’

10W}
CHRISTOPHER L. WANGER (Bar No. CA 164751)
(a)
g
FELED
.

AN: 3. (33:11:13q0 (Bar No. CA 286732)

AGuardado@manatt.con1 SAN a}; 1,1,1" EC) QQUNW
MANATT, PHELPS & PHILLIPS, LLP
One Embarcadero Center JUN 11 5 2018
30th Floor ,

San Francisco, CA 94111

Telephone: (415) 291-7400
Facsimile: (415) 291-7474

Attorneys for Defendants

698 OO\)O\
TIMOTHY C. DRAPER and DRAPER ASSOCIATES V
CRYPTO LLC
NOSIHHVH

IMNOLLVN

9117

A8
KO SUPERIOR COURT FOR THE STATE OF CALIFORNIA
3C1
198
XV:1

00H)
1.313818

10 COUNTY OF SAN MATEO

‘IVOEI‘I

V3218
0T1
11

01176
12 TRIGON TRADING PTY. LTD., AND Case No. 18—CIV—02045
-
BRUCE MACDONALD, individually and on ,

13 Behalf of All Others Similarly Situated, J OINDER OF DEFENDANTS TIMOTHY

DRAPER AND DRAPER ASSOCIATES V
14 Plaintiffs, CRYPTO LLC IN DEMURRER TO
-
COMPLAINT AND MOTION TO STAY
15 vs. ALL PROCEEDINGS
16
‘
é
DYNAMIC LEDGER SOLUTIONS, INC., a Date: June 12%2018
Delaware corporation, TEZOS STIFTUNG, a Time: 9:00 am
17 '
Swiss Foundation, KATHLEEN Dept". Law and Mon“
» - -

BREITMAN, an Individual, ARTHUR

18 BREITMAN, an Individual, TIMOTHY
COOK DRAPER, an Individual, DRAPER
19

20
. ASSOCIATES V CRYPTO LLC, and DOES
1 100, INCLUSIVE -1s_c‘.(,'_,T,,5
J01
‘“‘*-"g
' 1

Defendants. )Joinder
'21 )1192860
‘

22
lll1111111111111"111Hill
'23.

24

25

26

27

28
“ JOINDER IN DEMURRER AND MOTION TO STAY
“1311113113151?
Case No. 18-CIV—02045 1
ATTORNEYS AT LAW
SAN FRANCISCO
 Defendants Timothy Draper and Draper Associates V Crypto LLC (the “Draper

Defendants”) hereby join in the Demurrer and Motion of Defendant Dynamic Ledger Solutions

Inc. (“DLS”) to Stay all Proceedings. This putative class action suit (“MacDonald 11”) was filed

A by Plaintiffs’ counsel only after they suffered a series of defeats in an earlier filed and

subsequently consolidated putative class action pending before the Hon. Richard Seeborg in the
\IONUI

US. District Court for the Northern District of California entitled In re Tezos Securities
Litigation (N .D. Cal. Case No. 17-cv-06779-RS) (the “Consolidated Federal Action”). Plaintiff

Bruce MacDonald and his counsel, Hagens Berman Sobol Shapiro LLP (“Hagens”), originally

filed his putative class action alleging securities law claims relating to the Tezos fundraiser in the

1o Northern District of California on December 20, 2017 (U.S.D.C. N.D. Cal. Case No. 3:17-cv-

1 1 07095-RS) (“MacDonald I”).

12 In MacDonald I, Hagens sought and was denied a Temporary Restraining Order (“TRO”)
13 freezing all assets contributed. to the Tezos fundraiser. A copy of the Order denying Hagen’s

14 TRO application in MacDonald I is attached hereto as Exhibit A. After Judge Seeborg denied
15 the TRO application, Hagens then sought and was denied expedited discovery in MacDonald I.

16 A copy of the Order denying Hagen’s Motion for Expedited Discovery in MacDonald I is

17 attached hereto as Exhibit B. Subsequently, Judge Seeborg consolidated MacDonald I. as part of

18 the Consolidated Federal Action over the objection of MacDonald and his co-Plaintiff in this
19 action —, Trigon Trading Ltd. (“Trigon”). In the same Order, Judge Seeborg denied the request of
2o Trigon and its counsel, Block & Leviton LLP, to be appointed as lead plaintiff and lead counsel

21 respectively in the Consolidated Federal Action. A copy of the Order consolidating MacDonald}
22 I as part of the Consolidated Federal Action and denying Trigon’ s motion to be appointed lead
1
23 plaintiff1s attached hereto as Exhibit C.

24 Only after suffering the foregoing string of defeats in MacDonald 1 did MacDonald
25 decide to dismiss MacDonald I from the Consolidated Federal Action and team up with Trigon
26 to refile MacDonald II in this Couit. But this action is entirely duplicative of the Consolidated

27 1
The Draper Defendants hereby request that the Court take judicial notice of Exhibits A, B and C
28 hereto pursuant to California Evidence Code sections 452 and 453.
'S‘ JOINDER IN DEMURRER AND MOTION TO STAY
Milfifffpiiifiif Case No. lS-CIV—02045
ATTORNEYS AT LAW
2
SAN FRANCISCO
 Federal Action. The identical federal claims asserted and the defendants named in this action are

all asserted and named in the Consolidated Federal Action. This action also duplicative of

another earlier filed state court putative class action - Baker v. Dynamic Ledger Solutions, Inc, et

al. (S.F. Sup. Ct. Case No. CGC—l7-562144).

As more fully explained in DLS’ Demurrer and Motion, the interests of comity, judicial

efficiency and economy all warrant abating or staying this action. Plaintiffs’ failures in

MacDonald I simply do not justify burdening this Court and the parties with this duplicative

action. The Consolidated Federal Action is a superior forum to adjudicate Plaintiffs’ federal

claims and the balanCe of private and public interest factors make it just that this action be

1o stayed. The Demurrer should be sustained and the Motion granted.

1 1 Dated: June 5, 2018 MANATT, PHELPS & PHILLIPS, LLP

12
By: >

13 Chr' *tfl, er L. Wanger

Att rneys for Defendants
14 TIMOTHY C. DRAPER and DRAPER
ASSOCIATES V LLC
15

16

17

18

19

2o

21

22
'

23

24

25

26

27

28
8‘ JOINDER IN DEMURRER AND MOTION TO STAY
“titllip‘éifit’? Case No. 18-CIV—02045 3
AT'IORNEYS AT LAW
SAN FRANCISCO
 ‘

‘
EXHIBIT A
 R,

Case 3:17-cv-O7095-RS Document 35 Filed 12/20/17 Page 1 of 7

OO\]O\U\4>

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

0
BRUCE MACDONALD,
Case No. l7—cv-07095-RS
Plaintiff,

V- ORDER DENYING APPLICATION FOR

TEMPORARY RESTRAININ G ORDER
Court
DYNAMIC LEDGER SOLUTIONS, INC,
California

et al.,

District
Defendants.
of

I. INTRODUCTION
District

States

”California resident Bruce MacDonald brings this putative class action on behalf of all

United Northern
persons who contributed to the Tezos Initial Coin Offering (“1C0”) in July 2017. MacDonald

alleges defendants participated in an illegal sale of unqualified securities in violation of

California’s Corporate securities Law. of 1968 (Cal. Corp. Code § 251 10) and-California’s Unfair :

Competition Law (Cal. Bus. & Prof. Code § 17200 et'seq.). l-Ie seeks a temporary restraining order

enjoining-defendantsl from selling, transferring, converting, or otherwise disposing of-any assets

collectedor derived from the ICC in advance of the preliminary injunction hearinghscheduled for

January 11, 20l 8 in related case Okusko v. Dynamic Ledger Solutions, Inc. et al., Case No. 3:17-

cv—06829. Because plaintiff has failed to show that he is likely to suffer irreparable harm in the

absence of injunctive relief, his application is denied.

l
Dynamic Ledger Solutions, Inc., Tezos Stiftung (the “Tezos Foundation”), Kathleen Breitman,
Arthur Breitman, Timothy Cook Draper, Draper Associates, Johann Gevers, Diego Ponz, Guido
Schmitz—Krummacher, Bitcoin Suisse AG, and NiklasNikolajsen.
 Case 3:17—cv—07095-RS Document 35 Filed 12/20/17 Page 2 of 7

11. BACKGROUND2

The Tezos project was originally conceived of by Defendants Arthur and Kathleen

Breitman. In 2014, Mr. Breitman released a White Paper touting Tezos as a “self-amending

crypto—ledger.” He soon after authored an associated business plan. in 2015, Mr. Breitman created

muamaww and incorporated Dynamic Ledger Solutions Inc. (“DLS”) in Delaware to develop Tezos, listing
himself as chief executive. Since its incorporation, DLS has principally operated out of the
Breitman’s home in Mountain View, California. The company was initially funded through a pre-

sale that garnered $612,000 from ten early backers that included hedge funds and high net-worth

\O individuals. Around May 2017, however, DLS began to run out of funding.

10 The Breitmans reached out to Defendant Tim Draper who, via his firm Draper Associates,

ll invested $1.5 million in the project and took a minority stake in DLS. Around the same time, the

12 Tezos Foundation was formed as an independent non-profit foundation in Zug, Switzerland. The
Court
California
Foundation was to serve as the recipient of ICO funds and to help promote the development and-

District
14 use of the Tezos blockchain. DLS, however, retained control of the Tezos source code and other .
of

15 intellectual property. Defendants Gevers, Ponz, and Schmitz-Krummacher were named as the
District

States

16 Foundation’s directors. _

United Northern
17 The Tezos ICO itself began in July of 201 7 and lasted about two weeks. It was “uncapped”

18 which meant there was no limit on the amount of payments accepted. Ultimately the ICC collected
19' 65,627 Bitcoin and 361 ,122 Ethereum, including 13.145 Ethereum' from Plaintiff MacDonald’At

20 the time, the combined value of those cryptocurrencies was approximately $232 million USD. -

21 ,Today,.they are valued at more than $1 billion USD.

22 In August 2017, the Foundation stated it had been slowly converting assets obtained
23. through the lCO into cash at a pace of roughly $500, 000 USD per day. It also announced it had
24

25

26 2
In evaluating an application for a TRO, the allegations in the complaint are taken as true.
27 Hughes v. Wells Fargo Bank, N./1., 2009 WL 5174987 at *l (D. Ariz. Dec. 18, 2009).

28 ORDER DENYING APPLICATION FOR TRO

CASE No. 17-cv-07095-RS
 l

I"
l
1.
Case 3:17-cv-O7095-RS Document 35 Filed 12/20/17 Page 3 of 7

committed $50 million USD in 1C0 proceeds to fund companies looking to build on the Tezos

platform.

In October 2017, an attorney for the Breitmans sent a 46-page letter to Defendants Ponz,

4; and Schmitz-Krummacher, calling for Defendant Gevers’ prompt removal from the Foundation’s

board and accusing Gevers of self-dealing, self-promotion, and conflicts of interest. The letter
alleged that Gevers had been improperly enriching himself through an unjustified seven—figure

\000\IO\UI
“bonus.” Gevers responded by calling the accusations character assassination and accusing the

other board members of an “illegal coup.” The Tezos Foundation promised an audit of the ICO
proceeds would be published in November 2017 but no such audit has been released. Most

10 recently, on December 12, 2017, Reuters reported Schmitz-Krummacher had resigned from the

11 Foundation’s board and that Gevers would nominate his replacement.

12 The instant action was filed on December 13, 2017. it is the fourth filed case before this
court involving the T ezos ICO.3 One of the related cases, OkuSko v. Dynamic Ledger Solutions,
Court
California
13

District
14‘ ‘Inc. et a1, Case No. l7-cv-6829, has a preliminary injunction hearing set for January 11, 2018. .
of

15 III. LEGAL STANDARD

District

States

l6 A request for a temporaiy restraining order is evaluated by the same factors that generally

United
Northern
17 apply to a preliminary injunction. See Stuhlbarg Int ’1. Sales Co. v. John D. Brushy & Co., 240

18 F.3d 832, 839 n. 7 (9th Cir. 2001). Thus, as a form ofpreliminary injunctive relief, a TRO is an
.

I9 “extraordinary remedy” that is “never granted as of right.” Winter v.‘ Natural Res; Def Council,
20 Inc., 555 US. 7, 24 (2008).
'-
21 .
To obtain preliminary relief, a plaintiff must “establish that he is likely to succeed on the

.
22 merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the
23- ‘balance of equities tips in his favor, and that an injunction is in the public interest.” 10!. at 21-22.

24

25
The first, GGCC, LLC v. Dynamic Ledger Solutions, Inc. et 01, Case No. 17-cv—6779, was filed
3

26 on November 26, 2017. The second, Okusko v. Dynamic Ledger Solutions, Inc. et 01, Case No. 17-
cv-6829, was filed on November 28, 2017. The third, Baker v. Dynamic Ledger Solutions, Inc. et
27 al, Case No. 17-cv-6850, was filed on November 29, 2017.

ORDER DENYING APPLICATION FOR TRO

28
CASENO. 17-cv-07095-RS
 Case 3:17-cv-07095-RS Document 35 Filed 12/20/17 Page 4 of 7

The Ninth Circuit has clarified, however, that courts in this Circuit should still evaluate the

likelihood of success on a “sliding scale.” Alliance for Wild Rockies v. Cottrell, 632 F.3d 1127,

1 134 (9th Cir. 201 1) (“[T]he ‘serious questions’ version of the sliding scale test for preliminary
injunctions remains viable after the Supreme Court’s decision in Winter.”). As quoted in Cottrell,

under the sliding scale test, “[a] preliminary injunction is appropriate when a plaintiff

demonstrates . . . that serious questions going to the merits were raised and the balance of

hardships tips sharply in the plaintiff’s favor,” provided, of course, that “plaintiffs must also
\OOO\]O\

satisfy the other'[Winter] factors” including the likelihood of irreparable harm. Id. at 1135.

IV. DISCUSSION
“Irreparable harm is traditionally defined as harm for which there is no adequate legal

remedy.” Arizona Dream Act Coal. v. Brewer, 757 F.3d 1053, 1068 (9th Cir. 2014). “[E]conomic

injury alone” is insufficient “because such injury can be remedied by a damage award.” Rent—A—

Court
California
Ctr., Inc. v. Canyon Television & Appliance Rental, Inc., 944 F.2d 597, 603 (9th Cir.1991)..

District
Moreover, the mere “possibility” of irreparable harm or of a “speculative injury” is not enough to
of

District
justify injunctive relief. See Winter, 555 US at 22; In re Excel Innovations, Inc., 502 F.3d 1086,
States

1098 (9th Cir. 2007). Such extraordinary relief is only appropriate where the-threat of harm is

United
Northern
“immediate.” Caribbean Marine Servs. Co. v. Baldrige, 844 F.2d 668, 674 (9th Cir.1988).

More specifically, to justify an asset freeze of the sort sought here, the party seeking relief
“must show a .likelihoodllof dissipation of the claimed assets, or other inability toirecover monetary

damages, if relief is not granted.” Johnson v. Couturier, 572 F.3d 1067, 1085 (9th Cir. 2009). In

determining whether a freeze is appropriate, courts in the Ninth Circuit have looked .to evidence

that defendants are in the process of dissipating assets, are strategizing to do so in thefuture, or

have a history of past financialmisconduct. See, 8. g. Conn. Gert-Life Ins. Co. v. New Images of.

hBeverly Hills, 321 F.3d 878, 881 (9“1 Cir. 2003) (affirming district court that expressly found it

“was not only possible, but probable” defendant would dissipate assets based on her past history

of fraudulent intra-family transfers, concealment of assets in defiance of a court order, and a

conveniently timed divorce settlement); Johnson, 572 F.3d at 1085 (past financial misconduct
ORDER DENYING APPLICATION FOR TRO
CASE No. 17-cv-07095-RS
 «-
e;

_
. Case 3:17—cv-07095—RS Document 35 Filed 12/20/17 Page 5 of 7

showed defendant was “more than capable of placing assets in his personal possession beyond the

reach of judgment.”)
AWN Here, MacDonald seeks an injunction preventing the defendants from spending,

converting, or dissipating the cryptocurrency assets acquired through the Tezos I CO. He argues

that in the absence of a TRO, he, and the class members he purports to represent, will suffer
irreparable harm from defendants looting or converting the cryptocurrency assets acquired in the

\OOO\l0\U1

ICC. In support of this argument, MacDonald alleges: 1) there have been very few updates about

the project despite investors having been told it would be launched by now; 2) there has been no

delivery of the promised tokens; 3) there is evidence of infighting amongst Tezos leadership

10 including accusations that Board Member Gevers has engaged in self-dealing, self—promotion and

ll conflicts of interest; 4) the Foundation promised an audit would be published in November but

12 recently fired its auditor; 5) the defendants have taken steps to convert the cryptocurrencies
Court
California
l3 received in the ICC into fiat currency (at an approximate rate of $500,000 USD each day); and 6)

District
14 the defendants have stated they intend to use $50 million USD of the 1C0 proceeds to invest in
of

15 companies looking to build on the Tezos platform.

District

States

16‘ Unfortunately for MacDonald, the facts alleged are not enough to suggest an immediate

United Northern
17 risk of irreparable harm. First, as a threshold matter, it is not clear that damages would-be

18 inadequate to compensate MacDonald for any harm he suffers. While it is. true that California

I9. . Civil Code§ 25503 offers rescission as a potential remedy, it also provides that, “if the :

20 consideration given for the security is not capable of being returned,” then the plaintiff may
.21 recover damages.

22_ . MacDonald attempts to dodge this argument by noting the volatility of the cryptocurrency
-
23 market. The Bitcoin and Ethereum he and others contributed during the Tezos ICO has since

24 ballooned in value.4 If the defendants are permitted to convert those cryptocurrencies into cash,

25 and the cryptocurrencies continue to increase in value, it is possible, MacDonald argues, that

26
4
27 What was worth $232 million in July is now worth over $1 billion.

28 ORDER DENYING APPLICATION FOR TRO

CASE No. 17—cv-07095—RS
 Case 3:17—cv-07095—RS Document 35 Filed 12/20/17 Page 6 of 7

defendants will not be able to afford to buy back the Bitcoin and Ethereum (or provide the

equivalent monetary damages) to which plaintiff and the class would be entitled if they prevail. It
is far from certain, however, that the value of Bitcoin and Ethereum will continue to rise. Nor does
Ab)

it seem inherently irresponsible or suspect that the Tezos Foundation would convert some of these
highly volatile assets into a more diverse and stable portfolio.

Moreover, MacDonald’s allegations of looting simply do not have enough behind them.
The lack of updates regarding the project, the infighting amongst T ezos leadership, the firing of an
\OOO\]O\

auditor, and the delayed launch of the project are all worrisome. None of them, however, are

strong evidence of looting. The funding of companies working to develop the Tezos network

10 seems consistent with the Foundation’s purpose (and the success of the enterprise as a whole). The

11 conversion of some portion of the volatile cryptocurrency assets into more stable currency is

12 unlikely to jeopardize MacDonald’s ability to recover the 18.145 Ethereum be contributed (or its

equivalent economic value) should he ultimately prevail. Additionally, plaintiffs allegations that
Court
California
13 a

District
14' TRO is necessary to prevent the cryptocurrency assets from being dissipated in their entirety and
of

15 on short notice is undercut by MacDonald’s acknowledgement that there are procedures in place to
District

States

16 make the rapid movement of 1C0 assets difficult. Specifically, Bitcoin Suisse is a mandatory co-

United Northern
17 signatory for any transactions involving the funds collected in the ICC. Bitcoin Suisse has publicly

I8 stated it is not aware of any evidence of funds being mismanaged and MacDonald has not alleged
‘ i V
l 1

19 any wrongdoing byBitcoin Suisse}-

20 On the whole, MacDonald fails to'show that the defendants are in the process‘of

21‘ dissipating assets, are strategizing to do so, or have a history of past financialsmiseonduct. As a

22 result,.hi_s concerns about dissipation rise to little more than speculation. They are not sufficient to

24

25 5
Relatedly, a declaration submitted by plaintiffs (documenting comments made in an online
'26 forum by an individual claiming to be Defendant Schmitz—Krummacher) suggests that even if
defendants wanted to convert large amounts of cryptocurrency into fiat currency rapidly it would
27 be difficult to do so due to reluctance by Swiss banks to conduct such transactions.

ORDER DENYING APPLICATION FOR TRO

28
CASE No. 17-cv—07095-RS
 1

Case 3:17~cv—07095—RS Document 35 Filed 12/20/17 Page 7 of 7

support a finding of irreparable harm and therefore do notjustify the “extraordinary remedy” of

N issuing injunctive relief.

Because plaintiff has failed to show he is likely to suffer irreparable harm, his other
hw

arguments—regarding success on the merits and whether the balance of equities and the public

interest favor injunctive relief—need not be reached.

V. CONCLUSION

Plaintiff MacDonald’s application for a temporary restraining order is denied.

\OOOQCAU‘I

IT IS SO ORDERED.

10

ll Dated: December 20, 2017

12.
Court
California
13
RICHARD SEEB ORG
United States District Judge
'
6
.14
District
of

15
District

States

‘16

United Northern
17

18

,19’

20

21-

22..

23

24

25

26

27

28 Appucmou FOR TRO

ORDER DENYING
CASENO. l7-cv—07095—RS
EXHIBIT B
 Case 3:17-cv-07095—RS Document 69 Filed 01/24/18 Page 1 of 2

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

BRUCE MACDONALD,
Case No. l7—cv—07095—RS
Plaintiff,

V- ORDER DENYING MOTION FOR

EXPEDITED DISCOVERY
Court
DYNAMIC LEDGER SOLUTIONS, INC., '

California

et al.,

District
Defendants.
of

Plaintiff Bruce MacDonald moves for permission to take expedited discovery from
District

States

Defendants Dynamic Ledger Solutions, Tezos Stiftung, and Bitcoin Suisse AG in advance of the

United Northern
parties Rule 26(f) conference. That conference is currently scheduled to take place no later than

February 22, 2018. MacDonald contends expedited discovery is necessary to: a) investigate issues

_
raised in this previously denied application for a temporary restraining order—_and,.in so doing, to

determine if he should move for a preliminary injunction; b) monitor the‘safety of the ICC
proceeds; and c) uncover facts relevant to whether the Court has personal jurisdiction over the

Swiss defendants. . .
_
_
_
‘

Rule 26(d)- of the Federal Rules of Civil Procedure generally prohibits a party from seeking
discovery prior to the parties meeting and conferring as required by Rule 260“).] District courts

may grant requests for expedited discovery in advance of a Rule 26(f) conference, however, on a

'
Rule 26(d) provides that “[a] party may not seek discovery from any source before the parties
have conferred as required by Rule 26(f), except in a proceeding exempted from initial disclosure
under Rule 26(a)(1)(B), or when authorized by these rules, by stipulation, or by court order.”
 Case 3:17—cv—O7095—RS Document 69 Filed 01/24/18 Page 2 of 2

showing of “good cause.” Rovio Entm'l Ltd. v. Royal Plush Toys, Inc, 907 F. Supp. 2d 1086, 1099

(N.D. Cal. 2012). “Good cause may be found where the need for expedited discovery, in

consideration of the administration of justice, outweighs the prejudice to the responding party.” Id.
LII-DWN
(citing Semitool, Inc. v. Tokyo Electron Am, Ind, 208 F RD. 273, 276 (ND. Cal. 2002)). The

party seeking discovery bears the burden of showing that good cause exists. Id.
Here, consideration of MacDonald’s motion and supporting memorandum, as well as

defendants’ responses, reveals good cause does not exist to justify expedited discovery.
\DOO\]O\

MacDonald has not met his burden of showing that departing from normal discovery procedure

would serve the interests of justice in ways that outweigh the prejudice suffered by defendants——

10 especially when the Swiss defendants have not yet had the chance to contest whether they are

11 subject to the Court’s jurisdiction.2 Moreover, as noted at the hearing on MacDonald’s TRO

12 application, this case is one of four currently pending cases addressing the Tezos ICO. Rather than
Court
California
13 granting a request that will further complicate efforts to consolidate and streamline the litigation of

District
14 these cases, the better course is to encourage Plaintiff MacDonald,.and all of the parties, to work
of

15 together in developing a litigation plan that is both logical and efficient.

District

States

16 MacDonald’s motion for expedited discovery is denied}

United
Northem
17 IT IS SO ORDERED.
18

.19. Dated; mm '24, 2018

20

21
RICHARD SEEDORG
United States District'Judge‘
U
22,
23 2
On January 5, 2018, the Court approved a stipulation entered into by the parties under which the
24 Swiss defendants agreed to waive'service of the summons and complaint while preserving their
right to challenge the Court’s exercise of personal jurisdiction. The stipulation provided that
25 defendants would have until March 6, 2018 to answer, move to dismiss, or otherwise respond to
the complaint. (Dkt. No. 49).
26 3
This decision does not foreclose MacDonald from renewing his request forjurisdictional
27 discovery, If necessary, In response to a motIon to dismiss.

28 ORDER DENYING MOTION FOR EXPEDITED DISCOVERY

CASE No. 17-cv-07095-RS
EXHIBIT C j
 Case 3:17—cv—O7095—RS Document 96 Filed 03/16/18 Page 1 of 12

\OOO\10\U14>-wt\)._.

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

GGCC, LLC, et al., Case Nos. l7-cv-06779-RS

. . l7-cv~06829—RS
P'a'm‘ffs’
l7-cv-06850-RS
v. l7—cv-07095—RS

ORDER REGARDING
Court
California
(REAR/”C LEDGER SOLUTIONS’ INC" CONSOLIDATION, APPOINTMENT OF
LEAD PLAINTIFF, AND SELECTION
Defendants, OF LEAD COUNSEL
District
of

District

States

I. INTRODUCTION
United Northern
This securities class action is brought on behalf of individuals who contributed to the
NNNNNNNNN—.-—-—-—-~—-—»—-

Tezos Initial Coin Offering (“ICO”) in July 2017. Four related cases have been filed in (or
mxIONM-bw'N~O\OOO\IO\LA-D-UJN~O

removed to) this Court asserting a variety of federaliand‘state.law'clairns._l At core, all of the cases

revolve around the underlying assertion that the Tezos ICO involved the sale of unregistered

securities. Five different plaintiffs and plaintiff groups initiallymoved for appointment as lead

plaintiff and for approval ofltheir respective selections of counsel._0ne plaintiff has since
conceded, leaving four remaining contenders.2 In conjunction 'With their motions for appointment,

I
I
The three actions other than this one are: Okusko v. Dynamic Ledger Solutions, Inc. et al, Case
No. 17-cv—6829; Baker v. Dynamic Ledger Solutions, Inc. et al, Case No. l7-cv-6850; and
MacDonald v. Dynamic Ledger Solutions, Inc., et al., Case No. 17-cv-7095.
2
The four remaining contenders for lead plaintiff are: 1) Arman Anvari; 2) Trigon Trading; 3)
David Lang, Ryan Coffey, and Alejandro Gaviria (the “Gaviria Group”); and 4) Nicolas
Andreasson, Paul Martin, and Richard Reckenbeil (the “Tezos Investors Group”).
 Case 3:17—cv—07095-RS Document 96 Filed 03/16/18 Page 2 Of 12

plaintiffs have also proposed varying approaches to consolidating and/or coordinating the four

actions at issue.

For the reasons explained below, Arman Anvari is appointed as lead plaintiff. LTL

.3;
Attorneys LLP and Hung G. Ta, Esq. PLLC will serve as lead counsel. The GGCC, Okusko, and

MacDonald actions are consolidated and the Baker action shall be coordinated for case

management purposes. Whether Baker should be consolidated can be revisited, if necessary, after
OKOOOQQU‘I
the Supreme Court issues its decision in Cyan, Inc. v. Beaver County Employees Retirement Fund,

et al., No. 15—1439, and a determination can be made as to whether remand is appropriate.

II. LEGAL STANDARD

. Under Federal Rule of Civil Procedure 42(a), a court may consolidate actions that “involve

a common question of law or fact}? Whether Or not to consolidate is at the discretion of the district
12 court. Inv’rs Research Co. v. US. Dist. Ct. for Cent. Dist. of Cal., 877 F.2d 777, 777 (9th Cir.
Court
California
13 1989). The Private Securities Litigation Reform Act (“PSLRA”) requires that when “more than

District
14 one action on behalf of a class asserting substantially the same claim or claims arising under this
of

15 title has been filed, and any paIty has sought to consolidate those actions” the court shall not make
District

States

16 a determination of lead plaintiff until after a decision on the motion to consolidate is rendered. 15
' i ' i

United Northern
17 U.S.C. § 78u—4(a)(3)(B)(ii).

18 The PSLRA requires the court to appoint as lead plaintiff “the member or members of the
.

‘19 purported plaintiff class that the court determines'to be the'mos't capable of adequately
20 representing the interests of the class members.” 15 U..SC. §78u-4(a‘)(3)(B)(i); Hodges v. Akeena

21 Solar, Inc., 263 F.R.D. 528, 531 (N .D. Cal. 2009). The Act creates a rebuttable presumption that

22. the most adequate plaintiff is the f‘person or group of persons’,’ that (1) either filedthe complaint or
23 made a motion in response to the published notice; (ii) in the determination of the court, has the
24 largest financial interest in. the relief sought; and (iii) otherwise satisfies the requirements of Rule
-25
.
23 ofthe Federal Rules of Civil Procedure. 15 U.S.C. §78u—4(a)(3)(B)(iii).

26

27

28 ORDER RE: CONSOLIDATION, LEAD PLAINTIFF, & LEAD COUNSEL

CASE No. l7—cv-06779-RS
2
 Case 3:17-cv-07095—RS -

Document 96 Filed 03/16/18 Page 3 of 12

N—‘
III. DISCUSSION
A. Consolidation

The movants take varying positions on consolidation. All parties agree that Okusko and

GGCC should be consolidated. They disagree, however, over what to do with Baker and

MacDonald. This disagreement is based on the factors that distinguish these two cases from the

OKOOOQONUI-P-UJ other three: MacDonald brings only state law claims and Baker, which was removed from state

court, has been stayed pending a Supreme Court decision that will be relevant to determining
whether remand is appropriate. See Baker, Case No. 17-cv-6850, Dkt. 18.

Anvari and the Tezos Investors Group both assert MacDonald and Baker should be

consolidated with the other two actions—a position supported by Defendants Tezos Stiftung,

*— Dynamic Ledgers Solutions, Inc., Kathleen and Arthur Breitman, Draper Associates V Crypto

N LLC, and Timothy Draper. Trigon Trading and the Gaviria Group, by contrast, argue MacDonald
Court
California
W should be coordinated but not consolidated—Le, MacDonald and his counsel should coordinate

District
4; with the other cases when possible regarding scheduling, briefing, and discovery, but the case
of
KJ’I
should not be litigated with the others under a single operative complaint. Finally, Baker argues
District

States

his case should not be consolidated. Doing so, he contends, would require lifting the stay recently
\].O\

United Northern
issued in his case, despite not yet having received the Supreme Court guidance that was the reason

OO
for the stay, and would thus unjustly force Baker to proceed in federal court.
.

\O With regard to MacDonald, the arguments in favor of consolidation are far more
'

O persuasive than those against. As an initial matter, the fact that MacDonald advances state rather

>—‘
than federal claims does not preclude consolidation. See, e.g., In re Reserve Fund Sec. & Deriv.

[\J Litig, 2009 WL 10467937, at "f1 —2 (S.D.N.Y. Aug. 26, 2009) (consolidating PSLRA and non-
DJ
PSLRA cases involving “thesame core set of operative facts”). As previously noted, the standard

A for consolidation under Rule 42 is whether the actions at issue involve common questions of “law
U!
or fact.” In applying this standard, courts have found that “[c]onsolidation of private securities

O‘\
fraud class actions arising from the same alleged misconduct is generally appropriate.” Knox v.

Q Yingli Green. Energy Holding Co. Ltd, 136 F. Supp. 3d 159, 1162 (CD. Cal. 2015).
1

00 ORDER RE: CONSOLIDATION, LEAD PLAINTIFF, & LEAD COUNSEL

CASE No. l7-cv-O6779-RS
3
 Case 3:17—cv-O7095—RS Document 96 Filed 03/16/18 Page 4 of 12

Here, the claims in MacDonald arise from the same factual predicate as the other cases: the

Tezos ICO. They rely 011 the same legal theory: that the lCO constituted an unregistered sale of
securities. They seek the same relief: the return of the funds raised. Lastly, they are brought on
LII-PLAN

behalf of a putative class of California contributors to the lCO that is entirely subsumed by the

classes in the other three actions. Under these circumstances, the gains in efficiency, convenience,

and cost reduction that flow from consolidation are apparent and outweigh any prejudice that

might be caused.3 See Sw. Marine, Inc. v. Triple A Mach. Shop, Inc., 720 F .Supp. 805, 807 (ND.

OKOOONO
Cal. 1989) (“To determine whether to consolidate, a court weighs the interest of judicial

convenience against the potential for delay, confusion and prejudice caused by consolidation”)

Baker’s arguments against consolidation are more compelling than MacDonald’s. Like

11 MacDonald, Baker arises from the same factual predicate, advances similar legal theories, and

12 seeks similar relief. It is quite possible that at some point in the future these factors will make
Court
California
13 Baker ripe for consolidation. For now, however, Baker is correct-that consolidating his action

District
14 would run counter to the very reason for which the action was stayed. Having refrained from
of

15 issuing a decision on Baker’s remand motion until guidance is provided by the Supreme CouIt, it
District

States

16 would not make sense to force Baker to proceed in federal court before that guidance is

United
Northern
17 forthcoming. Moreover, given that Baker is stayed, there is little prejudice that can flow from

18 failing to consolidate the case at thisjuncture. In light of the above, GGCC, Okusko, and
'

- 1’9 MacDonald are consolidated. Baker shall becoordinated with the consolidated action—Le, Baker
20' and his counsel shall be kept informed of all case management and Scheduling matters so later

21 consolidation, should that prove appropriate, can be as streamlined as possible.4

.22
3
MacDonald presents no reasons Why the state law claims-Would be prejudiced through
23 consolidation beyond being subject to the temporary discovery stay imposed by the PSLRA. Such
a limited stand down period ultimately is unlikely to have a negative impact on the plaintiffs.
24
4
Bitcoin Suisse AG and Niklas Nikolajsen, two defendants in the MacDonald action, object to
25 consolidation of MacDonald on the grounds that they believe they were improperly named in the
MacDonald action and are not subject to personal jurisdiction. See MacDonald, l7-cv-7095, Dkt.
26 No. 88. Consolidation of MacDonald does not require that Bitcoin Suisse AG or Nikolajsen waive
either of these arguments. They may raise theirjurisdictional objections in the consolidated action
27 if they so choose. Accordingly, their objection to consolidation is overruled.
28 ORDER RE: CONSOLIDATION, LEAD PLAINTIFF, & LEAD COUNSEL
CASE NO. l7—cv-06779-RS
4 .
 Case 3:17—cv-07095—RS Document 96 Filed 03/16/18 Page 5 of 12

B. Lead Plaintiff

The Ninth Circuit has articulated a three-part test for determining which applicant meets

the criteria for lead plaintiff under the PSLRA. In re Cavanaugh, 306 F.3d 726, 732 (9th Cir.
LII-{>935}

2002). First, the court must determine whether the first plaintiff to file an action issued a notice

publicizing the pendency of the action. Id. at 729 (citing 15 U.S.C. §78u-4(a)(3)(A)). Second, the

court must decide which plaintiff has the most to gain financially from the lawsuit, and whether

this plaintiff satisfies the requirements of Rule 23 of the Federal Rules of Civil Procedure. Id. at

OOOOQQ 730. Rule 23 provides that a party may serve as a class representative if the claims or defenses of
the representative parties are typical of claims or defenses of the class and the representative
parties fairly and adequately protect the interests of the class. Fed. R. Civ. Proc. 23(a). Finally, the

11 court must consider competing plaintiffs’ attempts to rebut the presumptive plaintiff 5 showing

12 that it satisfies Rule 23. Cavanaugh, 306 F.3d at 730.

Court
California
13 As long as the plaintiff with the largest losses satisfies the typicality and adequacy

District
14 requirements, he or she is entitled to lead plaintiff status. Id. at 732. The district court may not
of

l5 overcome this statutory presumption, even if it thinks a different plaintiff would do a betterjob. 1d.
District

Nor may the district court consider the relative merits of the plaintiffs seeking lead status. Id.
States

16

United Northern
17 Rather, the process is sequential, starting with the potential plaintiff with the greatest financial
V

18 interest. 1d.
-

.19, 1. Notice Requirement and Filings .

20 Here, as required by statute, the plaintiff in GGCC published a notice on November 26,

21 2017, via PRNewswire, which announced the litigation and correctly stated that motions for lead

22 plaintiffhad to be filed within 60 days (i.e., byJanuary 25,2018). See Dkt. No. 12; 15 U.S.C.

23 -
§78u-4(a)(3)(A)(1). Four plaintiffs filed motions clearly falling within the statutory deadline:

24 1. Trigon Trading asserts a financial interest of 18.9999 Bitcoin (“BTC”) and seeks
approval of Block & Leviton as lead counsel (Dkt. No. 55);
25
2. David Lang, Ryan Coffey, and Alejandro Gaviria (the “Gaviria Group”) assert a
26
financial interest of 9.6163174 BTC and 53.0799 Ethereum (“ETH”) and seek approval
27 of the Robbins Geller and Silver Miller firms as lead counsel (Dkt. No. 38);

28 ORDER RE: CONSOLIDATION, LEAD PLAINTIFF, & LEAD COUNSEL

CASE No. 17-cv-O6779-RS
5
 Case 3:17-cv—07095-RS Document 96 Filed 03/16/18 Page 6 of 12

3. Nicolas Andreasson, Paul Martin, and Richard Reckenbeil (the “Tezos Investors
Group”) assert a financial interest of 4 BTC and 64.97925707 ETH and seek approval
of Levi & Korsins'ky as lead counsel (Dkt. 49); and

Anew
4. GGCC, LLC, Pumaro, LLC, and Nick Anthony (the “GGCC Group”) assert a financial
interest of 1.90406 BTC and l l ETH and seek approval of the Restis and Lite DePalma
firms as lead counsel (Dkt. No. 53).5

A fifth plaintiff, Arman Anvari, also filed a motion on January 25, 2018. Unlike the other
\]O\Ul

plaintiffs, however, Anvari filed his motion in the related MacDonald action rather than this action

(GGCC). One day later, on January 26, 2018, he refiled an identical version of his motion in

GGCC, asserting a financial interest of 250 ETH and seeking approval of LTL Attorneys LLP and

Hung G. Ta, Esq. PLLC (“HGT Law”) as lead counsel.

10 The timing of Anvari’s motion is critical because he undisputedly asserts the largest

ll financial interest (see section below). Thus, if his motion is timely, and he satisfies the Rule 23
12 requirements, he is the presumptive lead plaintiff. Cavanaugh, 306 F.3d at 730.
Court
California
13 Not surprisingly, the other movants argue Anvari’s motion came too late and therefore

District
14 should not be considered. They point to various cases in which courts have rigidly enforced the
of

15 60-day filing deadline and have emphasized the importance of the strict time requirements
District

States

16 imposed by the PSLRA. See, e.g., Zlm v. UCBH Holdings, Inc., 682 F.Supp. 2d'1049, 1053 (ND.

United Northern
17 Cal. 2010) (“The plain language of the statutes precludes consideration of a financial loss asserted
18 for the first time in a complaint, or any other pleading, for that matter, filed after the sixty (60) day
L
-19 _
window has closed”) (citations omitted). They'even identify one case, Skwortz v. Crayfish Co.,
H
20 2001 WL 1 160745 (S.D.N.Y. Sept. 28, 2001), in which the court rejected a lead plaintiff
"
21 application that was filed one day late. Id. at *5'. '

22 None ofthe cases, however, are satisfactorily analogous to the situation presented here.6
23-
5
24 The GGCC Gi‘oup has subsequently withdrawn its application for lead and given its support to
the application of Arman Anvari.
25 6
Some of the cases cited also acknowledge that while courts generally enforce the sixty-day
26 deadline, “rare circumstances” mayjustify consideration of an untimely motion. See, e. g., In re
MicroStrategy Inc. Sec. Litig, 110 F.Supp. 2d 427, 433 (ED. Va. 2000). See also Reitan v. China
27 Mobile Games & Entm’! Grp, Ltd, 68 F. Supp. 3d 390, 397 (SD. NY. 2014) (collecting cases
and noting common reasons why certain courts “have not adhered strictly to the PSLRA’s timing
28 ORDER RE: CONSOLIDATION, LEAD PLAINTIFF, & LEAD COUNSEL
CASENO. l7-cv-O6779-RS
6
 Case 3:17—cv-O7095—RS Document 96 Filed 03/16/18 Page 7 of 12

While Anvari’s motion in GGCC is one day late, he did file an identical motion in the related

MacDonald action by the January 25, 2018 deadline. Moreover, Anvari claims he filed his motion

in MacDonald in response to a notice issued by MacDonald’s counsel, Hagens Berman. That

notice announced a securities class action had been brought on behalf of investors in the Tezos

ICO alleging “unregistered offering and sale of securities in violation of Sections 5, 12(a)(1) and

15 of the Securities Act of 1933.” It stated the Lead Plaintiff deadline was January 25, 2018. The
\OOOQQLh-b

notice also included a link to a webpage with information regarding MacDonald—including the

MacDonald case number (3: l 7-cv-07095-J SC) and a second reference to the January 25 “Lead

Plaintiff 'Deadline”—but with no mention of GGCC or any of the other related cases.

10 Under the circumstances, Anvari’s filing in MacDonald appears best understood as a

ll mistake made in good faith rather than as an act of legal gamesmanship of the sort the PSLRA was
12 designed to prevent. See Reitan, 68 F. Supp. 3d at 399 (“The goal of the PSLRA was not to select
Court
California
13 individuals for lead plaintiff who make no mistakes—rather it was to promote a client-driven

District
14 rather than lawyer-driven process . . . .”). Ideally, Anvari’s lawyers would have avoided this
of

15 mistake. There is no indication, however, that the less than twenty-four hours that elapsed between
District

their filing in MacDonald and their subsequent filing of the same motion in GGCC caused any
States

16

United Northern
17 prejudice to the other movantswat oral argument, the other movants acknowledged as much.

18 There is similarly little reason to believe that considering Anvari’s motion would foil the overall
1 .

‘19' goals of the PSLRA’s time provisions-“to ensure that the lead plaintiff is appointed at the earliest

20 possible time and to expedite the lead plaintiff process.” See Zhu, 682 F.Supp. 2d at 1053. Rather,

21 refusing to consider Anvari’s motion would be an unnecessarily stringent application of the

22 statutory deadlines that would undercut the PSLRA’s preference for appointing the plaintiff with

23 the greatest financial stake in the outcome. Cavanaugh, 306 F.3d at 729-30.

24

25

26
requirements in every instance,” including where “granting the motion would not undermine any
27 of the policies that underlie the PSLRA”).

28 ORDER RE: CONSOLIDATION, LEAD PLAINTIFF, & LEAD COUNSEL

CASENO. l7-cv-06779-RS
7
 Case 3:17-cv-07095—RS Document 96 Filed 03/16/18 Page 8 of 12

2. Financial Interest of Potential Plaintiffls

The Ninth Circuit has not provided clear guidance on which metrics district courts should

employ in identifying the lead plaintiff which has the largest financial interest, noting only that
4:. “the court may select accounting methods that are both rational and consistently applied.” See

Mulligan v. Impax Labs Inc., 2013 WL 3354420, at *4 (ND. Cal. July 2, 2013) (quoting

Cavanaugh, 306 F.3d at 730). Here, given the volatility of cryptocurrency assets, the most rational
and consistent way to estimate the financial interest of the potential plaintiffs is by assessing the

value of their contributions at thetime the Tezos ICO concluded. Using this benchmark, the
000°m

financial interest of each of the movants is as listed below:

ETH/BTC APPROXIMATE USD

MOVANT
CONTRIBUTED VALUE AT CLOSE OF IC07

12
Arman Anvari .250 ETH $49,467.50

Court
Trigon Trading 18.9999 BTC $44,235.76
California
13
Gaviria Group 9.62 BTC; 53.1 ETH $32,904.28
14 Tezos Investors Group 4 BTC; 65 ETH $22,174.39
District
of
GGCC Group 1.9 BTC; 11 ETHC $6,600.17
15
District

States

16 As evidenced by this chart, Anvari has the largest financial interest in the litigation, a fact that no

United Northern
17 movant has disputed.

18 3. Rule 23 (a) Requirements —

Typicality and Adequacy
-

19 Because Anvari has the largest financial interest, the next step is to determine whether he

20 meets the “typicality” and “adequacy” requirements of Rule 23(a). Cavanaugh, 306 F.3d at 730. In
21 making this determination, two questions are‘considered: “(1) do[es] the named plaintiffI] and

22 [his] counsel have any conflicts of interest with the other class members and (2) will the named
.23 plaintifflland [his] counsel prosecute the action vigorously on behalf of the class?” Hanlon v.
24 Chrysler Corp, 150 F.3d 1011, 1020 (9th Cir. 1998).

25
7
26 The USD value of BTC and ETl-l are based on the closing prices for each currency for July 14,
2017 (the final day of the Tezos ICO) as found on http://www.coindesk.com. For BTC, that price
27 is $2328.21. For ETH, it is $197.87.

28 ORDER RE: CONSOLIDATION, LEAD PLAINTIFF, & LEAD COUNSEL

CASE No. l7-cv—06779-RS
8
 Case 3:17-cv-O7095—RS Document 96 Filed 03/16/18 Page 9 Of 12

Here, there is no serious dispute as to Anvari’s typicality. As an individual who

contributed to the T6203 ICO, his claims are representative of the putative class.8 The other

#WN movants do challenge Anvari’s adequacy, however, on the grounds that: 1) he filed an improper

certification; 2) he previously worked at a law firm, Perkins Coie LLP, which has counselled other

cryptocurrency startups; and 3) he has selected counsel that is not sufficiently qualified.

The first two of these arguments are especially unpersuasive. With regard to certification,
\OOO\IO\UI

Civil Local Rule 3-7(c) explicitly states that “[a]ny party seeking to serve as lead plaintiff, bI'It

who does not file a complaint, need not file the certification required in Civil L.R. 3-7(b).”

(emphasis added). Accordingly, Anvari was not required to file the certification in question and

10 any deficiencies in that certification that have not already been corrected by his subsequent filings

11 are not a “determinative factor” in selecting the lead plaintiff. Pirelli Armstrong Tire Corp. Retiree
12 med. Benefits Trust v. Labranche & Co., Inc., 229 F.R.D. 395, 407 (S.D.N.Y. 2004). With regard
Court
California
13 to his past employment, Anvari has stated that he never worked on cryptocurrency assignments

District
Of
14 while at Perkins Coie. Even if he had, it is unclear why he would have any continuing allegiance
15 to the interests or views Of his former employer in a way that would put him in conflict with other
District

States

16 class members.
_

United Northern
17 The third argument merits slightly more consideration. The other movants contend that

18 Anvari has selected counsel that is not equal to the task of litigating this securities class action.
19 First, they argue the resumes fOr'bothiLTL Attorneys and HGT Law reveal a lack of experience in

20 litigation Of this sort. Second, they assert Anvari’s Counsel has already made mistakes

21 demonstrating their inadequacy including: filing Anvari’s motion late (and/or in the wrongcase),

22 filing anallegedly deficient certificationLand inaccurately referencing the wrong securities laws.
23 It is true that LTL and HGT appear to have somewhat less experience in litigating complex

24

25 8
At least one movant has suggested that issues may arise from having a lead plaintiff (or plaintiff
26 group) that contributed either BTC or ETH to the Tezos [CD but not both. At oral argument,
however, counsel could not identify how the currency used to make the contribution made any
27 discernible difference to the issues to be litigated.

28 ORDER RE: CONSOLIDATION, LEAD PLAINTIFF, & LEAD COUNSEL

CASE No. 'l7—cv-06779-RS
9
 Case 3:17—cv-07095-RS Document 96 Filed 03/16/18 Page 10 of 12

securities class actions than do some of the law firms selected by other movants. They are not,
however, as inexperienced as the other movants suggest, nor is the Court tasked with assessing the

adequacy of a putative lead plaintiff’s choice of counsel with the rigor that the other movants seek.

As the Ninth Circuit explained in Cavanaugh,

The presumptive lead plaintiff’s choice of counsel and fee arrangements may be relevant in
ensuring that the plaintiff is not receiving preferential treatment through some back-door
financial arrangement with counsel, or proposing to employ a lawyer with a conflict of
OO\]O\
interest. But this is not a beauty contest; the district court has no authority to select for the
class what it considers to be the best possible lawyer or the lawyer offering the best
possible fee schedule. Indeed, the district court does not select class counsel at all. Rather,
such information is relevant only to determine whether the presumptive lead plaintiff‘s
choice of counsel is so irrational, or so tainted by self—dealing or conflict of interest, as to
CO
cast genuine and serious doubt on that plaintiffs willingness or ability to perform the
functions of lead plaintiff.
11 306 F.3d at 732—33.

12. As evidenced by its submitted materials, LTL is a litigation firm with three offices and
Court
California
13 over 30 attorneys. lts lawyers have substantial experience litigating complex class actions in state

District
14 and federal court and appear to have obtained favorable results for class members in multiple
of

15 cases. HGT’s filings, as well as Mr. Ta’s presentation at oral argument, similarly make clear that
District

States

16 its attorneys, though less numerous, have reputable credentials and significant litigation

United Northern
17 experience. Accordingly, Anvari’s selection of LTL and HGT as lead counsel comes nowhere near

18 to being “so irrational” as to “cast genuine doubt” on Anvari’s adequacy.

19 Given that Anvari has the most significant financial interest in this action and also satisfies
20 the typiCality and adequacy requirements of Rule 23, he is the presumptive lead plaintiff. The
21 other movants have failed to offer evidence sufficient to overcome that presumption. Therefore,

22 Anvari shall be appointed lead plaintiff in thisaction. ,

23 4. Selection of Lead Counsel

24 Once a lead plaintiff is chosen, that plaintiff may select its counsel, subject to approval of
25 the court. 15 U.S.C. §78u-4(a)(3)(B)(iv). As discussed above, Anvari’s choice of counsel is

26 acceptable. LTL Attorneys LLP and HGT Law are therefore appointed as co-lead counsel.

27

28 ORDER RE: Consonmnon, LEAD PLAINTIFF, & LEAD COUNSEL

CASE No. l7-cv-06779-RS
10
 a.

Case 3:17—cv-O7095—RS Document 96 Filed 03/16/18 Page 11 of 12

V. CONCLUSION

For the foregoing reasons, the Court orders as follows:

1. Actionsl 7-cv-6829 (Okusko), 17—cv—7095 (MacDonald), and I7-cv-6779 (GGCC) are

Ul-DLDN

hereby consolidated pursuant to Federal Rule of Civil Procedure 42(a) for pretrial

purposes. The consolidated action shall be captioned: “In re Tezos Securities

Litigation,” and shall be maintained in one file under Master File No. l7-cv-06779—RS.
\19

2. All related actions subsequently filed in, or transferred to, this District shall be

consolidated with this action for pretrial purposes. The parties shall notify the Court of

any other action pending or filed outside of this District which may be related to the

10 subject matter of the consolidated action when they become aware of such actions.

11 3. Every pleading filing in the consolidated action shall bear the following caption:

12 UNITED STATES DISTRICT COURT

Court
California
13 NORTHERN DISTRICT OF CALIFORNIA

District
14 -

of
IN RE T EZOS SECURITIES LITIGATION Master File No. _
l7-cv-06779—RS
15 .

States
District
This document relates to: CLASS ACTION
16

United Northern
17
4. When a pleading is intended to be applicable to all actions to which this Order applies,
I8
the words ‘fAIl Actions’? shall appear immediately after the words “This document
19
relates to:” in the caption aboVe. When a pleading applies only to some ofthe actions,
20
the document shall list, immediately after the phrase “This document relates to:” the
21
docket number for each individual action to which the document applies, along with
22
the last name of the first-listed plaintiff in said action.
23
5.' Arman Anvari is appointed as lead plaintiff. LTL Attorneys LLP and Hung G. Ta, Esq.
24
PLLC will serve as lead counsel.
25
6. Within ten (10) days of the entry of this Order, the parties shall meet and confer and
26
file with the Court a stipulation and proposed order setting forth a proposed schedule
27

28 ORDER RE: CONSOLIDATION, LEAD PLAINTIFF, & LEAD COUNSEL

CASE No. I7-cv—O6779-RS
1 1
 Case 3:17—cv—O7095-RS Document 96 Filed 03/16/18 Page 12 of 12

for the filing of a consolidated complaint and a briefing schedule for defendants’

anticipated motions in response to the consolidated complaint.

7. Anvari and his selected counsel shall coordinate with Baker and his counsel regarding

case management matters so that later consolidation of the Baker action, Case No. 17-

cv-6850, if necessary, can be completed as efficiently as possible.

IT IS SO ORDERED.
0000\10

Dated: 3/16/18
. , x)":
it?!" Execs; flux

11
RICHARD SEEBORG v
United States District Judge
12
Court
California
13

District
14
of

15
District

States

16

United
Northern
17

18

19

20

21

22‘
23

24

25

26'

27

28 ORDER RE: CONSOLIDATION, LEAD PLAINTIFF, & LEAD COUNSEL

CASENO. l7-cv-06779—RS
12
 H
if) PROOF OF SERVICE

I, Bridgette Miller-Phillips, declare as follows:

I am employed in San Francisco County, San Francisco, California. I am over the

~

age of eighteen years and not a party to this action. My business address is MANATT, PHELPS
& PHILLIPS, LLP, One Embarcadero Center, 30th Floor, San Francisco, California 94111. On
June 5, 2018, I served the within:

KOOOQO’xUI-b-UJN
> JOINDER OF DEFENDANTS TIMOTHY DRAPER AND DRAPER
ASSOCIATES V CRYPTO LLC IN DEMURRER TO COMPLAINT AND '
MOTION TO STAY ALL PROCEEDINGS
1

on the interested parties in this action addressed as follows:

David Houska, Esq. Donald R. Pepperman, Esq.

Patrick Gibbs, Esq. Brian Klein, Esq.
Jeff Kaban, Esq. Scott Malzahn, Esq.
o
Samantha Kirby, Esq. Brian Grace, Esq.
H
COOLEY LLP BAKERMARQUART
101 CalifOrnia Street, 5th
Floor 2029 Century Park East, 16th Floor
Los Angeles, CA 90067
N San Francisco, CA 941 1—5 800
1
Tel: 424.652.7804
Tel: 415.693.2153 Fax: 424.652.7850
W
Fax: 415.693.2222 Email: dpepperman@bakermarquart.com
Email: dhouska@cooley.com flgleindflbakermarquartcom
-h

pgibbs@cooley.com smalzahn@bakermarquart.com
LII jkaban@cooley.com bgrace@bakermarquart.com
skirby@cooley.com
O\

Reed Kathrein, Esq. Joel Fleming, Esq.

\l
Lisa Lin, Esq. Jake Walker, Esq.
00
Danielle Smith, Esq. BLOCK & LEVITON LLP
HAGENS BERMAN SOBOL 155 Federal Street, Suite 400
\O
SHAPIRO LLP Boston, MA 02110
715 Hearst Avenue, Suite 202 Tel: 617.398.5615
O Berkeley, CA 94710 Email: joel@blockesg.com
Tel: 510.725.3030 jake@blockesg.com
Email: reed@hbsslaw.com
b—i

‘
LisaL@hbsslaw.com
N
danielles@hbsslaw.com
U)
BY MAIL: By placing such document(s) in a sealed envelope, with postage
'2' thereon fully prepaid for first class mail, for collection and mailing at Manatt,
4}
Phelps & Phillips, LLP, San Francisco, California following ordinary business
LI! practice. I am readily familiar with the practice at Manatt, Phelps ‘& Phillips, LLP
for collection and processing of correspondence for mailing with the United States
ON
Postal Service, said practice being that in the ordinary course of business,
correspondence is deposited in the United States Postal Service the same day as it
\]
is placed for collection.

28
MANATT, PHELPS & 1
PHILLIPS, LLP
ATTORNEYS AT LAW
PROOF OF SERVICE
SAN FRANCISCO
 I declare under penalty of perjury under the laws of the State of California that the
foregoing is true and correct and that this declaration was executed on June 5, 2018, at San
Francisco, California.

Bridgette Miller—Phillips

3204869421
\OOO\lO\

10

1 1

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28
‘3‘ 2
Willis???
ATTORNEYS AT LAW
PROOF OF SERVICE
SAN FRANCISCO