this forced a conversation—
in the Ethereum communityAdCholces ll>
Crunchbase
as to whether or not there ought to be a do over. Call it a mulligan, if you will, on this
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whole DAO fiasco. That led to a split in the chain of Ethereum, which is how we got
two versions: Ethereum Classic which is favored by some More
people in the community
because it didn’t unwind this transaction — it forced people to deal with the
consequences of this heist. And then regular Ethereum or Search
Ethereum as we know it
today, which basically called a do over. This was ultimately2018
a governance question and
Year in Review
Google
the whole nexus of Tezos is — governance is very much a part of blockchains, we can’t
Asia governing philosophy.
divorce the math and computer science aspect from the overall
Facebook
So this forced a conversation.

AMLG: So when there’s a fork and a community has to vote on a direction

there’s basically an informal process that’s determined by perceptions,
perception of which fork seems most authoritative or valid or which
constituents shout the loudest which is what we saw after the DAO hack. This is
the problem you’re trying to solve with Tezos — you’re trying to formalize the
process of how one upgrades a protocol? Login / Sign up

KB: So the Tezos position paper examines the potential threats to bitcoin. Ethereum
was not factored into the analysis in the initial white paper or position paper, but yes
essentially the idea is that ultimately these systems are very fragile in the sense that if
you have undue influence over the protocol on this soft level you can render different
results at the protocol level.

You see this with bitcoin. You have core developers who have personalities and it kind
of becomes a cult of personality over who you’re with and people taking sides on
Twitter. But there’s no meaningful way to enact change. In the sense that ultimately

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you’re at the behest of miners in China over which version of the protocol is actually
deployed.

Startups
AMLG: So your mechanism allows blockchain to change the blockchain itself.
Very meta, turtles all the way down there. Your central Apps
idea was — you saw this
fallacy underlying bitcoin, that code can solve everything. Or as Arthur puts it,
Gadgets
nothing bad can happen to bitcoin because MATH. ButEvents
really blockchains are
embedded in society, society can be compromised. So this is what you’re
Videos
getting at with Tezos right. The question I have that follows — under the current
Podcasts
construction isn’t there a risk that the network favors the people who are more
— AdCholces ll>
technical, the more technical stakeholders who are knowledgeable about
Crunchbase
anything that you would vote to change? What do you do for the non
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technically-savvy tokenholders?
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KB: That’s a good question. We have what’s called delegated proof-of-stake in our
system. Essentially what this means is that everyone who Search
owns a token can become a
validator in the network. Or they can actually assign that right
2018toYear
someone
in Reviewelse and
Google
that person can vote on their behalf. So there is going to be some element of
politicking, but at least it’ll be something where people canAsia
express that in a much
Facebook
more legitimate way than just saying that that guy’s right because —

AMLG: So sort of a proxy vote.

KB: It’s a proxy vote yes. Some people call it liquid democracy.

AMLG: But you can never really remove the element of humans influencing
other humans’ ideas right, it’s just the voting piece?
Login / Sign up
KB: Most definitely. That’s an important caveat. That’s why it’s an experimental piece
of technology. Ultimately this is still going by people’s judgment, which is of course
always subject to some sort of fallacy. The main innovation with Tezos is giving a way
to air legitimacy on the chain. Right now it’s sinuous as to how decisions are made. By
making things more explicit we hope that we can get more useful conversations going.

AMLG: It’s super relevant now since we’re seeing this play out with massive
battles over block size in bitcoin, whether to go with bip-148 or SegWit2, all
these different things. Maybe you could just fit Tezos into the landscape for the
listeners. You’ve said previously that the Bitcoin model is so decentralized that

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it’s beholden to these populist campaigns and there’s this governance

deadlock. Then on the other side, Ethereum is moving very fast but is very
centralized because the Foundation has a lot of clout over the protocol. Where
Startups
do you fit on that spectrum?
Apps
KB: In some ways we’re choosing a middle ground between the two and in other ways
Gadgets
we’re taking a radically different approach. So a little aboutEvents
how Tezos governance
works in its first iteration: what we’re going to do is a two-phased vote. We’re taking
Videos
our cues from the Republic of Venice and we’re doing affirmative voting on the first
Podcasts
iteration. So what would you like to test. So say six people have proposed these things
— AdCholces ll>
and they all have different tradeoffs, what we want to actually test and see if it’s useful
Crunchbase
for the protocol. What’s the proposition here.
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AMLG: Then that proposition has to pass a threshold to get the main vote?
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KB: Yes after testing. We’ll spin up a testnet. It will say for example,
Search well you said that
this preserves privacy but we actually found that it does not.
2018 Year in Review
Googlelevel? Some of the
AMLG: What happens if you don’t get people over a certain
Asia
DAO propositions won only 5 or 6% the votes.
Facebook
KB: One way of approaching that is delegation — making it easy to not have to think
critically about every proposal. If you take a vacation you shouldn’t have to worry too
much about the network.

AMLG: Right and it’s very easy to bash every option down.

KB: But we also adjust the quorum every time. For instance maybe people just want
Login
two people making all the decisions. That’s a weird outcome / Sign up but it’s possible.
certainly

AMLG: Is it possible that Ethereum could change its governance structure?

KB: They could introduce different roles for people. They could introduce something
like a representative democracy. But the innovation with Tezos is that we can actually
iterate on our governance model. We can adjust it at the meta level. That’s something
you have to bake into the protocol at the base layer.

AMLG: They really can’t bake it in at this stage — it’s done?

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KB: I think it would be remarkably difficult. I’m not going to underestimate Vitalik of
course. But with Tezos we don’t just have this governance layer, we also have a way
of pushing the upgrades out to everyone, it’s one and the same, making it a very
Startups
powerful mechanism. Whereas bitcoin and Ethereum still have manual processes for
Apps
updating their chain.
Gadgets
AMLG: You’ve said yours is modular, with the three layers swappable you can
Events
swap things in and out?
Videos
Podcasts
— AdCholces ll>

Crunchbase
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2018 Year in Review

Google
Asia
Facebook
KB: Yes. It’s called a hot swap on the protocol.

AMLG: Hot swap on the protocol. Well Vitalik is a brilliant guy, but I did love the
fact that your smart contract language is Michelson—

KB: Michelson. At least that’s how French developers pronounce it. I actually don’t
know, I mispronounce everything —

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AMLG: How’s your blockchain French?

KB: Better than my blockchain English.

AMLG: But so it’s a reference to the Michelson-Morley experiment, which

disproved Aether right? Not to be confused with Ether. That’s hilarious. I love
that you guys throw those little things in.

KB: It’s the only cheeky thing we’ve done.

AMLG: The other interesting thing is that you’ve built in incentives for
developers — bounties and invoice potential on the chain.

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KB: Yes. So I think a big failing of open source technology nowadays is that you
basically have corporates sponsoring it because they use it in some capacity and
that’s kind of how these things are governed. But outside of a group of enthusiasts and
Startups
people who have a vested interest in its success you don’t find too many people
Apps
actively trying to contribute just for the sake of it or for pecuniary gain. We decided
Gadgets
early on that that would be a massive inhibitor to innovation in these blockchain
Eventsto ideologues — 
protocols. Because at the beginning at least they seem to appeal
Videos from a university
which mind you is just fine — but I like the idea of having someone
Podcasts
who’s been studying something on the periphery and incentivizing them to contribute
— of it appetizing.
to the protocol, even if they don’t find the ideological aspects AdCholces ll>

Crunchbase
AMLG: For the mercenary engineers out there.
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KB: There are many of them. More

AMLG: Really you guys have been working on this for Search
a while but it feels like
you’re just making your entrance onto the scene more. In the grand scheme of
2018 Year in Review
course it’s still very early, but surely many of the folks interested in the space
Google
have already taken stakes in other competing ledgers?Asia
How have you navigated
these existing vested interests and converted people to the Tezzie religion? I
Facebook
know you’ve said that community building has turned out to be one of the
hardest parts.

KB: It’s genuinely really tough. I think that’s part of the reason we did an uncapped
crowd sale. When we were thinking of the best way to get Tezos backing from people,
it wasn’t obvious to us how to do it. But one way is to make sure that everyone has the
ability to take part in the ecosystem. People having an interest in you and contributing
Login / Sign up
to your fundraiser is a way to get them interested in the technology.

AMLG: You really opened it up broadly with the fundraiser.

KB: Absolutely.

AMLG: Should we not be saying ICO?

KB: I mean it is a fundraiser. People call it an ICO. But it is a fundraiser. I was thinking
of making tote bags like PBS tote bags.

AMLG: Because we’re donating to a nonprofit.

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KB: Exactly. And the non-profit is recommending an allocation of tokens.

Proceeds of initial coin offerings, by year

Startups
$1300 million
Apps
1200 Gadgets
1100 Events
Videos
1000
Podcasts
900 —
Crunchbase
800
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700 More
600
Search

500 2018 Year in Review

Google
400
Asia

300 Facebook

200

100

0
2014 '15 '16 '17
Source: Smith & Crown Login / Sign up

Roughly ~$1.3b billion cumulative dollars have gone into ICOs in 2017, with over $600 million in June alone.
[For more data see Smith + Crown.]

AMLG: Let’s step back for a second and lay out the landscape for people who
haven’t seen all the headlines on ICOs. What’s a quick explainer on an initial
coin offering and what have you done so far.

KB: Basically there are a number of new projects in this space and one way to
distribute the token is to simply receive donations to their blockchain and then in return
you get the token. And typically they’ll price it at a certain number of Bitcoin or

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ethereum and deploy it right away. So it’s an alternative financing structure for some
projects and for some projects it’s a distribution mechanism

AMLG: And the tokens are not securities. Startups

Apps
KB: I mean in some cases they could be right, like if you have a claim on a line of
Gadgets
revenue. Arguably that’s a security. But with Tezos you’re basically getting computing
power on a decentralized blockchain.
Events
Videos
AMLG: Let’s get into some of the questions that have been raised — we ought to
Podcasts
cover a few. I admit when I first heard some of the facts about Tezos I was
— AdCholces [l>
skeptical. It’s easy to fall into cynicism. There’s all these keyboard warriors on
Crunchbase
Reddit throwing out one liners. But the papers you’ve put out actually give clear
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and well-thought out answers to some of these mainstream public questions. I
More
want to get into a few of them. The first thing I want to ask is about the
pushback over the fact that the fundraiser is uncapped. Uncapped meaning
Search
there’s no upper limit on the funds you can raise. The limit is just the time, the
2018 Year in Review
window in which you’re raising — two weeks. In the Tezos overview you state the
Google
reason for this which I will read here:
Asia
Facebook
“There is no cap on the amount of contributions that will be accepted. This is done in
order to ensure that participation is not limited only to insiders or the fast fingered.
The Tezos team believes that an uncapped fundraiser will promote a widespread
distribution of the tokens a necessary prerequisite to launching a robust network.”

So that inclusive argument instinctively makes sense to me. But of course the
problem with democracy is democracy. The system itself. Crowds don’t always
get things right and in this case your crowd may be speculators.
Login / Sign up There’s been a

lot of speculative buying in China for instance. Do you worry about who the
tokenholders are and whether their incentives are aligned with Tezos?

KB: It’s tough. We didn’t do much marketing outside of the U.S. Well rather Arthur and
I are based in the U.S. and we talk about the technology in mainstream U.S. press
outlets and sometimes it’s picked up in Asian outlets. We mostly have just been
evangelizing about the technology. But certainly there are a lot of people who are
interested in the more speculative aspects. I think there’s a lot of fervor and froth in the
marketplace right now. That does make it a bit odd to launch something that’s more
community-based on some level when there’s a lot of people who are just profit-

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seeking. I suppose I do worry but ultimately we’re appealing to people’s rational self-
interest. So at the end of the day I hope that the proper incentives will align
themselves.
Startups
Appspeople who align with
AMLG: And that the tokens end up in the right hands, with
your values? Gadgets
Events
KB: Yes.
Videos
AMLG: Let’s talk about the structure, which is the other question people ask,
Podcasts
and fiduciary liabilities. You’ve laid out the Tezos Foundation’s goal is to
— AdCholces [l>
promote the use of the Tezos protocol. So participants in the crowd sale donate
Crunchbase
to the Swiss Foundation which in turn provides the contributors with a token
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allocation. You’ve said the Foundation will spend on conferences, marketing,
More
funding developers. If your director decided he wanted to buy an island in the
Caribbean who votes on that? How does the corporateSearch
structure work?

KB: That’s a good question. Part of the reason this is not a2018
security isReview
Year in because you
Google
have no claim on the revenue and that includes the revenue from the fundraiser. The
Asia
Tezos Foundation is at the behest of the Swiss nonprofit authority, which has a clear
Facebook
directive to adhere to whatever the Tezos foundation sets out to do. So if Johann
wants to buy a Caribbean island where there there’s a ton of Ocaml programmers
that’s kosher if Johann wants —

AMLG: So if they program better there it’s OK — as long as productivity goes up.

KB: Ha yes. If Johann wants to buy a Caribbean island because he wants to run it on
the Tezos blockchain in some way, I guess that falls in line with it. But if he wants to do
Login / Sign up
it because — well he’s quite pale so I don’t know if he wants to go tanning — but if he
wants to go on vacation and buy an island that would not be OK. You could
theoretically hold him accountable under Swiss law. And I think that the Foundation
ought to survey the community for major decisions to reflect their will better. But there’s
no explicit voting mechanism on it. Part of the reason that’s not such a bad thing is that
anyone can contribute to the protocol. There’s the Foundation which has veto power
for one year, but other than that they don’t have any favored status in the protocol.

AMLG: It’s amazing how you’re paving the way and there doesn’t seem to be
any regulatory framework for what you’re doing. What was your thinking on

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going to Switzerland? I know that the U.S. money transmission laws are nuts on
a state by state basis, it’s so complex here. But it sounds like it’s complex there
as well. What are your thoughts on how the regulatory framework will evolve?
Startups
KB: Well Johann is the founder of the Crypto Valley in Zug,Apps
which is a Canton in
Zurich. It has a ton of Bitcoin companies it has a ton of watching
Gadgetscompanies located
there and including Ethereum foundation. Events
Videos
AMLG: So I guess they paved the way. Do you think others will follow — do you
think there’s a best practice being set here? Podcasts
— AdCholces [l>
KB: I think so. There are other a few other places — Gnosis which is an ethereum
Crunchbase
prediction market token I think they had their token sale out of Gibraltar. Estonia wants
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to do work around this. I think the Ethereum foundation itself is actually in Singapore
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right now. So there’s all sorts of accommodating usually small nations that are willing
to work with you. Search

2018 Year in Review

Google
AMLG: Why is it there so much nastiness in the blockchain
Asia crypto world — is it
just smart people with opinions strongly held? Or is it Facebook
monetary reasons?

KB: I think people are just naturally inclined towards taking sides, you see this in
politics too. “I’m team Ethereum. Ethereum is going up 4,000X why don’t you like
ethereum, why do you think you’re better than Ethereum?” Right.

AMLG: But actually it seems like you cooperate with a lot of the other folks in
the space. I mean Zcash, Zooko — he’s one of your advisors right?
Login / Sign up
KB: Oh yes Zooko. In general we have a good working relationship with most of the
people in the space that we admire. It’s really folks who can’t evaluate our technology
who get really upset with us and start to caterwaul. You can’t let that get to you.
Honestly if you look back at Ethereum people were much more vicious. So we got off
pretty easy on the vilification front. Most of the attacks have been very personal. But
I’ve been on the internet since I was 12. And I worked at Bridgewater so I have thick
skin.

AMLG: All the character building you needed.

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KB: Exactly. You’ll have to come at me a little harder if you want to hurt my feelings.

AMLG: How do you cope with the stress, the two of you. I guess you’re both
moving around internationally and busy, but you are inStartups
a relationship with each
other —  Apps
Gadgets
KB: I mean, it’s compartmentalizing. Sometimes it’s “OK right now you’re my business
Events
partner and I’m telling you that this is a terrible idea.” And sometimes it’s “I know you’re
stressed out. We should really talk about this. But let’s firstVideos
see a movie or watch bad
TV.” I think we just know each other really well. Podcasts
— AdCholces [l>
AMLG: What is your go-to bad TV?
Crunchbase
KB: The new like 24 spin off, Designated Survivor. It’s just Advertise
so awful.
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AMLG: Your brain doesn’t even need to be switched on.
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KB: It’s just its so stupid. It’s really fantastic because it’s like conspiracy theory after
conspiracy theory and you can’t quite trace it. 2018 Year in Review
Google
AMLG: And your parents now know that you’re doing this
Asia right? I know you
were “a financial software engineer” for a while. Facebook

KB: Yeah I was doing “accounting software.” Now they’re on to me. My mother
unfortunately has learned what Reddit is like. But she still loves me which is great. She
doesn’t seem to be assuaged by the arguments that I’m an incompetent boob or just
terrible. So I’ve got that going. My mother still loves me.

AMLG: I’m curious to zoom out for a minute on your self-identification as an An-
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Cap. What exactly is an anarchist capitalist, in rough terms?

KB: In general its someone who believes that markets do a better job of distributing
goods than the government. They tend to have a preference against government
aggression in any form.

AMLG: You put at the top of your white paper “laissez faire les proprietaires”
which sums up a lot of this. You’ve said the whole cypherpunk movement is
about using the Internet to free people both informationally but also financially.
It’s interesting to think about how Tezos and the work you’ve been doing builds
upon decades of thinking. Privacy advocates have been organizing in Silicon

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Valley since the 80s — guys like David Chaum, Timothy May and that cypherpunk
mailing list. Which then evolved into the cryptography mailing list where you got
started. I have a quote from May’s manifesto which I thought would be fun to
Startups
read:
Apps
“Just as the technology of printing altered and reduce the powerGadgets
of medieval guilds and the
social power structure. So too will cryptologic methods fundamentally alter the nature of
Events
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Timothy(. May

That was 1988 — 20 or so odd years before Bitcoin. People have wanted this for
a long time and then cryptocurrencies raised their head again
Login / Signin
upthe mid 2000s

and then boom Satoshi. Where do you see yourself fitting into this long history
of crypto anarchist capitalists?

KB: To your point it’s been a series of failures and a series of people who are a bit too
far ahead of their time. So I hope my timing is right. It is just massively experimental.
So we have to take that into account. Bitcoin is the new fad. It’s the new fashion.
People like to talk about it because it invites people to think about a world without
intermediaries as they know it. That’s cool. Maybe bitcoin isn’t the end game. Maybe
it’s some other application that’s built. But I think it’s a very inspirational piece of
technology.

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AMLG: Where did it start for you? Was there an Atlas Shrugged moment when
you were young. Did you read some book?

KB: My parents are both pretty far to the right and classicalStartups
conservatives. My dad
subscribed to National Review when I was little and it was Apps
like read this. So I grew up
with a more right-leaning bias. Then I read Milton FriedmanGadgets
when I was like 16. He
died in 2006 when I was 16 and I read his obituary written Events
by Amity Shlaes. It was
eloquent and talked about how Friedman really cared about people’s ability to prosper
Videos
and make commerce for themselves and that was a nice idea. I think instinctually I
Podcasts
don’t like being told what to do. I don’t like any form of tyranny. Even the more
— AdCholces [l>
mundane types like being told to go to class.
Crunchbase
AMLG: I was on Twitter this morning and I thought youAdvertise
would enjoy this article
that Andy Weissman of USV tweeted out. So a prominent
Moretheoretical physicist,
Yaneer Bar-Yam, who crunches big data and generally analyzes complex
Search
systems — he actually accurately predicted the Arab Spring — he borrowed
mathematical frameworks from quantum field theory and
2018did
Yearainstudy
Reviewon

government. He found something that we have alreadyGoogle

been thinking about — 
Asia society has become
that hierarchal systems no longer work given how complex
Facebook
and how globally interconnected we are. Hierarchies used to work in smaller
kingdoms but since the 1980s there’s been a breakdown. Whether it’s a financial
crisis or environmental issues or diseases, it’s just too complex for a few
entities or people at the top to respond to and decide on policy. At the end of
this analysis he proposed a shift to “horizontal distributed governance” which
to me points straight to you.

KB: Why didn’t he publish this like six weeks ago. Login / Sign up

AMLG: He also looks at the brain. If you think about the brain there isn’t one
neuron telling the other neurons what to do. There’s a collective behavior that’s
responsible for how we think and decide. As you read this research you think
OK this makes sense, everything is too complex, but then what’s the
mechanism?

KB: Yeah part of the reason that we set up Tezos the way we did — and we could have
been way more prescriptive with the initial governance model — the reason we chose a
vanilla two-phase vote was because we didn’t want to be too prescriptive. It took

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upstart | TechCrunch

society thousands of years to come upon the institutions that we have today. There are
subtleties that you just can’t quite capture. You can’t capture them for a variety of
reasons. Part of the limitation is that Tezos is going to be digital commonwealth. That
Startups
means it’s not going to be particularly tangible outside of the world of the Internet. But
Apps
also there’s a lot of counterintuitive things when you look at government and the way it
works today and the way liabilities work.
Gadgets
Events
One of my favorite books which has just been updated is David Friedman’s “Legal
Videos
Systems Very Different from Ours.” It talks about things like punishment structures in
Podcasts
different societies and cultures. It’s interesting because you’re always trying to
— AdCholces [l>
optimize for one thing and you’re not always super sure what types of incentives
Crunchbase
you’re building in. One of my favorite anecdotes is that in the 1970s in Vietnam they
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used to give money out for rat pelts. The idea was they wanted to get rats out of the
More
cities. What happened instead was that there were elaborate rat farms. You can’t
always fine tune human behavior. You never quite know it’sSearch
going to happen. So it’s
best to take a wait and see approach and see how communities emerge and how they
2018 Year in Review
self-organize.
Google

AMLG: Why the name Tezos? Asia

Facebook
KB: When we were coming up with the name Arthur wanted an original .com so he
wrote an algorithm to find an unclaimed .com that was pronounceable in English.
Apparently it’s slang in Colombian teenager speak on Twitter for “expert.” So that’s a
massive freebie.

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Case 3:17-cv-06779-RS Document 187-13 Filed 01/09/19 Page 1 of 10

EXHIBIT H
3/23/2018 Case 3:17-cv-06779-RS Document
Exclusive: Billionaire 187-13
investor Draper Filed
to participate 01/09/19
in blockchain Page
token sale 2 of
for first time10

Myanmar Energy & Environment Brexit North Korea Earnings Future of Money Breakingviews

,
••• •
•• • ••
• • •• • ••
•
• •
• • •• • • • •
•
•• •• •• • •
• ••
•
•
•
.. •• •
•• Will Blockchain Stand the Test of Time

••
• January 16, 2018
• • •
Products and companies with sustainable competitiv
advantages and low capital requirements often make
attractive investments, provided they’re acquired at..

READ MORE

BUSINESS NEWS
MAY 5, 2017 / 3:35 PM / 10 MONTHS AGO

Exclusive: Billionaire investor Draper to participate in

blockchain token sale for first time

Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) - Billionaire venture capitalist Tim Draper soon plans to take a step
that even he, a long-time bitcoin aficionado, has eschewed to now: buying a new digital
currency offered by a technology startup.

https://www.reuters.com/article/us-tezos-blockchain-draper/exclusive-billionaire-investor-draper-to-participate-in-blockchain-token-sale-for-first-time-idUSKBN181250
3/23/2018 Case 3:17-cv-06779-RS Document
Exclusive: Billionaire 187-13
investor Draper Filed
to participate 01/09/19
in blockchain Page
token sale 3 of
for first time10

Venture capital investor Tim Draper speaks at a panel in Beverly Hills, California August 5, 2015. REUTERS/Danny
Moloshok

Draper, an early supporter of bitcoin and its underlying blockchain financial ledger technology,
told Reuters in an interview he will for the first time participate in a so-called “initial coin
offering” (ICO) of Tezos slated later this month.

Tezos, a new blockchain platform launched by a husband and wife team with extensive Wall
Street and in hedge fund backgrounds, will launch the ICO on May 22. Draper will also invest
in U.S.-based Dynamic Ledger Solutions Inc, the creator of Tezos, but did not disclose details.

Draper, who scored big as an early backer of Skype and Baidu, becomes the first prominent
venture capitalist to openly embrace initial coin offerings. This would be a significant stamp of
approval for this new financing mode of blockchain start-ups. Some investors have expressed
concern about lack of regulatory oversight for ICOs.

Over the last year, blockchain start-ups have been raising cash by creating and selling their
own currencies or tokens in unregulated offerings that bypass banks or venture capital firms as
intermediaries. Interest in these deals has been stoked by the run-away performance of the
original cyber currency, bitcoin BTC=BTSP, which has surged more than 67 percent in the last
six weeks to hit a record high.

“The best thing I can do is lead by example,” said Draper, on his plan to participate in Tezos’
token offering.

https://www.reuters.com/article/us-tezos-blockchain-draper/exclusive-billionaire-investor-draper-to-participate-in-blockchain-token-sale-for-first-time-idUSKBN181250
3/23/2018 Case 3:17-cv-06779-RS Document
Exclusive: Billionaire 187-13
investor Draper Filed
to participate 01/09/19
in blockchain Page
token sale 4 of
for first time10

“Over time, I actually feel that some of these tokens are going to improve the world, and I
want to make sure those tokens get promoted as well. I think Tezos is one of those tokens.”

Most traditional venture capital firms are prohibited by agreements with investors from
deploying cash into such high-risk assets as digital currencies.

But Draper said the contract terms with his investors allow investing in pretty much any
vehicle.

“I think most investor contracts did not anticipate something like an ICO,” said Draper. “But
we did anticipate that certain things are going to happen and finance is going to be
transformed.”

Draper said his firm has specifically carved out money for non-traditional investments.

Tezos is similar to bitcoin and other blockchain platforms, but its design allows for
decentralized and automated upgrades.

Most software platforms provide for automated updates, but blockchains remain notable
exceptions because update procedures are typically centralized. Tezos touts itself as the first
blockchain platform to overcome that hurdle.

Tezos was created over a span of three years by Kathleen and Arthur Breitman. Arthur
Breitman had worked at the high frequency trading desk at Goldman Sachs and was an options
market maker at Morgan Stanley, while Kathleen Breitman is a former management associate
at Bridgewater Associates, the world’s largest hedge fund.

Unlike previous ICOs, Kathleen Breitman said Tezos’ deal would not be capped by a set
number of tokens to be created.

“What we’re going to do is allow as many people who want to buy into the crowdsale over a
two-week period,” she said.

Reporting by Gertrude Chavez-Dreyfuss; Editing by Dan Burns and David Gregorio

https://www.reuters.com/article/us-tezos-blockchain-draper/exclusive-billionaire-investor-draper-to-participate-in-blockchain-token-sale-for-first-time-idUSKBN181250
3/23/2018 Case 3:17-cv-06779-RS Document
Exclusive: Billionaire 187-13
investor Draper Filed
to participate 01/09/19
in blockchain Page
token sale 5 of
for first time10

Our Standards: The Thomson Reuters Trust Principles.

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BUSINESS NEWS
MARCH 23, 2018 / 10:26 AM / UPDATED 2 HOURS AGO

U.S. lawmakers formally ask Facebook CEO to testify on user

data

David Shepardson

https://www.reuters.com/article/us-tezos-blockchain-draper/exclusive-billionaire-investor-draper-to-participate-in-blockchain-token-sale-for-first-time-idUSKBN181250
3/23/2018 Case 3:17-cv-06779-RS Document
Exclusive: Billionaire 187-13
investor Draper Filed
to participate 01/09/19
in blockchain Page
token sale 6 of
for first time10

WASHINGTON (Reuters) - U.S. lawmakers on Friday formally asked Facebook Inc’s (FB.O)
Mark Zuckerberg to explain at a congressional hearing how 50 million users’ data got into the
hands of political consultancy Cambridge Analytica.

FILE PHOTO: Facebook Founder and CEO Mark Zuckerberg speaks on stage during the annual Facebook F8
developers conference in San Jose, California, U.S., April 18, 2017. REUTERS/Stephen Lam/File Photo

The world’s largest social media network is under growing pressure from governments,
investors and advertisers. This follows allegations by a whistleblower that British political
consultancy Cambridge Analytica improperly accessed users’ information to build profiles on
American voters that were later used to help elect U.S. President Donald Trump in 2016.

“The hearing will examine the harvesting and sale of personal information from more than 50
million Facebook users, potentially without their notice or consent and in violation of

https://www.reuters.com/article/us-tezos-blockchain-draper/exclusive-billionaire-investor-draper-to-participate-in-blockchain-token-sale-for-first-time-idUSKBN181250
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Exclusive: Billionaire 187-13
investor Draper Filed
to participate 01/09/19
in blockchain Page
token sale 7 of
for first time10

Facebook policy,” chairman Representative Greg Walden, a Republican who chairs the panel,
and Frank Pallone, the top Democrat, and other committee leaders wrote in the letter.

REL ATED COVERAGE

Ex-Cambridge Analytica insider says firm worked for pro-Brexit group: report

UK investigators enter Cambridge Analytica offices in London

UK investigators search London office of firm at center of Facebook data storm

The House Energy and Commerce Committee did not say when they planned the hearing but
it will not happen until Congress returns from a two-week recess.

Zuckerberg said this week he would be willing to testify if he is the right person at the company
to speak to lawmakers.

A Facebook spokesman confirmed the company had received the House letter and was
reviewing it, but did not say whether or not Zuckerberg would agree to testify.

Separately, the leaders of the U.S. Senate Commerce Committee also asked Zuckerberg to
testify. Senator John Thune, the committee chairman, and Bill Nelson, the top Democrat, said
the committee would work with Facebook “to find a suitable date for Mr. Zuckerberg to testify
in the coming weeks.”

Facebook executives spent Wednesday and Thursday on Capitol Hill briefing congressional
committee staffers.

Two senators also asked the Federal Trade Commission, the leading U.S. consumer regulator,
to investigate if other firms improperly obtained user data from Facebook users. The FTC is
reviewing whether Facebook violated a 2011 consent decree it reached with the authority over
its privacy practices, a person briefed on the matter told Reuters this week.

https://www.reuters.com/article/us-tezos-blockchain-draper/exclusive-billionaire-investor-draper-to-participate-in-blockchain-token-sale-for-first-time-idUSKBN181250
3/23/2018 Case 3:17-cv-06779-RS Document
Exclusive: Billionaire 187-13
investor Draper Filed
to participate 01/09/19
in blockchain Page
token sale 8 of
for first time10

Zuckerberg apologized on Wednesday for the mistakes his company had made and promised to
restrict developers’ access to user information as part of a plan to protect privacy.

Facebook Inc 159.39

FB.O NASDAQ -5.50 (-3.34%)

200

190

180

170

160

JANOl FEB 01 MAROl

ZOOM

....•...•... 1 •••••••.••••••••••••••••••••..•••..•.•.•..• 11111

FB.O CBKG.DE TSLA.O

His apology has failed to appease investors and advertisers.

Facebook shares fell on Friday, although not at the pace of earlier in the week. After opening
higher, they were down 1.6 percent at $162, and have fallen around 12 percent since last
Friday. The company has lost more than $50 billion in market value since the allegations
surfaced.

Advertisers Mozilla and German bank Commerzbank (CBKG.DE) have suspended ads on the
service and the hashtag #DeleteFacebook remained popular online.
https://www.reuters.com/article/us-tezos-blockchain-draper/exclusive-billionaire-investor-draper-to-participate-in-blockchain-token-sale-for-first-time-idUSKBN181250
3/23/2018 Case 3:17-cv-06779-RS Document
Exclusive: Billionaire 187-13
investor Draper Filed
to participate 01/09/19
in blockchain Page
token sale 9 of
for first time10

On Friday, electric carmaker Tesla Inc’s (TSLA.O) and its rocket company SpaceX’s Facebook
pages - each with more than 2.6 million followers - were deleted after Chief Executive Elon
Musk promised to do so.

FRONTUNE
CLUB-

Related Video

“I didn’t realize there was one. Will do,” Musk wrote on Twitter, responding to a person urging
him to delete the SpaceX page. The Tesla page was taken down shortly afterwards. “Definitely.
Looks lame anyway,” Musk tweeted.

Reporting by David Shepardson in Washington; Editing by Chizu Nomiyama and Susan Thomas
Our Standards: The Thomson Reuters Trust Principles.

Apps Newsletters Reuters Plus Advertising Guidelines Cookies Terms of Use Privacy

https://www.reuters.com/article/us-tezos-blockchain-draper/exclusive-billionaire-investor-draper-to-participate-in-blockchain-token-sale-for-first-time-idUSKBN181250
3/23/2018 Case 3:17-cv-06779-RS Document
Exclusive: Billionaire 187-13
investor Draper Filed
to participate 01/09/19
in blockchain token Page 10time
sale for first of 10

"# f a m in ::\\

All quotes delayed a minimum of 15 minutes. See here for a complete list of exchanges and delays.

© 2018 Reuters. All Rights Reserved.

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Case 3:17-cv-06779-RS Document 187-14 Filed 01/09/19 Page 1 of 3

EXHIBIT I
12/27/2018 Case 3:17-cv-06779-RS Document
Tim Draper: 187-14
There Was Nothing Filed
Secretive About01/09/19 Page
Our Purchase of Tezos 2 of 3

BTC $ 3,798 (/bitcoin-price-index) XRP $ 0.36 (/xrp-price-index) ETH $ 126 (/ethereum-price-index) BCH $ 164 (/bitcoin-cash-price-index) EOS $ 2.56 (/eos-price-in

(https://servedbyadbutler.com/redirect.spark?
MID=169476&plid=866014&setID=289765&channelID=0&CID=0&banID=519649052&PID=0&textadID=0&tc=1&mt=1545926992198039&hc=03814269

By Cyril Gilson OCT 23, 2017

Tim Draper: There Was Nothing Secretive About Our Purchase of Tezos

13439 Total views 277 Total shares

ICO WATCH

On Oct. 22, Cointelegraph published our contributor Nick Ayton’s opinion piece called “What Lessons Can Be Learnt From Tezos ICO Debacle
(https://cointelegraph.com/news/what-lessons-can-be-learnt-from-tezos-ico-debacle).” The piece asked questions regarding the situation with the Tezos’s ICO, the
companies, foundations and persons that participated in it.

It has recently been reported that a San Diego legal firm is considering filing a class action lawsuit (https://cointelegraph.com/news/tezos-ico-class-action-lawsuit-in-
works-as-value-tumbles) on behalf of some US investors against the company Dynamic Ledger Solutions, Inc. that, as the law firm suggests, is holding the rights to the
Tezos network.  

Our aim is serving the crypto community, for which the question of raising money for Blockchain projects is vital. That’s why we consider the issues relating to the
security and trust during ICOs (https://cointelegraph.com/tags/ico) as being of utmost importance.

In his opinion piece, Nick Ayton has asked questions about the sale, Tim Draper’s role in it, why was the Tezos token not registered with the SEC, raising corresponding
issues. Again, regardless of Nick Ayton’s interpreting and questioning certain actors’ actions and motives, the piece was clearly marked as “opinion” and should be
considered as such. Cointelegraph’s Terms of service agreement (https://cointelegraph.com/terms-and-privacy) clearly underlines that: ”the opinions of authors and
other contributors are their own and should not be taken as financial advice...All materials on this site are for informational purposes only. None of the material should
be interpreted as investment advice.”

Tim Draper’s statement

Mr. Draper has made a valuable comment regarding the article which, being faithful to the standards of journalism ethics, we are happy to publish in full:

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12/27/2018 Case 3:17-cv-06779-RS Document
Tim Draper: 187-14
There Was Nothing Filed
Secretive About01/09/19 Page
Our Purchase of Tezos 3 of 3
purchase-of-tezos) secretive-about-our-purchase-of-tezos via @cointelegraph)

“This was brought to my attention. Please get your facts straight. My fund is a long-term investor and holder of tokens. I back promising entrepreneurs with the prospect of
transforming society for the good of the customer. There was nothing secretive about our purchase of Tezos. We invested for ownership in the company, which at the time
was two bright young people and an idea. The sale might not have happened at all! We also participated in the Pre-sale. Most ICO founders earn tokens over time. All
tokens we hope to receive that we didn’t buy in the Pre-sale (alongside with all the other investors who participated) will vest over time with the founders’ tokens. I have no
intention of selling these tokens because I am a true believer in the Tezos mission: to build a Blockchain on proof of stake and open it up for developers to build and invent
on a new and more relevant platform. It can be faster and more energy efficient than existing solutions. It can have a hand in transforming everything from healthcare to
the insurance industry to real estate to government. Arthur and Cathleen are dedicated, honest and brilliant founders. They made it clear to me and the other purchasers
that the token would require time to develop. If they are successful, they might just transform society, and we will all be better off as a result, and then, maybe 5 or ten
years down the road, my investors and I might get rich. I expect a full retraction. And I think you should send Arthur and Cathleen some flowers and an apology.”

Should the comments from Mr. Johann Gevers, Mr. and Mrs. Arthur and Cathleen Breitmans be forthcoming, we’ll be happy to publish them in all fairness.

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14 Comments

By Gareth Jenkinson SEP 21, 2018

Lambos, Bling and Mansions — What Purchases Do Crypto Millionaires Make

91744 Total views 259 Total shares Listen to article (https://s3.coin

7:34
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Case 3:17-cv-06779-RS Document 187-15 Filed 01/09/19 Page 1 of 1

EXHIBIT J
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EXHIBIT K
 Case 3:17-cv-06779-RS Document 187-17 Filed 01/09/19 Page 2 of 2

From: "Kathleen Breitman" <[email protected]>

Sent: Fri, 10 Mar 2017 17: 19:24 +0000 (UTC)
To: "Andrew Moroz" <[email protected]>
Subject: QQ

Hey Andrew,
QQ: Have you decided if you'd like to invest in the crowdsale? No hard feelings if you aren't but I have a media
opportunity for you if you are.

Best,
Kathleen

Kathleen Breitman
[ Red acted ___]

DLS00007719
Case 3:17-cv-06779-RS Document 187-18 Filed 01/09/19 Page 1 of 3

EXHIBIT L
 Case 3:17-cv-06779-RS Document 187-18 Filed 01/09/19 Page 2 of 3

From: "Kathleen Breitman" <[email protected]>

Sent: Tue, 23 May 2017 15:31:27 +0000 (UTC)
To: "Nicholas Chirls" <[email protected]>
Subject: Re: May visit

Hi Nick, sorry for the radio silence... I must have missed your last email!
Our crowdfunding site has an offline mode which is considerably more secure than staying online or even going
through BitcoinSuisse. We recorded a video to walk people through this but are actually re-taping it in NY this
weekend. I will share that with our mailing list once complete but it should be done close enough to the
fundraising event that you can do a few dress rehearsals. We strongly recommend buying piecemeal and
confirming each transaction. You'll have 3 days for each discount phase (20%, 15%, etc.) so that's ample time to
get comfortable with the system and register a few transactions.

On Mon, May 22, 2017 at 5:57 AM, Nicholas Chirls <[email protected]>wrote:

Kathleen - Question for you - We have decided to consider an investment into the Tezos ICO via our fund,
likely $100k-$500k or so. For relatively large sizes... how are you expecting folks to transfer payment?
Thx!
Nick

On Wed, Apr 26, 2017 at 11 :28 AM, Nicholas Chirls <[email protected]>wrote:

hi! sorry for slow response, been a hectic few days. I'm planning to participate in the ICO, but I think it will
be personally (ie. smaller) rather than through Notation. Happy to meet, but also understand if its less
useful given that context and want to be respectful of your time. LMK either way!
Nick

On Sun, Apr 23, 2017 at 7:41 PM, Kathleen Breitman <[email protected]>wrote:

Hi Nick,
I'll be in town from May 3 - 6. I'm free many afternoons and the morning of May 5. I'd be delighted to
meet up for coffee or a meal while I'm in town if you're still weighing a Tezos purchase!

Best,
Kathleen

Kathleen Breitman
i Redacted
i.·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-j
i

Partner - Notation Capital

@nchirls

Partner - Notation Capital

@nchirls

DLS00007231
 Case 3:17-cv-06779-RS Document 187-18 Filed 01/09/19 Page 3 of 3

Kathleen Breitman
i Redacted i
i-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·

DLS00007232
Case 3:17-cv-06779-RS Document 187-19 Filed 01/09/19 Page 1 of 1

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 Case 3:17-cv-06779-RS Document 187-21 Filed 01/09/19 Page 2 of 4

M
Tezos Fundraiser scheduled for July 1
1 message

Tezos Foundation <[email protected]> Thu, Jun 15, 2017 at 7:44 AM

Reply-to: Tezos Foundation <[email protected]>
To: [email protected]

Tezos Fundraiser scheduled for July

1

This is a message from the Tezos foundation.

The Tezos Foundation is pleased to announce that the legal structure

of the Tezos Foundation, its fundraiser, and related contracts have
been approved by the Swiss Foundation Supervisory Authority.

With this regulatory stamp of approval, we are now excited to

announce the official start of the Tezos fundraiser on Saturday, July
1, 2017 at 6 am UTC. We chose this date to give everyone enough
time to complete their funding arrangements.

We believe it's important to do things right and protect our contributors

and users from risk, which is why we went beyond current industry
practice and waited to receive official approval before accepting
contributions. We expect this high level of care to serve our
technology, our community, and the world as we continue to build and
grow this essential infrastructure for a free and prosperous society.
 Case 3:17-cv-06779-RS Document 187-21 Filed 01/09/19 Page 3 of 4
For technical information on how to participate in the Tezos
fundraiser, please always refer exclusively to the Tezos website
at https://tezos.com

Contributions will open at https://tezos.com on July 1 at 6 am UTC. In

addition, we have approved our broker, Bitcoin Suisse, to offer its
customers participation in the Tezos fundraiser for a fee. Note that
only Bitcoin Suisse and no other service has been approved to do so,
and that using such a service requires you to trust the service provider
with your private keys.

If you would like to contribute, only do so through our own

website https://tezos.com once the fundraiser opens, or
through https://www.bitcoinsuisse.ch/tezos starting today.

No other websites are authorized to provide information on Tezos or

accept contributions to the Tezos fundraiser.

To stay updated with developments, sign up for the mailing list

at https://tezos.com.

The Tezos Foundation is extremely pleased with the fantastic

community that is starting to sprout around the Tezos project. The
interest in the Tezos fundraiser has been electrifying. It is an amazing
vote of confidence in decentralized governance and in the world class
team developing the project. That interest has been matched by
engineering development resulting in a testnet that has been operating
for several months already and a production version that is expected
to ship later this year.

Many thanks
Johann, Guido, Diego, and the Tezos Foundation team

Note: If you intend to participate through Bitcoin Suisse rather than

directly through https://tezos.com, bear in mind that funding
arrangements can take longer than expected - in some cases, two weeks
or longer. So if you want to ensure your participation, you should start
the process immediately.
Case 3:17-cv-06779-RS Document 187-21 Filed 01/09/19 Page 4 of 4
Find Out More

Want to change how you receive these emails?

You can update your preferences or unsubscribe from this list
 
Case 3:17-cv-06779-RS Document 187-22 Filed 01/09/19 Page 1 of 1

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6/6/2018 Case 3:17-cv-06779-RS Document
Tezos Stiftung –187-24 Filed 01/09/19
Update on Contributions to Date Page 2 of 3

contribution terms fundraiser faq tezos main site

HOME ARCHIVES CATEGORIES TAGS ATOM

Update on Contributions to Date

Posted on Wed 05 July 2017 in misc

When designing the contribution so ware, we made sure that all contributions to the Tezos
fundraiser are recorded on the Bitcoin and Ethereum blockchains, so there is no risk of
losing or forgetting any contributions, and so the fundraiser can be audited at a later time.

For convenience, we also created a counter that produces summaries of contributions on

the https://check.tezos.com website and a global counter at https://tezos.com. In the first
hour of the fundraiser, we experienced a corruption of a database we use to produce these
summaries, but the outage only prevented less than 1% of the contributors to
automatically confirm their transaction. We manually confirmed the contributions of these
contributors.

We worked directly with these contributors to explain the situation and include their
transaction confirmation in the database. Meanwhile, we carefully wrote and tested scripts
for checking the consistency of the database, both its inner consistency and its consistency
relative to the Bitcoin and Ethereum blockchains. Here is the result of a dry run on the
production database, a er 726 blocks (the 5th of July around 2PM UTC). These results are
consistent with a complete replay on a test database.

Missed UTXOs (unspent transaction outputs): 199

Missed deposits: 45
Global data a er fix:
Collected BTC: 48,768 (-4,565)
Collected ETH: 274,613 (+1,984)
Total allocated wallets: 21,755 (+348)
Changed wallets: 1,272
Added wallets: 200

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6/6/2018 Case 3:17-cv-06779-RS Document
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Update on Contributions to Date Page 3 of 3
In other words, once we run our cleanup scripts, the website counter will show 4,565 less
BTC and 1,984 more ETH.

Note that all transactions have been processed correctly on the blockchains
themselves, so the actual contributions are not a ected. Only our separate,
independent database that creates a summary of the results was temporarily a ected
during the first hour of the fundraiser and we’ve now produced a fix for the issue.

The number of wallets that had inaccurate summaries is 1,272. Of these, only 243 were
missing UTXOs or ETH deposits. For the other a ected wallets the listed contributions were
valid but the total number of allocated tezzies was buggy.

All missed UTXOS (except 4) occurred in the 8 first blocks of the crowdsale. The 4 remaining
missing UTXOs were randomly spread (level: 15, 331, 524, 575).

The errors that occurred during the 8 first blocks of the crowdsale resulted from two
mistakes:

• The 'o line' server was initially deployed with too little RAM, and the maintenance
script crashed a couple of times. This explains the missing UTXOs.
• While debugging these random crashes, we mistakenly (due to sleep deprivation at
the time) deleted some global counters. This explains the disparities between the
actual collected BTC/ETH and the amounts shown by the website counter.

We have no explanation yet for the four unregistered UTXOs that occurred later in the
crowdsale. But we suspect a bug either in the Bitcoin parsing library we rely on, or the
database library, or the way we use them. Anyway, we now have a robust consistency
checker, and can promptly detect and correct any missing UTXOs.

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6/6/2018 Case 3:17-cv-06779-RS Document 187-25
Tezos Stiftung Filedupdate
– September 01/09/19 Page 2 of 4

contribution terms fundraiser faq tezos main site

HOME ARCHIVES CATEGORIES TAGS ATOM

September update
Posted on Sat 30 September 2017 in misc

Dear Tezos Supporters

It has been a busy few weeks for the Tezos team, working on core development and
establishing long-term structures and processes. We are delighted to share with you our
progress over the past month.

Organizations
One of the primary goals of Tezos is to facilitate coordination among diverse, independent
parties. The governance of Tezos, as a project and a protocol, therefore, seeks to reflect this
same goal: creating a mechanism for coordination and iteration, while maintaining
decentralization.

In alignment with this philosophy, the mission of the Tezos Foundation is to foster the
development of the Tezos protocol, to support the creation of applications leveraging
Tezos, and to promote the broader goals of the project.

To execute on this vision, we intend to support the creation of a diverse set of actors
contributing to Tezos over the long term. We are working to build an ecosystem in which
individuals, startups, academic organizations, corporate entities, not-for-profits, public
sector players, and others work independently or collaboratively to build with and on the
Tezos platform.

As with any network, the critical question for Tezos' early days is how to bootstrap this
ecosystem.

https://www.tezos.ch/september-update.html#september-update 1/3
6/6/2018 Case 3:17-cv-06779-RS Document 187-25
Tezos Stiftung Filedupdate
– September 01/09/19 Page 3 of 4
To this end, the Tezos Foundation is establishing organizations to house teams working on
the core protocol, building out the developer experience, and cra ing products and
applications. The goal is for these organizations to serve as catalysts for the development of
a diverse, vibrant ecosystem. We look forward to sharing more on this front in the lead-up
to network launch.

Core Development Team

As a part of this initiative, we are on the lookout for talented engineers interested in joining
the developer team for the core protocol. We are seeking several types of profiles, but
especially PhDs or postdocs with a strong interest in OCaml and/or blockchains.
Thematically, our development team focuses on a range of problems including peer-to-peer
networking, programming language design, and cryptographic algorithms.

While core development will eventually be geographically distributed, this team is currently
based in Paris. Compensation is competitive.

If you meet the above requirements and are interested, please send your CV to
[email protected].

Technical Development
The Tezos team has been heads down this past month on core development. Over the last
several weeks, this has primarily taken the form of a variety of security dives into the
codebase and analysis of the consensus algorithm. This is a preliminary step to conducting
in-depth external audits. So far, our review has broadly confirmed our approach to design
and architecture. As this process continues, we will have a better sense of our roadmap over
the coming months that we look forward to sharing.

The Validator Program

For the Tezos ecosystem to thrive, the Tezos community needs to build a strong and diverse
validator network. Tezos' proof-of-stake implementation allows for token holders to
participate in the network by creating new blocks. Participation is rewarded with a
distribution of new tokens at the annual inflation rate, but is also costly in that participants
will need to run an always-on, security-critical internet service. So we expect that many
token holders will choose to delegate this function.

To assist token holders with this, we are working to ensure that the network will launch
with a set of validators that accept delegation of stake. It is in the interest of the network for
the Foundation to ensure that these validators have built the best systems to secure the
network. We have planned a number of resources for prospective validators.

We have recruited a respected leader in the blockchain space to lead our Validator program.
Expect an announcement from us soon with details on how to participate.

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6/6/2018 Case 3:17-cv-06779-RS Document 187-25
Tezos Stiftung Filedupdate
– September 01/09/19 Page 4 of 4
Note that this program is geared toward those who have the infrastructural setup and
personnel in place to support such operations at scale. We anticipate this will end up being
institutions and initiatives with experience and expertise in operating and maintaining such
systems.

Prior to network launch, we will provide information to token holders, explaining their
options and how to participate via delegation.

Regulatory Oversight
One of the reasons we chose to base Tezos in Switzerland is that Switzerland o ers a unique
combination of a business-friendly approach balanced with strong regulatory oversight.
The Swiss have established a matchless reputation for stability and the rule of law, and our
choice of jurisdiction has served the Foundation well in its young existence.

We chose the structure of a Swiss foundation because of its additional strong legal
protections that provide peace of mind to contributors. As a Swiss foundation active in the
cryptofinance space, the Tezos Foundation is subject to two Swiss regulatory authorities —
the Swiss Financial Market Supervisory Authority (Finma) and the Swiss Foundation
Supervisory Authority. From the beginning, we have been working closely with the
authorities to ensure compliance with regulatory requirements. This is an ongoing process.

Cryptofinance is a new and evolving technology domain that requires ongoing supervision
and evaluation by regulators for how best to serve the twin purposes of fostering innovation
while protecting against abuses. The Finma is currently reviewing how tokens and
cryptocurrencies fit into their regulatory framework. The Tezos Foundation welcomes long-
term clarity and guidance from the authorities on this topic, which will benefit the
development of blockchain technology in general and the Tezos ecosystem in particular.

Fundraiser Refunds
A few weeks ago, we announced our intention of o ering refund options to those who made
late or sub-threshold contributions, and remain committed to doing so in a way that is both
technically secure and legally compliant. We are doing this as a discretionary measure of
goodwill towards our supporters, even though we are not legally obliged to do so.

Our proposal to refund those who made late and sub-threshold contributions is currently
under review as part of the Finma’s broad review of best practices for the cryptofinance
industry. We will announce the outcome of this process as soon as it has been completed.
Thank you for your patience as we work to support the interests of the entire Tezos
community.

As always, please reach out with any questions. We are available at [email protected] and
are happy to help.

©
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Case 3:17-cv-06779-RS Document 187-26 Filed 01/09/19 Page 1 of 1

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EXHIBIT S
 Case 3:17-cv-06779-RS Document 187-28 Filed 01/09/19 Page 2 of 2

From: "Arthur Breitman" <[email protected]>

Sent: Sat, 1 Jul 2017 16: 17:21 +0000 (UTC)
To: "Bruce Seymour" <[email protected]>
Subject: Re: 2nd Transfer Issue

Ah yes, that's weird. We had some issue with the DB early in the morning and we are still trying to reconstruct
the missing bit. The good news is that your transactions are clearly on the Ethereum blockchain so we'll be able
to get it in. I'm really sorry for the inconvenience but rest assured that both contributions will be reflected once
we manage to resync the db with the Ethereum blockchain.

On Sat, Jul 1, 2017 at 9:02 AM Bruce Seymour <[email protected]> wrote:

Thanks Arthur,
. Public. Key Hash ·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·
i Redacted
i-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-j
i
Best,
Bruce

On Jul 1, 2017, at 12:00 PM, Arthur Breitman <[email protected]> wrote:

Sorry about what, I can try to help, what's your tzl public key hash?

On Sat, Jul 1, 2017 at 8:58 AM Bruce Seymour <[email protected]> wrote:

Hello Tezos Team, Foremost, congratulations on the successful launch! I woke up at 2am to
participate early.

Over 9 hours ago, I transfered an initial 10 ETH to the crowdsale contract followed by a second 20
ETH. https://check.tezos.com shows only the 10 ETH balance. Both transactions have
verified. Below are the TX ID'S. Can you please advise what's happened?

Best,
Bruce Seymour

.FlRS.I.TRAN.SMISBI.ON._IXID.~.---·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-,
I Redacted
i-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·
!

____ SECOND.TR.AN.S.M.I.S.S.I.ON._TX.TD.~.---·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-··

!-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·Red acted ·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-· I

FROM:
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L-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·.
:
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TQ·
i Redacted
L·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·!
i

DLS00005061
Case 3:17-cv-06779-RS Document 187-29 Filed 01/09/19 Page 1 of 2

EXHIBIT T
 Case 3:17-cv-06779-RS Document 187-29 Filed 01/09/19 Page 2 of 2
From: "Arthur Breitman" <[email protected]>
Sent: Mon, 3 Jul 2017 04:06:36 +0000 (UTC)
To: "[email protected]" <alain.mebsout@ocamlpro
.com>; "benjamin canou" <[email protected]
>
Subject: Fwd: Please tezos crowdfunding help.

One more user with missing Ethereum transaction

---------- Forwarded message---------

From: Arthur Breitman <[email protected]>
Date: Sun, Jul 2, 2017 at 9:05 PM
Subject: Re: Please tezos crowdfunding help.
To: 'EJ !?-El <[email protected]>

Hello,

We had an issue with the db early on and are working on restoring it. As long as your transactions appear on the blockchain, they are safe. The outage affected only a couple hundred
people out of tens of thousands, but unfortunately you are one of them, I apologize for the inconvenience.

Could you send me your public key hash and we'll look into your contribution. Once again, rest assured that this is a display issue, the Ethereum blockchain is the authoritative record for
your contribution.

Best,
Arthur

On Sun, Jul 2, 2017 at 8:51 PM 'EJ !?-El <[email protected]> wrote:

Dear

My token is not being v1ewed at tezos fundraiser(check tezos com)

total, O.IETH. IETH

1 ETH can be

My wallet address is
l·-·-·-·-·-·-·-·-·-·-·-·-· Redacted ·-·-·-·-·-·-·-·-·-·-·-·-l

_Please confirm. that l_will send.the transaction. information. tosiether. ·-·-·-·-·-·-·-·,

i Redacted
L--·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-··
!

My public key hash is sent if necessary.

Thank you.

[i https://ci4.googleusercontent.com/proxyi_ i
~ https://ci3.googleusercontent.com
/proxyt !

DLS00005395
Case 3:17-cv-06779-RS Document 187-30 Filed 01/09/19 Page 1 of 11

EXHIBIT U
Tezos Contribution and XTZ Allocation Terms and Explanatory Notes

1. Principles

1. The following Terms (“Terms”) govern the contribution procedure (“Contributions” collec-
tively, and “Contribution” individually) to the Tezos Foundation (“TEZOS”) by contributors
(“Contributors” collectively, and “Contributor” individually) and the subsequent genesis allo-
cation of transferable cryptographic blockchain-based digital information units called tez
(“XTZ”) to Contributors.

2. TEZOS promotes and develops new technologies and applications, especially in the fields
of new open and decentralized software architectures. A dominating, but not exclusive focus
is set on the promotion and development of the so-called Tezos protocol and the related
technologies, as well as the promotion and support of applications using the Tezos protocol.
TEZOS will mainly promote the development of software technology (“the Client”) that can
handle different sorts of blockchain algorithms and can be used to design a blockchain,
which can amend itself to perform new functionalities over time (“Tezos Network”). Opera-
tion of the Tezos Network involves transferable cryptographic blockchain-based digital in-
formation units called tez (XTZ). XTZ is a token that allows the holder to deploy and run
software code, vote on network governance issues and support operation of the network
through “block creation and validation”. TEZOS will have a veto power regarding all votes
cast by the XTZ holders for one year following the launch of the Tezos Network.

3. When TEZOS judges that the Client has been sufficiently developed to allow the Tezos
Network to be launched, TEZOS will issue a public announcement recommending what
initial state (“Genesis State”) it should have. The Genesis State will include allocations of
XTZ that are essential for the Tezos Network to operate. The recommended allocations of
XTZ will reflect early contributions made towards the development of the network, and Con-
tributions made to support TEZOS. However, since the Tezos Network will be operated by
an independent community of participants around the world using The Client, the commu-
nity has discretion to adopt or not to adopt the recommendation. Therefore, TEZOS cannot
guarantee to any party that they will have an initial allocation of XTZ, because this depends
upon the discretion of the community. The Contributor understands and accepts that
TEZOS cannot guarantee that Contributors shall have any allocation of XTZ when the
TEZOS Network is created.

4. The Contributor understands and accepts that while the individuals and entities, including
involved entities assigned to this task, will make reasonable efforts to develop and complete
the Tezos Network, it is possible that such development may fail and that the Tezos
Network and any XTZ will not be created, become useless and/or valueless due to
technical, commercial, regulatory or any other reasons (see also section 7 regarding
Risks).

5. The Contributor is also aware of the risk that even if all or parts of the Tezos Network are
successfully developed and released in full or in parts, due to a lack of public interest, the
Tezos Network could be fully or partially abandoned, remain commercially unsuccessful, or
shut down for lack of interest or other reasons. The Contributor therefore understands
and accepts that the Contribution to TEZOS, and/or the allocation, use and ownership
of XTZ, carries significant financial, regulatory and/or reputational risks (including
the complete loss of value (if any) of XTZ and attributed features).

1 | 10
6. By contributing to TEZOS, the Contributor expressly agrees to all of the terms and condi-
tions set forth in the “Contribution Software System” or “CSS”, existing on the blockchain at
the addresses published before the start of the Contribution Period at: https://crowdfund.te-
zos.com, and in this document (together the “Terms”). The Contributor further confirms to
have carefully reviewed the Terms and fully understands the risks and costs of making a
Contribution to TEZOS.

7. The Contributor also understands and accepts that - as the issuance of allocation proposals
of XTZ is software based - the functions, terms and conditions applicable thereto are set
forth in the CSS. To the extent the terms contained herein or in any other document or
communication contradict the ones set forth in the CSS, the terms of the CSS prevail. Fur-
thermore, no other document or communication may modify or add any additional obliga-
tions or covenants to TEZOS beyond those set forth in the CSS or in this document.

8. This document does not constitute a prospectus of any sort, is not a solicitation for invest-
ment and does not pertain in any way to an offering of securities in any jurisdiction. It is a
description of the functionality of a software-based fundraising campaign.

9. By donating to TEZOS, and/or by receiving, using and holding XTZ, no form of partnership,
joint venture or any similar relationship between the Contributors, TEZOS and/or other in-
dividuals or entities involved with the Tezos Network is created.

2. Representations and Warranties of Contributor

10. The Contributor understands and accepts that XTZ do not represent or constitute any
ownership right or stake, share or security or equivalent right in or relating to TEZOS, the
Client, the Tezos Network and/or any software, any public or private company, corpora-
tion, entity or property.

11. By donating to TEZOS, and/or by receiving, using and holding XTZ, the Contributor rep-
resents and warrants that:

a. the Contributor deeply understands the functionality, usage, storage, transmis-

sion mechanisms and intricacies associated with cryptographic tokens, such
as bitcoin (BTC) and ether (ETH), and blockchain-based software systems and
intends to use XTZ to participate in network governance, mining activities or
connecting private networks;

b. the Contributor is legally permitted to receive and hold and make use of XTZ in
the Contributor’s jurisdiction;

c. the Contributor is legally permitted to receive software and contribute to TE-

ZOS;

d. the Contributor is of a sufficient age to legally obtain XTZ;

e. the Contributor will take sole responsibility for any restrictions and risks asso-
ciated with receiving and holding XTZ;

f. the Contributor is not contributing to TEZOS to obtain XTZ for the purpose of
speculative investment;

2 | 10
 g. the Contributor is not obtaining or using XTZ for any illegal purposes;

h. the Contributor waives the right to participate in a class action lawsuit or a

classwide arbitration against any entity or individual involved with the Contribu-
tion to TEZOS, with the allocation of XTZ and with the operation of the Tezos
Network;

i. the Contributor understands the Contribution to TEZOS and the allocation of

XTZ do not involve the purchase of shares or any equivalent in any existing or
future public or private company, corporation or other entity in any jurisdiction;

j. the Contributor understands and expressly accepts that there is no warranty

whatsoever on XTZ and/or the success of the Tezos Network, expressed or
implied, to the extent permitted by law, and that XTZ is created and obtained
at the sole risk of the Contributor on an “as is” and “under development” basis
and without, to the extent permitted by law, any warranties of any kind, includ-
ing, but not limited to, warranties of title or implied warranties, merchantability
or fitness for a particular purpose;

k. the Contributor understands and accepts that the Contribution Software and/or
the CSS and/or underlying protocols may either delay and/or not execute a
Contribution due to the overall Contribution volume, mining attacks and similar
events;

l. the Contributor understands with regard to XTZ no market liquidity may be

guaranteed and that the value of XTZ over time (if any) may experience ex-
treme volatility or depreciate in full;

m. the Contributor understands that the Contributor bears the sole responsibility
for determining if the Contribution to TEZOS, the allocation, use or ownership
of XTZ, the potential appreciation or depreciation in the value of XTZ over time
(if any), the sale and purchase of XTZ and/or any other action or transaction
related to the Tezos Network have tax implications; by contributing to TEZOS,
and/or by receiving, using or holding XTZ, and to the extent permitted by law,
the Contributor agrees not to hold any associated party (including developers,
auditors, contractors or founders) liable for any tax liability associated with or
arising from the Contribution to TEZOS, the allocation, use or ownership of XTZ
or any other action or transaction related to the Tezos Network;

n. the Contributor accepts any and all risks, costs and damages associated with
Contributions from any US persons or US entities related in any way to the
Contributor.

3. TEZOS Contribution Procedure

3.1. Qualification

12. Any contribution made to TEZOS during the Contribution Period as described below is
qualified as a non-refundable donation, except a respective portion of a non-refundable

3 | 10
 administration support fee of USD 150,000 in total, calculated using the exchange rates
as reported by http://www.coindesk.com/price/ at the end of the Contribution Period.

3.2. Contribution Period

13. The contribution period starts on Saturday, July 1, 2017 at 6 am UTC and will last for 2000
bitcoin blocks, which should correspond approximately to 14 days (“Contribution Period”).

14. Contributions can be made using ether (ETH) or bitcoin (BTC).

15. The minimal Contribution amount per User will be 0.1 BTC. If a User makes a contribution
of less than 0.1 BTC, this will still be counted as a Contribution and no refund is possible.
However, any recommendation for XTZ allocation (as set forth below, see section 4) in
such a case, is fully at the discretion of the Foundation, and cannot be expected. The
ETH amounts will be calculated according to the mechanism as defined in paragraph 25.

16. There is no cap regarding possible Contributions.

3.3. Contribution Software and Contribution Procedure

17. Contributions in ETH or BTC must be made by using the contribution software (“Contri-
bution Software”) provided by TEZOS. The Contribution Software creates a key pair for
every Contributor (“Key Pair”), consisting of the private key (encrypted with a password
provided by the Contributor) and a public key. The Contributor will have to download and
store a copy of the Key Pair.

18. Within the Contribution Software, the Contributor may choose, whether he wants to con-
tribute in ETH or in BTC. Generally, a Contribution in BTC is recommended. Any ETH or
BTC Contribution to TEZOS without using the Contribution Software will not lead to a
recommendation for XTZ allocation as set forth below (see section 4). TEZOS is aware
that Users may be able to participate via exchangers and other intermediaries. The use
of such exchangers or intermediaries is solely at the Users’ own risk and TEZOS accepts
no responsibility for their use.

19. If Contributor contributes BTC, the Contribution Software will derive a unique BTC ad-
dress associated with the User’s newly generated public key (“BTC Contribution Ad-
dress”). This will be a P2SH multisignature address, which starts with an OP_Pushdata
operation containing the hash of the public key of the Contributor. Contributions to BTC
Contribution Addresses must be linked to this hash, otherwise no recommendation for an
allocation to the Contributor may be made. The amount of BTC, the date of the Contribu-
tion and the public key of the Contributor will be recorded on the Bitcoin blockchain and
later extracted by the CSS and used for the recommendation of allocation of XTZ.

20. If Contributor contributes ETH, he sends the Contribution to an Ethereum contract that is
a part of the CSS (“Contribution ETH Contract”). The Contributor sends a hash of his
Tezos public key generated by the CSS. The value of ETH Contributions will be recorded
according to paragraph 25. The information regarding the Contributions to the Contribu-
tion ETH Contract, specifically source, amount, value and the hash of the public key will
be extracted by the CSS and used for the recommendation of allocation of XTZ. The
Contributor has to ensure, not to send the wrong hash of the Tezos public key. Failure to

4 | 10
 do so may have the result, that Contributor will not get a recommendation of XTZ alloca-
tion.

21. Contributor will have the possibility to check via a link at https://crowdfund.tezos.com, if
all information has been transferred properly.

22. During the Contribution Period, the Tezos team may, for security reasons, pause the con-
tribution function until the security issues have been resolved.

3.4. Recorded Information

23. Contributions made to TEZOS during the Contribution Period will be recorded on the BTC
blockchain (BTC Contributions) or on the ETH blockchain (ETH Contributions) as contri-
bution information (“Contribution Information”).

24. Upon a successful Contribution having been made, the Contribution Information will be
recorded, reflecting the quantity of XTZ that TEZOS shall propose to allocate to the Con-
tributor in proportion to his Contribution. Such allocation shall be proposed in accordance
with the mechanism set forth below (see section 4).

25. The CSS will record the equivalent value of Contributions in BTC. The BTC equivalent for
ETH shall be calculated using the historical exchange rate of BTC/ETH at approximately
the time of the ETH Contribution, calculated by TEZOS based on data provided by Polo-
niex, Kraken and Gdax, or three other major exchanges chosen at the discretion of TE-
ZOS (if required because of technical difficulties). These calculations will be made on a
best effort basis by TEZOS.

3.5. Bonus System

26. When Contributions are recorded by the CSS, a bonus system is applied for the purpose
of XTZ allocation (“Contribution Bonus”). The basis of the bonus system is the conversion
of the Contribution Period into bitcoin blocks (“Blocks”). The Contribution Bonus will be
granted for Contributors, who contribute early in the Contribution Period and decreases
from 20% to 0% over a period of (2000) Blocks as follows:

a. Blocks 0 to 399 (inclusive): Contribution Bonus of 20%;

b. Blocks 400 to 799 (inclusive): Contribution Bonus of 15%;

c. Blocks 800 to 1199 (inclusive): Contribution Bonus of 10%;

d. Blocks 1200 to 1599 (inclusive): Contribution Bonus of 5%;

e. Blocks 1599 to 1999 (inclusive): Contribution Bonus of 0%;

4. XTZ Allocation Proposal

27. When TEZOS judges in its sole discretion both that the Client is sufficiently developed to
launch the TEZOS Network and that it is an appropriate time to launch the Tezos Network,
it will issue a public announcement recommending what the Genesis State should be. It
shall recommend the allocations of XTZ in the Genesis State as set forth below.

5 | 10
28. For every Contribution of BTC and/or ETH, as recorded by the Contribution Information,
TEZOS will recommend the allocation of XTZ in the Genesis Block as follows:

One XTZ shall be allocated for the amount (or equivalent according to paragraph 25) of
0.0002 BTC. Additionally, there shall be allocated the number of XTZ, according to the
Contribution Bonus system (see paragraph 26), if such a Contribution Bonus applies.

29. It remains in the community’s discretion to adopt or not to adopt the Genesis State that
TEZOS recommends. TEZOS cannot guarantee to Contributors that they shall have any
allocation and/or creation of XTZ as set forth in these terms.

30. TEZOS shall recommend the allocations of XTZ in the Genesis State according to the
principles set forth below and under section 3.5 above:

▪ Pool A: Consists of an open amount of XTZ that shall be allocated to Contributors who
made Contributions to TEZOS during the Contribution Period.

For Pool A, TEZOS will recommend XTZ to be created in the Genesis State and allo-
cated to the Contributors according to their respective Contributions as recorded in the
Contribution Information and reflecting the individual Contribution Bonus granted ac-
cording to paragraph 26.

▪ Pool B: Consists of the amount of XTZ equivalent to USD 893’200.77, plus a Contri-
bution Bonus of 20% at the start of the Contribution Period. The exchange rate of
BTC/USD will be calculated based on the closing rate on the last day before the start
of the Contribution Period, as reported by http://www.coindesk.com/price/. The Gene-
sis State shall allocate Pool B to early backers, who have contributed in advance of
the Contribution Period (“Early Backers”).

For Pool B, TEZOS will recommend the individual amounts of XTZ, which shall be
created and allocated to Early Backers in proportion to their Contributions.

▪ Pool C: Consists of the amount of XTZ equivalent to USD 422’000.00, plus a Contri-
bution Bonus of 20% at the start of the Contribution Period. The exchange rate of
BTC/USD will be calculated based on the closing rate on the last day before the start
of the Contribution Period, as reported by http://www.coindesk.com/price/. The Gene-
sis State shall allocate Pool C to Advisors, Management, Founders and other persons
who have supported the Tezos Project in an early stage.

▪ Pool D: 1/8 of the amount of XTZ of Pool A, B and C combined (approx. 10% of the
total amount of XTZ) shall be allocated by the Genesis State to TEZOS itself. These
XTZ will be used at the complete discretion of TEZOS for the development and mainte-
nance of the Tezos Project and/or the Tezos Network. The XTZ of Pool D shall vest
over a period of 4 years.

▪ Pool E: 1/8 of the amount of XTZ of Pool A, B and C combined (approx. 10% of the
total amount of XTZ) shall be allocated by the Genesis State to TEZOS and shall be
used to finance the purchase of the shares of Dynamic Ledger Solutions Inc. by TE-
ZOS. If this purchase effectively takes place, the XTZ of Pool E will transferred to the
sellers of Dynamic Ledger Solutions over a duration of 4 years. Any XTZ of Pool E,
which have not been used for the purchase of the shares of Dynamic Ledger Solutions

6 | 10
 Inc., may be used by TEZOS at its own discretion to further develop and maintain the
Tezos Network and the Tezos Project.

31. Contributors will have to download encrypted wallets (“XTZ Wallet”), which will be neces-
sary to claim XTZ as soon as the Tezos Network has been launched. Technically, the
Contributor will have to import his XTZ Wallet into the Tezos Client after the Launch of the
Tezos Network, in order to claim his XTZ. The XTZ will then be allocated to this wallet
address. Contributor hereby agrees and accepts, that he will not gain access to his XTZ,
if he does not download the respective XTZ Wallet, or loses the password and/or private
key or fails to secure the XTZ Wallet against unauthorized access. In any such case,
neither TEZOS, nor any other of the involved persons will be able to restore the infor-
mation and the XTZ will be irretrievably lost.

32. The Contributor understands and accepts, that the Tezos Network will create new XTZ as
a reward for “block creation and validation”. These rewards will create nominal inflation of
XTZ and may therefore lead to a dilution of the overall amount of XTZ.

5. TEZOS Project Execution

33. It remains at TEZOS' sole discretion to decide how to use the received Contributions to
develop and execute the Tezos Project. A part of the Contributions will be used to pur-
chase all shares of Dynamic Ledger Solutions, Inc. This part (which is independent from
Pool E) maximally amounts to 8.5% of the Contributions made. If this part has not been
used (partially or entirely) for the purchase of the shares of Dynamic Ledger Solutions
Inc., it may be used by TEZOS at its own discretion to further develop and maintain the
Tezos Network and the Tezos Project.

34. The Contributor understands and accepts that he does not have any influence over the
governance of TEZOS.

35. TEZOS has the right to engage subcontractors to perform some or all of the development
and execution of the Tezos Project.

36. The Contributor understands and accepts that the Tezos Network is undergoing substan-
tial development which may involve significant conceptual, technical and commercial
changes before release.

6. Audit of the Contribution Software and the CSS

37. The Contribution Software and the CSS have been, on a reasonable effort basis, audited
and approved by technical experts with regard to their functionality. The technical experts
have further confirmed that the Contribution Software and the CSS have, with regard to
both accuracy and security, been programmed according to the current state of the art.

38. However, the Contributor understands and accepts that the used software and technology
is still in an early development stage and its application is of an experimental nature which
carries significant operational, technological, financial, regulatory and reputational risks.
Accordingly, while the conducted audit raises the level of security and accuracy, the Con-
tributor understands and accepts that the audit does not amount to any form of warranty,
including direct or indirect warranties that the Contribution Software and the CSS are fit

7 | 10
 for a particular purpose or do not contain any weaknesses, vulnerabilities or bugs which
could cause, inter alia, the complete loss of BTC, ETH and/or XTZ.

7. Risks

39. The Contributor understands and accepts the risks in connection with the Contribution to
TEZOS, and/or with the allocation, use and ownership of XTZ. In particular, but without
being limited to these examples, the Contributor understands the inherent risks set forth
above and hereinafter:

▪ Risk of software weaknesses: The Contributor understands and accepts that the un-
derlying software application and software platform, the Tezos Network, the Client, the
Contribution Software, the CSS and other involved software and technology and tech-
nical concepts and theories are still in an early development stage and unproven, that
there is no warranty that the process for receipt, use and ownership of XTZ will be
uninterrupted or error-free and that there is an inherent risk that the software and re-
lated technologies and theories could contain weaknesses, vulnerabilities or bugs
causing, inter alia, the complete loss of XTZ.

▪ Regulatory risk: The Contributor understands and accepts that blockchain technolo-
gies allow new forms of interaction and that it is possible that certain jurisdictions will
apply existing regulations on, or introduce new regulations addressing, blockchain
technology-based applications, which may be contrary to the current setup of the CSS
and which may, inter alia, result in substantial modifications of the Tezos Network, in-
cluding its termination and the loss of XTZ for the Contributor. Further, the Contributor
accepts and bears the risks with respect to US regulations that may regulate Contribu-
tion and/or potential custody of XTZ.

▪ Risk of abandonment / lack of success: The Contributor understands and accepts

that the allocation of XTZ and the development of the Tezos Network may be aban-
doned for a number of reasons, including lack of interest from industry and/or the pub-
lic, lack of funding, lack of commercial success or prospects (e.g. caused by competing
projects). The Contributor therefore understands that there is no assurance that, even
if the Tezos Network is partially or fully developed and launched, the Contributor will
receive any functionality through the XTZ held by him.

▪ Risk associated with other applications: The Contributor understands and accepts
that the Tezos Network may give rise to other, alternative projects, promoted by unaf-
filiated third parties, under which XTZ will have no intrinsic value.

▪ Risk of loss of private key: XTZ may only be accessed using a private key that cor-
responds to the address at which it is stored. The Contributor understands and accepts
that if his private key, or the “seed” used to create his address and corresponding pri-
vate key is lost or stolen, the obtained XTZ associated with the Contributor’s address
will be unrecoverable and will be permanently lost.

▪ Risk of theft: The Contributor understands and accepts that the underlying software
application and software platform, the Tezos Network, the Client, the Contribution Soft-
ware, the CSS, other involved software, other technology components and/or platforms
may be exposed to attacks by hackers or other individuals that could result in theft or

8 | 10
 loss of XTZ, or the theft or loss of Contributions, impacting the ability to develop and
launch the Tezos Network.

▪ Risk of blockchain mining attacks: The Contributor understands and accepts that,
as with other public blockchain-based systems that depend on independent miners,
the Tezos Network may be susceptible to mining attacks including but not limited to
double-spend attacks, majority mining power attacks, “selfish-mining” attacks, and
race condition attacks. Any successful attacks present a risk to the Tezos Network,
expected proper execution and sequencing of XTZ transactions, and expected proper
execution and sequencing of software computations.

▪ Risk of governance attacks and failure: The Contributor understands and accepts
that the Tezos Network uses an in-built decentralized governance system (“Govern-
ance System”). It is possible that the Governance System adopts proposals that have
an adverse effect on the useful functioning of the Tezos Network and/or the value of
XTZ. If the Governance System is attacked, or becomes controlled either directly or
indirectly by some party or parties that make unwise decisions, or the community gen-
erally makes unwise decisions, the value of XTZ held by a Contributor might be greatly
reduced or even permanently lost.

8. Taxation

40. The Contributor bears the sole responsibility for determining if his Contribution to TEZOS,
the allocation, use or ownership of XTZ, the potential appreciation or depreciation in the
value of XTZ over time (if any), the sale and purchase of XTZ and/or any other action or
transaction related to the Tezos Network have tax implications for him.

41. By donating to TEZOS, and/or by receiving, using or holding XTZ, and to the extent per-
mitted by law, the Contributor agrees not to hold any third party (including developers,
auditors, contractors or founders) liable for any tax liability associated with or arising from
the Contribution to TEZOS, the allocation, use or ownership of XTZ or any other action or
transaction related to the Tezos Network.

9. No Liability

42. The Contributor acknowledges and agrees that, to the fullest extent permitted by any ap-
plicable law, the Contributor will not hold TEZOS, any developers, auditors, contractors
or founders and/or the Tezos Network liable for any and all damages or injury whatsoever
caused by or related to the use of, or the inability to use, the Contribution Software, the
CSS, the XTZ or the Tezos Network under any cause or action whatsoever of any kind in
any jurisdiction, including, without limitation, actions for breach of warranty, breach of con-
tract or tort (including negligence) and that developers, auditors, contractors or founders
of the Contribution Software, the CSS, the XTZ or the Tezos Network shall not be liable
for any indirect, incidental, special, exemplary or consequential damages, including for
loss of profits, goodwill or data, in any way whatsoever arising out of the use of, or the
inability to use of the Contribution Software, the CSS, the XTZ or the Tezos Network.

43. The Contributor further specifically acknowledges that TEZOS and developers, auditors,
contractors or founders of the Contribution Software, the CSS, the XTZ or the Tezos Net-
work are not liable, and the Contributor agrees not to seek to hold them liable, for the

9 | 10
 conduct of third parties, including other creators of XTZ, and that the risk of creating,
holding and using XTZ rests entirely with the Contributor.

44. By receiving, holding or using XTZ, and to the extent permitted by law, the Contributor
agrees not to hold any third party (including, without limitation, TEZOS, developers, audi-
tors, contractors or founders) liable for any regulatory implications or liability associated
with or arising from the allocation, ownership or use of XTZ or any other action or trans-
action related to the Tezos Network.

10. Miscellaneous

45. The Contributor agrees that if any portion of these Terms is found illegal or unenforceable,
in whole or in part, such provision shall, as to such jurisdiction, be ineffective solely to the
extent of such determination of invalidity or unenforceability without affecting the validity
or enforceability thereof in any other manner or jurisdiction and without affecting the re-
maining provisions of the Terms, which shall continue to be in full force and effect.

46. The Contribution Software and the Client are located in Alderney. Consequently, the con-
tribution procedure, the XTZ creation and XTZ allocation is considered to be executed in
Alderney.

47. The Terms govern the Contributions to TEZOS, and the allocation, use and holding of
XTZ and supersede any public statements about the launch of Tezos Network and/or the
XTZ made by anyone in the past, present and future.

48. The applicable law is Swiss law. Any dispute arising out of or in connection with the crea-
tion of the XTZ and the development and execution of the Tezos Network shall be exclu-
sively and finally settled by the ordinary courts of Zug, Switzerland.

10 | 10
Case 3:17-cv-06779-RS Document 187-31 Filed 01/09/19 Page 1 of 4

EXHIBIT V
 TzScan: the Tezos Block Explorer OCamlPro
OC,ml
Case 3:17-cv-06779-RS Document 187-31 Filedby01/09/19
Dll!II
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ork?r=50&state=all
Case 3:17-cv-06779-RS Document 187-32 Filed 01/09/19 Page 1 of 1

EXHIBIT W
FILED UNDER SEAL
Case 3:17-cv-06779-RS Document 187-34 Filed 01/09/19 Page 1 of 4

EXHIBIT X
 Case 3:17-cv-06779-RS Document 187-34 Filed 01/09/19 Page 2 of 4

THE SUPERIOR COURT OF CALIFORNIA

COUNTY OF SAN FRANCISCO

MINUTES

Date entered: December 19, 2018 Department: 305

COORDINATION PROCEEDING
SPECIAL TITLE [RULE 1550(b)] Judicial Council Coordination
Proceeding No.: CJC-18-004978
TEZOS JCO CASES

Nature of Cause: Case Management Conference

Present:

Judge: MARYE. WlSS Clerk: SEAN KANE

Reporter: NONE Bailiff: NONE

APPEARANCES:
Jessica Valenzuela Santamaria
Danielle Smith
David Houska
HAGENS BERMAN SOBOL SHAPIRO LLP
COOLEY LLP
715 Hearst Avenue, Suite 202
317 5 Hanover Street
Berkeley, CA 94710
Palo AHo, CA 94304-1130
Tel: 510-725-3000
Tel: 650-843-5000
for Trigon Trading Pty. ltd
.for Dynamic LedgerSolutions. Inc.
Lucas F. Olts
Christopher L. Wanger
ROBBINS GELLER RUDMAN & DOWD LLP
MANATT, PHELPS & PHILLIPS, LLP
655 West Broadway, Suite I 900
One Embarcadero Center
San Diego, CA 92101
301h Floor
Tel: 619-231-1058
San Francisco, CA 94111
Tel: 415-291-7400
for Andrew Baker
.for Timothy C. Draper and Draper Associates V
Crypto LLC
Case No.: CJC-18-004978
Case Title: TEZOS ICO CASES
Date: December 19, 2018
Old Form: MCOOIOOO -I - Form: COO I 00 I
 Case 3:17-cv-06779-RS Document 187-34 Filed 01/09/19 Page 3 of 4

The above-entitled coordination proceeding comes on calendar having been set for hearing an
Case Management Conference. Court personnel and counsel for parties are present as listed
above.

The Court and counsel discuss the issues of neither a protective order nor an ESI protocol having
been put in place for this coordination proceeding yet, and the disagreements amongst the parties
thereon.

The Court and counsel discu. s the status of the related federal action. The Court requests
counsel provide the Court with copies of the orders Judge Seeborg issues in the federal action.
Counsel inform the Court that a motion to quash the deposition subpoena of plaintiff Mr. Anvari
has been denied by Judge Seeborg and that Mr. Anvari's deposition is now proceeding. Counsel
indicate there is an issue in the federal action of a new lead plaintiff being proposed.

The Court and counsel discuss Trigon Trading's request for publication of service regarding the
Tezos Foundation and the Breitmans. The Court indicates that Trigon Trading must either effect
service through the Hague Convention if necessary or demonstrate publication of service is
permitted.

The Court indicates that in order to move this coordination proceeding forward, the Court intends
to lift the stay on discovery. The Court indicates, however, that defendants will not be required lo
respond to any prior discovery requests or forthcoming discovery requests until a protective order
is first put in place. The Court indicates that if the parties are not able to agree on a protective
order, a party will need to bring forth a motion for protective order.

The Court encourages the parties to develop a numbering system for documents at the outset of
discovery and to stick with that numbering system throughout the taking of depositions.

The Court indicates that an ES! protocol needs to be put in place for this coordination proceeding
and that if the parties are not able to agree on a protocol, a party will need to bring forth a motion
on the issue.

The Court indicates that there appears to be ongoing maneuvering in the federal action and it
remains unclear at this time who the lead plaintiff in the federal action will be. As such, the
Court indicates it sees no reason why this coordination proceeding should not go forward.

The Cou11 and counsel possible motions to stay being brought by defendants. The Court indicates
that defendants may do so but that plaintiffs arc now permitted to serve discovery requests.

With the agreement of counsel, the Court sets the next CMC in this coordination proceeding for
February 15, 2019 at 2:30 p.m. The Court instructs the parties to submit an updated joint CMC
statement three court days prior to the next CMC.

The Court indicates that any motions brought by the parties on the outstanding issues addressed
today may be noticed for February I 5, 2019 at 2:30 p.m. as well.
Case No.: CJC-18-004978
Case Title: TEZOS ICO CASES
Date: December 19, 2018
Old Form: MCOOIOOO -2- Form: COO I 00 I
 Case 3:17-cv-06779-RS Document 187-34 Filed 01/09/19 Page 4 of 4

The Court encourages the parties in this coordination proceeding to coordinate if at all possible
with the federal action on discovery and depositions in order to avoid duplication.

The Court stands adjourned.

Case No.: CJC-18-004978

Case Title: TEZOS ICO CASES
Date: December 19, 2018
Old Form: MCOOIOOO -3- Form: COO I 00 I
Case 3:17-cv-06779-RS Document 187-35 Filed 01/09/19 Page 1 of 13

EXHIBIT Y
 Case 3:17-cv-06779-RS Document 187-35 Filed 01/09/19 Page 2 of 13
ATTORNEYS LOS ANGELES
SAN FRANCISCO
ORANGE COUNTY

FIRM RESUME
LTL Attorneys LLP (“LTL”) is an AV-Rated litigation-only firm with three offices in California
(Los Angeles, San Francisco, and Orange County). As the first spin-off of the international firm
Quinn Emanuel Urquhart & Sullivan, LLP, our practice is devoted solely to trials, litigation and
arbitrations in the areas of intellectual property, commercial disputes and class actions. With over
40 attorneys, LTL is believed to be the largest minority-owned litigation-only firm in the country,
serving global clients with their most complex matters.

LTL has been recognized for its outstanding and innovative legal work. We were named to the
2018 US News & World Report’s Best Lawyers List; selected to the National Law Journal’s 2017
Elite Boutiques Trailblazers List (one of 18 firms nationally); named as One of the Best Firms at
Developing and Implementing Alternative Fee Arrangements and as a 2016 Client Service A-
Team (BTI Consulting); named the 2015 Law Firm of the Year by the National Asian Pacific
American Bar Association; and selected to the 2014 National Law Journal Litigation Boutiques
Hot List (one of ten firms nationally). Our attorneys have been honored as among the “Top 20” in
California, “Best Lawyers...in America” and “Super Lawyers” by leading legal publications and
organizations. Clients and opposing counsel have referred to us as “the finest trial lawyers in the
country,” “outstanding, tenacious, and cost effective,” and “creative.”

Our professional and academic credentials are second to none, and our attorneys are heavily involved
with several organizations including AIPLA, Asian American Bar Associations, Women’s Intellectual
Property Association, Inn of Court, and several others, where their involvement insures that our
attorneys stay on the forefront of the most pressing legal issues and developments.

LTL’s attorneys have extensive complex class-action litigation experience at every level of the state
and federal court systems. We have successfully litigated and continue to litigate class disputes,
including the following:

Obtained $11.5 million class settlement as class counsel representing class of over three
thousand technicians in a wage and hour class action against a dental laboratories company
(Huynh v. James R. Glidewell Dental Ceramics, Inc., Case No. 30-2009-00180107-CU-OE-
CXC, OC Superior Court).

Successfully represented global network equipment manufacturer TP-Link USA Corporation

in consumer class action for alleged violations of California Consumer Legal Remedies Act,
California Business and Professions Code Sections 17200 et seq., and California Business and
Professions Code Sections 17500 et seq. involving advertised data transmission speeds of
powerline communication devices. Obtained dismissal with prejudice without class
certification (Joe Arroyo v. TP-Link USA Corporation et al., Case No. 2:16-CV-01044, U.S.
District Court, Central District of California).

LTL ATTORNEYS LLP WWW.LTLATTORNEYS.COM

 Case 3:17-cv-06779-RS Document 187-35 Filed 01/09/19 Page 3 of 13
ATTORNEYS LOS ANGELES
SAN FRANCISCO
ORANGE COUNTY

Appointed class counsel, through final approval, in obtaining class settlement valued at over
$5 million against a nationwide calling card company (Sabaj v. Nobel, Case No. BC 435467,
LA Superior Court).

Represented plaintiffs in a consumer class action alleging false advertising against Diamond
Foods, Inc. (Wise v. Diamond Foods Inc., Case No. 39-2010-00249819-CU-MT-STK, San
Joaquin Superior Court).

Defeated class certification in wage and hour class action involving manufacturing and
recycling employees (Magana v. Guangyi Group, Case No. BC432188, LA Superior Court).

Defeated two separate class certification motions in wage and hour class actions involving
various types of nursing employees (Kimani v. Healthcare Investments, Inc., Case No.
BC432360, LA Superior Court).

Obtained an Order Dismissing Class Allegations in several wage and hour class actions against
a property management company (Anthony v. AMC LLC, Case No. BC470800, LA Superior
Court; Delgado v. Apartment Management Consultants, LLC, Case No. BC470626, LA
Superior Court; Nicole Danileian v. AMC LLC, Case No. BC470859, LA Superior Court;
Anthony v. AMC LLC, Case No. BC473723, LA Superior Court).

Obtained favorable settlement defending an insurance claims administrator against a class

action lawsuit alleging employee misclassification (Gaa v. Intercare Holdings, Case No.
BC489800, LA Superior Court).

Successfully defended Wal-Mart Stores against wage & hour class action lawsuit alleging
unpaid overtime pay related to off-the-clock activities. Obtained dismissal with prejudice.
(German v. Wal-Mart Stores, Inc., Case No. 5:14-cv-00945-TJH (SPx), U.S. District Court,
Central District of California).

Obtained $995,000.00 class settlement representing more than 9,000 individuals in consumer
class action regarding infant and toddler car seat products (Kopin v. Orbit Baby, Inc., et al.,
Case No. RG16813239, Alameda Superior Court

LTL’s attorneys currently include the following:

James M. Lee – Co-Managing Partner

James Lee serves as LTL’s co-managing partner and heads the firm’s complex commercial litigation
and business contingency practices. He has handled complex litigation matters at both Quinn Emanuel
and Morgan Lewis before co-founding the firm. James has extensive experience litigating intellectual
property matters, software related litigation, fraud cases, commercial disputes, class actions, privacy and
cybercrime matters, antitrust, and other complex claims.

He has most recently obtained several seven figure awards in trials and arbitration matters and has
favorably settled a number of other cases with several matters in which combined recoveries were well
over $300 million.

LTL ATTORNEYS LLP WWW.LTLATTORNEYS.COM

 Case 3:17-cv-06779-RS Document 187-35 Filed 01/09/19 Page 4 of 13
ATTORNEYS LOS ANGELES
SAN FRANCISCO
ORANGE COUNTY

James is a graduate of Stanford Law School where he has taught trial advocacy. James is AV-rated by
Martindale-Hubbell.

Representative Experience
Served as co-lead counsel to the founder of social media app Snapchat in lawsuit over ownership
claims against co-founders and company. Case settled for $157 million.
Prevailed in a six-day jury trial regarding trademark infringement claims brought by Lush
Cosmetics in which they sought $30 million in damages.
Obtained $100 million settlement in breach of contract dispute on behalf of publicly traded
Taiwanese energy company against U.S. NYSE company.
Obtained $1.7 million in federal trial in breach of contract action on behalf of VIZIO against
contract manufacturer for manufacturing defects.
Settled complex adulterated food product matter on behalf of Herbalife against various suppliers
for confidential terms.
Successfully defended client against $18 million breach of contract claim brought by subsidiaries
of a $1.4 billion Japanese conglomerate, where plaintiffs walked away with NO net monetary
damages.
Defense verdict in an investment fraud and breach of fiduciary duty trial.
Settled bad faith insurance claim for $27 million on behalf of plaintiffs.
Represented Actuate Corporation (now part of OpenText) in various copyright infringement and
licensing dispute matters across the country resulting in combined recoveries in the 8 figures.
Obtained $3 million award in a joint venture/fraud dispute.
Obtained $1.2 million settlement in Ponzi-scheme case against international bank.
Obtained a $2.7 million victory before the Court of Appeal in connection with the 1998 landslide
in Orange County.
Obtained $1.6 million award in shareholder’s dispute.
Obtained $1.4 million in a real estate transaction litigation matter.
Represented LAUSD in a multi-million dollar breach of contract/commercial dispute.
Obtained settlement valued at over $4.1 million in international arbitration against NASDAQ
company involving breach of buyout agreement.
Represented one of Korea’s largest electronic companies involving the theft of one of the largest
trade secrets cases to hit the company. The former employee fled and avoided legal process after
transmitting highly confidential strategic plans.
Represented one of America’s largest and fastest growing companies against insurance company
for bad faith denial of coverage in connection to a trademark lawsuit. After discovery and
successful motions to compel, obtained critical documents demonstrating bad faith denial of
benefits. Insurance company immediately settled for a confidential six figure sum in excess of
actual loss.
Represented NYSE traded software publisher’s copyrights and related intellectual property
against infringers in a number of matters.
Represented a government contractor in a $10 million breach of contract action in United States
District Court for the Eastern District of Virginia. Prevailed on motion to dismiss.
Successfully opposed a TRO request to take over company on behalf of minority shareholder.
Settled case on confidential terms immediately thereafter.
Represented NASDAQ listed company in a $2.6 million breach of contract dispute involving
long term lease agreement. Settled case on favorable terms after mediation.

LTL ATTORNEYS LLP WWW.LTLATTORNEYS.COM

 Case 3:17-cv-06779-RS Document 187-35 Filed 01/09/19 Page 5 of 13
ATTORNEYS LOS ANGELES
SAN FRANCISCO
ORANGE COUNTY

Represented large cable station in a copyright infringement action. Prepared successful summary
adjudication motions and reduced scope of case from six potential infringements to only one.
Obtained summary judgment in breach of contract action where plaintiff sought $5 million in
damages. Settled remaining fraud claim with no payment of money.

Speaking Engagements
Managing Multi-Jurisdictional Trademark Disputes, panel speaker, IPBA, Kuala Lumpur, April
16, 2016
Leading Change: Two Smaller Firms’ Success Stories, Thomson Reuters (April 27, 2016)
Global IP Litigation, panel speaker, IAKL, Washington D.C., September 30, 2016
Business Development for Litigators: Best Practice and Innovative Techniques, October 27,
2016, Practical Law by Thomson Reuters
BCLT Berkeley Law, Berkley Center Law & Technology, Impact of Artificial Intelligence &
Technological Innovation on the Practice of Law, March 2, 2017
Managing Litigation Using Creative Methods and Efficient Tools, IP Law Summit, Las Vegas,
March 27, 2017
Age of A.I.: How is Artificial Intelligence Transforming and Disrupting the Practice of Law,
MCCA Global TEC Form (G-TEC), June 19, 2017
Artificial Intelligence and the Law, panel speaker, IAKL, Seoul, Korea, September 2017
Artificial Intelligence and the Future of Litigation, Law.com, Podcast, October 2, 2017

Enoch H. Liang – Managing Partner

Enoch Liang is the firm’s Managing Partner and also heads the firm’s Intellectual Property (IP) litigation
practice. He is an experienced IP attorney, and has litigated all facets of IP disputes (including patents,
copyrights, trademarks, trade dress, trade secrets and idea theft claims). Enoch has served clients across
numerous industries including in technology, retail, cosmetics, automotive, and entertainment, in cases
venued in California, Delaware, Texas, Ohio, and New York, as well as in China and Hong Kong.

Enoch is AV-rated by Martindale-Hubbell and in 2016, the BTI Consulting Group honored Enoch as a
“Client Service All-Star,” one of only 30 IP attorneys nationwide in the entire report. He has been named
a “Super Lawyer” by Thomson Reuters multiple times. Enoch was also recently selected by his peers
for inclusion on the 2018 list of The Best Lawyers in America©, after being named a “Recommended
Expert” in trademark litigation by the World Trademark Review. American Law Media and Martindale-
Hubbell also rated him as a “2014 Top Rated Lawyer in Intellectual Property Law.”

In addition to IP matters, Enoch has successfully represented clients in business litigation, including in
partnership disputes, breach of contract disputes, and consumer class actions. Since mid-2010, Enoch
has argued (and won) all the appeals he has handled, including four in the Ninth Circuit and several more
in California state courts. In that same timeframe, Enoch served as the first chair trial lawyer in seven
trials or arbitrations – winning all of them.

Enoch also has had the unique distinction of practicing commercial and IP litigation with leading law
firms in both the United States and China. This provides him with rare experience and perspective
regarding the legal systems of the world’s 2 largest economies, as well as an extensive network of
contacts in both countries. In China and in Hong Kong, Enoch focused his practice on IP matters,
including the acquisition and enforcement of IP rights. He has also personally attended numerous trials

LTL ATTORNEYS LLP WWW.LTLATTORNEYS.COM

 Case 3:17-cv-06779-RS Document 187-35 Filed 01/09/19 Page 6 of 13
ATTORNEYS LOS ANGELES
SAN FRANCISCO
ORANGE COUNTY

in China. With this background, Enoch is well-positioned to counsel clients engaged in cross-border
business—either from the US going to China, or vice versa—as well as the attendant litigation that often
arises.

Enoch is a graduate of Columbia Law School where he was a Harlan Fiske Stone Scholar.

Representative Experience
Acted for defendant in complex, multi-jurisdictional trademark dispute where trademark owner
requested $30M in damages in the US case; complete defense verdict after 6-day jury and bench
trial in CDCAL; appeal to the Ninth Circuit pending.
Lead trial counsel for defendant in AAA arbitration over distributorship contract in Turkey;
complete defense verdict.
Lead trial counsel for defendant in bench trial over patent ownership dispute; complete defense
verdict.
Lead trial counsel for plaintiff in 2-week jury trial over dispute over dilution of minority
shareholder’s shares by majority shareholder; 12-0 jury verdict for plaintiff, including punitive
damages.
Lead trial counsel for defendant in 2-week jury trial over construction dispute; jury returned
verdict of less than 13% of plaintiffs request for damages; verdict was much less than what client
offered to settle the case.
Lead counsel for two defendants in federal court copyright and trade dress infringement action;
obtained summary judgment less than one week from trial.
Lead counsel for leading Taiwanese entertainers in breach of contract case where entertainers
did not perform at a concert; substituted in only 21 days before trial and obtained very favorable
settlement.
Argued and won complex 9th Circuit trademark appeal overturning district court ruling;
substituted in as counsel for oral argument after briefs were already completed.
Argued and won 9th Circuit copyright/trade dress appeal with novel issues; 9th Circuit affirmed
two weeks after oral argument.
Represented bank in 3-week arbitration over failed sub-prime credit card business; plaintiff
sought over $100 million in damages; resulted in complete defense verdict and award of costs to
client.
Defended one of world’s largest sporting shoes and apparel companies in design patent case
where plaintiff sought over $60 million in damages; resulted in summary judgment for client;
affirmed on appeal by the Federal Circuit.
Coordinated defense of nationwide class actions over failed hard disk drives; resulted in very
favorable settlement for client hard disk drive manufacturer.
Handled over 50 copyright, trademark, and trade secret matters for numerous clients, including
leading toy company in California, famous entertainment institutions, and companies spanning
all industries, ranging from insurance to video games to cosmetics to arts & crafts to tiles, etc.

Awards
BTI Consulting Group “Client Service All-Star 2016” (only 312 attorneys selected nationwide;
only 30 attorneys were focused on practicing IP)
AV-rated by Martindale-Hubbell
Named by his peers to the 2018 list of Best Lawyers in America©

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World Trademark Review “Recommended Expert in Trademark Litigation” for 2015 to 2017
“Super Lawyers” list by Thomson Reuters in 2011, 2012, 2013, 2014, 2016 and 2017 (both
Southern and Northern California)
“2014 Top Rated Lawyer in Intellectual Property Law” by American Law Media and
Martindale-Hubbell

Damian Martinez – Partner

Damian J. Martinez is an experienced litigator in complex civil, white collar criminal, and regulatory
matters. He has represented corporate officers and directors against the Department of Justice and the
Securities and Exchange Commission in matters involving subprime lending, stock options pricing,
stock sales by corporate insiders and international antitrust investigations. He has also represented senior
officers of a major regional bank in receivership litigation in federal court and companies and corporate
employees in municipal regulatory matters.

Damian served as an Assistant United States Attorney in Los Angeles, and as a federal prosecutor,
conducted grand jury investigations, tried numerous cases to verdict, and handled multiple appeals
before the U.S. Ninth Circuit Court of Appeals. Damian also responded to multiple extradition requests
from foreign nations. Following the US Attorney’s Office, Damian served as in-house litigation counsel
for an entertainment and consumer products company where he managed outside counsel in domestic
and international cases.

Damian is a graduate of Columbia Law School

Representative Matters
Lead attorney representing public company in a malpractice action against a national law firm.
Matter settled without litigation being initiated in court.
Lead attorney representing president of a lending division of a financial institution in federal
action brought by the FDIC. Matter settled favorably.
Co-lead attorney representing partner of an algorithmic trading company in a breach of contract
action the partner brought against the company. After one week of arbitration, matter settled
favorably.
Lead attorney representing an entertainment company in litigation brought by an international
shipper. Case proceeded to trial and plaintiff recovered a fraction of the amount demanded in
pre-trial settlement.
Mr. Martinez has represented general counsel of public and private companies in internal
investigations, investigations by the Department of Justice, and in shareholder litigations. Mr.
Martinez has recently represented a general counsel in a false claims act case brought by the
Manhattan U.S. Attorney’s Office.
Mr. Martinez has high-level corporate executives in investigations by the Department of Justice
antitrust division. Mr. Martinez recently represented the senior most executive of a manufacturer
in a DOJ antitrust investigation and parallel civil action.
Represented the senior most officer of a public mortgage originator company in litigation
brought by the Securities and Exchange Commission. Also represented the officer in an
investigation by the bankruptcy examiner.
Represented witnesses in an unfair competition action brought by the District Attorney’s Office
against a high-tech ride sharing company.

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Lead attorney in an internal investigation on behalf of a public company. In the investigation,

Mr. Martinez interviewed over 15 witnesses in Spanish and reviewed Spanish-language
communications. At the end of the investigation, Mr. Martinez reported the findings and
conclusions to the senior executives of the corporation.
Lead attorney for a high-tech startup in internal investigation related to a personnel matter.
Conducted an internal investigation in multiple Asian countries into potential violations of the
Foreign Corrupt Practices Act as part of a merger of two public companies.

Kevin Bringuel - Partner

Kevin Bringuel brings impressive trial and appellate experience to the firm. Kevin was formerly
associated with Quinn Emanuel Urqhart & Sullivan where he worked in several litigation areas including
intellectual property, employment, contractual disputes, and “white collar” criminal defense. Following
Quinn Emanuel, Kevin served for four years as a federal public defender, followed by nine years
handling capital cases in habeas corpus proceedings, after which he joined LTL. As a result, Kevin is
among the few attorneys who is a seasoned specialist in both trial and appellate advocacy.

Kevin is a graduate of the University of Michigan Law School and serves as an adjunct professor at
Berkeley Law, where he teaches legal research and writing in the LL.M. program.

Representative Experience
TRIALS: 20 trials to verdict. Achieved several prominent victories, including acquittals in cases
with false confessions, and securing an appropriate sentence of 6 months/time served versus the
19 years that the government vigorously sought.
APPEALS: 21 appeals, with 9 Ninth Circuit arguments. Achieved affirmances of LTL victories
in California Court of Appeals.
Co-lead counsel in seven-day federal jury trial in trademark case, prevailing on the verdict and
post-trial motions.
Co-lead counsel in five-day federal bench trial in patent and breach-of-contract case, prevailing
on all claims.
Co-lead counsel in three-day contempt proceeding in state court, earning acquittal of LTL’s
client on all charges.
Achieved appellate reversals from the Ninth Circuit as well as the U.S. Supreme Court, as well
as published victories regarding discovery from the California Court of Appeal and the
California Supreme Court. In one case, Kevin’s appellate brief persuaded the prosecutor to
vacate the client’s conviction and settle for the defense’s pre-trial plea offer.
Handled complex litigation in capital habeas proceedings, managing cases with thousands of
witnesses and millions of pages of documents.

Caleb H. Liang – Partner

Caleb Liang is a partner in the business contingency practice group. He specializes in employment
litigation, complex litigation and class actions. He has successfully represented and defended Fortune
500 companies in various employment and commercial disputes. He’s also represented plaintiffs and
class members in consumer and employment class/representative actions. From 2013 to 2018,
Thompson Reuters recognized Caleb as a “Super Lawyers Rising Star.” He serves on the board of
directors for the Southern California Chinese Lawyers Association and the Asian Pacific Alumni of
UCLA.

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Prior to joining LTL, Caleb worked at Kingsley & Kingsley APC in Los Angeles, California, a well-
known plaintiffs’ firm specializing in employment and class action litigation. He is a graduate of the
University of California, Davis – School of Law.

Representative Experience
Obtained class settlement and class counsel designation in a wage and hour class action against
a catering company.
Obtained a significant six-figure class settlement and class counsel designation in a wage and
hour class action against a steel manufacturing company.
Obtained a significant six-figure class settlement and class counsel designation in a wage and
hour class action against a car rental and service company.
Obtained class settlement valued at over $5 million and class counsel designation in a
consumer class action against a nationwide calling card company.
Lead trial counsel obtaining full recovery of all requested damages after a five-day trial in an
individual action recovering unpaid wages for overtime and breaks.
Obtained confidential resolutions for two separate employees in individual actions against an
export import company for unpaid wages and sexual harassment.
Represented plaintiffs in a consumer class action alleging false advertising against Diamond
Foods, Inc.
Defeated class certification in wage and hour class action involving manufacturing and
recycling employees.
Defeated two separate class certification motions in wage and hour class actions involving
types of nursing employees.
Obtained an Order Dismissing Class Allegations in several wage and hour class actions against
a property management company.
Defended an insurance claims administrator against a class action lawsuit alleging employee
misclassification that resulted in a favorable settlement.
Obtained $11.5 million class settlement and class counsel designation in a wage and hour class
action against a dental laboratories company.
Trial counsel defending a well-known healthcare provider where plaintiff alleged a novel
FEHA discrimination claim based upon her association with her disabled son and requested
nearly $8 million in damages in a fourteen-day jury trial, but recovered just 6% of the
requested amount in a split jury verdict (8-3).

Steven Gonzalez – Partner

Steven Gonzalez heads LTL’s employment practice group. He serves as managing partner in both
single-plaintiff/non-class employment defense cases as well as complex class action defense matters.
Before joining LTL, Steve practiced for fifteen years at Perkins Coie LLP, focusing on employment
litigation throughout that time. Steve's extensive experience includes all aspects of employment
matters, including class actions. In addition to defending employers against claims involving wrongful
termination, discrimination, defamation, breach of contract, and other employment claims, Steve has
represented employers in numerous wage and hour class actions throughout California in matters
involving alleged misclassification, unpaid overtime, unpaid rest and meal breaks, and related claims.
He represents and has represented well-known industry leaders including Wal-Mart, The Home Depot,

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Southern California Edison, Kaiser Permanente, Taco Bell, Panda Restaurant Group, Smart & Final,
Safeco Corporation, and Shurgard Storage Centers.

Steve earned his J.D. from Stanford Law School, and his B.A. from the University of California, Los
Angeles. He is admitted to practice in all state and federal courts throughout California.

Representative Matters – Class Actions

Currently representing global retailer in multiple wage & hour class action matters.
Successfully represented global retailer in wage & hour class action matter involving alleged off-
the-clock compensable time. Obtained dismissal with prejudice.
Successfully represented Southern California Edison in wage & hour class action matter
involving alleged off-the-clock compensable time, as well as related violations of meal and rest
break periods.
Represented Smart & Final in a wage and hour case where a class of retail managers and assistant
managers in California brought claims for overtime based on alleged misclassification of exempt
and nonexempt employees. Planned and implemented a strategy to collect defensive declarations
adverse to the class claims, then successfully marshaled these to negotiate a favorable settlement.
Represented Smart & Final in California class action (with multiple subclasses) brought against
employer-client alleging a myriad of wage and hour claims (including those pertaining to meal
and rest period violations and so-called “off-the-clock” work), and seeking in excess of $100
million in purported damages and penalties. After filing multiple motions for summary
adjudication, case was settled on terms favorable to the Company.
Represented Smart & Final in a case where the plaintiff alleged his employer had improperly
deducted impermissible costs from his wages, and sought class action status. Before class
certification issue was decided, the case was successfully disposed on terms favorable to the
employer.
Lead counsel in nationwide FLSA collective action (together with supplemental state law class
claims), alleging numerous federal and state wage and hour violations. After provisional
collective action status was established, case was settled on terms very favorable to the
employer.

Patricia Kinaga – Partner

Patricia Kinaga is widely regarded for her extensive first chair jury trial work in both state and federal
courts. For over 20 years, Ms. Kinaga has focused her practice on employment litigation, including
class actions, representing private and public employers in high-profile cases. Her successful first chair
trial experience in sensitive cases, including defending a discrimination case brought by a quadriplegic
LAUSD school teacher, prosecuting a disciplinary arbitration against a police officer accused of
homicide, and defending a large national clothing retailer in a Muslim religious discrimination case,
has resulted in her reputation as a preeminent employment trial attorney. Her clients have included
companies in the retail, manufacturing, banking, high tech, healthcare, restaurant and real estate
industries, as well as non-profit corporations.

Patricia earned her J.D. from Georgetown University Law Center, her M.A. in City Planning from the
University of California, Berkeley, and her B.A. from the University of California, Los Angeles. She
is admitted to practice in all state and federal courts throughout California.

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Representative Experience
Represented film director in federal case involving copyright infringement, breach of contract,
breach of covenant of good faith and fair dealing, promissory fraud, intentional interference with
contractual relations, and unfair competition.
Represented plaintiffs in property and personal injury case against homeowners and homeowner
association.
Represented corporation in suit alleging failure to pay overtime compensation, provide meal and
rest periods, and maintain records; case settled during trial.
Represented plaintiff in Federal copyright infringement case; settled shortly before trial.
Represented employer in wrongful termination suit alleging disability discrimination and failure
to accommodate; case was successfully mediated.
Represented employer in wrongful termination suit alleging disability discrimination and failure
to accommodate; case was settled following limited discovery.
Conducted numerous workplace investigations on behalf of the water district, including
allegations of retaliation and race and gender discrimination.

David Ammons – Partner

David Ammons is a partner in the firm’s commercial litigation and employment group. David is an
experienced trial attorney having first chaired 23 jury trials to verdict. As a former Deputy San
Francisco City Attorney, David has handled all facets of commercial and employment claims,
including several high-profile cases. Prior to joining the San Francisco City Attorney’s Office, David
was an associate at Schiff Hardin, Manatt Phelps, and Baker & Hostetler LLP. He was also an adjunct
professor at Golden Gate University School of Law.

David earned his J.D. from the University of Michigan and his B.A. from the University of Southern
California.

Representative Experience
Lead counsel in breach of contract suit in which plaintiffs sought $2 million in damages; jury
ruled 12-1 in Airport’s favor.
Prevailed in bench trial against commercial tenant resulting in six-figure damages and attorney’s
fees award.
Obtained defense verdict in serious motor vehicle accident in which plaintiff sought more than
$800,000 in damages.
Obtained defense verdict personal injury suit in which the Plaintiff sought more than $1 million
in damages.
Obtained defense verdict personal injury suit in which the Plaintiff sought in excess of $1 million
in damages.

Eugene Hahm - Partner

Eugene Hahm is a partner in the intellectual property and commercial litigation practice groups. He is
an experienced litigator whose practice focuses on a broad range of civil litigation and arbitration
disputes, including business torts, unfair competition, antitrust, and intellectual property matters.

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His substantial experience includes litigating matters in state and federal courts throughout the country
at both the trial and appellate levels. Eugene is active in all phases of litigation disputes, including pre-
litigation counseling, law and motion practice, complex discovery, and jury and bench trials.

In addition, Eugene has cultivated wide expertise in representing non-profit organizations and charitable
foundations in trust and fiduciary litigation between fiduciaries, beneficiaries, and creditors. He has
successfully handled multiple will and trust contest disputes on behalf of his charitable beneficiary clients
and routinely represents corporate trustees in claims involving breaches of fiduciary duty.

Prior to joining LTL, Eugene worked at Manatt Phelps & Phillips for over 12 years where he was an
associate and later a partner in the intellectual property and complex commercial litigation groups. He
is a graduate of the University of Virginia Law School.

Representative Experience
Successfully defended flash memory storage manufacturer in international arbitration over
distributorship contract in Turkey.
Successfully defended two Fortune 100 software companies in breach of contract and patent
infringement lawsuits filed in filed in multiple federal courts.
Represented Fortune 100 software company as plaintiff in breach of licensing agreement and
copyright infringement lawsuit.
Represented developer/licensor of ID card software in breach of licensing agreement lawsuit.
Represented leading retailer of crafts and fabric products in trademark infringement dispute.
Represented founders of closely-held manufacturing company in breach of fiduciary duty and
corporate dissolution lawsuit filed by co-founder.
Successfully represented telecommunications company in antitrust lawsuit regarding licenses of
federally regulated radio spectrum.

Activities
Instructor – Trial Advocacy Clinic, Stanford Law School (2012 – present)
Coach – Honors Moot Court External Program, Santa Clara University School of Law (2009 –
2014)
Pro Bono Counsel – San Mateo County Legal Aid Society and Stanford Law Clinic (2009-2014)
Mentor – Students Rising Above (non-profit organization assisting economically challenged
students attend college) (2014 – present)
Member – Edward J. McFetridge American Inn of Court (2014 – present)

Prashanth Chennakesavan – Senior Associate

Prashanth Chennakesavan is a senior associate in the firm’s complex commercial litigation practice
group. He has represented clients in federal and state courts, and before arbitration panels, throughout
the country in a broad range of cases, including trade secrets, antitrust, intellectual property, and other
complex commercial litigation. Prashanth has managed all stages of litigation; he has developed
strategies and drafted initial complaints, prepared and responded to motions targeting the pleadings,
taken and defended depositions and coordinated discovery, prepared and responded to dispositive
motions, prepared examination outlines for trial, and prepared post-trial and appellate briefs. He has also
provided pre-litigation counseling to clients and successfully avoided disputes.

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Before joining the firm, Prashanth was a litigation associate in the New York and Los Angeles offices
of Quinn Emanuel Urquhart & Sullivan, LLP.

Representative Experience
Obtained complete dismissal with prejudice of antitrust, contract, and unfair competition claims
in the District of Oregon for a nationwide radio broadcaster.
Obtained summary judgment, and affirmance on appeal, of antitrust claim in California state
court for a satellite television distributor.
Obtained favorable settlement in a trade secrets misappropriation action in Florida state court for
a roofing supply distributor.
Successfully represented smartphone manufacturer in complex, multi-year intellectual property
litigations in the Northern District of California.

Alex Hu – Senior Associate

Alex Hu is an associate in the firm’s intellectual property and complex commercial litigation
groups. Alex has handled all facets of intellectual property (with particular emphasis on patent
infringement cases) and commercial matters. Prior to joining LTL, Alex served two years as a law clerk
to Hon. Charlene Honeywell of the United States District Court for the Middle District of Florida. He
started his career as a litigation associate at Quinn Emanuel’s Los Angeles office and then served as a
litigation associate at Davis Polk & Wardwell’s Menlo Park (Silicon Valley) office.
Alex is a graduate of Columbia Law School where he was a Harlan Fiske Scholar. He obtained his B.S.
in Biological and Environmental and Mechanical Engineering from Cornell University.

Representative Experience
Worked on several patent lawsuits representing large telecommunications company
Part of trial team that obtained favorable verdict for client in a commercial dispute, including an
award of attorneys’ fees
Worked on a shareholder derivative lawsuit representing board of directors of Fortune 500
company

Casey Kemper – Senior Associate

Casey Kempner is an associate with the firm’s intellectual property litigation group, specializing in patent
litigation. Casey has experience in all aspects of litigation and patent prosecution. He possesses a
Bachelor of Science degree in Physics/Biophysics with significant experience in the biotechnology
industry developing medical devices. Recently, his work has focused on patent cases involving
electronics. Casey has extensive experience conducting patent infringement and validity analysis, taking
and defending depositions, including technical deposition of expert witnesses, key fact witnesses, and
30(b)(6) designees. He also has extensive experience working with joint defense groups, managing local
counsel, and overseeing large volume eDiscovery.

Prior to law school, Casey worked as a Scientist and Research Associate at medical device companies
including PerGenix, LLC, FasTraQ, and BioSite Diagnostics. Prior to joining LTL, Casey was an
Intellectual Property associate at Haynes and Boone, LLP where he worked on both patent litigation and
prosecution matters. Casey is admitted to practice before the United States Patent & Trademark Office.
Casey is a graduate of the University of California, Davis School of Law. He obtained his B.S. in
Physics/Biophysics from the University of California, San Diego.

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