Case Document 1 Filed 11/13/17 Page #ngiagg? 7 Time CLERK, us. Dismtercoom MIDDLE UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA Civil Action No. ALEJANDRO GAVIRIA, individually, and on behalf ofAll Others Similarly Situated; Plaintiff, v. DYNAMIC LEDGER SOLUTIONS, INC, a Delaware corporation; KATHLEEN BREITMAN, an individual; ARTHUR BREITMAN, an individual; and TEZOS FOUNDATION, a Swiss corporation; Defendants. CLASS ACTION COMPLAINT Plaintiff ALEJANDRO GAVIRIA (?Plaintiff?), individually and on behalf of all other persons similarly situated as de?ned herein, by and through undersigned counsel, hereby sues DYNAMIC LEDGER SOLUTIONS, INC, 21 Delaware corporation KATHLEEN BREITMAN, an individual; ARTHUR BREITMAN, an individual; and 13208 FOUNDATION, a Swiss corporation (DLS and THE FOUNDATION collectively referred to as (?Defendants?), for damages and for equitable relief. In support thereof, Plaintiff alleges as follows: PRELIMINARY STATEMENT i. This nationwide class action is brought by Plaintiff ALEJANDRO GAVIRIA, individually and on behalf of a class of similarly situated investors (the ?Class Members?) who contributed more than $232 million worth of to an Initial Coin Offering (ICO) propagated by Defendants a contribution that, due to the rising value of the invested by the Plaintiff Class, is now valued at approximately $600 million. SILVER MILLER 11780 West Sample Road Coral Springs. Florida 33065 Teiephonc (954) 516.6000 "Mill Case Document 1 Filed 11/13/17 Page 2 of 40 PagelD 2 2. Defendants and ARriilUR BREITMAN have spent years promoting interest in their effort, in their abilities to provide a groundbreaking new blockchain technology, and in the newly-created that they purported would skyrocket in demand and value once the technology came to the open market. 3. in an attempt to evade federal securities laws and scrutiny from the investors, Defendants have purported that the funds they raised were ?donations, not investments; and that the newly~creatcd each investor receiver] in return for his/her/its ?donation? (Tezos coins or ?"l?emies? or is not a security subject to federal and state securities laws and regulations. 4. As the old saying goes: ?If it walks like a duck, and it quacks like a duck, it?s a duck.? 5. Texaies allegedly derive their value from the usefulness and popularity of the TEZOS network, which was not fully developed or functional at the time Plaintiff and each Class Member made his/ her/ its investment. As of the date of this ?ling, the TEZOS blockchain is purportedly still being developed and, upon information and belief, might never be launched. In other words, there never was, and may never be, a 'I?EZOSubased coin. 6. Of course, the investors were never to play any role whatsoever in the development or launch of the Rather, the investors invested in a common enterprise and with an expectation that the increased value of their "l?czzies would produce a substantial return on the]: investment that would be derived solely from the efforts of others namely, Defendants. 7. In short, the thing for which Plaintiff and each Class Member invested his/ her/ its valuable assets looks like a security, functions like a security, and fits the de?nition of a security. Securities regulators look. beyond the form or label someone appends to his/ her/ its activity and instead consider the actual substance and purpose of the activity. -7- SILVER MILLER 11780 West Sample Read Coral Springs, Florida 33065 Telephone (95-3) 516-6000 Case Document 1 Filed 11/13/17 Page 3 of 40 PagelD 3 8. Notwithstanding Defendants? attempts to avoid governmental and private scrutiny, it is clear that the ?nanciers were indeed pro?t?seeking investors in a security and that Defendants promoted and conducted an unregistered offering of securities, not a charitable fundraiser a security that has already plummeted in value over Defendants? corporate in??ghting and public concern that the "113208 blockchain might never be iaunched. 9. Defendants have already pocketed for themselves tens of millions of dollars for their promotional efforts, and due to the many misrepresentations, factual omissions, and unlawful activities engaged in by Defendants it appears Plaintiff and the Class cannot, and potentially will not, see any return on their investments. it). In describing lCOs as a ?fertile ground for fraud on investors,? United States Securities and Exchange Commission (SEC) Chairman jay Clayton recently said: ?[l]nvestors often do not appreciate that insiders and management have access to immediate liquidity, as do larger investors, who may purchase tokens at favorable prices. ?l?rading of tokens on these platforms is susceptible to price manipulation and other fraudulent trading practices.?I Mr. Clayton went on to state: ?The SEC may not yet have policy or rulemaking answers in these areas, but we are on the lookout for ways to ?ght the type of opacity that can create an environment conducive to misconduct.? 11. Plaintiff and Class Members seek compensatory and equitable relief rescinding their investments in. and restoring to them the assets and funds they were fraudulently induced into investing. jay Clayton, Garrarllmar and '1 1l'tlliJf?il'6?lItJ! at [be and in Mariam, Remarks at the PM 49th Annual Institute on Securities Regulation - New York, NY (November 8, 20?! 7), 17?1 "1438. 3 SILVER MILLER 11780 West Sample Road - Coral Springs. Florida 33065 'I?elephone (954} 516-6000 Case Document 1 Filed 11/13/17 Page 4 of 40 PageID 4 QENERAL ALLEGATIONS THE PARTIES Plaintiff 12. Plaintiff ALEJANDRO GAVIRIA is an individual domiciled in Sanford, Florida and is Jrrz'jnir. On July 1, 2017, Plaintiff GAVIRLA transmitted to TEZOS 25.0799 Ether (then valued at $6,713.64) as his initial investment in the TEZOS ICO. On july 6, 2017, Plaintiff GAVIRIA transmitted to TEZOS an additional 28 Ether (then valued at $7,440.72) as his follow? up investment in the TEZOS ICO. Plaintiff Ether (now being held by TEZOS) are currently worth approximately $17,347.22. Defendants 13. Defendant DLS is a Delaware for-pro?t corporation which lists its principal place of business in San Francisco, California. DLS is currently controlled by its founders, KATHLEEN BREITMAN and ARTHUR BREITMAN. It owns all of the EZOS-related intellectual property, including -- to the extent it even exists the source code of the TEZOS ledger, logos, and trademark applications associated with the name TEZOS, domain names, and goodwill. 14. Defendant KATHLEEN BREITMAN is an individual domiciled in San Francisco, California and is 15. Defendant ART I-IUR BREITMAN is an individual domiciled in San Francisco, California and is mz'jmir. 16. At all times relevant here, KATHLEEN BREITMAN and ARTHUR BREITMAN were, and still are, married to one another. 4 SILVER MILLER 11780 West Sample Road - Coral Springs, Florida 33065 Telephone (954) 516-6000 iririri?tlremillet!entertain Case Document 1 Filed 11/13/17 Page 5 of 40 PageID 5 17. Defendant TI-IE FOUNDATION is an entity allegedly based in Zug, Switzerland that is seeking but has not yet been granted -- not-for?profit status. THE FOUNDATION is allegedly managed by a three-person Board of Directors, headed by THE President, Johann Gevers. As explained in greater detail below, it is unclear who is actually managing THE operations; as in-fighting between and Mr. Gevers and THE recent attempt to usurp managerial control over THE FOUNDATIONS operations -- are ongoing and are causing widespread uncertainty as to who is truly controlling TI-IE FOUNDATION. The only thing that is clear is that THE believe they can exert from the United States their control over operations and the assets it holds, wherever in the world they may be found. IURISDICTION AND VEE QB Subject Matter jurisdiction 18. This Court has jurisdiction over the subject matter of this action pursuant to 28 U.S.C. ?1332, as amended by the Class Action Fairness Act of 2005, because the matter in exceeds Five Million Dollars exclusive of interest and costs, and is a class action in which some members of the Class are citizens of different states than Defendants. See, 28 U.S.C. 1332(a) and This Court also has supplemental jurisdiction over the state law claims pursuant to 28 U.S.C. 1367. Personal urisdiction 19. This Court has personal jurisdiction over Defendants because: at least one Defendant is operating, present, and/ or doing business within this District, and Defendants? breaches and unlawful activity occurred within this District. 5 - SILVER MILLER 11780 West Sample Road - Coral Springs. Florida 33065 - Telephone (954) 516-6000 Case Document 1 Filed 11/13/17 Page 6 of 40 PageID 6 20. Defendants solicited investors in this jurisdiction, including Plaintiff ALEJANDRO to participate in the ICO reaping from those investors large sums of money and other assets, including valuable In light of the foregoing, Defendants have purposefuliy availed themselves of the benefits of Operating in this jurisdiction; and this Court may exercise personal jurisdiction over Defendants. Venue 22. Venue is proper pursuant to 28 U.S.C. 1391 in that a substantial part of the events or omissions giving rise to the claims set forth herein occurred in this judicial district, as severai of the investors reside in 23. In light of the foregoing, this District is a proper venue in which to adjudicate this dispute. FACTUAL ALLEGATIONS APPLICABLE TO ALL COUNTS A Brief Primer on 24. Although precise de?nitions vary, the United States Internal Revenue Service (IRS) has de?ned k/ a ?virtual currency?) as a digital representation of value that functions as a medium of exchange, a unit of account, and/ or a store of value. In some environments, it operates like a ?real? currency. Virtual currency that has an equivalent value in real currency, or that acts as a substitute for real currency, is referred to as ?convertibie? virtual currency. 25. Among the most popular and widely?used are Bitcoin (ETC) and Ether (err-1). 6 - SiLvna MILLER 12780 West Sample Road Coral Springs. Florida 33065 . Telephone (954) 5316-6000 ?331.33 hit: ii rlai cu Case Document 1 Filed 11/13/17 Page 7 of 40 PagelD 7 26. Bitcoin, Ether, and other convertible currencies of their type rely upon (and unique digital signatures) for security based on public and private keys and complex mathematical algorithms. Moreover, they run on decentralized peer-to-peer networks of computers and ?miners? that operate on open?source software and do ?work? to validate and irrevocably log transactions on a permanent public distributed ledger visible to the entire network (the ?blockchain?). By functioning this way, users are able to transfer ownership between one another without the need for a trusted, central intermediary like a government regulator. 27. Bitcoin and Ether exchangers typically accept payments of flat currency (currency which derives its value from government regulation or law) or other convertible digital currencies. When a user wishes to purchase Bitcoin or Ether from an exchanger, the user will typically send payment in the form of flat currency, often via bank wire or ACH or other convertible digital currency, to the exchanger for the corresponding quantity of Bitcoin or Ether, based on a fluctuating exchange rate. The exchanger, often for a commission, will then typically attempt to broker the purchase with another user of the exchange that is trying to sell Bitcoin or Ether, or, in some instances, will act as the seller itself. If the exchanger can place a buyer with a seller, then the transaction can be completed. The ICC Market 28. While in traditional Initial Public Offerings (IPOs), a start?up company offers its investors company stock in exchange for investment capital; a company promoting an ICO offers something different to its investors: such as Bitcoin, Ether, or a newly-created virtual currency issued or managed by the start-up company in exchange for the investors? capital, which itself might be lure-existing owned by the investors. -7- SILVER MILLER 11780 West Sample Road Coral Springs. Florida 33065 Telephone (954) 516-6000 AMY-9.0.1.11 Case Document 1 Filed 11/13/17 Page 8 of 40 PagelD 8 29. Much like capital stock, the value of can rise or fall with the success or failure of the start-up venture. 30. Moreover, much like with traditional IP05, the ?nancial fortunes (or misfortunes) of the investors whose funds are used to fuel the new venture rely upon the knowledge, skill, and efforts of someone other than themselves -- speci?cally, the promoters or operators of the new venture. Tezos Is Born 31. According to published reports, ARTHUR BRIEITMAN -- in or around the summer of 2014 developed the concepts underlying technology, though he did so by publishing a Tezos Position Paper and a Tezos White Paper under a pseudonym Goodman?) for fear of violating his obligations of loyalty to his then-employer, Morgan Stanley. 32. In early?2015, ARTHUR BREITMAN a self?described -- told others that he wanted to start a business based on TEZOS, but he did not want to be publicly associated with the effort. 33. At that time, ARTHUR BREITMAN was registered with the U.S. Financial Industry Regulatory Authority (FINRA) as a ?nancial representative working at Morgan Stanley. 34. FINRA Rule 3270 requires each registered securities professional to provide prior written notice to his/ her employer before he/ she can conduct outside business activities if he/ she has a ?reasonable expectation of compensation? from those activities. 35. Also in early-2015, ARTHUR wrote a ?Tezos Business Plan? which projected that if the company survived ?fteen (15) years, it would be worth between $2 Billion and $20 Billion. 3 SILVER MILLER 1 I780 West Sample Road Coral Springs, Florida 33065 Telephone (954) 516-6000 Case Document 1 Filed 11/13/17 Page 9 of 40 PageID 9 36. The business plan called for raising $355 Million to $310 Million over two to three years and also included a budget that called for paying ARTHUR BRETFMAN a $212,180 salary by the company?s third year in existence. 37. in August 2015, while still working at Morgan Stanley -- incorporated DLS and named himself Chief Executive Of?cer. 38. In violation of FINRA Rule 3270, pitcher. ?Tezos, Inc.? in 2015. 39. lwlowever, those efforts and involvement with DLS and TEZOS were not disclosed to Morgan Stanley. 40. In April 2016, ARTHUR left Morgan Stanley without ever having disclosed under FINRA Rule 3270 his involvement with DLS and TEZOS. Tezos Winds Up For Its Big Pitch 4?1. l'--Iaving failed with his initial Tezos fundraising effort, ARTHUR BREETMAN joined by his wife started working in or about September 2016 on a new strategy for conducting an online fundraiser (the to distribute to whoever invested with their money or assets newly-created digital tokens (??l?ezzies? or XTZ), whose holders would maintain the "l?li'lZOS 42. According to the 'l?ezoscom website, they received over the next six months $612,000 from ten early backers, including several hedge funds. 43. To conduct the. ICO, and BREITMAN helped create ITO UNDATION in Zug, Switzerland. 44. As BREEITMAN told Reuters in the midst of their prc?ICO promotional efforts, she and ARTHUR opted to use a foundation based in Zug -9- SILVER MILLER [780 West Sample Road Coral Springs, Florida 33065 Telephone (9511) 518-6000 analyst? .il rural ills tla Case Document 1 Filed 11/13/17 Page 10 of 40 PagelD 10 because Switzerland has ?a IZg/i/?f?g? that bar! a amount {if overnight but not like anything too canary.?3 45. According to documents on the Tezos website, the plan was for THE FOUNDATION to raise money Via the then acquire DLS and all of its TEZOS?related 14 intellectual property, including the source code of the EZOS ledger, logos, and trademark applications associated with the name T133208, domain names, and goodwill. 46. The website further explains that THE and DLS ?have negotiated a contractual agreement in which THE FOUNDATION will acquire DLS and release its ll) under a free software license.? THE FOUNDATION will ?also acquire existing business relationships with contractors and potential customers, as well as its trademark applications and domain names.? 47. One of the earliest investors in was Silicon Valley venture capital billionaire Tim Draper who through his company Draper Associates invested $1.5 Million in in return for which he was given a minority stake in DLS. 48. Mr. Draper was solicited by IMTHLEEN who not only desperately needed Mr. Draper?s cash to keep the "171.3203 effort moving forward but also the goodwill attached to his name to bolster the perception of legitimacy and interest surrounding efforts. 3 Anna Errera, Steve Stecklow, and Brenna Hughes Neghaiwi, Bar/lama?; Barr/z! $230 Million Veil/ma, Reuters (October '18, 2017), article biteoin? ltu itiing- lL?Zt :s/speciai? idL'Sl .ni-N 1 M1331 (emphasis added). i 10 - SILVER MILLER 1.1780 West Sample Road 30ml Springs. Florida 33065 'l" lephone (954) 516-6000 mam Silreta Case Document 1 Filed 11/13/17 Page 11 of 40 PagelD 11 And Here?s The Pitch . . . . 49. In the months leading up to the TEZOS ICO, Defendants particularly ARTHUR and -- made numerous public statements exaggerating the progress of the TEZOS network, misrepresenting the relationship between Defendants (speci?cally, the relationship between DLS and THE FOUNDATION), misrepresenting the desirability of technology, and misrepresenting when tangible benefits from investments would be received. 50. ARTHUR BREITMAN and BREITMAN spoke to numerous media outlets and interested audiences in heavily promoting their efforts to raise additional interest in investing in TEZOS. We Have Relationships and Interest in Tezos . . . That We Don?t Really Have 51. For example, to promote the TEZOS ICO and lure in a larger group of investors, TEZOS retained a U.S.?based communications company (Strange Brew Strategies) who, TEZOS believed, would reach a wide audience of potential investors. 52. Among the representations made by Strange Brew Strategies on behalf were that applications had been recognized and adopted by such well-known and well? established companies as the accounting ?rms Ernst Young and Deloitte and the French software company Lexil-i'i. 53. Contrary to that representation, lirnst?: Young has publicly denied ever having adopted applications. 54. Likewise, Deloitte has publicly denied using technology for any of its client projects. 55. Similarly, LexiFi has publicly denied adopting technology. - 11 - SILVER MILLER 11780 West Sample Road - Coral Springs. Florida 33065 - Telephone (9521) 516-6000 Case Document 1 Filed 11/13/17 Page 12 of 40 PagelD 12 Our Technology Is Close To Launch . . . Except It Is Not Actually Close 56. Additionally, on the T3208 website, Defendants also exaggerated the development of the project. For example, the foilowing was given as one of the reasons given as the ?rationale? for THE compensation: A large subset of the projects conducting fundraisers (sometimes called ?lCOs?) today are based on little more than a white paper and will remain in a development phase for years. Participants in those fundraisers have no idea how much of their contributions will be spent bringing those projects to fruition if they ever reach that point. In contrast, Tezos established a working testnet in February 2017 which can be accessed upon request to assess the state of the completion of the Tezos project. Most of the remaining development consists of performing security audits and improving the test coverage of the project so it can confidently launch as a public blockchain. 57. In a May 39, 2017 blog post published to stoke the embers of interest in TEZOS, wrote that the team could reasonably launch the TEZOS network ?in a three? to four~month period . . . Giving his worst-case projection, ARTHUR continued: ?It?s entirely within the realm of possibility that the project takes up to 6 months to ship. Based on my assessment of the remaining development . . . that does not seem likely, but it?s not impossible.? 58. In june 2017, the website similarly proclaimed that ?[t]hc development team estimates that the time to completion [of the 'l?ezos network] is around 4 months.? 59. As of the date of this filing, the network has stili not launched; and there are no reasonably reliable signs that the network is anywhere near completion. According to recent public statements by BREITMAN, the network is now not expected to be completed until February 2018 at the earliest. 12 SILVER MILLER 11780 West. Sample Road Coral Springs. Florida 33065 'l?eiephone (9534) 516-6000 rail is! In if} ataxia: Case Document 1 Filed 11/13/17 Page 13 of 40 PagelD 13 6?1. \Vhile "ll-IE FOUNDATION was created to purchase DLS (and the source code that makes functional), Defendants did not disclose to ICO investors the terms of THE acquisition of DLS or how long that acquisition would take. Upon information and belief, DLS shareholders have up to two years to exercise a contractual option to sell their shares to THE FOUNDATION. That two?year period commences two months after the network launches, which presently has no set date for its launch. 63. If the D115. shareholders do not timely exercise their option to sell their shares to THE FOUNDATION within the allotted two?year time period, Till-31 FOUNDATION has up to one year thereafter to purchase DLS. 64. As noted above, it is entirely unclear at this time when the TEZOS network will be ready to launch, if ever. According to statements made by and BREITMAN to media sources, the ?current best estimate? for launch of the TEZOS network is February 2018 -- though that is merely an estimate that can be extended further into the future if computer network is ?not ready? for launch at that time. 65. Therefore, investors might be waiting for three years, or more, before THE FOUNDATION fulfills its obligation to purchase DLS the action that will link the investors? funds with the blockchain source code in which they invested and thus give value to the lei/its the investors purchased. 66. That time frame which was a highly-material fact to investors Was not disclosed to TEZOS investors. - 13 SILVER MILLER 1 3780 West Sample Rem! ?oral Springs. Florida 33065 rI'elt-zphone (954) 516-6000 wwuz?ilte Case Document 1 Filed 11/13/17 Page 14 of 40 PagelD 14 67. Meanwhile, contracts on the future value of Tezzies have already reportedly plummeted by as much as seventy??ve percent 68. As shown above, Defendants? statements about the progress of the TEZOS network, the desirability of and demand for technology, and the time within which investors would receive a tangible benefit for their investments were materially false and misleading. 69. Had Defendants not materially misled investors, many investors would not have participated in the ICC. The Tezos ICO -- uly 2017 70. After an initial delay from its planned May 2017 commencement, the TEZOS ICO was conducted in _]uly 2017. 71. The terms of the fundraising offer are memorialized in a document titled ezos Contribution and XTZ Allocation Terms and Explanatory Notes? (the ICO Terms for Investors?). A true and correct copy of the TEZOS ICO Terms for Investors is attached hereto as Exhibit 72. Upon information and belief, not all investors in the ICC saw, agreed to, or were aware of the TEZOS ICO Terms for Investors. Many investors relied solely on information TEZOS had disseminated through various media sources, blogs, conventions at which they spoke, and podcasts. 73. According to the TEZOS ICO Terms for Investors, investors upon the launch of the fully~functional TEZOS network -- would be allocated 5,000 Tezzies for each Bitcoin invested during the ICC). The ICO was uncapped, meaning that there was ?no limit on the amount of contributions that [were] accepted.? -14- SILVER MILLER 11780 West Sample Road - Coral Springs. Florida 33065 Telephone (9511) 516-6000 8115:931th 0191:! insure"; Case Document 1 Filed 11/13/17 Page 15 of 40 PagelD 15 74. Moreover, to create a greater sense of urgency and heighten investor interest, the ICC) provided for ?time-dependent The TEZOS website described the bonuses thusly: ?From 20% at the outset, the bonuses wili decrease progressively to 0% over four additionai periods 10" 0, and lasting 400 Bitcoin blocks [approximateiy two days and eighteen hours] each.? 75. The one-sided terms imposed upon Plaintiff and the Class Members in the TEZOS ICO Terms for Investors are both unconscionable. and illusory. The EZOS ICO Terms for Investors purport to require agreement from the investors that, despite the investors? investments, TIEZOS might not allocate to the investors any 'l?ezzics when the TEZOS network is created, TEZOS might not create any Tczzics at all, any 'lTeazies created might be useless or valueless, and has the right to abandon all efforts to develop and release the ?173205 network all while retaining the investors? invested funds and assets. Moreover, the onerous manner in which imposed upon investors its Terms render the Terms unfair, unconscionable, oppressive, and a contract of adhesion. 76. Nouvithstanding the adhesive, oppressive, and unconscionabie terms of the offering, the ?fear of missing out? hyped up by TEZOS succeeded; as the vast majority of investments occurred during the ?rst few days of the K30. 77. The TEZOS was ultimately conducted over the course of two weeks in July 2017 Only 1, 2017 ~July 14, 2017). 78. When she spoke to Reuters in the month preceding the ICC), BRJEITMAN said that when she, her husband, and the team decided to conduct the ?7 online fundraiser, ?we were like, ?Hey, we would be iuclty if we get 20 miliion [dollars]. 15 SILVER MILLER 11780 West Sample Road Corai Springs, Florida 33065 harsh i hit: i'Milii-itl aur- as in). Case Document 1 Filed 11/13/17 Page 16 of 40 PageID 16 79. Well beyond that target 0171120 million, the project received from investors about 65,703 Bitcoins and 361,122 Ether a sum valued at approximately $232 million at the time. As of the date of this ?ling, that sum has increased in value to more than $600 million. 80. Upon information and belief, Defendants were aware injuly 2017 that third parties were re-selling access to the ICC) and future rights regarding ownership of Tezzies. 81. Follow The Money . . . Right to Defendants? Pockets The TEZOS crowdfunding site also contained a detailed yet deceiving chart demonstrating how funds raised would be spent, based on the amount raised, [0 mil: tezoseom Note, all amunxs in 51.000 Ingmumg Huleoum ley 1m ROI I l?l trusty m- Cami-Mammal i H?hmg 1'wa rm logl?mim Variynlo lumm Develowum leynu ?Elumion ley me Maud. Mu 82. CURRENT awn; Jemxm: .10 :u ww?enu 101?"le .mp9?? Hannah's-4U; ?Haunt" Cw rm ?Mm with an :Wnuez?m finnhnay 311% ?Harlin-?ll: u-J we ?[11 ?Quaint-us PJ'ufsl! lira Emu] ?ag ?.120 36.00% finmode. {rt?mhi? will in- ne- 1mm? my .n-m r?xu A ring-.111 my): "r ?res: m?mrMu'HMI Emma mm I'fr- cu' :nmuiw new tn "hl? Rama; martini up! n: Ext-3 ruin-Jr Haw?. spin-51m? usxr?b We Gmdarrn 1.1mm! ?at {me L?mm'h Nib i4" (Minn) Jan-n Nu?Wl ma?wm um .- while-:1 mshv. SW) ?our: mm :4 mi ?cache-n tram 13 mm $10 ?.310 IF THE FOUNDATION IS ENDOWED $12.000+ 'qur' PM ustl-crlla?m ?H?umhrk I (rs-pr- W??i'?l'rr ?ur?anlr'i! N.- 511213 {yum slum in?rm. 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I my rq Mew are tum Wall?h'um his but bra-m cpl-mm luttff'?'? MK I amt-mm?; I I: tun rum!? rm with! rrnutmq gym: I: the 39:: were" 1551M: r! Mn *0 in MARS-SHOT that: n} at: an.) a wqmualcu??mn unflh?s k1 {urea [va nut? 1 M1 {Itasca r5! ?qr-Jan 1 I'd-airman? anew-sh Del-am mun! :ralrrm?m mum-w 51m: ?an2 am at): let: If kin-imitation 131.3 mm-uww gar: n! cur-.1 I: gunm- rd 4dr" 1.er dummy: haw r. sum 6m! din?: d- "v rd "in run-.munkugr m1! an) uni pct-pry: 17m hip-:9 My." uni ream mu: ?are: ??rm a: on thin aha use mi ind?n: 9:99: a! Emma! mum Mum my? stun I: hrmummww irmlevmmirm him Ind Although TEZOS raised more than 10 times beyond its wildly-optimistic $20 Million Defendants are not believed to have spent any money on any of the identi?ed by TEZOS. SILVER MILLER 11780 West Sample Road - Coral Springs. Florida 33065 - 'l?elephone (9541) 516-6000 Case Document 1 Filed 11/13/17 Page 17 of 40 PagelD 17 83. To the contrary, TEZOS has instead spent the money by paying Defendants and the EZOS insiders. 84. While Defendants have taken the public position that no profit was to be made or expected from the $232 million ICO, the TEZOS insiders have already reaped from the funds invested huge pro?ts for themselves something that would not have happened if the TILZOS ICO were a mere charitable fundraiser. 85. According to the terms of the TEZOS ICO, eight?and?a?half percent of all contributed funds were allocated in US. Dollars to DLS and its shareholders a sum payable as soon as TEZOS functions as a blockchain (successfully or not) for at least three months. An additional ten percent of all Tezzies issued in the genesis block would also go to founders. 86. If Tezzies were merely utility tokens as Defendants have claimed, the TEZOS insiders would have no need for such tokens. The purpose of the token is the intrinsic value for which it will trade on the open exchanges. 87. When the TEZOS ICO was conducted, the funds raised from investors (in the form of Bitcoin, Ether, and other sources) were valued at approximately $232 million; and the 8.5" a ?owing therefrom to DLS shareholders was approximately $20 million. 88. With the dramatic rise in the value of Bitcoin and Ether since July 2017 (when the TEZOS ICO was conducted), the funds raised from investors in the ICC are presently valued at approximately $600 million; and the 8.5% ?owing to DLS shareholders is now valued at approximately $50 million. 89. BREITIVLAN and ARTHUR BREITMAN (along with Tim Draper) are believed to be the largest, if not only, shareholders in DLS. -17- SILVER MILLER 11780 West. Sample Road Coral Springs. Florida 33065 Telephone (954) 516-6000 ataxia-.8.ilrs-ithtlil Case Document 1 Filed 11/13/17 Page 18 of 40 PagelD 18 90. Based on the large volume ofshares they own in BREITMAN and are believed to have already been allocated tens of millions of dollars in cash from the ICO. 91. Regardless of whether the functionality underlying technology is a success (thus providing value to ICC) investors), TEZOS insiders -- including BREITMAN and BRli?ll'Fh?lAN will get paid their tens of millions of dollars in cash. if the technology is a success, that payment only goes up when also factoring in the 10% bonus being paid to founders. 92. As noted above, SEC Chairman jay Clayton warns that fundraising efforts in exchange for tokens issued for start?up or open-source proiects are ripe for misconduct especially because ?insiders and management have access to immediate liquidity, as do larger investorsort: If It Walks Like A Duck and It uacks Like A Duck . . . . 93. While T121208 insiders reap the ?nancial windfall that was generated from the ICC (and stand to garner tens of millions of dollars more when they pay themselves their 10% bonuses), Defendants purport that no such rewards are due, or are owed, to the investors who funded the ICC). 94. TEZOS does not: like to refer to its financiers as ?investors?; rather, TEZOS refers to them as ?donors? and the $232. million they contributed as ?non?refundable donations.? 95. Notwithstanding 'l?li'LZOS?s formal characterization of its efforts as some sort of charitable endeavor for which participants were given the future right to own Tezzies in exchange for their financial support, the SEC has been studying the ECO market and declared, in luly 2017, that ?the virtual coins or tokens that are offered or sold [to ICC investors] may be securities? subject to all federal and state securities laws. ?13 - SILVER MILLER 11780 West Sample Road - Coral Springs, Florida 33065 - 'l?eiephone 51643000 Case Document 1 Filed 11/13/17 Page 19 of 40 PagelD 19 96. As the SEC stated in itsjuly 2017 report (the Report?)3: The Commission is aware that virtual organizations and associated individuals and entities increasingly are using distributed ledger technology to offer and sell instruments such as DAO Tokens to raise capital. These offers and sales have been referred to, among other things, as ?initial Coin Offerings? or ?Token Sales.? Accordingiy, the Commission deems it appropriate and in the public interest to issue this Report in order to stress that the US. federal securities law may apply to various activities, including distributed iedger technology, depending on the particular facts and circumstances, without: regard to the form of the organization or technology used to effectuate a particular offer or sale. In this Report, the Commission considers the particular facts and circumstances of the offer and saic of DAO Tokens to demonstrate the application of existing US. federal securities laws to this new paradigm. 97. The DAO Report went on to state: [Federal securities registration] requirements apply to those who offer and sell securities in the United States, regardless whether the issuing entity is a traditionai company or a decentralized autonomous organization, regardless whether those securities are purchased using US. dollars or virtuai currencies, and regardless whether they are distributed in certi?cated form or through distributed ledger technology. in addition, any entity or person engaging in the activities of an exchange, such as bringing together the orders for securities of muitiple buyers and seliers using cstabiished nondiscretionary methods under which such orders interact with each other and buyers and sellers entering such orders agree upon the terms of the trade, must register as a national securities exchange or operate pursuant to an exemption from such registration. 98. Ultimately, the DA0 Report concluded that DAO Tokens -- a newly?issued created by The DAD (an unincorporated organization), German?based company Slockit, and Sioekit?s which were given to investors in The distributed ledger or hiockchain?enabled means for raising capital are securities under the Securities Act of 1933 and the Securities Exchange Act of 1934. 1? 19 Strauss MILLER 11780 West Sample Road Coral Springs. Florida 33065 Telephone (9511) 516-6000 starts.- diivvrM it Case Document 1 Filed 11/13/17 Page 20 of 40 PagelD 20 99. If TEZOS tokens are likewise deemed ?securities? subject to federal and state securities laws, they will not be allowed to he traded on US. exchanges because the securities were not properly registered. 100. One of the greatest values the owner of a security has is his/ her/ its ability to trade that security on the open market for an appropriate monetary value. When robbed of the ability to trade the security, the owner is also robbed of much, if not all, of the value attached to that security. Pro-Network Launch Tokens Are Securities 101. By their very nature, tokens sold before a network launch are securities, because investors purchasing those tokens are relying on the technical and managerial efforts of others to affect the failure or success of the enterprise. 102. While lure-network iaunch tokens may someday have a consumptive use, the fact that they have no pro?launch utiliur renders them almost entirely dependent upon the efforts of the issuer to successfully develop and launch a functional network. 103. Here, Plaintiff and the Class were (and still are) entirely dependent upon TEZOS to launch its network and provide some valuable use to the tombenissued 'l'eazies for which Plaintiff and the Class have already provided their investment funds. Tezos Investors: We Made Investments on Which We Expect A Pro?t 104. Just as suggested by the SEC in the DA0 Report, many investors in TEZOS indeed consider themselves investors, not ?donors,? in efforts; and those investors expect a return on their investments. 20- StLvua MILLER 11780 West Sample Road Coral Springs. Florida 33065 Telephone (954) 516-6000 truss 1831 H3. skills ttlautz. m! Case Document 1 Filed 11/13/17 Page 21 of 40 PagelD 21 105. or example, Kevin Zhou co-foundcr of the trading fund Galois Capital told Reuters: ?For me and for a lot of people, this is an investment. We are looking for a return.? ?106. Similarly, Tim Draper himself told Reuters that are commodities like pork bellies; and he characterized acquiring Tezzies as a purchase rather than a donation. 107. So too do Plaintiff and the Class View their financial contributions as investments that were made dependent upon Dcfendants? representations and efforts. 108. In fact, KATHLEEN BREITMAN herself has conceded to multiple media outlets that Defendants are well-aware that the Class Members view the endeavor as a speculative investment into which they are buying in return for what is expected to be a financial profit: 0 lily/mt we ?re going {a do is ail/mp at ?any! people Who Want to buy into the crowdsale over a hm-uwc/e period?? 0 Q. ran/ch do? ?t aha/(yr gut l/Jhl?gr rig/JIM and in this case?jyout arm-1rd may be speculators. There {them 41/0! ofipem/atiue [upright C/iilm?jfar Do you worry about who the tokenholders are invent/Mr are aligned with Texas? A: {r tong/J. [Cjertainly there are a [or of people who are interested in the more speculative aspects. I think there?s a lot run/frail; in the Jig/1:110:12. That doe: ?Ia/{setter 12/? add to frame/J met/rig ?lm! more val/immigr- based hurl when there?s a lot of people who are just 109. Here, managers themselves have acknowledged that fact by revealing in their own pre?fundraiscr ?Static Paper? that several layers of pus?functional launch contributors Gertrude Chavez?Dreyfuss, EXC/l/Jillih? Bil/Jame)? interior Draper 1?0 participate in blacks/Jain 10hr? tale for ?uff lime, Reuters (May 5, 201.7), (further noting that billionaire Venture capitalist Tim Draper viewed- Tczos? token offering as a ?non?traditional investment?) (emphasis added). 5 MUSE Pamper/filer -- Kalb/run Brut/1m? Teqar [In/earlier! Guly 12, 2017), (emphasis added). -21- SILVER MILLER 11780 West Sample Road - Coral Springs. Florida 33065 'l?elephone (954) 516-6000 Case Document 1 Filed 11/13/17 Page 22 of 40 PageID 22 will be paid cash and Tezzies for their contributions to the development: of the technology and the promotion of the ICC: The Early Advisers. 1.0% to the 10% for fundraiser backers PR. and Foundation. acquisition development vesting over of DLS I to cdubov . mm?m?fn? m: team bonuses four years resting over . amount ol'badilnu to our at: imil?ll? land nonummallag Mlmumequmlunl ye allowed an a ?an: o! "momma $891.20! mum will? '0 ?9m? m: equmkn: 5.0m nun! plus mummtsemhm 9mm! In 'm?mlld'" lumomutchm . on bun-u thus tum W55 med podskl. "mm ?mm unnamed; Inmmontolm wemwm :9?ch or 990? by lb! mehtbn Madmen-1575.009 mom memo: mam: mm ?mm w? bewamed WW sham autumn Mum-d1. not I. ?nd WWLM 510.000 ?"99 mammal bythe Ms nun-nun o. the worth mum; to the fundrmumn ,mm antiwar mum tokens. immune! mm for Whilst?um wmullmg?tm. Whit? Sectlon-h?mo Ipulode?yuu IOllInl will venom and I 9" Ml"- ohm mlmuntol mien; mot-d. 5,000 XTZ I XBT $893,201 worth $422,000 worth 10% over 4 years 1 0% over 4 year: up to 20% bonus 20% bonus 20% early?bonus 110. \Vhile Defendants and several TEZOS insiders are already slated to be paid, Plaintiff and the Class cannot say the same. Infi htin at Tezos Has Rendered The Entire Pro'ect in Doubt 111. For several months following the ICC), neither THE FOUNDATION nor DLS had provided to investors or the general public any signi?cant status updates on when the TEZOS blockchain might launch and when everyone?s funding and efforts would reach their fruition. 112. On or about October 18, 2017, ARTHUR individually, and on behalf of published a blog post titled ?The Path Forward,? conceding that progress since the ICC) ?had fallen short of our expectations.? 113. According to ARTHUR blog post, HE President (Johann Gevers) was responsible for acts of ?self?dealing, self-promotion, and con?icts of interest.? ARTHUR BREITMAN called for Mr. Gevers? prompt removal and sought to -22- SILVER MILLER H780 West Sample Road - Coral Springs. Florida 33065 . ?l?elephone (954) 516-6000 Case Document 1 Filed 11/13/17 Page 23 of 40 PagelD 23 restructure the relationship between DLS and "fl-ll}: FOUNDATION so that KATHLEEN BREITIVIAN and BREITMAN would be able to take a ?substantial role? in managing futture without unnecessary interference from Mr. Gevers and/ or Tl?lliil FOUNDATION. Moreover, the blog post conciuded that ?[olur current best estimate for shipping the [Toms] main net is now li?ebruary 2018, though the firm date [tie] remains ?when it is ready.? ?114. N11: Gevers responded to the accusations by refusing to step down from his post at and by casting equally-vet]omous accusations back at Tl?lli?l BlUtuil'l'lVlANS. He accused ARTHUR of?eharacter assassination? and alleged that THE were ?attempting an illegal coup.? Mr. Gevets further alleged that Tl-llii effort to usurp power was ?unnecessarily putting the project at risk.? 1?15. As of the date of this tiling, DLS has not yet sold its shares to THE and, amidst all of the TEZOS futures have plummeted by approximately 50?75% of their value at their peak. No Safe Harbor 1'16. The statutory safe~harhor provided for forward?looking statements under certain circumstances does not apply to any of the allegedly false statements pleaded in this Complaint. 117. Many of the specific statements pleaded herein were no identified as ?forward? looking statements? when made. 1'18. To the extent there were any forward-looking statements, there were no meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those in the purportedly forward?looking statements. - 23 - SILVER MILLER 31780 West Read - Coral Springs. Florida 33065 Telephone (95105136000 assas?ilrtr .rMilit-i r! a siesta Case Document 1 Filed 11/13/17 Page 24 of 40 PagelD 24 119. Alternatively, to the extent the statutory safe?harbor does apply to any forward- looking statements pleaded herein, Defendants are liable for those false forward?looking statements because at the time each of those forward?looking statements were made, the particular speaker knew that the particuiar fonvard~looking statement was false or that the forward?looking statement was authorized or approved by an executive officer of who knew those statements were false when made. THE TEZOS FORUM SELECTION CLAUSE. CHOICE OF LAW PROVISION. AND ANTI-CLASS-ACTION PROVISIONS ARE ALL UNENFORCEABLE 120. The terms and conditions of the ICC purport to restrict all disputes arising out of the ICC) to ?the ordinary courts 0 Zug, Switzerland,? mandate that Swiss law applies, and preclude participation in class actions. Ali of these provisions are unenforceable for a variety of reasons.6 By way of example only, Piaintiff addresses some of these bases below. 'i2'1. First, the ICC), including each and every one of its provisions, was induced by fraud and overreaching. Defendants designed the ICC) with the specific intent to evade US. federal and state securities laws; and in so doing, to deprive Plaintiff and the Class of the ability to enforce such rights in US. courts. To reward Defendants? attempts to evade US. federal and state securities by enforcing any or ail such provisions would contravene a strong public policy in favor of enforcing such rights and laws. 122. Similarly, enforcing such provisions would deprive Piaintiff and the Class of their day in court because of both the inconvenience and unfairness of the forum Defendants chose to 6 Plaintiff does not waive his rights to argue, and specifically reserves his right to argue, that these provisions are unenforceable based on facts and legai arguments not addressed herein. - 24 SILVER MILLER 11780 West, Sample Road - Coral Spring", Florida 33065 '1?aiephone (954) 516-6000 thiille lfi 41.35.14.191? Case Document 1 Filed 11/13/17 Page 25 of 40 PagelD 25 facilitate their attempts to evade US. law and render themselves immune from suit. That would also effectively serve to deprive Plaintifl?and the Class of a remedy. "123. For the same reasons, the ICO and its anti-class-action provision are both procedurally and substantively unconscionable, and therefore unenforceable. Herc, Plaintiff and the Class were fraudulently .induced to participate in the ICC, based on as set forth herein the Defendants? misrepresentations and omissions. Every aspect of the ICC) and its ?take?it-or-leave? it? terms were intended to separate Plaintiff and the Class from their funds and render Defendants effectively immune from suit by the vast majority of their investors, who Defendants knew or should reasonable have known are US. residents. In fact, herself has publicly admitted that didn?t do much marketing outside of the US. Well, rather, Arthur and are based in the US, and we talk about the technology in mainstream US. plus outlets . . . 124. In short, the ECO and its contractual provisions (including, but not limited to, the anti-class-action provision) are unreasonable and to an outrageous degree unfair to Plaintiff and the Class. FACTS SPECIFIC TO INVESTOR PLAINTIFF Alejandro Gaviria '125. As noted above, Plaintiff GAVIRIA, onjuly l, 2017, invested with TEZQS 25.0799 Hill; and on] Lil)? 6, 2017, he invested with TETJOS an additional 28 E?i?i?l. Those 53.0799 (now being held by are currently valued at approximately $15,660.00. 126. To make his investment, l?laintiff ALEJANDRO GAVIRIA logged onto to the website from his home in Sanford, Florida and Followed the instructions provided. 7 RREE Venn/rat .Pengim'limrr Kath/run Bram/ma - Trent Uri/rather] Only ?12, 2017), 25 - SILVER MILLER I 1780 West Sample Road - Coral Springs, Florida 33065 - Telephone (954) 516-6000 mvuj?ilverhlalley] .aw.r:um Case Document 1 Filed 11/13/17 Page 26 of 40 PagelD 26 CLASS ACTION ALLEGATIONS 127. A class action is the proper form to bring Plaintiffs and the Class Members? claims under 23. The potential class is so large that joirider of all members would be impractical. Additionally, there are questions of law or tact common to the class, the claims or defenses of the representative parties are typical of the claims or defenses of the class, and the representative parties will fairly and adequately protect the interests of the class. 128. Plaintiff brings this nationwide class action pursuant to Rule 23 of the Federal Rules of Civil Procedure on behalf of himselfand all members of the following class and subclass: NATIONWIDE CLASS: All TEZOS investors who, between July 1, 2017 and July ?15, 2017, transferred Biteoins, Ether, alternative or any other form of monies or currency to TEZOS in furtherance of ICO. Excluded from the class are: Defendants themselves, Defendants? retail employees, Defendants? corporate of?cers, members of Defendants? boards of directors, Defendants? senior executives, and any and all judicial officers (and their staff) assigned to hear or adjudicate any aspect of this litigation. The Nationwide Class asserts claims for Unregistered Offer and Sale of Securities in Violation of Sections 5(a) and 5(c) of the Securities Act; Fraud in the Offer and Sale of Securities in Violation of Section 17(a)(1) of the Securities Act; Fraud in the Offer and Sale of Securities in Violation of Section 17(a)(2) and 17(a)(3) of the Securities Act; Rescission of Contract; and Alter Ego Liability (see Counts I -- V). FLORIDA SUBCLASS: All Florida resident TEZOS investors who, betweenjuly l, 2017 audjuly 15, 2017, transferred Bitcoins, Ether, alternative or any other form of monies or currency to TEZOS in furtherance of 1C0. Excluded from the class are: Defendants themselves, Defendan'ts? retail employees, Defendants? corporate of?cers, members of Defendants? boards of directors, Defendants? senior executives, and any and all judicial of?cers (and their staff) assigned to hear or adjudicate any aspect of this litigation. The Florida Subclass asserts claims for Unregistered Offer and Sale of Securities in Violation of Fla. Stat. 517.011, et seq; -26- SILVER MILLER 12780 West Sample Road Coral Springs. Florida 33065 Telephone (954) 516-6000 Harlan ?15:0 In Case Document 1 Filed 11/13/17 Page 27 of 40 PagelD 27 Fraud in the Offer and Sale of Securities in Violation of Fla. Stat. 517.011, at set}; and Violation ofFlorida?s Deceptive and Unfair Trade Practices Act, Chapter 501, 211(1), Fla. Stat. (see Counts V1 - l29. This action satis?es all of the requirements of Federal Rules of Civil Procedure, inciuding numerosity, commonality, predominance, typicality, adequacy, and superiority. Numerosity 1130. Members of the Class are so numerous and geographically dispersed that joinder of all members is impractical. 131. While the exact number of class members remains unknown at this time, upon information and belief, there are at least hundreds if not thousands of putative Class members. 132. Again, while the exact number is not known at this time, it is easily and generally ascertainable by appropriate discovery. ?133. it is impractical for each class member to bring suit individually. 134. Plaintiff does notanticipate any dif?culties in managing this action as a class action. 135. There are many common questions of law and fact involving and affecting the parties to be represented. '136. When determining whether common questions predominate, courts focus on the issue of liability; and if the issue of liability is common to the class and can be determined on a class?wide basis, as in the instant matter, common questions will be held to predominate over individual questions. l37. Common questions include, but are not limited to, the following: (21) Whether the "l?ezaies offered for sale during the TEZOS ICO constitute securities under federal and state securities iaws; -27- SILVER MILLER H780 West Sample Road Coral Springs, Florida 33065 Telephone (954) 516-6000 oil il in thaw in Case Document 1 Filed 11/13/17 Page 28 of 40 PagelD 28 Whether violated federal and state securities laws in conducting its Initial Coin Offering and in failing to register its Tezzies as securtties; Whether statements made by Defendants before and during the TEZOS ICO misrepresented material facts about the TEZOS network and the value of Tezzies; Whether TEZOS has converted the funds belonging to Plaintiff and the Class Members; Whether TEZOS owed duties to Plaintiff and the Class Members, what the scope of those duties were, and whether TEZOS breached those duties; Whether conduct was unfair or unlawful; Whether the terms of ICO Terms for Investors are unconscionable, void, or voidablc; Whether has been unjustly enriched; and Whether Plaintiff and the Class Members have sustained damages as a result of conduct. 138. These common questions of law or fact predominate over any questions affecting only individual members of the Class. Tmicalig 139. Plaintiffs claims are typical of those of the other Class Members because, intern/fa, all members of the Class Were injured through the common misconduct described above and were subject to Defendants? unfair and unlawful conduct. 140. Plaintiff is advancing the same claims and legal theories on behalf of himself and all members of the Class. - 23 - SILVER MILLER 11780 West Sample Road Coral Springs. Florida 33065 Telephone (954) 516-6000 writes-9iIvc-rM..i 410m Case Document 1 Filed 11/13/17 Page 29 of 40 PagelD 29 Adeguacy of Representation 41. Plaintiff will fairly and adequately represent and protect the interests of the Class Members in that he has no disabling conflicts of interest that would be antagonistic to those of the other members of the Class. 1.42. Plaintiffis committed to the vigorous prosecution of this action and has retained competent counsel, experienced in complex consumer class action litigation of this nature, to represent him. 14-3. Plaintiff seeks no relief that is antagonistic. or adverse to the members of the Class. 144-. The infringement of the rights and the damages Plaintiff has suffered are typical of other Class members. 14-5. To prosecute this case, Plaintiff has chosen the law firms of Silver Miller and the Wires Law Firm. These firms are experienced in class action litigation and have the ?nancial and legal resources to meet the substantial costs and legal issues associated with this type of litigation. Superiority 146. Class action litigation is an appropriate. method for fair and efficient adjudication of the claims involved herein. M7. Class action treatment is superior to all other available methods for the fair and ef?cient adjudication of the controversy alleged herein; as it will permit a large number of Class Members to prosecute their common claims in a single forum simultaneously, efficiently, and without the unnecessary duplication of evidence, effort, and expense that hundreds of individual actions would require. 29 SILVER Magma 11780 West. Sample Road - Coral Springs. Florida 33065 Telephone (9511) 516-6000 Case Document 1 Filed 11/13/17 Page 30 of 40 PagelD 30 148. Class action treatment will permit the adjudication of relatively modest claims by certain Class Members, who could not individually afford. to litigate a complex claim against a well? funcled corporate defendant like TEZOS. 14-9. Further, even for those Class Members who could afford to litigate such a claim, it would still be economically impractical. 150. The nature of this action and the nature of laws available to Plaintiff make the use of the class action device a particularly efficient and appropriate procedure to afford relief to Plaintiff and the Class Members for the wrongs alleged because: Defendant would necessarily gain an unconscionable advantage if it were allowed to exploit and overwhelm the limited resources of each individual Class member with superior ?nancial and legal resources; The costs of individual suits could unreasonably consume the amounts that would be recovered; Proof of a common course of conduct to which Plaintiff was exposed is representative of that experienced by the Class and will establish the right of each member of the Class to recover on the cause of action alleged; Individual actions would create a risk of inconsistent results and would be unnecessary and duplicative of this litigation; The Class Members are geographically dispersed all over the world, thus rendering it inconvenient and an extreme hardship to effectuate joinder of their individual claims into one lawsuit; There are no known Class Members who are interested in individually controlling the prosecution of separate actions; and The interests of justice will be well served by resolving the common disputes of potential Class Members in one forum. 151. Plaintiff reserves the right to modify or amend the definition of the proposed class and to modify, amend, or create proposed subclasses before the Court determines whether certification is appropriate and as the parties engage in discovery. 30 - SILVER MILLER 11780 West Sample Read Coral Springs. Florida 33065 - Telephone (954) 516-6000 swar?ilre rm illerl, iterates Case Document 1 Filed 11/13/17 Page 31 of 40 PageID 31 152. The class action is superior to all other availabie methods for the fair and ef?cient adjudication of this controversy. 153. Because of the number and nature of common questions of fact and law, multipie separate lawsuits would not serve the interest of judicial economy. 154. As a result of the foregoing, Plaintiff and the Class Members have been damaged in an amount that will be proven at trial. ?55. Plaintiff has duly performed all of his duties and obligations, and any" conditions precedent to Plaintiff bringing this action have occurred, have been performed, or else have been excused or waived. 156. To enforce his rights, Plaintiff has retained undersigned counsel and is obligated to pay counsel a reasonable fee for its services, for which Defendants are liable as a result of their bad faith and otherwise. COUNT I UNREGISTERED OFFER AND SALE OF SECURITIES IN VIOLATION OF SECTIONS 5(a) AND 5(c) OF THE SECURITIES ACT Plaintiff re~alieges, and adopts by reference herein, l:?aragraphs 'i ?156 above, and further alleges: 157. Defendants, by engaging in the conduct described above, directly or indirectiy made use of means or instruments of transportation or communication in interstate commerce or of the mails to offer to seli or to actualiy sell securities, or to carry or cause such securities to be carried through the maiis or in interstate commerce for the purpose of sale or for delivery after sale. 158. Defendants are ?sellers? within the meaning of '15 USC. 77c because they or their agents solicited Plaintiff? and the Class Members? investments in the TEZOS ECO. 31 i SILVER MILLER H780 West Sample Road Cora! Springs. Florida 33065 Telephone (954) 516.6000 transs? i ?if? 4n when) Case Document 1 Filed 11/13/17 Page 32 of 40 PageID 32 159. The terms of the TEZOS ICO called for an investment of or fiat currency by Plaintiff and the Ciass Members. 160. The funds paid by Plaintiff and the Class Members pursuant to the EZOS ICO were pooled by Defendants in an effort by Defendants to secure a pro?t for themselves and the investors. As a result, the investors, including Plaintiff and the Class Members, shared in the risks and bene?ts of the investment. 161. Plaintiff and the Class Members relied on, and are dependent upon, the expertise and efforts of Defendants for their investment returns. 162. Plaintiff and the Class Members expected that they would receive profits from their investments in Defendants? efforts. 163. Tezzies constitute investment contracts and are therefore subject to federal securities laws, including the registration requirements promulgated thereunder. 164. No registration statements have been filed with the SEC or have been in effect with respect to any of the offerings alleged herein. 165. By reason of the foregoing, Defendants have violated Sections 5(a) and 5(c) of the Securities Act, 15 U.S.C. 77e(a) and 77e(c). 166. As a direct and proximate result of Defendants? unregistered sale of securities, Plaintiff and the Class Members have suffered damages in connection with their respective purchases of Tezzies securities in the 13208 ICC. 167. Defendant BREITMAN is subject to liability by virtue of her top- level executive position with DLS and her undeniable influence over THE FOUNDATION, which provided her the power to control or influence actions. For example, BREITMAN is an executive of DLS, is one of its only shareholders, and is - 32 SILVER MILLER 11780 West; Sample Roud - Coral Springs, Florida 33065 Telephone (954) 516-6000 Case Document 1 Filed 11/13/17 Page 33 of 40 PagelD 33 responsible for much oi the. company?s day?to?day operations, including its operations vise?vvis Plaintiff and the Class Members. As a top-level executive and controlling person of TEZOS, BRIEITMAN knew of, or recklessly disregarded, the alleged misrepresentations made by WEZOS in connection with the ICC. 168. Defendant is a culpable participant in the fraudulent scheme described herein and caused to engage in the acts and omissions which give rise to liability under '1 U.S.C. 77c. 169? Accordingly, Defendant is a ?controlling person? of TIEZOS within the meaning of Section 15(a) of the Exchange Act, 15 U.S.C. 770. '170. Plaintiff and the Class Members have suffered damages as a result of Defendant violation 'lS(a) of the Exchange Act, '25 U.S.C. 770. 'l7'l. likewise, Defendant ARTHUR BRENNAN is subject to liability by virtue of his top-level executive position with Digs and his undeniable influence over which provided him the power to control or in?uence actions. For example, BREITMAN is an executive of DIS, is one ofits only shareholders, and is responsible for much of the company?s clay?toutiay operations, including its operations vis?a?vis Plaintiff and the Class Members. As a top-level executive and controlling person of knew of, or reckiessly disregarded, the alleged misrepresentations made by in connection with the 1C0. 172. Defendant ARTHUR is a culpable participant in the Fraudulent scheme described herein and caused TIEZOS to engage in the acts and omissions which give rise to liability under 15 U.S.C. 77c. .. 33 .. SILVER MILLER 1780 West. Sample Road Coral Springs, Florida 33065 'i?elephone (954) 516-6000 ?aris?i life Mills r1 mystic: Case Document 1 Filed 11/13/17 Page 34 of 40 PageID 34 173. Accordingly, Defendant ARTHUR BREITMAN is a ?controlling person? of TEZOS within the meaning of Section 15(a) of the Exchange Act, 15 U.S.C. 770. 174. Plaintiff and the Class Members have suffered damages as a result of Defendant ARTHUR violation of Section 15(a) of the Exchange Act, 15 U.S.C. 770. COUNT II - FRAUD IN THE OFFER AND SALE OF SECURITIES IN VIOLATION OF SECTION 17121111) OF THE SECURITIES ACT Plaintiff re?alleges, and adopts by reference herein, Paragraphs 1 456 above, and further alleges: 175. Defendants are ?sellers? within the meaning of 15 U.S.C. 771(a) because they or their agents solicited Plaintiffs and the Class Members? investments in the 13208 ICC. 176. The terms of the TEZOS ICO called for an investment of or ?at currency by Plaintiff and the Class Members. 177. Tezzies constitute investment contracts and are therefore subject to federal securities laws, including the registration requirements promulgated thereunder. 178. Defendants, in the offer and sale of 'I?ezzies securities, by the use of the means and instruments of transportation and communication in interstate commerce or by use of the mails, directly or indirectly, have employed devices, schemes, and arti?ces to defraud. 179. in the offer and sale of the Tczzies securities and as part of their scheme to defraud, Defendants made false and misleading statements of material fact and omitted to state material facts to investors and prospective investors, as more fully described above. 180. Defendants engaged in the conduct alleged herein knowingly or with reckless disregard for the truth. -34- SILVER MILLER 11780 West Sample Road - Coral Springs, Florida 33065 - Telephone (954) 516-6000 Case Document 1 Filed 11/13/17 Page 35 of 40 PagelD 35 181. As a direct and proximate result of the foregoing, Defendants have each violated Sections of the Securities Act, 15 1.1.80 77q(a)(1). 182. Defendant KATHLEEN BREITMAN is subject to liability by virtue of her top~ level position with DLS and her undeniable influence over TIWIE FOUNDATION, which provided her the power to control or influence actions. For example, is an executive of DLS, is one of its only shareholders, and is responsible for much of the company?s day?to-day operations, including its operations vis-z?i-vis Plaintiff and the Class Members. As a top-level executive and controlling person of TEZOS, knew of, or recklessly disregarded, the alleged misrepresentations made by EZOS in connection with the ICC). 183. Defendant KATHLEEN BREITMAN is a culpable participant in the fraudulent scheme described herein and caused TEZOS to engage in the acts and omissions which give rise to liability under 15 U.S.C. 771(21). 184. Accordingly, Defendant KATHLEEN BREIT MAN is a ?controlling person? of TEZOS within the meaning of Section 15(a) of the Exchange Act, 15 U.S.C. 770. 185. Plaintiff and the Class Members have suffered damages as a result of Defendant violation of Section 15(a) of the Exchange Act, 15 U.S.C. 770. 186. Likewise, Defendant ARTHUR is subject to liability by virtue of his top-level executive position with DLS and his undeniable influence over THE FOUNDATION, which provided him the power to control or influence actions. or example, ARTHUR is an executive of DLS, is one of its only shareholders, and is responsible for much of the company?s day-to-day operations, including its operations vis?a-vis Plaintiff and the Class Members. As a top?level executive and controlling person of TEZOS, ARTHUR BREITMAN 35 SILVER MILLER 11780 West Sample Road Coral Springs. Florida 33065 Telephone (954) 516-6000 ?at ?2.81.1 new i lerl .: 19:, so In Case Document 1 Filed 11/13/17 Page 36 of 40 PageID 36 knew of, or recklessly disregarded, the alleged misrepresentations made by TEZOS in connection with the ICC). 187. Defendant ARTHUR BREITMAN is a culpable participant in the fraudulent scheme described herein and caused TEZOS to engage in the acts and omissions which give rise to liability under '15 U.S.C. 77l(a). 188. Accordingly, Defendant ARTHUR BRIEITMAN is a ?controlling person? of TEZOS within the meaning of Section 15(a) of the Act, 15 U.S.C. 770. 189. Plaintiff and the Class Members have suffered damages as a result of Defendant ARTHUR violation ot'Section 15(a) of the Exchange Act, 15 U.S.C. 770. COUNT FRAUD IN THE OFFER AND SALE OF SECURITIES IN VIOLATION or SECTION 17(a)(2) AND 17(a)(3) OF THE SECURITIES ACT Plaintiff re?aileges, and adopts by reference herein, Paragraphs 1-156 above, and further alleges: 190. In the offer and sale of the Tezzies securities, Defendants by use of means or instruments of transportation or communication in interstate commerce or by use of the mails -1 directly or indirectly: obtained money or property by means of untrue statements of material Facts or omitted to state material facts necessary to make not misleading the statements made, in light of the circumstances under which they were made; or engaged in transactions, practices, or courses of business that operated or would operate as a fraud or deceit upon the purchasers of the Tezzies. 19'1. Defendants acted at least negligently with respect to the facts and circumstances described above. 36 SILVER MILLER 11780 West Sample Road Coral Springs. Florida 33065 - Telephone (954) 516-6000 A 1 ?7 . 2 to Case Document 1 Filed 11/13/17 Page 37 of 40 PageID 37 192. As a direct and proximate result of the foregoing, Defendants have each violated Sections 17(a)(2) and 17(a)(5) of the Securities Act, 15 U.S.C. 77q(a)(2) and (3). .193. As a direct and proximate result of Defendants? conduct, Plaintiff and the Class Members have suffered damages in connection with their respective purchases of Tezzies securities in the ICC). COUNT IV - RESCISSION OF CONTRACT Plaintiff re~allegcs, and adopts by reference herein, Paragraphs 'l~156 above, and further alleges: 194. The terms of the TEZOS ICO constitute a contract between: (1) Plaintiff and the Class Members, and (2) Defendants. 195. The contract was entered into by and between Defendants and each Class Member between july 2017 and uly 15, 2017. 196. The terms of the ICO called for an investment of by Plaintiff and the Class Members. 197. The funds paid by Plaintiff and the Class Members pursuant to the TEZOS were pooled by Defendants in an effort by Defendants to secure a pro?t for themselves and the investors. As a result, the investors, including Plaintiff and the Class, shared in the risks and bene?ts of the investment. 198. Plaintiff and the Class Members relied on, and are dependent upon, the expertise and efforts of [Defendants for their investment returns. 199. The terms of the ICO constitute an investment contract. and is therefore subject to federal and state securities laws, including the registration requirements promulgated thereunder. 37 SILVER MILLER H780 West Sample Road Zoral Springs. Florida 33065 Telephone (954) 516-6000 Case Document 1 Filed 11/13/17 Page 38 of 40 PagelD 38 200. No registration statement was filed or in effect with any federal or state regulatory body, and no exemption from registration exists with respect to the TEZOS ICC. 201. Moreover, the ECO Terms for Investors are unconscionable and iilusory. As a bene?t for the uniiatetallymimposcd bargain thrust upon them by Plaintiff and the Class Members might receive no Teazies and no TEZOS network at all while Defendants purport a right to retain all of the funds and assets Plaintiff and the Class Members invested. 202. As a result of Defendants? fraud, false representations, and violation of federal and state securities laws in connection with the TEZOS ICO, Plaintiff and the Class Members state their demand that the Contract be rescinded and canceled. 203. To the extent that Plaintiff has received from Defendants any benefits through the contract a? though none are known to them at this time Plaintiff hereby offers to restore to Defendants those benefits, once they are identified and can be quantified. 204. As a direct and proximate cause of Defendants? conduct, Plaintiff and the Class Members have been damaged. 205. Defendant D115 is subject to liability because it solicited and otherwise participated in the sale to Plaintiff and the Ciass Members of the misrepresented and unregistered securities identi?ed herein. Moreover, Defendant DLS is subject to liability because it is believed to control, or have obtained control over, a large portion of the assets invested by Plaintiff and the Ciass Members which must be disgorged and returned to Plaintiff and the Ciass Members in effectuating the rescission of the contract into which they were unlawfully led. 206. Defendant BRIEITMAN is subject to because she solicited and otherwise participated in the sale to Piaintiff and the Class Members of the misrepresented and unregistered securities identified herein. Moreover, Defendant BRIETMAN -38- SILVER MILLER 11780 West Sample Road - Coral Springs. Florida 33065 Telephone (95-5) 516-6000 Case Document 1 Filed 11/13/17 Page 39 of 40 PageID 39 is subject to liability because she is believed to control, or have obtained control over, a large portion of the assets invested by Plaintiff and the Class Members which must be disgorged and returned to Plaintiff and the Class Members in effectuating the rescission of the contract into which they were unlawfully led. 207. Defendant BREITMAN is subject to liability because he solicited and otherwise participated in the sale to Plaintile and the Class Members of the misrepresented and unregistered securities identi?ed herein. Moreover, Defendant ARTHUR BRIETMAN is subject to liability because he is believed to control, or have obtained control over, a large portion of the assets invested by Plaintiff and the Class Members which must be disgorged and returned to Plaintiff and the Class Members in effectuating the rescission of the contract into which they were unlawfully led. 208. Defendant "Fl-11:12 FOUNDATION is subject to liability because it solicited and otherwise participated in the sale to Plaintiff and the Class Members of the misrepresented and unregistered securities identi?ed herein. Moreover, Defendant THE FOUNDATION is subject to liability because it is believed to control, or have obtained control over, a large portion of the assets invested by ll?laintiff and the Class Members which must be disgorged and returned to Plaintiff and the Class Members in effectuating the rescission of the contract into which they were unlawfully led. COUNT ALTER EGO LIABILITY Plaintiff rte?alleges, and adopts by reference herein, Paragraphs '1 ?156 above, and further alleges: 2209. Upon information and belief, at all times material hereto, each of the Defendants were principal, agent, affiliate, manager, alter-?ego, co-venturer, partner, surety, guarantor, officer, .. 39 MILLER 11780 West Sample Road Coral Springs. Florida 33065 Telephone (951) 516-6000 urn'w SiIVt-I?Milliyrlinwatnm Case Document 1 Filed 11/13/17 Page 40 of 40 PagelD 40 director, or employee of the remaining Defendants and were at all times acting within the scope of such agency, affiliation, management, alter?ego relationship and/or employment; and actively participated in or subsequently ratified and adopted, or both, each and all of the acts or conduct alleged, with full knowledge of all of the facts and circumstances, including, but not limited to, full knowledge of each and every violation of Plaintiffs and the Class Members? rights and the damages to Plaintiff and the Class Members proximately caused thereby. 210. Upon information and belief, there exists, and at all times material hereto existed, a unity of interest and ownership between and among Defendants, such that any individuality and/ or separateness between them has ceased to exist. 211. Upon information and belief, DLS and THE FOUNDATION were mere shells, instrumentalities, and conduits through which Defendants carried on their business for THE primary, if not sole, benefit. DLS and THE FOUNDATION were and are controlled, dominated, and operated by THE BREITMANS as their individual businesses and alter egos. 212. Upon information anti belief, Defendants have intermingled their assets and obtained assets from other Defendants to suit their convenience and to evade U.S. regulations, liability to defrauded investors in the EZOS ICO, payment of taxes, and other legitimate obligations. 213. Upon information and belief, Defendants have used their own assets, and those of other Defendants, for personal use and obtained funds from other Defendant-5? business accounts for their own personal use. - 40 . SILVER MILLER ?780 West Sample Road - Coral Springs. Florida 33065 Telephone (954) ENS-6000 itsrw?ilre e\ HI lei-l mv rain Case Document 1-1 Filed 11/13/17 Page 1 of 7 PagelD 41 214. Under the facts and circumstances present herein, adhering to the fiction of separate entities would sanction a fraud and or promote injustice, because Plaintiff and the Class as victims of Defendants? wrongdoing, would suffer injury. 215. In light of the foregoing, Plaintiff and the Class Members are entitled to a judgment against Defendants iointly and severally, in a sum according to proof at trial, plus interest at the maximum rate allowed by law and reimbursement of costs. COUNT v1 UNREGISTERED OFFER AND SALE OF SECURITIES IN VIOLATION OF FLA. STAT. s? 517.011. 61* saga Plaintiff re-allegcs, and adopts by reference herein, Paragraphs 1 - 156 above, and further alleges: 2'36. The called for an investment of money or assets by Plaintiff and the Class Members w? speci?cally, the Bitcoin, Ether, and other assets of value transferred to Defendants in exchange for the nonwfunctional Tezzies issued by Defendants. 217. The funds paid by Plaintiff and the Class Members were pooled by Defendants in the project in an effort by Defendants to secure a profit for themselves and the Plaintiff Class. As a result, the Plaintiff Class -.. as the investors shared in the risks and benefits of the investment scheme. 2?18. Plaintiff and the Class Members relied upon, and were dependent: upon, the expertise and efforts of Defendants for their investment returns. Plaintiff and the Class Members expected that they would receive profits from their investments in Defendants? efforts. 220. Tezzies constitute investment contracts and are therefore subiect to the Florida Blue Sky Laws, including the registration requirements of Fla. Stat. 517.07. . SILVER MILLER 11780 West Sample Read - Coral Springs. Florida 33065 'l?elephone (95-4) 516-6000 Case Document 1-1 Filed 11/13/17 Page 2 of 7 PagelD 42 221. No registration statements have been filed with the Florida Office of Financial Regulation or have been in effect with respect to any of the offerings alleged herein. 222. Similarly, no exemption from regisrration exists with respect to the TEZOS ICC. 223. By reason of the foregoing, Defendants have violated Fla. Stat. 517.07, at .rrq. 224. Defendants BREITMAN and ARTHUR are subject to liability under Fla. Stat. 517.07 and 517.2? because they solicited and otherwise personaily participated and aided the sale to Flaintiff and the Class Members of the 'I?eazies at issue herein. 225. As a direct and proximate result of Defendants? unregistered sale of securities, Plaintiff and the Class Members have suffered damages in connection with their respective purchases of ?l?czzies securities in the TEZOS ICC). COUNT VII FRAUD IN THE OFFER AND SALE OF SECURITIES IN VIOLATION OF FLA. STAT. 517.011. et seq. Plaintiff re-alleges, and adopts by reference herein, Paragraphs 1-156 above, and further alleges: 226. Fla. Stat. 517.301 makes it unlawful for anyone, in connection with the rendering of any investment advice or in connection with the offer, sale, or purchase of any investment or security: to employ any device, scheme, or artifice. to defraud; to obtain money or property by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; or to engage .in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon a person. 227. Defendants conducted an unlawful sale of securities as de?ned in Fla. Stat. 517.011, et seq. - 42 SILVER MILLER 1780 West Sample Road Coral Springs. Florida 33065 ?I?Ilephone (954) 516-8000 Case Document 1?1 Filed 11/13/17 Page 3 of 7 PagelD 43 228. More speci?cally, in connection with the offer to sell a security or investment to Plaintiff and the Class Members, Defendants: employed a scheme to defraud Plaintiff and the Class Members; obtained Plaintiffs and the Class Members" invested funds and assets by means of untrue statements of material fact; and engaged in transactions and a course of business which operated as a fraud or deceit upon Plaintiff and the Class Members. 229. As Defendants intended, Plaintiff and the Class Members justifiably relied upon the multiple material misrepresentations Defendants made to Plaintiff and the Class Members in the course of their solicitations in connection with Plaintiff and the Class Members? investments in the TEZOS ICO. 230. As a direct and proximate result of Defendants? violations of Fla. Stat. 517.011, at .req., Plaintiff and the Class Members have suffered damages. 231. Defendants each participated in, or aided in, the unlawful procurement of Plaintiffs and the Class Members? investments in the TEZOS ICC). 232. Plaintiff and the Class Members are entitled to an award of attorneys? fees pursuant to Fla. Stat. 517.211. COUNT - VIOLATION OF DECEPTIVE AND UNFAIR TRADE PRACTICES ACT. CHAPTER 501 211 1 FLA. STAT. Plaintiff re-allcges, and adopts by reference herein, Paragraphs 1? 156 above, and further alleges: 233. Chapter 501, Fla. Stat, Florida?s Deceptive and Unfair Trade Practices Act is to be iiberall)r consrrued to protect the consuming public, such as Plaintiff and the Class Members in -43- SILVER MILLER 11780 West Sample Road Coral Springs, Florida 33065 'l?elephone (954) 516-6000 Case Document 1-1 Filed 11/13/17 Page 4 of 7 PagelD 44 this case, from those who engage in unfair methods of competition, or unconscionable, deceptive or unfair acts or practices in the conduct of any trade or commerce. 234. Plaintiff and the Class Members are ?consumers? within the meaning of Fla. Stat. 501.2030). 235. By soliciting investor funds in the manner in which they did, Defendants engaged in ?trade and commerce? within the meaning of Fla. Stat. 236. While FDUTPA does not de?ne ?deceptive? and ?unfair,? it incorporates by reference the Federal Trade Commission?s interpretations of these terms. The FTC has found that a ?deceptive act or practice? encompasses ?a representation, omission or practice that is likely to mislead the consumer acting reasonably in the circumstances, to the consumer?s detriment.? 237. The federal courts have defined a ?deceptive trade practice? as any act or practice that has the tendency or capacity to deceive consumers and have defined an ?unfair trade practice? as any act or practice that offends public policy and is immoral, unethical, oppressive, unscrupulous, or substantially injurious to consumers. 238. Moreover, as the securities laws are designed for consumer protection and ?proscribe[ unfair methods of competition, or unfair, deceptive, or unconscionable acts or practices,? a violation of the securities laws is a perm violation of 239. Defendants? acts and omissions of representing to Plaintiff and the Class Members that, among other things: applications had been recognized and adopted by several well-known and well?established companies; network would be fully functional shortly after the DLS would timeiy sell its shares to THE FOUNDATION shortly after the ICC -44- SILVER MILLER 11780 West Sample Road Coral Springs, Florida 33065 - Tilephone (954) 516-6000 isms-S mm i i luv! any-sum Case Document 1-1 Filed 11/13/17 Page 5 of 7 PagelD 45 constitute both deceptive and unfair trade practices because the false representations and omissions made by Defendants have a tendency or capacity to deceive consumers, such as Plaintiff and the Class Members, into investing in faiscly-tout?cd business and are immoral, unethicai, oppressive, unscrupulous, or substantially injurious to consumers. 240. As a result of Defendants? deceptive trade practices, Plaintiff and the Class Members were deceived into investing their money with a company that functioned solely as an engine of fraud thus causing significant economic damage to Plaintiff and the Class Members. 241. The materialiy false statements and omissions as described above, and the fact that this was a misleading investment, were unfair, unconscionable, and deceptive practices perpetrated on Plaintiff and the Ciass Members which would have likely deceived a reasonable person under the circumstances. 242. Defendants were on notice at ail relevant times that the false representations of material facts described above were being communicated to prospective investors (such as Plaintiff and the Class Members) by their authorized agents. 243. As a result of the false representations and violations of the securities laws described above, Plaintiff and the Class Members have been damaged by, among other things losing their invested capital. 2244. Plaintiff and the Class Members have also been damaged in other and further ways subject to proof at trial. 245. Therefore, Defendants engaged in unfair and deceptive trade practices in violation of Section 501.201 Mara, Fla. Stat. .. 45 SILVER MILLER 11780 West Sample Road Coral Springs. Florida 33065 Telephone (954) 516.8000 trim Si ii is Case Document 1?1 Filed 11/13/17 Page 6 of 7 PagelD 46 246. Pursuant to Sections 501.211(1) and 501.2105, Fla. Stat, Plaintiff and the Class Members are entitled to recover from Defendants the reasonable amount of attorneys? fees Plaintiff and the Class Members have had to incur in representing their interests in this matter. PRAYER FOR RELIEF WHEREFORE, Plaintiff ALEJANDRO GAVIRIA, individually and on behalf of all others similarly situated, respectfully prays for relief as follows: A declaration from this Court that this action is a proper class action, including certi?cation of the proposed Class, appointment of Plaintiff as the class representative, and appointment of Plaintiff?s counsel as class counsel; A judgment awarding Plaintiff and the Class Members equitable restitution, including, without limitation, rescission of the terms of the T3203 ICO, restoration of the rial/Ir (11m ante, and return to Plaintiff and the Class Members all or flat currency paid to Defendants in connection with the as a result of Defendants? unlawful and unfair business practices and conduct; An award of any and all additional damages recoverable under law -- jointly and severally entered against Defendants including but not limited to compensatory damages, punitive damages, incidental damages, and consequential damages; Pre- and post-judgment interestAttorneys fees, expenses, and the costs of this action, ant All other and further relief as this Court deems necessary, just, and proper. DEMAND FOR IURY TRIAL Pursuant to Rule 38 of the Federal Rules of Civil Procedure, Plaintiff demands trial by jury in this action of all issues so triable. ~46- SILVER MILLER 11780 West Sample Road Coral Springs. Florida 33065 - Telephone 51645000 ttltii?t?. i led Case Document 1-1 Filed 11/13/17 Page 7 of 7 PagelD 47 Respectfully submitted, SILVER MILLER ?1'1780 W. Sample Road Coral Splings, Florida 33065 '1 lephoue: (954) 516 6000 Dated: November 9. 201.7 47 SILVER MILLER 11780 West Sample Road - Coral Springs, Florida 33065 mm: Florida Bar No. 572764 E-mnil: .nwm 3m S. MILLER Florida Bar No. 072206 E?mail: _l h-?liller?l?lSilwrMillcri ,21w.com - and - WITES LAW FIRM 4400 N. Federal Highway Lighthouse Point, Florida 33064 Telephone: (954) 57043989 Facsimile: (954) 354-0205 MARC A. WITES Florida Bar No. 024783 E-mail: mwi tes?im'kln wy ers.com P/aintgf Telephone (954) 516-6000 Case Document 1-2 Filed 11/13/17 Page 1 of 10 PagelD 48 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 by contributors ("Contributors" collectively, and ?Contributor" individually) and the subsequent genesis allo- cation of transferable blockchain-based digital information units called tez to Contributors. 2. TEZOS promotes and develops new technologies and applications, especially in the ?elds of new open and decentralized software architectures. Adominating, 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 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, andIor the allocation, use and ownership of XTZ, carries significant financial, regulatory andIor reputational risks (including the complete loss of value (if any) of XTZ and attributed features). EXHIBIT 1 1? Case Document 1-2 Filed 11/13/17 Page 2 of 10 PagelD 49 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 existing on the biockchain at the addresses published before the start of the Contribution Period at: 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 038. To the extent the terms contained herein or in any other document or communication contradict the ones set forth in the 088, the terms of the CSS prevail. Fur- thermore, no other document or communication may modify or add any additional obiiga- 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 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- 208; d. the Contributor is of a sufficient age to legally obtain e. the Contributor will take sole responsibility for any restrictions and risks asso- ciated with receiving and holding f. the Contributor is not contributing to TEZOS to obtain XTZ for the purpose of speculative investment; 2 10 Case Document 1-2 Filed 11/13/17 Page 3 of 10 PagelD 50 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 anyjurisdiction; 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 iaw, 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 titie or implied warranties, merchantability or fitness for a particular purpose; k. the Contributor understands and accepts that the Contribution Software and/or the 088 and/or underlying protocols may either delay and/or not execute a Contribution due to the overall Contribution volume, mining attacks and similar events; 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 1o Case Document 1-2 Filed 11/13/17 Page 4 of 10 PagelD 51 administration support fee of USD 150,000 in total, calculated using the exchange rates as reported by 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 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 Contribution Ad? dress?). This will be a PZSH 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 088. 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 Case Document 1-2 Filed 11/13/17 Page 5 of 10 PageID 52 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 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 088 will record the equivalent value of Contributions in BTC. The BTC equivalent for ETH shall be calculated using the historical exchange rate of 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- 208 (if required because of technical dif?culties). These calculations will be made on a best effort basis by TEZOS. 3.5. Bonus System 26. When Contributions are recorded by the 038, 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 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%; 0. Blocks 800 to 1199 (inclusive): Contribution Bonus of 10%; d. Blocks 1200 to 1599 (inclusive): Contribution Bonus of e. Blocks 1599 to 1999 (inclusive): Contribution Bonus of 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 Case Document 1-2 Filed 11/13/17 Page 6 of 10 PagelD 53 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 893200.77, plus a Contri- bution Bonus of 20% at the start of the Contribution Period. The exchange rate of will be calculated based on the closing rate on the last day before the start of the Contribution Period, as reported by The Gene- sis State shall allocate Pooi 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 422000.00, plus a Contri? bution Bonus of 20% at the start of the Contribution Period. The exchange rate of will be calculated based on the closing rate on the last day before the start of the Contribution Period, as reported by The Gene- sis State shall allocate Pool 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, and 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 shall vest over a period of 4 years. Pool E: 1/8 of the amount of XTZ of Pool A, and 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 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 Case Document 1-2 Filed 11/13/17 Page 7 of 10 PagelD 54 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 wallets 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 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 088 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 038 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, ?nancial, 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 088 are fit 7 1o Case Document 1-2 Filed 11/13/17 Page 8 of 10 PagelD 55 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 I 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 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 Case Document 1?2 Filed 11/13/17 Page 9 of 10 PagelD 56 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 083, the XTZ or the Tezos Network under any cause or action whatsoever of any kind in anyjurisdiction, 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 088, 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 088, 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 088, the XTZ or the Tezos Net- work are not liable, and the Contributor agrees not to seek to hold them liable, for the 9 1o Case Document 1-2 Filed 11/13/17 Page 10 of 10 PagelD 57 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 hoid 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