case 1:19-cv-05244-akh document 45 filed 01/14/20 page 1 …...case 1:19-cv-05244-akh document 45...

Patrick E. Gibbs +1 650 843 [email protected]

Cooley LLP 3175 Hanover Street Palo Alto, CA 94304-1130 t: (650) 843-5000 f: (650) 849-7400 cooley.com

January 14, 2020

Honorable Alvin K. Hellerstein United States District Judge Daniel Patrick Moynihan United States Courthouse 500 Pearl Street New York, NY 10007-1312

Re: SEC v. Kik Interactive, No. 19-cv-5244 (AKH)

Dear Judge Hellerstein:

Pursuant to Local Rule 37.2 and Rule 2(E) of Your Honor’s Individual Rules of Practice, the parties write to request the Court’s intervention regarding a discovery dispute concerning the U.S. Securities and Exchange Commission’s (“SEC”) 30(b)(6) deposition notice (the “Notice”) to Kik Interactive, Inc. (“Kik” or the “Company”). Specifically, Kik seeks a protective order precluding the deposition. Alternatively, Kik requests that the Court meaningfully narrow the deposition topics. A copy of the Notice is attached to this letter as Exhibit A. The parties met and conferred regarding this dispute twice by telephone. On November 19, 2019, Patrick Gibbs, Brett De Jarnette, and Michael Welsh of Cooley LLP (“Cooley”) spoke for approximately 20 minutes with Stephan Schlegelmilch, David Mendel, and Laura D’Allaird of the SEC. When it was apparent the parties would not resolve the dispute, Kik sent the SEC a proposed letter to this Court seeking a protective order on November 27, 2019. The SEC responded on December 8, 2019 by sending Kik an Amended Rule 30(b)(6) notice (the “Amended Notice”). A copy of the Amended Notice is attached as Exhibit B. On December 11, 2019, Mr. Gibbs, Mr. De Jarnette, and Jenna Bailey from Cooley again spoke to Mr. Schlegelmilch, Mr. Mendel, and Ms. D’Allaird from the SEC, this time for approximately 10 minutes about the Amended Notice. On December 18, 2019, and as the parties discussed, Kik sent the SEC a letter explaining its basis for objecting to the topics in the Amended Notice and encouraged the SEC to narrow its topics. On December 20, 2019, the SEC stated its view that the parties were still no closer to a resolution and sent Kik its portion of this letter. On January 6, 2020, Kik sent the SEC a revised version of Kik’s portion of the letter, and, on January 10, the SEC sent Kik revisions to the SEC’s portion. The parties set forth their respective positions regarding this deposition below.

KIK’S POSITION

I. Introduction

After conducting a year-and-a-half long investigation, taking 15 days of testimony from 11Kik personnel, compiling a 90,000 document investigative file, and receiving substantial written responses over the course of two years about every aspect of this case, the SEC now seeks corporate testimony on hundreds of topics or subtopics, either noticed expressly in their Rule

VIA ECF & Hand Delivery

Case 1:19-cv-05244-AKH Document 45 Filed 01/14/20 of 23

Honorable Alvin K. Hellerstein January 14, 2020 Page Two


30(b)(6) Notice or by reference to other discovery documents. The SEC claims that it needs to take a Rule 30(b)(6) deposition of Kik, at the very end of fact discovery, purportedly to “streamline” the discovery process. But the SEC’s proposed deposition would do no such thing. Instead, it would burden Kik with preparing for an unnecessary deposition, entirely duplicative of the vast discovery record in this case, and one in which the topics are so expansive that there are essentially no boundaries on questions the SEC may ask.

The SEC claims it is entitled to a 30(b)(6) deposition as a matter of course because the noticed topics are “relevant,” without regard to scope of permissible discovery under Rule 26. The SEC is wrong. Indeed, courts routinely preclude 30(b)(6) depositions or strike topics.1 But more importantly, the SEC’s position is flatly inconsistent with its own refusal to produce a Rule 30(b)(6) witness to Kik, on topics that were indisputably “relevant” to Kik’s defense of the case, including topics seeking to permit Kik to better understand the facts underlying the SEC’s allegations. (ECF No. 27.) Here, the Court has even more reason to deny a Rule 30(b)(6) deposition of Kik because the SEC’s claim against Kik is supposed to turn solely on objective evidence, necessitating less discovery than Kik’s vagueness affirmative defense, which turns on both objective and subjective evidence. Compare Hayes v. New York Attorney Grievance Comm., 672 F.3d 158, 163 (2d Cir. 2012) (subjective testimony from regulating entity was relevant in finding a statute unconstitutionally vague) with Warfield v. Alaniz, 569 F.3d 1015, 1021 (9th Cir. 2009) (determining whether a transaction is an “investment contract” under Securities and Exchange Commission v. W. J. Howey Co., 328 U.S. 293 (1946) is an “objective inquiry.”). It would be manifestly unfair to deny Kik any testimony from the SEC, including Rule 30(b)(6) and percipient witness depositions, while allowing the SEC to burden Kik with a limitless Rule 30(b)(6) notice after the two years of discovery it has already taken.

Importantly, the SEC does not dispute that the Amended Notice requests information it has already received during discovery. Instead, it claims that it is entitled to a Rule 30(b)(6) deposition because such deposition binds the company whereas individual testimony does not. The SEC’s argument is misguided. Kik’s document productions and written responses are entirely duplicative of the information sought, which renders the proposed deposition entirely unnecessary. The SEC fails to explain otherwise. Further, Kik has repeatedly offered to designate portions of individual testimony as being on behalf of the company, and even agreed to stipulate that certain of Mr. Livingston’s are corporate admissions. The SEC has refused these 1 E.g., Blackrock Allocation Target Shares: Series S Portfolio v. Wells Fargo Bank, Nat. Assoc., 2017 WL 9400671, at *2 (S.D.N.Y. Apr. 27, 2017) (striking topics seeking overbroad and duplicative testimony); Janki Bai Sahu v. Union Carbide Corp., 528 Fed. App’x 96, 103 (2d Cir. 2013) (affirming preclusion of 30(b)(6) testimony where requests were overbroad and cumulative); Apple Inc. v. Samsung Elec. Co., Ltd., 2012 WL 1511901, at *2-3 (N.D. Cal. Jan. 27, 2012) (granting protective order where Rule 30(b)(6) notice was “facially excessive” and the number and breadth of the subject areas “render[ed] unworkable” the responding party’s obligation to designate and prepare a witness); Bowers v. Mortgage Elec. Registration Sys., Inc., 2011 WL 6013092, at *7 (D. Kan. Dec. 2, 2011) (granting protective order where some categories were not described with reasonable particularity and those that were were “otherwise so overly broad that they subject [the responding party] to an undue burden in attempting to respond to the deposition notice.”); Nicholas v. Wyndham Int’l, Inc., 373 F.3d 537, 543 (4th Cir. 2004) (finding Rule 30(b)(6) testimony inappropriate as the topics were duplicative of previous information received).


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offers at every turn. Kik should not be punished through a burdensome and duplicative deposition as a result.

The SEC’s Amended Notice is improper, and a protective order is appropriate, for two reasons that the SEC does not meaningfully dispute. First, the SEC’s proposed topics are extremely overbroad and fail to come anywhere close to the “painstaking specificity” that Rule 30(b)(6) requires. Prokosch v. Catalina Lighting, Inc., 193 F.R.D. 633, 638 (D. Minn. 2000). As courts have found in many similar circumstances, the topics do not provide Kik with adequate notice to prepare a witness to testify on behalf of the Company. See n.1, infra. Kik has repeatedly told the SEC that it will produce a 30(b)(6) witness if the noticed topics are compliant with the Federal Rules. But the SEC has instead chosen to stick with its dozens of infinitely broad topics, imposing virtually no boundaries on questions it could ask a witness. And, in its one purported attempt to “narrow” the scope of the notice, the SEC actually added topics, including over 100 responses to requests for admission (“RFAs”) that were incorporated by reference. Tellingly, the SEC does not address Kik’s argument that the noticed topics are overbroad. See infra at 16. Nor does it contest that a protective order is appropriate under such circumstances. Instead, the SEC argues only that the topics are relevant. They are not, but in any event, relevance alone is not a reason to burden Kik with a Rule 30(b)(6) deposition.

Second, the proposed deposition is duplicative of the vast information the SEC obtained in both its investigation and this litigation. The SEC does not dispute this and instead insists that it is entitled to a Rule 30(b)(6) deposition regardless. But a Rule 30(b)(6) deposition should not be used as a vehicle to obtain an additional deposition of a percipient witness or as a catch-all to reexamine the universe of information already produced. See Edwards v. Scripps Media, Inc., 331 F.R.D. 116, 121 (E.D. Mich. 2019) (describing situations where a party may not be required to produce a 30(b)(6) witness as including when the deposition “would be used inefficiently ‘as a catch-all technique to reexamine’” information the opposing party already produced) (internal citations omitted). Here, the time, effort, and resources to prepare an individual to testify imposes a burden on Kik that is wildly disproportionate to the needs of the case, especially given the vast discovery record already produced in this case. Bigsby v. Barclays Capital Real Estate, Inc., 329 F.R.D. 78, 81 (S.D.N.Y. 2019) (striking certain topics that imposed a disproportionate burden on the responding party). Even before taking discovery in this matter, the SEC, unlike a typical litigant, had the benefit of (and Kik was subjected to) a year-and-a-half long investigation. During its investigation and this litigation, the SEC has taken dozens of hours of testimony from Kik’s senior management and other employees, noticed many of them for additional depositions, and has received tens of thousands of documents and detailed responses to written discovery and other questions. The SEC has implicitly acknowledged the adequacy of that discovery; it does not identify in more than a conclusory fashion any information it has not already received from Kik. Moreover, the SEC’s conduct suggests discovery to date has been adequate. The SEC (1) withdrew the deposition subpoena of Kik’s CEO, (2) did not propound a single interrogatory, and (3) did not seek further RFA responses. Finally, the SEC has refused to seek the information


Honorable Alvin K. Hellerstein January 14, 2020 Page Four


through less burdensome means as it has rejected Kik’s offers to stipulate to facts or to designate previous testimony as made on behalf of the Company.2

For the reasons described herein, Kik respectfully requests that the Court issue a protective order.3

II. A Protective Order Is Warranted Because the Amended Notice Is Improper.

Courts have discretion to issue protective orders to bar depositions and limit discovery to protect a party from “annoyance, embarrassment, oppression, or undue burden or expense.” Fed. R. Civ. P. 26(c); see Progress Bulk Carriers v. Am. S.S. Owners Mut. Prot. & Indem. Ass’n, Inc., 939 F. Supp. 2d 422, 427 (S.D.N.Y. 2013), aff’d, 2 F. Supp. 3d 499 (S.D.N.Y. 2014); Favale v. Roman Catholic Diocese of Bridgeport, 235 F.R.D. 553, 555 (D. Conn. 2006). The fact that requested information is in some way relevant does not mean that a party is entitled to it in discovery. Rather, courts are required to “limit the frequency or extent of discovery otherwise allowed” if: 1) “the discovery sought is unreasonably cumulative or duplicative, or can be obtained from another source that is more convenient, less burdensome, or less expensive; 2) the party seeking discovery has had “ample opportunity to obtain the information by discovery in the action”; or 3) the proposed discovery is beyond the scope of Rule 26. Fed. R. Civ. P. 26(b)(2)(C); see Nicholas v. Wyndham Int’l, Inc., 373 F.3d 537, 543 (4th Cir. 2004) (“[T]he simple fact that requested information is discoverable . . . does not mean that discovery must be had.”); Apple, 2012 WL 1511901 at *3 (Rule 26 directs courts to “limit the extent of otherwise relevant discovery where the benefit to and need of the propounding party is outdone by the burden, expense” and “impracticable demand” imposed on a party). Because of “the potential impact of the testimony that can be obtained through [Rule 30(b)(6) depositions], courts should scrutinize Rule 30(b)(6) notice topics for proportionality, burden, and reasonable particularity to ensure that the responding party can select and prepare the most suitable witness and so that the topics do not engender abuse of the process by either party.” Blackrock Allocation Target Shares: Series S Portfolio v. Wells Fargo Bank, Nat. Assoc., 2017 WL 9400671, at *2 (S.D.N.Y. Apr. 27, 2017). Accordingly, courts have barred Rule 30(b)(6) depositions or have stricken topics that seek overbroad, duplicative, or wasteful testimony. See n.1, infra.

A. The Noticed Topics Are Not Designated with “Painstaking Specificity,” so as to

Allow Kik to Adequately Prepare an Individual to Testify.

Rule 30(b)(6) requires parties to “describe with reasonable particularity the matters for examination.” Fed. R. Civ. P. 30(b)(6). In other words, the noticing party must designate topics

2 Given the massive amount of testimony, documents, and other information that Kik has already provided in connection with the SEC’s investigation and discovery in this matter, and given further that discovery is virtually complete at this point, the SEC’s suggestion that an additional, repetitive, overbroad, unnecessary and burdensome Rule 30(b)(6) deposition would serve to streamline discovery is disingenuous.

3 In the alternative, Kik respectfully requests that the Court meaningfully narrow the topics it determines to lack the requisite specificity (as described below) that would allow Kik to designate and reasonably prepare a representative to testify on behalf of the Company.


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“with painstaking specificity” to allow a corporation to adequately prepare an individual to testify on its behalf. Prokosch v. Catalina Lighting, Inc., 193 F.R.D. 633, 638 (D. Minn. 2000); see also Blackrock Allocation Target Shares, 2017 WL 9400671 at *1 (noting that “a Rule 30(b)(6) deposition should not be a ‘memory contest’ of topics better suited to a written response or a supplemental document production.”); Murphy v. Kmart Corp., 255 F.R.D. 497, 505-06 (D.S.D. 2009) (finding that topics of “the corporate history of four corporate entities [and] the corporate relationship between these entities” covered a “tremendous amount of information” and ordering noticing party to amend notice to reasonably narrow or clarify the lines of inquiry); Alvey v. State Farm Fire & Casualty Co., 2018 WL 826379, at *7 (W.D.K.Y. Feb. 9, 2018) (striking noticed topics as overbroad). Topics that are so “wide-ranging and broad” subject the responding party to an undue burden and prevent it from “identify[ing] the outer limits of the areas of inquiry noticed, and designating a representative in compliance with the deposition notice.” Bowers, 2011 WL 601392 at *4.

The topics in the SEC’s Amended Notice do not come close to the reasonable particularity that Rule 30(b)(6) requires. The SEC does not meaningfully dispute this. Below, the SEC asserts that its topics are described with reasonable particularity but does nothing other than simply restate the topics and suggest they are relevant. (Opp. at 16-17.) Of course, relevance does not mean the SEC has identified the topics with the specificity the Rules require.

As Kik has told the SEC, the topics in the Amended Notice are so expansive that there would be virtually no boundaries on the scope of the deposition. For example, the SEC seeks testimony about “Public statements and presentations by Kik executives, employees, representatives and/or agents relating the Kin token offering . . .” (Amended Topic 5). The SEC does not identify any specific statement, but instead unreasonably expects Kik to prepare a witness to answer any question about any statement ever made about Kik’s sale of Kin. The remainder of the noticed topics are riddled with the same overbreadth, imposing no parameters with respect to scope.

Notably, in response to Kik’s initial position statement about this deposition, the SEC amended its notice, in a superficial way that actually expanded the scope of the proposed deposition: the SEC added topics 13 through 17. The SEC included five new topics about Kik’s prior written discovery, making the topics by definition duplicative and therefore improper. The ruling in Edwards is illustrative. 331 F.R.D. at 125. In that case, a party noticed topics relating to discovery responses. The Court prohibited such “discovery about discovery” as it was “irrelevant and not important to resolve the case” and because “the burden of requiring defendant to prepare a witness to testify about these matters outweighs the likely benefit.”4 Id.; see also Washington-St. Tammany Elec. Coop., Inc. v. Louisiana Generating, LLC, 2019 WL 1804849, at *12 (M.D. La. April 24, 2019) (finding overly broad a 30(b)(6) topic that generally refers to written discovery).

4 In an effort to compromise and resolve this issue without court intervention, Kik sent the SEC a letter detailing the issues with the Amended Notice, encouraging the SEC to narrow its topic. See Ex. C, Gibbs Letter to Schlegelmilch of December 18, 2019. The SEC refused to narrow its topics and unilaterally declared the parties at impasse.


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As in Edwards, the Amended Notice adds the following topics (Amended Topics 13-17), which seeks discovery about over 100 written responses that are incorporated by reference:

• 13. “The topics covered by your letter dated November 17, 2017” – This topic calls for testimony about a 12-page narrative response that Kik provided to the SEC over two years ago discussing how Kik used proceeds of the SAFT sales, its KYC and AML processes, information about Kik users, and the public-sale, among dozens, if not more, other factual categories.

• 14. “The topics covered by the stipulation dated November 12, 2019” – This topic calls for testimony about a stipulation the parties entered into in lieu of the deposition of Kik’s CEO, containing 41 paragraphs.

• 15. “The topics covered by your letter dated November 4, 2019” – This topic calls for

testimony about a narrative letter addressing 11 requests for production, encompassing discussion of distinct and particular facts concerning various subject matter.

• 16. “Kik’s responses to the SEC’s Requests for Admission Nos. 51, 77, 86, 99, 107, 109-

114, 117-129, 132-136, 144-148” – This topic seeks testimony about nearly 30 responses to requests for admission. Not only has Kik provided responses to those requests, but many of such requests were deficient.

• 17. “Testimony Exhibit 206” – This topic calls for testimony about Kik’s responses to more

than 80 requests for admission Kik provided over a year ago. These requests include Kik’s sale of Kin during the public sale; Kik’s screening, KYC, and AML processes for purchasers; Kik’s sale of SAFTs from June to September 2017; Kik’s use of revenue from the public sale; the banks in which Kik deposited that revenue; and the structure and conduct of the Kin Ecosystem Foundation. In addition to the above-referenced topics, every other Amended Topic contains numerous

deficiencies as summarized by the below chart. These topics in the aggregate create an unending universe of questions about which the SEC could ask a witness, preventing Kik from being able to adequately prepare a witness to testify on behalf of the Company.

Topic in Amended Notice Kik’s Objections Prior Testimony or Admissions by Kik Covering This Topic

Topic No. 1: Kik’s corporate structure, ownership and offices between January 1, 2017 and the present.

Lacks specificity, overbroad, irrelevant, duplicative, could have been obtained by less intrusive means.

Depositions of P. Heinke; I. Leibovich; and E. Ben-Ari; Nov. 11 Stipulation ¶¶ 1, 41 RFA No. 79 Investigative testimony of E. Lyon, E. Livingston, E. Clift


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Topic No. 2: Kik’s current financial condition and operations.

Lacks specificity, overbroad, irrelevant, duplicative, could have been obtained by less intrusive means.

Topic No. 3: “Kik’s plan for the Kin token offering, including Kik’s plan for the use of the Kin token offering proceeds; Kik’s planned time frame for the Kin token offering, including the timing of any sales of Kin to the public, and any changes to this time frame and reasons therefore.”

Lacks specificity, overbroad, duplicative, could have been obtained by less intrusive means.

Depositions of P. Heinke; Investigative Testimony of E. Lyon, E. Livingston

Topic No. 4: “Kik’s announcement and marketing of Kin to potential purchasers, including Kik’s knowledge of the dissemination of video recordings relating to Kin on the internet, either by Kik or third parties.”


Depositions of P. Heinke; Nov. 11 Stipulation; Investigative Testimony of E. Livingston, T. Philp, E. Clift


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Topic No. 5: “Public statements and presentations by Kik executives, employees, representatives and/or agents relating the Kin token offering, including but not limited to” 12 subtopics, including, for example:

• “All statements made by Kik executives, employees, representatives and/or agents on social media relating to Kin, including, but not limited to, Twitter, Slack, and Medium”

• “Statements of persons including Kik CEO Edward Livingston at the ‘Token Summit” in New York, New York on May 25, 2017”

• “Statements of persons including Kik CEO Edward Livingston and Kik board member Fred Wilson in a video recording made publicly available on the website AVC.com as of May 27, 2017”

• And several additional subtopics

Lacks specificity, overbroad, duplicative, could have been obtained by less intrusive means, calls for testimony about statements made by non-Kik employees; calls for testimony “including but not limited to” subtopics.5

Nov. 11 Stipulation; RFA Nos. 13-14, 16, 18-19, 24, 26, 32; Investigative Testimony of E. Livingston, T. Philp, E. Clift

5 Topic 5 further calls for a Kik designee to be prepared to testify about all the statements of unknown attendees at numerous identified and unidentified meetings and about every Kik employee’s social-media account.


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Topic No. 6: “Kik’s consideration of whether the offer and sale of Kin was an offer and sale of an investment contract under the federal securities laws, including (a) Kik and Kik’s executives’ review of the DAO Report; (b) Kik executive and employee communications with the Ontario Securities Commission relating to whether the offer and sale of Kin was an offer and sale of an investment contract; and (c) Kik’s efforts, if any, to contact the SEC about Kin on or before September 26, 2017.”

Lacks specificity, overbroad, irrelevant, duplicative, could have been obtained by less intrusive means.6

Deposition of P. Heinke and R. McKee; Investigative Testimony of E. Lyon, P. Holland, T. Philp

Topic No. 7: “Kik’s efforts to enter into SAFTs, including the dates and terms of the SAFTs, including the ability of purchasers to cancel and/or withdraw from the SAFTs.”


Deposition of P. Heinke; RFA Nos. 41-46, 50-52, 54-72 Investigative Testimony of E. Lyon, P. Holland, T. Philp

Topic No. 8: “Details and circumstances of the development of the ‘Minimum Viable Product’ (‘MVP’) of Kin as referred to in Kik’s Answer to Paragraph 100 of the Complaint, including (a) Kik’s marketing of the MVP before sales of Kin to the public; and (b) The status of the MVP as of September 12, 2017.”


Depositions of P. Heinke; I. Leibovich; and E. Ben-Aril; Investigative Testimony of P. Holland, T. Philp, E. Clift

6 In addition to deposing each Kik employee involved in these discussions, the SEC previously deposed Kik’s outside counsel on these same topics. There is simply no testimony Kik could provide that the SEC does not already possess.


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Topic No. 9: “The details of Kik’s public sale of Kin in September 2017, and Kik’s efforts during the public sale, including (a) Kik’s disclosures about Kin to potential purchasers and/or purchasers; (b) Kik’s sales, including but not limited to the terms of the sales, and the consideration paid by purchasers; (c) Kik’s structure of the public sale, including, but not limited to, multiple rounds of sales, as well as caps on purchase amounts.”


4/9/18 Investigative RFA Nos. 38, 51-59; 6/22/18 Investigative RFA Nos. 39-41; Depositions of P. Heinke and E. Ben-Aril; Investigative Testimony of E. Livingston, T. Philp

Topic No. 10: The delivery and allocation of Kin tokens to SAFT participants, public sale purchasers, Kik, the Kin Foundation, and/or any other individual or entity in September 2017.


6/22/18 Investigative RFA Nos. 44-45; Depositions of P. Heinke and E. Ben-Ari; Investigative Testimony of E. Livingston, T. Philp

Topic No. 11: “Kik’s planned and actual use of the Kin token offering proceeds, including, but not limited to (a) Bank accounts, digital wallets, or any other location where Kik kept or maintained the Kin token offering proceeds; (b) Kik’s plan for the use of the proceeds; (c) Kik’s actual use of the proceeds; and (d) Kik’s public statements prior to the public sale in September 2017 about how it would use the Kin token offering proceeds.”

Lacks specificity, overbroad, duplicative, could have been obtained by less intrusive means, calls for testimony “including but not limited to” subtopics.

Depositions of P. Heinke and E. Ben-Ari RFA Nos. 60-61, 65 Investigative Testimony of E. Lyon, P. Holland, T. Philp; 6/22/18 Investigative RFA Nos. 46-52


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Topic No. 12: “The development, creation and operation of the Kin Ecosystem, including, but not limited to” for example:

• “Attributes of the Kin Ecosystem that existed as of May 25, 2017”

• “All the ways in which ‘Kin’s fundamental utility as a digital currency existed on the date of the TDE’ and how ‘Kin owners could use Kin for peer-to-peer transactions’ as of September 26, 2017, as stated in Kik’s Answer to Paragraph 16 of the Complaint”

• “All the ways in which ‘Kin was integrated into Kik Messenger’ at the time of the public sale in September 2017, as stated in Kik’s Answer to Paragraphs 132 and 140 of the Complaint”

• “All the ways in which ‘the Kin economy existed,’ and ‘the Kin economy was functional as of the date of the September 26, 2017 distribution as stated in Kik’s Answers to Paragraphs 61, 126, 132, 140, 175 of the Complaint”

• And eight additional categories

Lacks specificity, overbroad, duplicative, could have been obtained by less intrusive means, calls for testimony “including but not limited to” subtopics.

4/9/18 Investigative RFA Nos. 38, 42-47, 51-56, 59; 6/22/18 Investigative RFA Nos. 60-62; Deposition of E. Ben-Ari and I. Leibovich Investigative Testimony of E. Lyon, E. Livingston, T. Philp

Topic No. 13: The topics covered by your letter dated November 17, 2017.

Lacks specificity, overbroad, duplicative, seeks impermissible “discovery about discovery”

Duplicative of Kik’s responses to SEC’s Requests for Admission and topics the SEC purported to omit in Amended Notice.


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Topic No. 14: The topics covered by the stipulation dated November 12, 2019.


Topic No. 15: The topics covered by your letter dated November 4, 2019.


Duplicative of Kik’s responses to SEC’s Requests for Admission; Requests for Production of Documents; and narrative responses.

Topic No. 16: Kik’s response to the SEC’s Requests for Admission Nos. 51, 77, 86, 99, 107, 109-114, 117-129, 132-136, 144-148.


Duplicative of Kik’s responses to SEC’s Requests for Admission and topics the SEC purported to omit in Amended Notice.

Topic No. 17: Testimony Exhibit 206. Lacks specificity, overbroad, duplicative, seeks impermissible “discovery about discovery”

Duplicative of 80+ responses to Requests for Admission including topics SEC purports to omit from Topic 9

A protective order is appropriate here for the same reasons the Court granted one to the SEC: the SEC's claim relies on objective evidence about what purchasers were offered or promised. When determining whether an investment contract existed, Howey dictates that courts “must focus [the] inquiry on what purchasers were offered or promised” and must therefore “conduct an objective inquiry into the character of the instrument or transaction offered based on what purchasers were ‘led to expect.’” See Warfield v. Alaniz, 569 F.3d 1015, 1021 (9th Cir. 2009) (emphasis added). The SEC argues that it is entitled to a Rule 30(b)(6) deposition as a matter of course because the topics are supposedly relevant. (Opp. at 16-17.) But none of the SEC’s Rule 30(b)(6) topics are necessary to prove the objective facts about what purchasers were “led to expect” in connection with Kik’s sale of Kin tokens in 2017. Given its position with respect to Kik’s highly relevant topics for its own 30(b)(6) notice, it would be manifestly unjust for the Court to grant the SEC the right to a 30(b)(6) deposition regarding topics that bear no relation to its case. Because the Amended Topics effectively prevent Kik from preparing a witness to


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adequately testify and are irrelevant, the Court should issue a protective order precluding the deposition.

B. All of the Topics Sought by the SEC Are Cumulative, Duplicative, and Such

Information Should Have Been Obtained by Less Burdensome Means.

“Like other forms of discovery, a Rule 30(b)(6) deposition notice is subject to the limitations under Federal Rule 26—deposition topics should be proportional to the needs of the case, not unduly burdensome or duplicative, and described with ‘reasonable particularity.’” Bigsby, 329 F.R.D. at 81. In other words, Rule 30(b)(6) topics are improper when they request information already obtained in discovery. Id. (prohibiting deposition on multiple 30(b)(6) topics seeking already known information); In re Zyprexa Prods. Liability Litig., 2009 WL 9522945, at *1-2 (E.D.N.Y. Feb. 18, 2009) (precluding 30(b)(6) deposition that covered the same subject matter as produced documents). As a result, a “court should strike notice topics that would result in a witness merely testifying to information readily available through document production.” Blackrock Allocation Target Shares, 2017 WL 9400671, at *2 (striking deficient 30(b)(6) topics); see Bellinger v. Astrue, 2011 WL 4529602, at *3-4 (E.D.N.Y. Sept. 28, 2011) (Rule 30(b)(6) deposition unreasonably duplicative where plaintiff already deposed percipient witnesses and had obtained “ample discovery” from documents); see Virginia Dep’t of Corrections v. Jordan, 921 F.3d 180, 194 (4th Cir. 2019), cert denied sub nom. Jordan v. VA DOC, 2019 WL 6833407 (U.S. Dec. 16, 2019).

The Second Circuit’s decision in Janki Bai Sahu v. Union Carbide Corp. is instructive for

analyzing when a Rule 30(b)(6) deposition is cumulative. 528 Fed. App’x 96, 103 (2d Cir. 2013). There the Court found that a 30(b)(6) deposition was inappropriate where the noticing party, “ha[d] not explained why the depositions would not be cumulative, why the request was not purely speculative, or why, in light of the extensive discovery permitted in this case, she was not afforded a reasonable opportunity to elicit information from [the opposing party].”7 Similarly, in Nicholas, the Fourth Circuit affirmed the preclusion of a Rule 30(b)(6) deposition, where the noticing party already obtained relevant document discovery and deposed two key witnesses, one of whom would have been designated as the corporate representative. 373 F.3d 537, 543 (4th Cir. 2004).8

Contrary to the SEC’s characterization, Kik does not contend that Rule 30(b)(6) depositions are always “extraordinary” and “necessarily-oppressive” discovery. (Opp. at 14.) But 7 Sahu involved a renewed request for a deposition that the requesting party was not able to take during discovery. The SEC attempts to distinguish the case on grounds that the deposition involved events that occurred longer ago than the events in this case. The court in Sahu noted that “no one type of discovery is necessarily an adequate substitute for another.” 528 Fed. App’x at 103-04 (internal quotations omitted). Kik agrees. But, as is appropriate here, a court has discretion to limit discovery if it would be “cumulative or if the request is based only on speculation as to what potentially could be discovered.” 528 Fed. App’x at 103-04. 8 The SEC similarly suggests Nicholas is inapplicable as it involves extraordinary circumstances. But the SEC does not acknowledge the two facts that are glaringly similar: 1) like in Nicholas, Kik’s 30(b)(6) designee would be one or more of the witnesses who have already testified in their individual capacities, and 2) there is no further information about liability or damages that the witness could provide that the SEC does not already have.


Honorable Alvin K. Hellerstein January 14, 2020 Page Fourteen


in this case, where the questions to which the SEC seeks answers have been answered multiple times in testimony and written discovery, allowing a Rule 30(b)(6) deposition to proceed would impose an undue burden on the party that has already provided those answers, see Blackrock Allocation Target Shares, 2017 WL 9400671, at *2, and run contrary to the SEC’s supposed goal of “streamlining” discovery. The SEC’s cases do not suggest otherwise. Reilly v. Natwest Markets Grp. Inc., which the SEC cites on page 15, simply recites the general obligations of Rule 30(b)(6); it does not address the considerations of Rule 26 about when even relevant discovery may be limited. 181 F.3d 253, 268 (2d Cir. 1999). The same is true for In re Vitamins Antitrust Litig., 216 F.R.D. 168, 174 (DDC 2003), which ordered a corporation to produce a 30(b)(6) designee without considering whether there were other sworn statements made by the corporation, or whether the corporation had offered to designate individual testimony as binding. (Opp. at 15.)

1. The Amended Notice Is Duplicative of Percipient Witness Testimony.

The SEC no longer disputes that the Amended Topics are duplicative of individual testimony. Eleven of the most knowledgeable Kik personnel already testified about virtually every Amended Topic, and Kik has agreed to designate portions of that testimony as being made on behalf of the Company. See Table at 5-9, supra. For example, CEO Ted Livingston testified for nearly 15 hours over the course of two days about the initial development and plan for launching Kin and the reasons for doing so (Amended Topics 3(a)-(b)); statements Kik made about its sale of Kin (Amended Topic 5); Kik’s financial performance and efforts to monetize and sell Kik Messenger (Amended Topics 2(a)-(e)); and Kik’s marketing of Kin to potential purchasers (Amended Topic 4). The testimony was so comprehensive that the SEC effectively conceded its sufficiency when it withdrew Mr. Livingston’s deposition notice. Similarly, the SEC questioned Kik’s former CFO and COO Peter Heinke for over 13 hours over the course of three days about SAFTs (Amended Topics 7, 10) and whether Kik achieved a minimum viable product before launching the token distribution event (Amended Topics 8(a)-(b)). These dates of testimony, plus that of 9 other Kik executives, employees, board members, consultants, advisors, and outside counsel are summarized below.

Title Witness Dates of Testimony

Kik CEO Ted Livingston

11/17/18 11/18/18

Kik CFO/COO Peter Heinke

9/20/18 9/21/18 11/22/19

Kik Chief Product Officer Eran Ben-Ari

10/23/18

Kik Chief Marketing Officer Erin Clift 7/26/18

Kik Director of Corporate Development and Advisor to CEO

Tanner Philp

8/20/18 8/21/18


Honorable Alvin K. Hellerstein January 14, 2020 Page Fifteen


Title Witness Dates of Testimony

Kik Senior Manager Phil Yang 8/16/18 Kik General Counsel Eileen

Lyon 8/30/18

Kik Advisor Jake Brukhman

7/11/18

Kik Board Member Paul Holland

6/15/18

Kik Board Member Fred Wilson

9/5/18

Kik Consultant William Raduchel

7/30/18

Kik VP of Product Ilan Leibovich

12/19/2019

Kik’s Outside Counsel Ross McKee

12/10/2019

The SEC does not dispute the substantial testimonial record in this case, nor that it has

had ample opportunity to question Kik’s most knowledgeable witnesses about the topics in its Amended Notice. Indeed, the SEC has abandoned its position (in an earlier version of this letter) that the above-mentioned Kik witnesses did not provide the information sought by the SEC. Instead, the SEC argues that it is entitled to a Rule 30(b)(6) deposition regardless of the other discovery available in the case. (Opp. at 16.)

But in this case, where the questions to which the SEC seeks answers have been answered multiple times in testimony and written discovery, allowing a Rule 30(b)(6) deposition to proceed would impose an undue burden on the party that has already provided those answers. See Blackrock Allocation Target Shares, 2017 WL 9400671, at *2. Doing so would contradict the SEC’s supposed goal of “streamlining” discovery.

Kik has offered to avoid this burden imposed by preparing for duplicative testimony by designating prior testimony as binding on the corporation. The SEC has not explained why this is not sufficient other than to suggest that the 30(b)(6) testimony is not duplicative “because the answers Kik’s designee would be prepared in advance to provide in the deposition are, per se, sworn corporate admissions by a party.” (Opp. at 16.) This does not give the SEC an automatic right to obtain the testimony, however. Just because the testimony sought is from the Company does not mean that it is necessary or proportionate to the needs of the case. Nicholas, 373 F.3d at 543 (“[T]he simple fact that requested information is discoverable . . . does not mean that discovery must be had.”); Bai Sahu, 528 Fed. App’x at 103 (precluding 30(b)(6) deposition where party had not justified why the depositions would not be cumulative of other discovery already taken). Testimony from Kik as a corporate entity is cumulative and duplicative of prior testimony given that (as the SEC admits) the testimony of percipient witnesses is admissible against Kik. See Blackrock Allocation Target Shares, 2017 WL 9400671, at *2. Requiring Kik to prepare a witness to provide the same testimony that the SEC has already obtained would be a waste of


Honorable Alvin K. Hellerstein January 14, 2020 Page Sixteen


resources and impose a disproportionate burden on Kik. The SEC’s desire for additional answers to questions that other witnesses have already answered is not a sufficient reason to burden Kik with a Rule 30(b)(6) deposition.9 See Nicholas, 373 F.3d at 543 (finding no abuse of discretion in denying 30(b)(6) deposition of corporation where one of the individual witnesses who already testified would have been designated as the corporate representative).

2. The Amended Notice Is Duplicative of Written Discovery.

In addition to being duplicative of the testimony provided by Kik, the Amended Topics are duplicative of Kik’s written discovery, including narrative written responses, tens of thousands of produced documents, and multiple other written and verbal communications with the SEC.

Kik already produced documents that cover the Amended Topics, including all documents concerning the public sale or private sale; all communications with potential and actual private and public sale purchasers; and all communications concerning Kin, the public sale, or the private sale with any regulator, exchange, investor, or board member; and other overly inclusive requests. Further, Kik has provided RFA responses that overlap with Topics 1, 5, 6-7, and 9-13. Kik also provided numerous written responses to the SEC over the course of two years that cover the same ground as the noticed topics.

A protective order is appropriate here because it would be “more convenient, less burdensome, and less expensive” for the SEC to use the same information it already obtained in the 40,000 documents from more than 20 custodians Kik produced, and the additional information Kik provided through dozens of letters, presentations, and requests for admission. Fed. R. Civ. P. 26(b)(2)(C). These include documents concerning the public sale or private sale; communications with potential and actual private and public sale purchasers; and communications concerning Kin, the public sale, or the private sale with any regulator, exchange, investor, or board member; and other overly inclusive requests. The SEC does not argue that the 30(b)(6) testimony is unique from the extensive written discovery, and could not reasonably do so. At the SEC’s second examinations of Messrs. Ben-Ari and Heinke, the SEC asked almost identical questions about the same exhibits it asked during the investigation. Given the discovery record, and the fact that Kik would undoubtedly produce a Rule 30(b)(6) witness who has already testified, there is no way that the proposed deposition would avoid the same redundancy exhibited in these two recent depositions.

9 To the extent the SEC believes this insufficient because Kik will not deem entire testimonial transcripts as corporate admissions, Kik has explained that this Circuit requires parties to identify specific statements as opposed to entire testimony transcripts for purposes of corporate admissions. See Kolb v. Cnty. of Suffolk, 109 F.R.D. 125, 128 (E.D.N.Y. 1985) (Rule 801(d)(2)(D) “is rarely applied to allow admission of whole depositions of witnesses who could easily appear at trial on a party’s direct case.”). Kik remains willing to do so.


Honorable Alvin K. Hellerstein January 14, 2020 Page Seventeen


3. The SEC Could Have Pursued Less Burdensome Means of Obtaining Information.

The SEC’s contention that it needs the information requested by the Amended Topics makes no sense in light of its actions during the course of discovery. The SEC withdrew its deposition of Mr. Livingston, no doubt realizing how repetitive it would be, less than 48 hours before the deposition. Further, the SEC has not propounded a single interrogatory or followed up on any of the RFA responses incorporated by reference in the Amended Notice, some provided over a year ago. Nor has the SEC entertained Kik’s various offers to stipulate to facts or to designate prior testimony as being made on behalf of the Company. Indeed, given the fact that it has previously deposed all individuals knowledgeable on certain noticed topics, the SEC’s blanket refusal to accept designated testimony in lieu of an additional deposition underscores the fact that the SEC simply seeks to re-depose these same individuals. Because the SEC has had many opportunities to obtain the information through less intrusive means, a protective order should be issued to avoid Kik being burdened by the time and expense to prepare for an unnecessary deposition. Bai Sahu, 528 Fed. App’x at 103 (precluding Rule 30(b)(6) deposition where the noticing party failed to explain how the information sought could not be obtained by less burdensome means).

For the foregoing reasons, Kik respectfully requests this Court enter a protective order prohibiting the SEC’s 30(b)(6) deposition.

THE SEC’S POSITION

Kik has informed the SEC that it will appear for a Rule 30(b)(6) deposition, but only if it deems satisfactory the notice’s list of topics. Kik has twice rejected, wholesale, the SEC’s efforts to meet its demands, and Kik will not articulate for the SEC the contours of a notice to which it will agree. According to Kik, not a single one of the SEC’s topics meet Kik’s exacting (yet undefined) requirements. Accordingly, given the apparent impossibility of the SEC’s task and the fast-approaching discovery deadline, the SEC submits that a Rule 30(b)(6) deposition is both appropriate under the rules and the most efficient use of the time remaining, and asks that the Court order Kik to appear for deposition pursuant to its second, amended notice of deposition (Exhibit B).

A. The SEC’s Efforts To Obtain Kik’s Rule 30(b)(6) Deposition

After advising Kik of its intent to take a Rule 30(b)(6) deposition in September, the SEC first noticed the Rule 30(b)(6) deposition of Kik on October 25, 2019.10 See Exhibit A. The deposition was noticed for November 26, 2019. See id. Kik did not respond in any way to the deposition notice for 20 days, but on November 14, 2019, Kik demanded that the SEC withdraw its deposition notice or provide “the SEC’s grounds for refusing to do so.” See Exhibit D. During a November 19 call that followed, Kik’s counsel informed the SEC staff that Kik refused to testify

10 The SEC sent Kik a letter on September 19, 2019, informing Kik that it wished to take a Rule 30(b)(6) deposition in November 2019, followed by the SEC’s initial notice of deposition on October 25, 2019. Kik delayed for nearly two months any response whatsoever regarding the deposition.


Honorable Alvin K. Hellerstein January 14, 2020 Page Eighteen


pursuant to Rule 30(b)(6) because the deposition notice was “vague” and called for testimony that Kik deemed to be irrelevant. Despite these assertions, Kik’s counsel declined to respond to the SEC’s request that Kik identify any specific topic it contended was vague or irrelevant. Kik did not ask that the deposition be rescheduled; it simply stated that it would not appear. Kik also informed the SEC that it intended to seek a protective order in advance of the date set forth in the notice.

On Wednesday, November 27, the day after the scheduled date for the deposition, Kik provided to the SEC its portion of a joint letter motion seeking the Court’s intervention. For the first time, Kik articulated the specific bases for its refusal to sit for deposition, identifying certain topics it contended were vague and certain topics it argued were irrelevant or duplicative of other discovery already obtained by the SEC. In an effort to resolve the impasse and to timely conclude fact discovery without further Court intervention, on December 8, 2019, the SEC voluntarily amended its Rule 30(b)(6) deposition notice, significantly paring the topics it wished to cover and identifying by Bates stamp, author, or date many of the specific exhibits the SEC intended to cover during the deposition. See Exhibit B. The SEC also provided a redline comparison of the original and amended deposition notice and offered “to clarify any of the topics that you identify as vague.” See Exhibit E and F.

During a telephone conference on December 11 and in a letter dated December 18, Kik informed the SEC that it still refused to appear for the deposition as noticed. Counsel indicated that Kik might appear for a deposition pursuant to a notice that met with its approval, but counsel declined to describe the contours of a notice with which Kik would agree, and Kik maintains that each and every one of the topics identified in the SEC’s amended notice are improper.

Rather than engage in the endless goalpost moving Kik suggests, we ask the Court to intervene.

B. Rule 30(b)(6) Depositions Are Neither Burdensome Nor Redundant.

Kik’s argument regarding the supposed impropriety of the deposition begins with two false premises: first, that Rule 30(b)(6) depositions are extraordinary, necessarily-oppressive discovery devices, and second, that Rule 30(b)(6) depositions yield evidence identical to the discovery the SEC has already obtained from individual witnesses and that the SEC is limited to one witness per factual issue. But, neither of these premises are true.

First, Rule 30(b)(6) depositions are an uncontroversial discovery device that have been part of the discovery rules for decades. And numerous courts have expressly noted that such corporate depositions tend to “streamline the discovery process.” QBE Ins. Corp. v. Jorda Enterprises, Inc., 277 F.R.D. 676, 687 (S.D. Fla. 2012). See also Mill–Run Tours, Inc. v. Khashoggi, 124 F.R.D. 547, 549–50 (SDNY 1989) (“First, the interrogatory format does not permit the probing follow-up questions necessary in all but the simplest litigation. Second, without oral deposition, counsel are unable to observe the demeanor of the witness and evaluate his credibility in anticipation of trial. Finally, written questions provide an opportunity for counsel to assist the witness in providing answers so carefully tailored that they are likely to generate additional discovery disputes.”) (citations omitted); Greenberg v. Safe Lighting Inc., Inertia Switch Div., 24


Honorable Alvin K. Hellerstein January 14, 2020 Page Nineteen


F.R.D. 410, 411 (SDNY 1959) (“Experience has made it abundantly clear that the advantages of oral examination far outweigh the advantages of written interrogatories in carrying out the deposition procedures in aid of discovery under the [Federal R]ules [of Civil Procedure].”); National Life Ins. Co. v. Hartford Acc. and Indem. Co., 615 F.2d 595, 600 n. 5 (3d Cir. 1980) (“[T]here are strong reasons why a party will select to proceed by oral deposition rather than alternate means, most significantly the spontaneity of the responses.”). Consequently, Kik’s assertion that the deposition will be more burdensome than interrogatories, requests for admission, or negotiated stipulation is simply not borne out by experience, as Courts have noted time and again.

In sum, as this court has long held, “[t]he fact that [one party] has offered [the opposing

party] certain stipulations, which, in its judgment, will obviate the necessity of further depositions, should not foreclose the right of [parties] to prepare their [case] in accordance with provisions of the Rules of Civil Procedure.” Alfred Bell & Co. v. Catalda Fine Arts, 5 F.R.D. 327, 328 (SDNY 1946); see also QBE Ins., 277 F.R.D. at 689 (“In responding to a Rule 30(b)(6) notice or subpoena, a corporation may not take the position that its documents state the company’s position and that a corporate deposition is therefore unnecessary. Similarly, a corporation cannot point to interrogatory answers in lieu of producing a live, in-person corporate representative designee.”).11

Second, Kik’s argument that when there are individual witnesses a plaintiff simply cannot take a Rule 30(b)(6) deposition of a corporate defendant is not the law. Individual and corporate depositions are not equivalents. In contrast to a deposition of an individual deponent, Rule 30(b)(6) requires a corporate deponent to designate a witness that is prepared in advance to discuss identified topics, and the corporation is then bound by the designee’s answers. See Reilly v. Natwest Markets Group, Inc., 181 F.3d 253, 268 (2d Cir.1999) (“To satisfy Rule 30(b)(6), the corporate deponent has an affirmative duty to make available such number of persons as will be able to give complete, knowledgeable and binding answers on its behalf.”) (internal citations omitted). Consequently, the Rule 30(b)(6) deposition the SEC seeks is not duplicative of the depositions and other discovery the SEC has obtained to date, because the answers Kik’s designee would be prepared in advance to provide in the deposition are, per se, sworn corporate admissions by a party. See In re Vitamins Antitrust Litig., 216 F.R.D. 168, 174 (DDC 2003) (rejecting argument that a Rule 30(b)(6) deposition duplicates discovery obtained from corporate employees because “[defendant’s] Rule 30(b)(6) deposition is a sworn corporate admission that is binding on the corporation.”). Stated another way, “the testimony of a Rule 30(b)(6) designee represents the knowledge of the corporation, not of the individual deponents,” and “[a] Rule 30(b)(6) designee presents the corporation’s position on the noticed topics.” Great American Ins. Co. of New York v. Vegas Const. Co., 251 F.R.D. 534, 539 (D. Nev. 2008). While many of Kik’s executives and board members have already provided helpful evidence that is admissible against

11 In a reversal from its November 27, 2019 draft letter brief describing the dates and other details of allegedly “extensive written discovery during the investigation and litigation” taken by the SEC, Kik now seems to complain that the SEC should have taken more written discovery. Supra Kik Brief at 3 (noting SEC has not sought further RFA responses or propound interrogatories). In any event, as the case law confirms, it is the SEC’s prerogative to elect to proceed by Rule 30(b)(6) deposition rather than engage in the iterative written discovery process Kik now says it prefers.


Honorable Alvin K. Hellerstein January 14, 2020 Page Twenty


Kik, the statements of Kik’s designee are unique in that they will be prepared in advance and wholly attributable to Kik.12

Accordingly, the deposition the SEC seeks is neither overly burdensome nor redundant, and it should go forward as noticed.

C. Kik Has Rebuffed The SEC’s Efforts To Obtain Discovery By Other Means.

Kik also argues that the SEC is or should be required to seek discovery from Kik through a negotiated stipulation or through requests for admission – i.e., written answers that Kik’s attorneys can negotiate and finesse.

Where appropriate, the SEC has entered into a stipulation to obviate a deposition – the SEC did just this prior to canceling the deposition of Kik’s CEO. But, just because the SEC chose to do so once does not mean the SEC is required to do so in every instance, particularly for the named defendant who is obligated to prepare on designated topics. Greenberg, 24 F.R.D. at 411 (“There is no burden on the party seeking the deposition to show that written interrogatories would not be sufficient for its purposes.”).

Kik’s demand that the SEC seek only written discovery from Kik must also be seen in context. While Kik contends that requests for admission are now among the company’s preferred discovery devices, Kik objected and refused to respond to many of the SEC’s requests for admission. For example, Kik now contends that there is no reason for a company representative to sit for a deposition because numerous Kik executives have already provided sworn testimony. But, when asked to admit that such witnesses – including Kik’s own CEO – testified regarding matters within the scope of their employment and that such testimony constituted the statements of Kik pursuant to Evidence Rule 801(d)(2), Kik refused, claiming that each such transcribed and videotaped testimony13 was “outside the scope of Kik’s personal knowledge” and an “improper and inefficient use of this procedural mechanism,” improperly “calls for a legal conclusion,” and “assumes Kik’s admission of authenticity.” See Exhibit G at 27 (with respect to CEO’s testimony), 28 (former Chief Marketing Officer), 29-30 (Manager, Special Initiatives and Director, Corporate Development in 2017), 30 (General Counsel), 32 (former CFO), 35 (former Chief Product Officer).

In short, the SEC attempted to obtain relevant evidence through written requests but Kik stymied that effort through boilerplate and nonsensical objections like those set forth above. Kik cannot object to every form of discovery on the ground that another discovery tool is available

12 A Rule 30(b)(6) deposition is also potentially valuable because, under Federal Rule of Civil Procedure 32(a)(3), the deposition may be used for any purpose at trial by an adverse party (here the SEC), regardless of the availability of the witness. See 1970 Advisory Committee Note (stating the rule “is appropriate, since the deposition is in substance and effect that of the corporation or other organization which is a party”). 13 The SEC provided this and other investigative testimony transcripts to Kik on June 28, 2019, several weeks prior to the commencement of discovery in this matter. Kik’s counsel was present for each of the above-listed testimonies.


Honorable Alvin K. Hellerstein January 14, 2020 Page Twenty-One


(and then object when we use that tool). Nor can Kik limit the SEC’s ability to take its deposition regarding relevant topics by pointing to the testimony of Kik employees (who Kik may or may not dispute speaks for the company on the relevant issue). Accordingly, the SEC submits that a deposition of Kik is the most efficient use of the limited time remaining in the fact discovery period, and we submit that the Court should order that it go forward.

D. The Discovery The SEC Seeks Is Relevant And Has Been Described With

Reasonable Particularity.

Each of the topics contained in the SEC’s amended notice seeks evidence relevant to the SEC’s claim or one of Kik’s affirmative defenses, and each has been described with the “reasonable particularity” required by the rule.14 Topic Summary Relevance

1 “Kik’s corporate structure, ownership and offices”

Background; allegations in the complaint; Kik’s third affirmative defense.

2 “Kik’s current financial condition and operations”

Remedies

3 “Kik’s plan for the token offering” The allegations set forth in the complaint 4 “Kik’s announcement and marketing of

Kin to potential purchasers” The allegations set forth in the complaint

5 “Public statements and presentations . . . relating to the Kin offering”

The allegations set forth in the complaint

6 “Kik’s consideration of whether the offer and sale of Kin was an offer and sale of an investment contract”

The allegations set forth in the complaint; the allegations set forth in Kik’s answer and affirmative defenses.

7 “Kik’s efforts to enter into SAFTs” The allegations set forth in the complaint 8 “Details and circumstances of the

development of the ‘Minimum Viable Product’ (‘MVP’) of Kin as referred to in Kik’s Answer to Paragraph 100 of the Complaint”

The allegations set forth in the complaint; the allegations set forth in Kik’s answer

9 “The details of Kik’s public sale of Kin in September 2017”


10 “The delivery and allocation of Kin tokens to SAFT participants, public sale purchasers, Kik, the Kin Foundation, and/or any other individual or entity in September 2017”


14 Kik argues that the requirement is not “reasonable particularity” but is instead “painstaking specificity.” The SEC submits that the text of the rule speaks for itself.


Honorable Alvin K. Hellerstein January 14, 2020 Page Twenty-Two


Topic Summary Relevance 11 “Kik’s planned and actual use of the

Kin token offering proceeds” The allegations set forth in the complaint; the allegations set forth in Kik’s answer; remedies

12 “The development, creation and operation of the Kin Ecosystem”

The allegations set forth in the complaint; the allegations set forth in Kik’s answer; remedies

13 “The topics covered by your letter dated November 17, 2017”

Follow-up questions regarding statements made by Kik’s counsel on behalf of Kik during the SEC’s investigation regarding the token offering.

14 “The topics covered by the stipulation dated November 12, 2019”

Follow-up questions regarding topics covered by the parties’ November 12, 2019 stipulation

15 “The topics covered by your letter dated November 4, 2019”

Follow-up questions regarding statements made by Kik’s counsel on behalf of Kik and in lieu of producing documents in response to the SEC’s requests for production of records.

16 “Kik’s responses to the SEC’s Requests for Admission Nos. 51, 77, 86, 99, 107, 109-114, 117-129, 132-136, 144-148

Follow-up questions regarding Kik’s responses to certain of the SEC’s requests for admission.

17 “Testimony Exhibit 206” Follow up questions regarding exhibit marked during the SEC’s investigation.

E. Kik’s New Arguments In Its Revised Letter Brief Do Not Support A Protective Order

On January 6, 2020, in response to the draft SEC portion of this letter brief which the SEC sent to Kik on December 20, 2019, Kik sent the SEC a substantially revised – and significantly longer (now 13 pages) – portion of Kik’s letter brief. The SEC here briefly responds to Kik’s newly fashioned arguments, none of which merit the quashal of the Rule 30(b)(6) deposition.

Specifically, Kik’s newly expanded reliance on cases in which courts restricted Rule 30(b)(6) depositions is meritless, as the circumstances of those cases are plainly distinguishable:

• In Janki Bai Sahu v. Union Carbide Corp., 528 Fed. Appx. 96 (2d Cir. 2013) (cited supra Kik Brief at 10, 12, 13, and footnotes 1 and 7), the court upheld denial of a deposition that had been requested as additional discovery – and requiring the district court’s permission – pursuant to Federal Rule of Civil Procedure 56(d), and where the events at issue had taken place “between fifteen and thirty-five years ago” and “the benefit to the Plaintiffs would likely be extremely low” as “no witness can be expected to provide accurate and detailed accounts of events so far in the past,” id. at 103. Here, by contrast, the SEC seeks a deposition to which it is


Honorable Alvin K. Hellerstein January 14, 2020 Page Twenty-Three


presumptively entitled within the initial fact discovery period on events from two to three years ago.

• Nicholas v. Wyndham International Inc., 373 F.3d 537 (4th Cir. 2004) (cited supra Kik Brief at 4, 10, 12, and footnotes 1 and 8) is equally far afield. In Nicholas, involving tort claims against a resort by guests, the court of appeals upheld the magistrate judge’s denial, in an ancillary proceeding outside the jurisdiction of the pending action, of a 30(b)(6) deposition of a third-party corporation that was closely held by one of the individual plaintiff-guests who already had been deposed. The court of appeals highlighted the “extraordinary circumstances presented” by the case, including the concession by Wyndham’s attorney that no further information about liability or damages could be obtained from the third-party corporation. See id. 543. Here, of course, the SEC seeks the 30(b)(6) deposition of the sole party-defendant, Kik, and this case presents none of the extraordinary circumstances of Nicholas.

• Blackrock Allocation Target Shares: Series S Portfolio v. Wells Fargo Bank, Nat’l Ass’n, 2017 WL 9400671 (S.D.N.Y. Apr. 27, 2017) (cited supra Kik Brief 4, 10, 12 and footnote 1), far from supporting Kik’s position, confirms the importance of the availability of the deposition, because, “most critically, the organization will be bound by the answers provided by the Rule 30(b)(6) witness,” id. at *1. The Blackrock court ordered that Rule 30(b)(6) depositions proceed on numerous topics for numerous corporate parties, and stressed that it sought “[t]o avoid the fundamental unfairness of denying the Coordinated Plaintiffs any Rule 30(b)(6) deposition of [the defendant].” Id. at *3.

Accordingly, none of Kik’s objections have merit, and Kik has not carried its burden of demonstrating that the deposition noticed by the SEC should be quashed. And the SEC asks that the Court order Kik to appear for deposition as set forth in the SEC’s amended notice of deposition. Sincerely, /s/ Patrick E. Gibbs Patrick E. Gibbs

Counsel for Defendant Kik Interactive, Inc.

cc: All Counsel of Record (by ECF)


EXHIBIT A

Case 1:19-cv-05244-AKH Document 45-1 Filed 01/14/20 Page 1 of 9

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK

UNITED STATES SECURITIES AND ) EXCHANGE COMMISSION, ) ) ) Plaintiff, ) Case No. 1:19-cv-05244 ) v. ) ) KIK INTERACTIVE INC., ) ) Defendant. ) )

NOTICE OF RULE 30(b)(6) DEPOSITION To: See Attached Certificate of Service PLEASE TAKE NOTICE that, pursuant to Federal Rule of Civil Procedure 30(b)(6), Plaintiff Securities and Exchange Commission (“SEC”) will take the deposition upon oral examination of one or more officers, directors, agents, or other persons who shall be designated to testify on behalf of Defendant Kik Interactive Inc. (“Kik”) regarding all information known or reasonably available to Kik with respect to the topics identified in Exhibit A. The deposition will take place on Tuesday, November 26, 2019 at 9:00 a.m. at the SEC’s offices, located at 100 F Street, N.E., Washington, DC 20549, or at such other time or location agreed to by the parties. The deposition will be recorded by a stenographer and videographer, and will continue from day to day until completed. Dated: October 25, 2019 Respectfully submitted,

/s/Laura K. D’Allaird Laura K. D’Allaird Attorney for Plaintiff

U.S. SECURITIES & EXCHANGE COMMISSION


EXHIBIT A

This Notice incorporates by reference the definitions set forth in Plaintiff SEC’s First

Request for Admission to Defendant Kik.

TOPICS

1. Kik’s corporate structure, ownership and offices between January 1, 2017 and the present.

2. Kik’s current financial condition and operations.

3. The performance of Kik since January 1, 2015, including, but not limited to:

a. Kik’s financial performance;

b. The performance of Kik Messenger, including, but not limited to, Kik Messenger’s user base;

c. Any efforts to monetize Kik Messenger;

d. Any efforts to sell Kik; and

e. Projections relating to Kik’s financial “runway” or the amount of time before which Kik would run out of funds.

4. Kik’s reasons for deciding to create and offer Kin.

5. Kik’s plan for the Kin token offering, including but not limited to:

a. Kik’s conduct of market research, including hiring of consultants and deliverables;

b. Kik’s understanding of market conditions for initial coin offerings from January 1, 2017 through September 26, 2017;

c. Consideration of plans relating to the Kin token offering by the Kik Board of Directors;

d. Kik’s planned structure of the Kin token offering, including, but not limited to, Kin tokens sold pursuant to SAFTs and Kin sold directly to the public;

e. Kik’s plans for allocating the Kin it created;

f. The amount of funds Kik targeted to raise from the Kin token offering;

g. Kik’s plan for the use of the Kin token offering proceeds;


h. Kik’s planned time frame for the Kin token offering, including, but not limited to, the timing of any sales of Kin to the public, and any changes to this time frame and reasons therefore; and

i. The drafting of any registration statements or other materials to be filed with the U.S. Securities and Exchange Commission in relation to the Kin token offering.

6. Kik’s announcement and marketing of Kin to potential purchasers, including, but not limited to:

a. Kik’s plans to market Kin;

b. Kik’s “communication strategy” as referred to in Kik’s Answer to Paragraph 59 of the Complaint;

c. Any “roadshow” or other effort that involved promoting the awareness of Kin in different geographic locations, including Kik’s “Participant Roadshow” as referred to referred to in Kik’s Answer to Paragraph 59 of the Complaint;

d. Kik’s May 25, 2017 announcement of Kin; and

e. Kik’s knowledge of the dissemination of video recordings relating to Kin on the internet, either by Kik or third parties.

7. Roles played by Kik employees in the Kin token offering, including but not limited to, Kik CEO Edward Livingston.

8. Public statements and presentations by Kik executives, employees, representatives and/or agents relating the Kin token offering, including, but not limited to:

a. All statements made by Kik executives, employees, representatives and/or agents on social media relating to Kin, including, but not limited to, Twitter, Slack, and Medium;

b. Statements of persons including Kik CEO Edward Livingston at the “Token Summit” in New York, New York on May 25, 2017. (See recording produced at SEC-KIK-LIT-E-0000333; transcripts produced at SEC-KIK-LIT-E-0000181 to SEC-KIK-LIT-E-0000189, and SEC-KIK-LIT-E-0000260);

c. Statements of persons including Kik CEO Edward Livingston and Kik board member Fred Wilson in a video recording made publicly available on the website AVC.com as of May 27, 2017. (See recording produced at SEC-KIK-LIT-E-0000339; transcript produced at SEC-KIK-LIT-E-0000248 to SEC-KIK-LIT-E-0000253, and SEC-KIK-LIT-E-0000269);

d. Statements of persons including Kik CEO Edward Livingston at “TechCrunch Shenzen” in the People’s Republic of China on June 20, 2017. (See recording produced at SEC-KIK-LIT-E-0000305; transcripts produced at SEC-KIK-LIT-E-000031 to SEC-KIK-LIT-E-0000044, and KIK-LIT-E-0000264);


e. Statements of persons including Kik CEO Edward Livingston at the “San Francisco Bitcoin Meetup” in San Francisco, California, on June 27, 2017. (See recording produced at SEC-KIK-LIT-E-0000277; transcripts produced at SEC-KIK-LIT-E-0000133 to SEC-KIK-LIT-E-0000162, and SEC-KIK-LIT-E-0000254);

f. Statements of persons including Kik CEO Edward Livingston on the “Finance Magnate’s Blockchain Podcast” on August 1, 2017. (See recording produced at SEC-KIK-LIT-E-0000272; transcripts produced at SEC-KIK-LIT-E-0000119 to SEC-KIK-LIT-E-0000132, and SEC-KIK-LIT-E-0000256);

g. Statements of persons including Kik CEO Edward Livingston and an individual named William Mougayar at the “Fintech Canada Bitcoin Ethereum Summit,” on August 14, 2017. (See recording produced at SEC-KIK-LIT-E-0000275; transcripts produced at SEC-KIK-LIT-E-0000077 to SEC-KIK-LIT-E-0000090, and SEC-KIK-LIT-E-0000258);

h. Statements of persons including Kik CEO Edward Livingston at a public gathering sponsored by Spotify called the “Ethereum NYC Meetup” on September 7, 2017. (See recording produced by the SEC to Kik in this Action in the electronic Web Capture folder “HO-13388 233083 07-03-19,” as listed in the Addendum to SEC August 16, 2019 Index of Produced Documents: List of Web Captures);

i. Statements of persons including Kik CEO Edward Livingston during an interview on CNBC on or about May 25, 2017;

j. Any statements by Kik or Kik executives, employees, representatives and/or agents that Kin would be available on digital asset exchanges, including any such statements on social media;

k. Any statements by Kik or Kik executives, employees, representatives and/or agents “that Kin would be integrated with the use of stickers” as stated in Kik’s Answer to Paragraph 132 of the Complaint; and

l. Whether Kik made public statements on or before September 26, 2017, about goods or services that it would sell in exchange for Kin, and the content of any such public statements.

9. The creation, maintenance and use of the following documents, as well as any statements made therein:

a. The Kin white paper (KIK000001-28);

b. The “Frequently Asked Questions” document created by Kik (KIK0000029-36);

c. The private placement memorandum Kik provided to SAFT participants (KIK000037-65);


d. The Kin SAFT (KIK000066-72);

e. The Form D that Kik filed with the U.S. Securities and Exchange Commission on or about September 11, 2017 (KIK000073-78);

f. The “User Registration Guide” drafted by Kik for sales of Kin to the public (KIK000098-108);

g. Kik’s audited financial statements for the fiscal year that ended June 30, 2016 (KIK 00007193-7229);

h. Kik’s audited financial statements for the fiscal year that ended June 30, 2017 (KIK00007243-7279);

i. Kik’s records of individuals and entities that entered into the SAFTs with Kik (see KIK001187; KIK000283);

j. Kik’s records of individuals and entities who purchased Kin tokens in the public sale portion of the Kin token offering (see KIK001188); and

k. Any document produced by Kik in the Investigation that recorded the participants in the SAFTS and the public sale of Kin.

10. The details and circumstances of private meetings between Kik or Kik executives, employees, representatives and/or agents and potential public sale purchasers.

11. The details and circumstances of private meetings between Kik or Kik executives, employees, representatives and/or agents and persons and/or entities that might enter into SAFTs with Kik.

12. Kik’s consideration of whether the offer and sale of Kin was an offer and sale of an investment contract under the federal securities laws, including but not limited to:

a. The “substantial efforts Kik undertook to ensure compliance with the federal securities laws,” and the basis on which “Kik was confident that its sale of a digital currency would not implicate the federal securities laws,” as stated in Kik’s Answer to Paragraph 96 of the Complaint;

b. Communications among Kik executives and employees, including, but not limited to, Kik’s Board of Directors relating to whether the offer and sale of Kin was an offer and sale of an investment contract;

c. Communications with consultants, including, but not limited to, any communications with CoinFund relating to whether the offer and sale of Kin was an offer and sale of an investment contract;

d. Kik and Kik executives’ review of the DAO Report; and

e. Kik executive and employee communications with the Ontario Securities


Commission relating to whether the offer and sale of Kin was an offer and sale of an investment contract.

f. Kik’s efforts, if any, to contact the SEC about Kin on or before September 26, 2017.

13. Kik’s efforts to enter into SAFTs, including but not limited to:

a. The parties to whom Kik offered the SAFTs;

b. Documents used to market the SAFTs, including, but not limited to, term sheets, referred to in Paragraph 90 of the Complaint, as well as the private placement memorandum (KIK000037-65);

c. The dates and terms of the SAFTs, including the ability of purchasers to cancel and/or withdraw from the SAFTs;

d. The individual SAFTS entered into with each counterparty;

e. Consideration paid by SAFT participants;

f. The aggregate amount of funds Kik raised through SAFTs, including, but not limited to, the aggregate of all funds and the aggregate of funds raised from participants residing in the United States and New York; and

g. Communications with potential participants and/or participants concerning restrictions on the re-sale or trading of Kin tokens, and the use of the proceeds raised in the Kin token offering.

14. Details and circumstances of the development of the “Minimum Viable Product” (“MVP”) of Kin as referred to in Kik’s Answer to Paragraph 100 of the Complaint, including but not limited to:

a. Reasons for developing the MVP;

b. Development of digital stickers;

c. Consideration of alternatives to the MVP;

d. Representations in the private placement memorandum provided to SAFT purchasers relating to the MVP;

e. Kik’s marketing of the MVP before sales of Kin to the public; and

f. The status of the MVP as of September 12, 2017.

15. The details of Kik’s public sale of Kin in September 2017, and Kik’s efforts during the public sale, including but not limited to:

a. Kik’s announcements concerning the public sale;


b. Kik’s assessment of potential purchasers, including Kik’s conduct or arrangement for a Know Your Customer (“KYC”) process;

c. Kik’s disclosures about Kin to potential purchasers and/or purchasers;

d. Kik’s sales, including but not limited to the terms of the sales, and the consideration paid by purchasers;

e. Kik’s structure of the public sale, including, but not limited to, multiple rounds of sales, as well as caps on purchase amounts;

f. The aggregate amount raised through the public sale, including, but not limited to, the aggregate of all funds raised and the aggregate of funds raised from purchasers residing in the United States and New York;

g. Communications with potential purchasers and/or purchasers concerning restrictions on the re-sale or trading of Kin tokens, and the use of the Kin token offering proceeds; and

h. Any contractual or other obligations of public sale purchasers with respect to Kin purchased, including, but not limited to, any obligation to help create, build, or support the Kin Ecosystem or otherwise to create demand or increase the value of Kin as referred to in Paragraph 184 of the Complaint.

16. The delivery and allocation of Kin tokens to SAFT participants, public sale purchasers, Kik, the Kin Foundation, and/or any other individual or entity in September 2017.

17. The attributes of Kin delivered in September 2017, including, but not limited to, different classes of Kin, and whether the re-sale or use of Kin was restricted in any way.

18. Kik’s planned and actual use of the Kin token offering proceeds, including, but not limited to:

a. Bank accounts, digital wallets, or any other location where Kik kept or maintained the Kin token offering proceeds;

b. Kik’s plan for the use of the proceeds;

c. Kik’s actual use of the proceeds; and

d. Kik’s public statements prior to the public sale in September 2017 about how it would use the Kin token offering proceeds.

19. The development, creation and operation of the Kin Ecosystem, including, but not limited to, the following:

a. Attributes of the Kin Ecosystem that existed as of May 25, 2017;


b. All the ways in which “Kin’s fundamental utility as a digital currency existed on the date of the TDE” and how “Kin owners could use Kin for peer-to-peer transactions” as of September 26, 2017, as stated in Kik’s Answer to Paragraph 16 of the Complaint;

c. All the ways in which “Kin was integrated into Kik Messenger” at the time of the public sale in September 2017, as stated in Kik’s Answer to Paragraphs 132 and 140 of the Complaint;

d. All the ways in which “the Kin economy existed,” and “the Kin economy was functional” as of the date of the September 26, 2017 distribution as stated in Kik’s Answers to Paragraphs 61, 126, 132, 140, 175 of the Complaint;

e. Kik’s knowledge of goods or services that could be purchased in exchange for Kin as of September 26, 2017;

f. The availability of any “use cases” described in Kik’s white paper as of September 26, 2017;

g. Whether and the extent to which Kik had enabled Kin transactions among users of Kik Messenger on the Ethereum blockchain, as of September 26, 2017;

h. Kik’s awareness of commercial developers who engaged in Kin transactions on the Ethereum blockchain as of September 26, 2017;

i. The extent to which the Kin Rewards Engine was operational on September 26, 2017;

j. Kik’s plans for the future development of the Kin Rewards Engine as of September 26, 2017;

k. All developers to whom Kik provided a “software developer kit” before the September 26, 2017 distribution, and all instances of a developer using, or trying to use, the software developer kit as of September 26, 2017, as referred to in Kik’s Answer to Paragraph 140 of the Complaint; and

l. The operability of Kin on the Ethereum blockchain as of September 26, 2017.

20. The development, creation and operation of the Kin Foundation.


EXHIBIT B




AMENDED NOTICE OF RULE 30(b)(6) DEPOSITION To: See Attached Certificate of Service PLEASE TAKE NOTICE that, pursuant to Federal Rule of Civil Procedure 30(b)(6), Plaintiff Securities and Exchange Commission (“SEC”) will take the deposition upon oral examination of one or more officers, directors, agents, or other persons who shall be designated to testify on behalf of Defendant Kik Interactive Inc. (“Kik”) regarding all information known or reasonably available to Kik with respect to the topics identified in Exhibit A. The deposition will take place on Wednesday, January 15, 2020 at 9:00 a.m. at the SEC’s offices, located at 100 F Street, N.E., Washington, DC 20549, or at such other time or location agreed to by the parties. The deposition will be recorded by a stenographer and videographer, and will continue from day to day until completed. Dated: December 8, 2019 Respectfully submitted,

/s/Stephan J. Schlegelmilch Stephan J. Schlegelmilch Attorney for Plaintiff



EXHIBIT A

This Amended Notice incorporates by reference the definitions set forth in Plaintiff SEC’s

First Request for Admission to Defendant Kik.

TOPICS



3. Kik’s plan for the Kin token offering, including:

a. Kik’s plan for the use of the Kin token offering proceeds;

b. Kik’s planned time frame for the Kin token offering, including the timing of any sales of Kin to the public, and any changes to this time frame and reasons therefore.

4. Kik’s announcement and marketing of Kin to potential purchasers, including Kik’s knowledge of the dissemination of video recordings relating to Kin on the internet, either by Kik or third parties.

5. Public statements and presentations by Kik executives, employees, representatives and/or agents relating the Kin token offering, including, but not limited to:





e. Statements of persons including Kik CEO Edward Livingston at the “San


Francisco Bitcoin Meetup” in San Francisco, California, on June 27, 2017. (See recording produced at SEC-KIK-LIT-E-0000277; transcripts produced at SEC-KIK-LIT-E-0000133 to SEC-KIK-LIT-E-0000162, and SEC-KIK-LIT-E-0000254);



h. Statements of persons including Kik CEO Edward Livingston at a public gathering sponsored by Spotify called the “Ethereum NYC Meetup” on September 7, 2017. (See recording produced by the SEC to Kik in this Action at SEC-KIK-LIT-E-0002353 and in the electronic Web Capture folder “HO-13388 233083 07-03-19,” as listed in the Addendum to SEC August 16, 2019 Index of Produced Documents: List of Web Captures; transcripts produced at SEC-KIK-LIT-E-0002275 to SEC-KIK-LIT-E-0002310);

i. Statements of persons including Kik CEO Edward Livingston during an interview on CNBC on or about May 25, 2017. (See recording produced by the SEC to Kik in this Action at SEC-KIK-LIT-E-0002351; transcripts produced at SEC-KIK-LIT-E-0002269 to SEC-KIK-LIT-E-0002274);




6. Kik’s consideration of whether the offer and sale of Kin was an offer and sale of an investment contract under the federal securities laws, including:

a. Kik and Kik executives’ review of the DAO Report;

b. Kik executive and employee communications with the Ontario Securities Commission relating to whether the offer and sale of Kin was an offer and sale of an investment contract; and


c. Kik’s efforts, if any, to contact the SEC about Kin on or before September 26, 2017.

7. Kik’s efforts to enter into SAFTs, including the dates and terms of the SAFTs, including the ability of purchasers to cancel and/or withdraw from the SAFTs.

8. Details and circumstances of the development of the “Minimum Viable Product” (“MVP”) of Kin as referred to in Kik’s Answer to Paragraph 100 of the Complaint, including:

a. Kik’s marketing of the MVP before sales of Kin to the public; and

b. The status of the MVP as of September 12, 2017.

9. The details of Kik’s public sale of Kin in September 2017, and Kik’s efforts during the public sale, including:

a. Kik’s disclosures about Kin to potential purchasers and/or purchasers;

b. Kik’s sales, including but not limited to the terms of the sales, and the consideration paid by purchasers;

c. Kik’s structure of the public sale, including, but not limited to, multiple rounds of sales, as well as caps on purchase amounts;

10. The delivery and allocation of Kin tokens to SAFT participants, public sale purchasers, Kik, the Kin Foundation, and/or any other individual or entity in September 2017.

11. Kik’s planned and actual use of the Kin token offering proceeds, including, but not limited to:





12. The development, creation and operation of the Kin Ecosystem, including, but not limited to, the following:


b. All the ways in which “Kin’s fundamental utility as a digital currency existed on the date of the TDE” and how “Kin owners could use Kin for peer-to-peer


transactions” as of September 26, 2017, as stated in Kik’s Answer to Paragraph 16 of the Complaint;











13. The topics covered by your letter dated November 17, 2017;

14. The topics covered by the stipulation dated November 12, 2019;


16. Kik’s responses to the SEC’s Requests for Admission Nos. 51, 77, 86, 99, 107, 109-114, 117-129, 132-136, 144-148; and

17. Testimony Exhibit 206.


CERTIFICATE OF SERVICE

I hereby certify that on December 8, 2019, true and correct copies of the foregoing were

served by email on the following:

Patrick E. Gibbs [email protected] Brett de Jarnette [email protected] Cooley LLP 3175 Hanover Street Palo Alto, CA 94304-1130 Luke T. Cadigan [email protected] Cooley LLP 500 Boylston Street Boston, MA 02116-3736 Kenneth R. Lench [email protected] Kirkland & Ellis LLP 655 Fifteenth Street, N.W. Washington, DC 20005-5793 Attorneys for Defendant Kik Interactive Inc.

/s/ Stephan J. Schlegelmilch_____ Counsel to Plaintiff


EXHIBIT C


Patrick E. Gibbs +1 650 843 [email protected]

December 18, 2019

VIA EMAIL

Stephan Schlegelmilch U.S. Securities and Exchange Commission 100 F Street, N.E. Mail Stop 5977 Washington D.C., 20549-5973

Re: U.S. Securities and Exchange Commission v. Kik Interactive, Inc., No. 19-cv-05244

Dear Stephan:

This letter follows our letter of November 27, 2019 regarding the U.S. Securities and Exchange Commission’s (“SEC”) 30(b)(6) deposition notice (the “Notice”) to Kik Interactive, Inc. (“Kik”), your email response dated December 8, 2019 attaching an amended 30(b)(6) notice (the “Amended Notice”), and our phone conversation on December 11, 2019.

First, as I said on the December 11 call, Kik is not refusing to appear for a 30(b)(6) deposition. Kik is willing to prepare and present a witness to testify under Rule 30(b)(6), but only in response to topics complying with Rule 30(b)(6). As discussed below, the topics in your Amended Notice still do not comply with the Rule. If you are willing to clarify and narrow the topics in the Amended Notice such that Kik could reasonably prepare a witness to testify to them, however, Kik will present a witness for a 30(b)(6) deposition. Relatedly, your December 8 email says that the email is “one final effort” to resolve the parties’ impasse, and on our December 11 call, you expressed a concern about Kik “moving the goalposts.” But ever since our very first meet and confer call on this subject (which preceded your December 8 email), Kik has consistently noted its concerns about the scope, breadth, and lack of specificity in the SEC’s proposed Rule 30(b)(6) topics. It has not “moved the goalposts” at all. Moreover, your December 8 email marks the first time the SEC has agreed even to consider revising any of the topics identified in the original Notice. That concession comes nearly three weeks after the parties’ meet and confer call on this same topic, and ten days after Kik sent you a proposed joint letter to the Court.

Turning to the substance of the topics in the Amended Notice, Kik still has many of the same concerns it has raised repeatedly about the cumulative and sweeping nature of the topics, which prevents Kik from reasonably preparing a witness to testify.

First, as we discussed on the call on December 11, the Amended Notice renumbers and combines dozens of subtopics, but fails to meaningfully narrow their scope or provide any additional specificity to address the concerns Kik raised with respect to the initial Notice. While you have eliminated certain topics, the vast majority of your changes involved simply deleting enumerated sub-topics which by their own terms were not exhaustive (i.e., “including but not limited to”), without eliminating the umbrella topic. This is the case for Amended Topic Nos. 3, 5, 6, 7, 8, 9, 11, and 12.

Second, your Amended Notice does not address Kik’s concerns about the overbreadth of several topics. For example, Amended Topic 1 still refers to “Kik’s corporate structure, ownership, and offices between January 1, 2017 and the present.” It is unclear what information is being sought, as each of these terms encompasses a wide range of potential inquiry. Under that general topic, for example, you might ask



Stephan Schlegelmilch December 18, 2019 Page Two


questions about the duties and responsibilities of employees and the executive team, or you might ask about investors and amounts of investment in specific rounds of financing, or you might ask the witness to identify every office Kik maintained during that period, where it was located, how many people worked there at various points in time, which employees worked there, when the location opened, when it closed, etc. This isn’t even an exhaustive list, but it illustrates why it would be impossible for Kik to prepare an individual to testify about all of the potential questions you might choose to ask under this general topic. Surely, by now, you have a list of specific facts you think you need to know about Kik’s corporate structure, Kik’s ownership, or its offices from January 1, 2017 to the present. Most of those facts, I suspect, would be more easily provided in writing, rather than through testimony, but in any event, without knowing what those questions are, it is not feasible for us to prepare a person to answer all of the potential questions you might ask. See Murphy v. Kmart Corp., 255 F.R.D. 497, 505-06 (D.S.D. 2009) (finding that topics of “the corporate history or four corporate entities [and] the corporate relationship between these entities” covered a “tremendous amount of information” and ordering noticing party to amend notice to reasonably narrow or clarify the lines of inquiry); see also Edwards v. Scripps Media, Inc., 331 F.R.D. 116, 121 (E.D. Mich. 2019) (explaining that topics must be stated with enough specificity to allow the corporation to designate and prepare a representative to testify).

The same is true for the other Amended Topics to which you made no change other than renumbering the topic and its subparts. Questioning under Amended Topic 2, “Kik’s current financial condition and operations,” could potentially cover every possible business transaction and event that falls under “operations.” Moreover, the temporal scope of this topic is impermissible, as Kik’s financial conditions and operations in 2019 and 2020 (when you propose the deposition take place) are not relevant to whether its 2017 sales of Kin tokens were sales of securities. See Edwards, 331 F.R.D. at 122 (striking 30(b)(6) topics about company policies before the specific relevant time period). Amended Topic 4 now seeks testimony about “Kik’s knowledge of the dissemination of video recordings relating to Kin on the internet, either by Kik or third parties.” As drafted, this would require Kik’s witness to interview potentially dozens of former employees about any awareness of any video that even mentions Kin, and is available anywhere on the internet, regardless of who created the video, where it is posted, or when it was created. If you seek to understand whether certain key decision makers or executives at Kik were aware of particular videos or recordings about the sale of Kin before the SAFT or public sale, Kik would be much better able to prepare its witness if you identified the videos or statements and whose knowledge or awareness you seek. And again, these topics may be more easily provided by written stipulation, furthering Rule 30(b)(6)’s purpose of streamlining discovery. See Edwards, 331 F.R.D. at 121.

The references to certain documents, transcripts, and videos that you added to Amended Topic 5 do not solve the problem with the original topic: this Amended Topic 5 purports to seek Kik’s testimony about all “public statements and presentations by Kik executives, employees, representatives and/or agents[.]” There is simply no way that Kik can reasonably prepare a witness to testify to the range of statements of every Kik executive or employee made on a litany of social-media sites (personal or otherwise) or at any number of conferences and events.

Amended Topic 6 continues to seek largely privileged material that is cumulative of prior discovery. The umbrella topic of “Kik’s consideration of whether the offer and sale of Kin was an offer and sale of an investment contract under the federal securities laws” contemplates questions about legal analysis by Kik and legal advice it received from inside and outside counsel. The subtopics open the door to questions about potentially every employee at Kik who read the DAO Report and what his or her interpretation was (regardless of relevance), legal analysis about implications of the DAO Report, privileged discussions about contacting the Ontario Securities Commission (“OSC”), preparing for meeting with the OSC with Canadian and US counsel, and discussions during and after the OSC meeting and subsequent conversations with the OSC. Even beyond the privilege concerns this topic raises, the SEC has now deposed every Kik


Stephan Schlegelmilch December 18, 2019 Page Three


representative at the meeting with the OSC, an OSC official, and Kik’s outside Canadian counsel. As you know, the SEC also obtained testimony from Kik’s in-house counsel during the investigation and canceled an additional deposition of Kik’s outside US counsel earlier this year. A Rule 30(b)(6) notice is intended to streamline discovery; it is not a vehicle to seek an additional deposition of a percipient witness or as a catch-all to reexamine the universe of information already produced. See Edwards, 331 F.R.D. at 121.

In another example, Amended Topic 9 refers to “Kik’s efforts during the public sale.” Although you list three general subtopics, “Kik’s efforts” is vague and overbroad and could conceivably encompass any work undertaken by any Kik employee, consultant, or board member over the course of many months in 2017. You could ask about Kik’s efforts to promote the public sale, Kik’s efforts to develop the minimum viable product, Kik’s efforts to grow the messenger, Kik’s efforts to ensure pre-sale purchasers complied with the SAFT terms, and innumerable other topics that would potentially fall under this category.

Under the current Amended Topic 10 (“The delivery and allocation of Kin tokens to SAFT participants, public sale purchasers, Kik, the Kin Foundation, and/or any other individual or entity in September 2017”), you could ask technical questions about how any specific pre-sale or public-sale purchaser received Kin, how the board and executive team decided to allocate Kin to Kik or the Foundation, or the technical mechanics of doing so. Preparing for such a broad potential range and detail of questioning would likely involve participation across a range of people with different expertise and involvement at Kik. Similarly, under the Amended Topic 11, you theoretically could ask about any statement before September 2017 made by a Kik employee, executive, board member, or representative about the possible future use of Kin token offering proceeds; or you could ask for accounting-level detail about how the proceeds have been allocated and used since September 2017. We continue to believe these topics are improper because you have had ample opportunity to obtain the information through Kik’s written documents and prior depositions. See Edwards, 331 F.R.D. at 122 (limiting 30(b)(6) topics where plaintiff already had copies of relevant documents and deposed the percipient witnesses). However, at the very least, we cannot reasonably prepare a witness to testify about this “tremendous amount of information” without further specificity from the SEC. See Murphy, 255 F.R.D. at 505-06. As we have told you previously, Kik is willing to consider verifying or adopting certain statements of company executives if the SEC identifies specific statements from testimony or public statements for Kik to consider.

We are further concerned with the entirely new topics you added now numbered 13-17:

13. The topics covered by your letter dated November 17, 2017; 14. The topics covered by the stipulation dated November 12, 2019; 15. The topics covered by your letter dated November 4, 2019;

16. Kik’s responses to the SEC’s Requests for Admission Nos. 51, 77, 86, 99, 107, 109-114, 117-129, 132-136, 144-148; and

17. Testimony Exhibit 206. Kik is aware of no legal basis for the SEC to add topics to an existing deposition notice weeks after it has been served. But setting that aside, these additional topics encompass dozens of additional subtopics that are cumulative and duplicative of prior discovery, and essentially are seeking discovery about Kik’s discovery responses. What is more, many of the original subtopics you purport to have omitted from the original Notice are now captured by the sweeping categories included in Amended Topics 13-17.

On their face, these new topics request “discovery about discovery” in that they seek testimony about letters drafted by counsel, Kik’s responses to the SEC’s requests for production of documents, Kik’s responses to Requests for Admission, and stipulations entered into by the parties. This “discovery about discovery” is appropriate only where a party’s efforts to comply with discovery are reasonably called into question.


Stephan Schlegelmilch December 18, 2019 Page Four


See Edwards, 331 F.R.D. at 126 (prohibiting 30(b)(6) deposition about defendant’s discovery responses as “irrelevant and not important to resolve the case” and because “the burden of requiring defendant to prepare a witness to testify about these matters outweighs the likely benefit”). There is no such question here that would require Kik to prepare a corporate representative to testify about the company’s responses to discovery.

Additionally, these new topics have the same problems that we raised about the original Notice. They do not describe with reasonable particularity the matters for examination, and do not give Kik notice of the actual likely areas of inquiry so it can adequately prepare. See Fed. R. Civ. P. 30(b)(6); Dongguk Univ. v. Yale Univ., 270 F.R.D. 70, 74 (D. Conn. 2010). Topic 13 alone references Kik’s responses to the SEC’s Requests for Admission and accordingly includes testimony about 30 distinct categories. Amended Topic 15 now calls for testimony concerning Kik’s responses to 11 requests for production of documents covering many distinct facts and topics. And perhaps most egregious of all is Amended Topic 17, which calls for unspecified testimony on any topic covered in “Testimony Exhibit 206”—Kik’s responses to more than 80 Requests for Admission during the investigation. Among the subject areas in that document alone about which the SEC is now seeking 30(b)(6) testimony are: the documents you purport to omit from Topic 9 in the original Notice; Kik’s sale of Kin during the public sale; Kik’s screening, KYC, and AML processes for purchasers; Kik’s sale of SAFTs from June to September 2017; Kik’s use of revenue from the public sale; the banks in which Kik deposited that revenue; and the structure and conduct of the Kin Ecosystem Foundation. Again, this list is not exhaustive, and you already have Kik’s sworn responses to these topics. By including “Testimony Exhibit 206” as an Amended Topic, the SEC has superficially cut certain topics from the Amended Notice, apparently to make the Notice seem more reasonable, without actually narrowing the substantive scope of the Notice. That approach is not productive or conducive to resolving this dispute.

This letter in no way exhausts the deficiencies in the topics now listed in the Amended Notice, but is intended only to highlight the most concerning topics and illustrate how we believe they continue to be overbroad, irrelevant, and cumulative, as described above. Kik reserves all rights to continue to object to specific topics and questions not identified in this letter and to seek a protective order from the Court if the parties are not able to reach an agreement. Notwithstanding Kik’s objections, we are prepared to continue to negotiate in good faith about Rule 30(b)(6) topics that are not duplicative of prior testimony and identified with reasonable particularity. We are hopeful we can resolve this without requiring the Court’s intervention, but cannot do so unless the SEC is prepared to significantly narrow the scope of its deposition topics.

Sincerely, /s/ Patrick Gibbs Patrick Gibbs


EXHIBIT D


1

Schlegelmilch, Stephan

From: Welsh, Michael E <[email protected]>Sent: Thursday, November 14, 2019 6:34 PMTo: Schlegelmilch, Stephan; D'Allaird, Laura; Mendel, David SCc: Gibbs, Patrick; Lightdale, Sarah; Cadigan, Luke T.; Lench, Kenneth R.; De Jarnette, Brett;

Landsvik, JulianneSubject: SEC v. Kik Interactive

CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.

Counsel: Please let us know when on Monday (11/18) or Tuesday (11/19) you are available to meet and confer about the SEC’s Rule 30(b)(6) Deposition Notice to Kik Interactive Inc. As an initial matter, the notice is grossly overbroad. It contains over 100 topics and subtopics, many of which are overly expansive and, as drafted, nowhere near the “painstaking specificity” required by the Federal Rules, Arnett v. Bank of Am., N.A., 11‐CV‐01372, 2012 WL 13055461, at *5 (D. Or. Dec. 17, 2012), and several of which plainly seek legal conclusions and to probe information protected by the attorney‐client privilege and/or the work product doctrine. Moreover, each topic is also duplicative of testimony the SEC has already obtained from Kik executives and other fact witnesses. By way of example, Topics 7 and 8 seek testimony on certain statements made by Mr. Livingston and his role in connection with the TDE. Of course, the SEC may not use Rule 30(b)(6) to seek an additional deposition of a percipient witness. See, e.g., Jones v. Hernandez, 16‐CV‐1986, 2018 WL 1981207, at *3 (S.D. Cal. April 27, 2018). And just this week, the SEC determined that it in fact did not require any additional testimony from Mr. Livingston in his percipient witness capacity (after Kik had committed and was prepared to make Mr. Livingston available for such additional testimony). By the same logic, we believe that the testimony contemplated by the SEC’s 30(b)(6) notice to Kik would be an unnecessary and inefficient waste of all parties’ time. Finally, we note that the Court’s November 12 order permitting an extension of time to complete certain depositions did not contemplate or authorize a 30(b)(6) deposition of Kik prior to the close of fact discovery. In light of the above, we are hopeful that the SEC will agree to withdraw its 30(b)(6) deposition notice to Kik. If not, we expect that on our meet and confer you will set forth the SEC’s grounds for refusing to do so. We look forward to hearing back from you regarding your availability to meet and confer on this matter. Thank you, Michael Welsh Michael Welsh Associate Cooley LLP 500 Boylston Street, 14th Floor Boston, MA 02116-3736 +1 617 937 2425 office +1 617 937 2400 fax +1 508 272 6210 mobile [email protected]


2

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EXHIBIT E




AMENDED NOTICE OF RULE 30(b)(6) DEPOSITION To: See Attached Certificate of Service PLEASE TAKE NOTICE that, pursuant to Federal Rule of Civil Procedure 30(b)(6), Plaintiff Securities and Exchange Commission (“SEC”) will take the deposition upon oral examination of one or more officers, directors, agents, or other persons who shall be designated to testify on behalf of Defendant Kik Interactive Inc. (“Kik”) regarding all information known or reasonably available to Kik with respect to the topics identified in Exhibit A. The deposition will take place on Tuesday, November 26, 2019Wednesday, January 15, 2020 at 9:00 a.m. at the SEC’s offices, located at 100 F Street, N.E., Washington, DC 20549, or at such other time or location agreed to by the parties. The deposition will be recorded by a stenographer and videographer, and will continue from day to day until completed. Dated: October 25December 8, 2019 Respectfully submitted,

/s/Laura K. D’Allaird Stephan J. Schlegelmilch Laura K. D’Allaird Stephan J. Schlegelmilch Attorney for Plaintiff



EXHIBIT A

This Amended Notice incorporates by reference the definitions set forth in Plaintiff SEC’s

First Request for Admission to Defendant Kik.

TOPICS



3. The performance of Kik since January 1, 2015, including, but not limited to:

a. Kik’s financial performance;

b. The performance of Kik Messenger, including, but not limited to, Kik Messenger’s user base;

c. Any efforts to monetize Kik Messenger;

d. Any efforts to sell Kik; and

e. Projections relating to Kik’s financial “runway” or the amount of time before which Kik would run out of funds.

4. Kik’s reasons for deciding to create and offer Kin.

5.3. Kik’s plan for the Kin token offering, including but not limited to:

a. Kik’s conduct of market research, including hiring of consultants and deliverables;

b. Kik’s understanding of market conditions for initial coin offerings from January 1, 2017 through September 26, 2017;

c. Consideration of plans relating to the Kin token offering by the Kik Board of Directors;

d. Kik’s planned structure of the Kin token offering, including, but not limited to, Kin tokens sold pursuant to SAFTs and Kin sold directly to the public;

e. Kik’s plans for allocating the Kin it created;

f. The amount of funds Kik targeted to raise from the Kin token offering;

g.a. Kik’s plan for the use of the Kin token offering proceeds;


h.b. Kik’s planned time frame for the Kin token offering, including, but not limited to, the timing of any sales of Kin to the public, and any changes to this time frame and reasons therefore; and.

i. The drafting of any registration statements or other materials to be filed with the U.S. Securities and Exchange Commission in relation to the Kin token offering.

6. Kik’s announcement and marketing of Kin to potential purchasers, including, but not limited to:

a. Kik’s plans to market Kin;

b. Kik’s “communication strategy” as referred to in Kik’s Answer to Paragraph 59 of the Complaint;

c. Any “roadshow” or other effort that involved promoting the awareness of Kin in different geographic locations, including Kik’s “Participant Roadshow” as referred to referred to in Kik’s Answer to Paragraph 59 of the Complaint;

d. Kik’s May 25, 2017 announcement of Kin; and

e.4. Kik’s knowledge of the dissemination of video recordings relating to Kin on the internet, either by Kik or third parties.

7. Roles played by Kik employees in the Kin token offering, including but not limited to, Kik CEO Edward Livingston.

8.5. Public statements and presentations by Kik executives, employees, representatives and/or agents relating the Kin token offering, including, but not limited to:






e. Statements of persons including Kik CEO Edward Livingston at the “San Francisco Bitcoin Meetup” in San Francisco, California, on June 27, 2017. (See recording produced at SEC-KIK-LIT-E-0000277; transcripts produced at SEC-KIK-LIT-E-0000133 to SEC-KIK-LIT-E-0000162, and SEC-KIK-LIT-E-0000254);



h. Statements of persons including Kik CEO Edward Livingston at a public gathering sponsored by Spotify called the “Ethereum NYC Meetup” on September 7, 2017. (See recording produced by the SEC to Kik in this Action at SEC-KIK-LIT-E-0002353 and in the electronic Web Capture folder “HO-13388 233083 07-03-19,” as listed in the Addendum to SEC August 16, 2019 Index of Produced Documents: List of Web Captures);; transcripts produced at SEC-KIK-LIT-E-0002275 to SEC-KIK-LIT-E-0002310);

i. Statements of persons including Kik CEO Edward Livingston during an interview on CNBC on or about May 25, 2017;. (See recording produced by the SEC to Kik in this Action at SEC-KIK-LIT-E-0002351; transcripts produced at SEC-KIK-LIT-E-0002269 to SEC-KIK-LIT-E-0002274);




9. The creation, maintenance and use of the following documents, as well as any statements made therein:

a. The Kin white paper (KIK000001-28);

b. The “Frequently Asked Questions” document created by Kik (KIK0000029-36);


c. The private placement memorandum Kik provided to SAFT participants (KIK000037-65);

d. The Kin SAFT (KIK000066-72);

e. The Form D that Kik filed with the U.S. Securities and Exchange Commission on or about September 11, 2017 (KIK000073-78);

f. The “User Registration Guide” drafted by Kik for sales of Kin to the public (KIK000098-108);

g. Kik’s audited financial statements for the fiscal year that ended June 30, 2016 (KIK 00007193-7229);

h. Kik’s audited financial statements for the fiscal year that ended June 30, 2017 (KIK00007243-7279);

i. Kik’s records of individuals and entities that entered into the SAFTs with Kik (see KIK001187; KIK000283);

j. Kik’s records of individuals and entities who purchased Kin tokens in the public sale portion of the Kin token offering (see KIK001188); and

k. Any document produced by Kik in the Investigation that recorded the participants in the SAFTS and the public sale of Kin.

10. The details and circumstances of private meetings between Kik or Kik executives, employees, representatives and/or agents and potential public sale purchasers.

11. The details and circumstances of private meetings between Kik or Kik executives, employees, representatives and/or agents and persons and/or entities that might enter into SAFTs with Kik.

12.6. Kik’s consideration of whether the offer and sale of Kin was an offer and sale of an investment contract under the federal securities laws, including but not limited to:

a. The “substantial efforts Kik undertook to ensure compliance with the federal securities laws,” and the basis on which “Kik was confident that its sale of a digital currency would not implicate the federal securities laws,” as stated in Kik’s Answer to Paragraph 96 of the Complaint;

b. Communications among Kik executives and employees, including, but not limited to, Kik’s Board of Directors relating to whether the offer and sale of Kin was an offer and sale of an investment contract;

c. Communications with consultants, including, but not limited to, any communications with CoinFund relating to whether the offer and sale of Kin was an offer and sale of an investment contract;


d.a. Kik and Kik executives’ review of the DAO Report; and

e.b. Kik executive and employee communications with the Ontario Securities Commission relating to whether the offer and sale of Kin was an offer and sale of an investment contract.; and

f.c. Kik’s efforts, if any, to contact the SEC about Kin on or before September 26, 2017.

13. Kik’s efforts to enter into SAFTs, including but not limited to:

a. The parties to whom Kik offered the SAFTs;

b. Documents used to market the SAFTs, including, but not limited to, term sheets, referred to in Paragraph 90 of the Complaint, as well as the private placement memorandum (KIK000037-65);

c.7. Thethe dates and terms of the SAFTs, including the ability of purchasers to cancel and/or withdraw from the SAFTs;.

d. The individual SAFTS entered into with each counterparty;

e. Consideration paid by SAFT participants;

f. The aggregate amount of funds Kik raised through SAFTs, including, but not limited to, the aggregate of all funds and the aggregate of funds raised from participants residing in the United States and New York; and

g. Communications with potential participants and/or participants concerning restrictions on the re-sale or trading of Kin tokens, and the use of the proceeds raised in the Kin token offering.

14.8. Details and circumstances of the development of the “Minimum Viable Product” (“MVP”) of Kin as referred to in Kik’s Answer to Paragraph 100 of the Complaint, including but not limited to:

a. Reasons for developing the MVP;

b. Development of digital stickers;

c. Consideration of alternatives to the MVP;

d. Representations in the private placement memorandum provided to SAFT purchasers relating to the MVP;

e.a. Kik’s marketing of the MVP before sales of Kin to the public; and

f.b. The status of the MVP as of September 12, 2017.

15.9. The details of Kik’s public sale of Kin in September 2017, and Kik’s efforts during


the public sale, including but not limited to:

a. Kik’s announcements concerning the public sale;

b. Kik’s assessment of potential purchasers, including Kik’s conduct or arrangement for a Know Your Customer (“KYC”) process;

c.a. Kik’s disclosures about Kin to potential purchasers and/or purchasers;

d.b. Kik’s sales, including but not limited to the terms of the sales, and the consideration paid by purchasers;

e.c. Kik’s structure of the public sale, including, but not limited to, multiple rounds of sales, as well as caps on purchase amounts;

f. The aggregate amount raised through the public sale, including, but not limited to, the aggregate of all funds raised and the aggregate of funds raised from purchasers residing in the United States and New York;

g. Communications with potential purchasers and/or purchasers concerning restrictions on the re-sale or trading of Kin tokens, and the use of the Kin token offering proceeds; and

h. Any contractual or other obligations of public sale purchasers with respect to Kin purchased, including, but not limited to, any obligation to help create, build, or support the Kin Ecosystem or otherwise to create demand or increase the value of Kin as referred to in Paragraph 184 of the Complaint.

16.10. The delivery and allocation of Kin tokens to SAFT participants, public sale purchasers, Kik, the Kin Foundation, and/or any other individual or entity in September 2017.

17. The attributes of Kin delivered in September 2017, including, but not limited to, different classes of Kin, and whether the re-sale or use of Kin was restricted in any way.

18.11. Kik’s planned and actual use of the Kin token offering proceeds, including, but not limited to:






19.12. The development, creation and operation of the Kin Ecosystem, including, but not limited to, the following:


b. All the ways in which “Kin’s fundamental utility as a digital currency existed on the date of the TDE” and how “Kin owners could use Kin for peer-to-peer transactions” as of September 26, 2017, as stated in Kik’s Answer to Paragraph 16 of the Complaint;











13. The development, creationtopics covered by your letter dated November 17, 2017;

14. The topics covered by the stipulation dated November 12, 2019;



16. Kik’s responses to the SEC’s Requests for Admission Nos. 51, 77, 86, 99, 107, 109-114, 117-129, 132-136, 144-148; and operation

17. Testimony Exhibit 206.



20. I hereby certify that on December 8, 2019, true and correct copies of the Kin

Foundation.foregoing were served by email on the following:

Patrick E. Gibbs [email protected] Brett de Jarnette [email protected] Cooley LLP 3175 Hanover Street Palo Alto, CA 94304-1130 Luke T. Cadigan [email protected] Cooley LLP 500 Boylston Street Boston, MA 02116-3736 Kenneth R. Lench [email protected] Kirkland & Ellis LLP 655 Fifteenth Street, N.W. Washington, DC 20005-5793 Attorneys for Defendant Kik Interactive Inc.

/s/ Stephan J. Schlegelmilch_____ Counsel to Plaintiff


EXHIBIT F


1

Schlegelmilch, Stephan

From: Schlegelmilch, StephanSent: Sunday, December 8, 2019 2:44 PMTo: 'Landsvik, Julianne'; D'Allaird, Laura; Mendel, David SCc: Gibbs, Patrick; Cadigan, Luke T.; De Jarnette, Brett; Welsh, Michael E; Bailey, Jenna C;

'Lench, Kenneth R.'Subject: RE: SEC v. Kik Interactive - 30(b)(6) Deposition of KikAttachments: 2019-12-8_Amended Rule 30(b)(6) deposition notice_v2.pdf; October 30(b)(6) vs

December 30(b)(6).pdf

Julianne: As we are preparing our response to your motion to quash the SEC’s Rule 30(b)(6) deposition of Kik, we would like to make one final effort to resolve our impasse by providing the attached amended notice of deposition, which addresses many of the issues set forth in your draft letter to the Court. For your convenience, I have also attached a comparison of the SEC’s original and amended notices, so that you can see our efforts to narrow our request. We are hopeful that this narrowing of the SEC’s notice resolves your concerns and that the deposition can go forward. As requested in earlier correspondence, we would like to schedule the deposition during the week of January 13, 2020. We have noticed the deposition for Wednesday, January 15, but we are available any day that week. If your client will not appear for a deposition under any circumstances – which we understand to be your position, prior this overture – please let us know immediately. For all the reasons discussed at length previously, we are not willing to accept a stipulation in lieu of this deposition, nor are we required to do so. Kik is a party to this action, and a Rule 30(b)(6) deposition is an uncontroversial discovery device in litigation involving a corporate entity like Kik. Each of the itemized topics are relevant (indeed, many are based upon your client’s narrative answer and affirmative defenses); we’re willing to clarify any of the topics that you identify as vague; and we’ve endeavored to reduce to the extent possible the burden on your client by significantly paring the SEC’s earlier request. Moreover, as we have discussed on the telephone, we have attempted to obtain similar discovery from your client through other means – e.g., requests for admission – and Kik’s answers to that discovery were in many instances non-responsive. Again, please let us know whether this resolves the dispute, and Kik will have a designee appear during the week of January 13, or whether we should revise the letter seeking Judge Hellerstein’s intervention accordingly. If a call regarding this and the other outstanding discovery issues would be helpful, please let us know your availability. That said, again, if Kik simply will not appear under any circumstances, please let us know so that we do not have to belabor this issue further. Thank you, Stephan Stephan J. Schlegelmilch U.S. Securities and Exchange Commission 202.551.4935

From: Landsvik, Julianne <[email protected]> Sent: Wednesday, November 27, 2019 3:00 PM To: Schlegelmilch, Stephan <[email protected]>; D'Allaird, Laura <[email protected]>; Mendel, David S


2

<[email protected]> Cc: Gibbs, Patrick <[email protected]>; Cadigan, Luke T. <[email protected]>; De Jarnette, Brett <[email protected]>; Welsh, Michael E <[email protected]>; Bailey, Jenna C <[email protected]> Subject: SEC v. Kik Interactive ‐ 30(b)(6) Deposition of Kik

CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.

Counsel: Following the parties’ meet and confer last week, attached is Kik’s position on the 30(b)(6) deposition. Please fill in the SEC’s position and return to us. Best, Julie Julianne Landsvik Cooley LLP 500 Boylston Street, 14th Floor Boston, MA 02116-3736 +1 617 937 2407 office +1 781 799 6155 mobile [email protected]

This email message is for the sole use of the intended recipient(s) and may contain confidential and privileged information. Any unauthorized review, use, disclosure or distribution is prohibited. If you are not the intended recipient, please contact the sender by reply email and destroy all copies of the original message. If you are the intended recipient, please be advised that the content of this message is subject to access, review and disclosure by the sender's Email System Administrator.


EXHIBIT G


UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

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U.S. SECURITIES AND EXCHANGE

COMMISSION,

The Commission,

vs.

KIK INTERACTIVE INC.,

Defendant.

:

:

:

:

:

Civil Action No. 19-cv-05244 (AKH)

KIK’S RESPONSES TO THE COMMISSION’S

FIRST SET OF REQUESTS FOR ADMISSION

(NOS. 1-150)

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PROPOUNDING PARTY: U.S. SECURITIES AND EXCHANGE COMMISSION

RESPONDING PARTY: KIK INTERACTIVE, INC.

SET NO.: ONE (NOS. 1-150)

Pursuant to Federal Rules of Civil Procedure 26 and 36, Defendant Kik Interactive, Inc.

(“Kik” or the “Company”) hereby responds to the U.S. Securities and Exchange Commission’s

(the “Commission”) First Set of Requests for Admission (the “Requests”) as follows:

I. GENERAL RESPONSES

1. Kik’s responses to the Requests are made to the best of its current employees’

present knowledge, information, and belief, and are at all times subject to such additional or

different information that discovery or further investigation may disclose. While based on the

present state of Kik’s recollection, Kik’s responses are subject to refreshing of such recollection,


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and such additional knowledge of facts, as may result from Kik’s further discovery or

investigation.

2. Kik reserves all objections or other questions as to the competency, relevance,

materiality, privilege, or admissibility its responses herein, as well as any documents cited herein,

in any subsequent proceeding in, or trial of, this or any other action for any purpose whatsoever

and any document or thing identified or provided in response to Plaintiff’s Requests.

3. To the extent Kik does not expressly admit to any or all of a Request, Kik denies

such Request.

4. No incidental or implied admissions are intended by these responses, and Kik’s

objection or response to any Request shall not be deemed an admission that Kik accepts or admits

the existence of any facts set forth or assumed by such Request, or that such objection or response

constitutes admissible evidence.

5. To the extent Kik states it lacks sufficient personal knowledge to admit or deny a

Request, Kik affirms that it has made a reasonable inquiry as to each such Request, and that the

information it knows or can readily obtain is insufficient to admit or deny each such Request.

II. GENERAL OBJECTIONS

1. Kik generally objects to the Commission’s use of documents that were produced in

the course of the Investigation.

2. Per Kik’s response to the SEC’s Requests for Production, Set One, Kik will

reproduce all documents that were produced in the course of the Investigation, subject to a

protective order.

3. Kik generally objects to the Commission’s attempt to use these Requests to

establish the admissibility of documents, recordings, testimony, and other statements. There are

“more convenient, less burdensome, and less expensive” means for the parties to resolve issues

regarding authenticity and applicability of the business records exception to the hearsay rule. See


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Fed. R. Civ. P. 26(b)(2)(C) (“On motion or on its own, the court must limit the frequency or extent

of discovery otherwise allowed by these rules or by local rule if it determines that . . . the discovery

sought . . . can be obtained . . . from some other source that is more convenient, less burdensome,

or less expensive”). Specifically, in order to facilitate efficient litigation, Kik is willing to agree

to a joint stipulation addressing the applicability of the business records exception to the hearsay

rule to specific statements, and authenticity issues as to certain documents. Kik believes that the

Court would prefer resolving admissibility issues in this fashion, as opposed to responding to

voluminous and highly burdensome requests for admission. See Pasternak v. Dow Kim, 2011 WL

4552389, at *6 n.6 (S.D.N.Y. Sept. 28, 2011) (ordering meet and confer where a “proposed

stipulation, or some variation thereof, would save both time and expense to the parties and also

provide an efficient presentation to the Court of matters not in dispute in the litigation”); see also

id. (“Indeed, some have said that the device provided for in Rule 36 ‘might well have been named

a “request for stipulations” since the term “admissions” suggests that evidence is being sought by

the device.’ A stipulation may well be able to resolve many of the issues presented herein.”).

4. Kik generally objects to the Requests insofar as each such Request is not full and

complete in and of itself.

5. Kik generally objects to the Requests insofar as each such Request contains

subparts, or a compound, conjunctive, or disjunctive Request.

6. Kik generally objects to the introductory definitions and instructions to the

Requests to the extent said definitions or instructions purport to enlarge, expand, or alter in any

way the plain meaning and scope of any specific Request on the ground that such enlargement,

expansion, or alteration renders said Request vague, ambiguous, unintelligible, unduly broad, and

uncertain.

7. Kik further objects to all instructions, definitions, and Requests to the extent they

seek to require Kik to admit the genuineness of original documents not currently in Kik’s

possession, custody or control, or to admit matters of fact involving persons, entities or events not

known to Kik, on the grounds that such instructions, definitions, or Requests seek to require more


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of Kik than any obligation imposed by law, would subject them to unreasonable and undue

annoyance, oppression, burden, and expense, and would seek to impose upon Kik an obligation to

investigate or discover information or materials from third parties or sources who are equally

accessible to the Commission.

III. SPECIFIC OBJECTIONS TO DEFINITIONS

1. Kik further objects to the definitions of “Kik,” “you,” and “your” as overbroad and

unduly burdensome to the extent that the Requests seek information from inaccessible or unknown

parties and to the extent that they seek information that is not reasonably known or obtainable by

Defendants. Kik further objects to the definition of “you” and “your” to the extent it calls for

privileged information from Kik’s attorneys or other representatives. Kik further objects with

respect to the terms “you” and “your” to the extent the definition calls for information from persons

“purporting to act on [Kik’s] behalf,” which Kik may not reasonably have access to.

2. Kik further objects to the definition of “Requests” as vague and ambiguous,

overbroad, and unintelligible, to the extent it calls for “all discovery requests and requests for

admission that have been, or will be, submitted by the SEC in this Action.”

3. Kik further objects to the definition of “SAFT” as vague and ambiguous, overbroad,

and unintelligible in the context for the Requests because, for example, this definition assumes the

existence of a single SAFT agreement, whereas in reality, each pre-sale participant executed

separate agreements with Kik. Kik objects to the use of “the SAFT” in the singular because each

SAFT entered into contained different terms depending on the pre-sale participant.

4. Kik further objects to the definition of “SAFT participant” as vague and ambiguous,

overbroad, and unintelligible in the context of certain Requests.

5. Kik further objects to the definition of “Public sale” as vague and ambiguous,

overbroad, and unintelligible, to the extent it calls for “process run by Kik from May to September

2017 through which Kik offered and sold Kin to the general public and arranged for the distribution

of Kin to buyers on September 26, 2017.”


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6. Kik further objects to the definitions of “Kik Messenger” and the “Kik app” as

vague and ambiguous, overbroad, and unintelligible in the context of certain Requests.

IV. RESPONSES AND OBJECTIONS TO INDIVIDUAL REQUESTS FOR ADMISSION

REQUEST FOR ADMISSION NO. 1:

Admit that the video recording produced by the SEC to Kik in this Action, identified by

Bates number SEC-KIK-LIT-E-0000333, is a genuine and authentic video recording of statements

by persons including Kik CEO Edward Livingston at a public gathering in New York City called

the “Token Summit,” on May 25, 2017.

RESPONSE TO REQUEST FOR ADMISSION NO. 1:

Kik incorporates its General Responses and Objections by reference herein. Kik further

objects to the use of the terms “genuine and authentic video recording” and “public gathering” as

vague and ambiguous, overbroad, and unintelligible in the context of this Request. Kik further

objects to the use of the phrase “statements by persons,” as the Commission does not identify such

persons, and Kik further objects that the phrase is vague and ambiguous, overbroad, and

unintelligible in the context of this Request. Further, Kik objects that this Request represents an

improper and inefficient use of this procedural mechanism. Kik further objects to this Request to

the extent it seeks information that is outside of Kik’s personal knowledge. Specifically, to the

best of Kik’s knowledge, Kik did not record the video referenced by this Request, nor is it in

possession, custody, or control of the original recording. Nor does Kik have sufficient knowledge

to determine whether the video was altered in any way. Further, Kik objects to the extent this

Request calls for a legal conclusion, as well as to the extent it assumes Kik’s admission of

admissibility.

Subject to and without waiving the foregoing General and Specific Responses and

Objections, and based on Kik’s understanding and reasonable interpretation of this Request, Kik

responds as follows: Kik admits that the video with Bates number SEC-KIK-LIT-E-0000333

appears to be some version of a video recording of statements made by Kik CEO Edward

Livingston and others at the “Token Summit” event on May 25, 2017. Kik otherwise lacks


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sufficient personal knowledge to either admit or deny this Request, and on that basis, among others,

denies the Request.


Admit that the statements of Kik CEO Edward Livingston at the May 25, 2017 Token

Summit, contained in the recording identified by Bates number SEC-KIK-LIT-E-0000333, were

on behalf of Kik, and were statements of Kik under Federal Rule of Evidence 801(d)(2).



objects to the use of the term “on behalf of Kik” as vague and ambiguous, overbroad, and


improper and inefficient use of this procedural mechanism. However, even if this Request was a

proper use of this procedural mechanism, Kik further objects to this Request as it fails to identify

specific statements by Mr. Livingston, and instead seeks the wholesale admission of entire

transcripts as corporate admissions. See Kolb v. County of Suffolk, 109 F.R.D. 125, 128 (E.D.N.Y.

1985) (“[Rule 801(d)(2)(D)] is rarely applied to allow admission of whole depositions of witnesses

who could easily appear at trial on a party’s direct case.”). Kik further objects to this Request to

the extent it seeks information that is outside of Kik’s personal knowledge. Kik further objects to

the extent this Request calls for a legal conclusion. Kik further objects to this Request as it assumes

Kik’s admission of authenticity.



responds as follows: this Request is an improper use of this procedural mechanism. Kik cannot

adequately consider such a request as the Commission fails to identify the specific statements it

requests that Kik deem corporate admissions pursuant to Federal Rule of Evidence 801(d)(2).

Accordingly, Kik denies this Request.


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Admit that the statements of persons including Kik CEO Edward Livingston at the May

25, 2017 Token Summit, contained in the recording identified by Bates number SEC-KIK-LIT-E-

0000333, were available on the Internet by June 3, 2017, and were posted on YouTube.



objects to use of the phrase “statements of persons,” as the Commission does not identify such



improper and inefficient use of this procedural mechanism. Kik further objects to the extent this

Request seeks information outside of Kik’s personal knowledge. Specifically, Kik did not post

the video referenced in this Request on YouTube. Further, Kik objects to the extent this Request

calls for a legal conclusion. Kik further objects to this Request as it assumes Kik’s admission of

authenticity.



responds as follows: Kik admits that the video purportedly referenced by this request appears to

be posted on a YouTube page by a user called “Token Summit,” which appears to be dated June

3, 2017. As Kik did not record, create, or post this video, Kik otherwise lacks sufficient personal

knowledge to either admit or deny this Request, and on that basis, among others, denies the

Request.


Admit that the transcripts produced by the SEC to Kik in this Action, identified by the

Bates range SEC-KIK-LIT-E-0000181 to SEC-KIK-LIT-E-0000189, and Bates number SEC-

KIK-LIT-E-0000260, are true and correct transcripts of the statements of persons including Kik

CEO Edward Livingston at the May 25, 2017 Token Summit, as contained in the recording

identified by Bates number SEC-KIK-LIT-E-0000333.


-8-



objects to the use of the term “true and correct transcripts” as vague and ambiguous, overbroad,

and unintelligible. Kik further objects to use of the phrase “statements of persons,” as the

Commission does not identify such persons, and Kik further objects that the phrase is vague and

ambiguous, overbroad, and unintelligible in the context of this Request. Further, Kik objects that

this Request represents an improper and inefficient use of this procedural mechanism. Kik further

objects to the extent this Request seeks information outside of Kik’s personal knowledge.

Specifically, Kik did not prepare the transcript referenced by this Request. Further, Kik objects to

the extent this Request calls for a legal conclusion.



responds as follows: Kik lacks sufficient personal knowledge to either admit or deny this Request,

and on that basis, among others, denies the Request.




by persons including Kik CEO Edward Livingston and Kik board member Fred Wilson that were

made publicly available on the website AVC.com by May 27, 2017.










-9-






admissibility.



responds as follows: Kik admits that a video that appears to be the video referenced by this

Request, which was originally posted by the Kin Foundation, appears to be posted on the

AVC.com website, which Kik does not control or operate, referencing a date posted of May 27,

2017. Kik otherwise lacks sufficient personal knowledge to either admit or deny this Request, and

on that basis, among others, denies the Request.


Admit that the website AVC.com is, and was from May to September 2017, a blogging

forum for Kik board member Fred Wilson.



objects to the use of the terms “blogging forum” as vague and ambiguous, overbroad, and

unintelligible in the context of this Request. Kik further objects to this Request to the extent it

seeks information that is outside of Kik’s personal knowledge.



responds as follows: while Kik’s understanding is that posts written by Fred Wilson in his personal

capacity appear on the website AVC.com, Kik lacks sufficient personal knowledge to either admit

or deny this Request. For example, Kik does not know who owns or operates the website

AVC.com. On that basis, among others, Kik denies the Request.


-10-


Admit that the statements of Kik CEO Edward Livingston, contained in the video recording

identified by Bates number SEC-KIK-LIT-E-0000339, were on behalf of Kik, and were statements

of Kik under Federal Rule of Evidence 801(d) (2).








transcripts as corporate admissions. See Kolb, 109 F.R.D. at 128. Kik further objects to this

Request to the extent it seeks information that is outside of Kik’s personal knowledge. Kik further

objects to the extent this Request calls for a legal conclusion. Kik further objects to this Request

as it assumes Kik’s admission of authenticity.










KIK-LIT-E-0000269, are true and correct transcripts of the statements by persons including Kik

CEO Edward Livingston and Kik board member Fred Wilson, as contained on the recording



-11-




and unintelligible. Kik further objects to use of the phrase “statements by persons,” as the









responds as follows: because Kik did not prepare the transcripts at issue, Kik lacks sufficient

personal knowledge to either admit or deny this Request, and on that basis, among others, denies

the Request.




by persons including Kik CEO Edward Livingston at a public gathering in the People’s Republic

of China called “TechCrunch Shenzhen,” on June 20, 2017, and the segment of the gathering in

which Mr. Livingston made these statements was entitled “Kin Fireside Chat at TechCrunch

Shenzhen.”







-12-









admissibility.





Livingston and others at the “TechCrunch Shenzhen” event on June 20, 2017. Kik otherwise lacks


denies the Request.


Admit that the statements of Kik CEO Edward Livingston, contained in the video recording

identified by Bates number SEC-KIK-LIT-E-0000305, were on behalf of Kik, and were statements

of Kik under Federal Rule of Evidence 801(d) (2).









-13-

transcripts as corporate admissions. See Kolb, 109 F.R.D at 128. Kik further objects to this












Bates range SEC-KIK-LIT-E-000031 to SEC-KIK-LIT-E-0000044, and Bates number SEC-KIK-

LIT-E-0000264, are true and correct transcripts of the statements by persons including Kik CEO

Edward Livingston at the TechCrunch Shenzhen, on June 20, 2017, as contained in the recording













-14-








by persons including Kik CEO Edward Livingston at a public gathering in San Francisco called

the “San Francisco Bitcoin Meetup,” on or about June 27, 2017, and the segment of this gathering

in which Mr. Livingston made these comments was entitled “An Evening with Ted Livingston,

CEO of Kik.”














admissibility.




-15-



Livingston and others at the “San Francisco Bitcoin Meetup” event on June 27, 2017 during a

segment called “An Evening with Ted Livingston, CEO of Kik.” Kik otherwise lacks sufficient


the Request.


Admit that the statements of Kik CEO Edward Livingston on or about June 27, 2017, at

the San Francisco Bitcoin Meetup, contained in the recording identified by Bates number SEC-

KIK-LIT-E-0000277, were on behalf of Kik, and were statements of Kik under Federal Rule of

Evidence 801(d) (2).

















-16-




Admit that the statements of persons including Kik CEO Edward Livingston on or about

June 27, 2017 at the San Francisco Bitcoin Meetup, contained in the recording identified by Bates

number SEC-KIK-LIT-E-0000277, were streamed live on the Internet, were publicly available on

the Internet as a recording by June 28, 2017, and were posted on YouTube.










authenticity.




be posted on a YouTube page by a user called “World Crypto Network,” which appears to be dated

June 27, 2017, and which references the fact that the video was streamed live on that same day.

As Kik did not record, create, or post this video, Kik otherwise lacks sufficient personal knowledge

to either admit or deny this Request, and on that basis, among others, denies the Request.





-17-


CEO Edward Livingston during the Kin Fireside Chat at the San Francisco Bitcoin Meetup, on or

about June 27, 2017, as contained in the recording identified by Bates number SEC-KIK-LIT-E-

0000277.


















by persons including Kik CEO Edward Livingston on August 1, 2017, on the “Finance Magnate’s

Blockchain Podcast.”






-18-










admissibility.





Livingston and others on the “Finance Magnate’s Blockchain Podcast” event on August 1, 2017.

Kik otherwise lacks sufficient personal knowledge to either admit or deny this Request, and on

that basis, among others, denies the Request.


Admit that the statements of Kik CEO Edward Livingston on August 1, 2017, during the

Finance Magnate’s Blockchain Podcast, contained in the recording identified by Bates number

SEC-KIK-LIT-E-0000272, were on behalf of Kik, and were statements of Kik under Federal Rule

of Evidence 801(d) (2).







-19-














Admit that the statements of persons including Kik CEO Edward Livingston on August 1,

2017, on the Finance Magnates Blockchain Podcast, contained in the recording identified by Bates

number SEC-KIK-LIT-E-0000272, were streamed live on the Internet and posted on YouTube.










authenticity.


-20-




be posted on a YouTube page by a user called “Finance Magnates,” which appears to be dated

August 1, 2017. As Kik did not record, create, or post this video, Kik otherwise lacks sufficient


the Request.





CEO Edward Livingston on the August 1, 2017 Finance Magnates Blockchain Podcast, as

contained in the recording identified by Bates number SEC-KIK-LIT-E-0000272.









Specifically, Kik did not prepare the transcripts referenced by this Request. Further, Kik objects

to the extent this Request calls for a legal conclusion.






-21-




by persons including Kik CEO Edward Livingston and an individual named William Mougayar,

on August 14, 2017, at a public gathering called the “Fintech Canada Bitcoin Ethereum Summit.”














admissibility.





Livingston and others at the “Fintech Canada Bitcoin Ethereum Summit” event on August 14,

2017. Kik otherwise lacks sufficient personal knowledge to either admit or deny this Request, and

on that basis, among others, denies the Request.


-22-


Admit that the statements of Kik CEO Edward Livingston on August 14, 2017, during the

Fintech Canada Bitcoin Ethereum Summit, contained in the recording identified by Bates number

SEC-KIK-LIT-E-0000275, were on behalf of Kik, and were statements of Kik under Federal Rule

of Evidence 801(d) (2).



















Admit that the statements of persons including Kik CEO Edward Livingston and William

Mougayar on August 14, 2017, at the Fintech Canada Bitcoin Ethereum Summit, contained in the

recording identified by Bates number SEC-KIK-LIT-E-0000275, were publicly available on the

website AVC.com by September 9, 2017.


-23-








the video referenced in this Request on YouTube, nor does it own or operate the website AVC.com.

Further, Kik objects to the extent this Request calls for a legal conclusion. Kik further objects to

this Request as it assumes Kik’s admission of authenticity.




be posted on a YouTube page by a user called “Fintech Canada,” which appears to be dated

October 30, 2017, and that said video was posted on the website AVC.com with a referenced date

of September 8, 2017. As Kik did not record, create, or post this video, Kik otherwise lacks


denies the Request.





CEO Edward Livingston and William Mougayar on August 14, 2017, at the Fintech Canada

Bitcoin Ethereum Summit, as contained in the recording identified by Bates number SEC-KIK-

LIT-E-0000275.


-24-






ambiguous, overbroad, and unintelligible in the context of this Request. Further, this is an


Request seeks information outside of Kik’s personal knowledge. Specifically, Kik did not prepare

the transcripts referenced by this Request. Further, Kik objects to the extent this Request calls for

a legal conclusion.






Admit that the video recording produced by the SEC to Kik in this Action in the electronic

Web Capture folder “HO-13388 233083 07-03-19” (see Addendum to SEC August 16, 2019 Index

of Produced Documents: List of Web Captures) and has the file name “NYC Ethereum

Cryptocurrency u0026 Consumer Media September 7th 2017,” is a genuine and authentic video

recording of statements by persons including Kik CEO Edward Livingston on September 7, 2017,

at a public gathering sponsored by Spotify called the “Ethereum NYC Meetup.”








-25-








admissibility.



responds as follows: Kik admits that the video in the electronic Web Capture folder “HO-13388

233083 07-03-19” (see Addendum to SEC August 16, 2019 Index of Produced Documents: List

of Web Captures) and has the file name “NYC Ethereum Cryptocurrency u0026 Consumer Media

September 7th 2017,” appears to be some version of a video recording of statements made by Kik

CEO Edward Livingston and others at the “Ethereum NYC Meetup” event on September 7, 2017.

Kik otherwise lacks sufficient personal knowledge to either admit or deny this Request, and on

that basis, among others, denies the Request.


Admit that the statements of Kik CEO Edward Livingston on September 7, 2017, during

the Ethereum NYC Meetup, as contained in the recording identified in the Request directly above,

were on behalf of Kik, and were statements of Kik under Federal Rule of Evidence 801(d)(2).








-26-













Admit that the statements of persons including Kik CEO Edward Livingston on September

7, 2017, 2017, at the Ethereum NYC Meetup, as contained in the above-identified recording, was

livestreamed on the Internet and posted on YouTube by September 8, 2017.










authenticity.




-27-


be posted on a YouTube page by a user called “NYC Ethereum,” which appears to be dated

September 8, 2017. This video does not specify whether it was live streamed. As Kik did not

record, create, or post this video, Kik otherwise lacks sufficient personal knowledge to either admit

or deny this Request, and on that basis, among others, denies the Request.


Admit that Kik CEO Edward Livingston’s investigative testimony on November 7 and 8,

2018, concerned matters within the scope of his employment by Kik, and Mr. Livingston’s

statements during such testimony were the statements of Kik under Federal Rule of Evidence

801(d) (2).



objects to the use of the term “within the scope of his employment by Kik” as vague and


this Request represents an improper and inefficient use of this procedural mechanism. However,

even if this Request was a proper use of this procedural mechanism, Kik further objects to this

Request as it fails to identify specific statements by Mr. Livingston, and instead seeks the

wholesale admission of entire transcripts as corporate admissions. Kolb, 109 F.R.D. at 128. Kik

further objects to this Request to the extent it seeks information that is outside of Kik’s personal

knowledge. Kik further objects to the extent this Request calls for a legal conclusion. Kik further

objects to this Request as it assumes Kik’s admission of authenticity.





requests Kik deem corporate admissions pursuant to Federal Rule of Evidence 801(d)(2).



-28-


Admit that Erin Clift’s July 26, 2018, investigative testimony concerned matters within the

scope of her employment by Kik, and Ms. Clift’s statements during such testimony were the

statements of Kik under Federal Rule of Evidence 801(d)(2).







Request as it fails to identify specific statements by Ms. Clift, and instead seeks the wholesale

admission of entire transcripts as corporate admissions. Kolb, 109 F.R.D. at 128. Moreover, Kik

objects on the basis that Ms. Clift was not employed by Kik at the time these statements were

made. Kik further objects to this Request to the extent it seeks information that is outside of Kik’s

personal knowledge. Kik further objects to the extent this Request calls for a legal conclusion.

Kik further objects to this Request as it assumes Kik’s admission of authenticity.








Admit that Phillip Yang’s August 16, 2018, investigative testimony concerned matters

within the scope of his employment by Kik, and Mr. Yang’s statements during such testimony

were the statements of Kik under Federal Rule of Evidence 801(d)(2).


-29-







specific statements by Mr. Yang, and instead seeks the wholesale admission of entire transcripts

as corporate admissions. Kolb, 109 F.R.D. at 128. Kik further objects to this Request to the extent

it seeks information that is outside of Kik’s personal knowledge. Kik further objects to the extent

this Request calls for a legal conclusion. Kik further objects to this Request as it assumes Kik’s

admission of authenticity.








Admit that Tanner Philp’s investigative testimony on August 20 and 21, 2018, concerned

matters within the scope of his employment by Kik, and Mr. Philp’s statements during such

testimony were the statements of Kik under Federal Rule of Evidence 801(d)(2).








-30-

specific statements by Mr. Philp, and instead seeks the wholesale admission of entire transcripts












Admit that Eileen Lyon’s investigative testimony on August 30, 2018, concerned matters

within the scope of her employment by Kik, and Ms. Lyon’s statements during such testimony

were the statements of Kik under Federal Rule of Evidence 801(d) (2).







specific statements by Ms. Lyon, and instead seeks the wholesale admission of entire transcripts






-31-








Admit that as of September 20-21, 2018, Peter Heinke provided services to Kik pursuant

to a consulting agreement.



objects to the use of the terms “provided services” as vague and ambiguous, overbroad, and

unintelligible in the context of this Request. Kik further objects to the extent this Request calls for

a legal conclusion. Kik further objects to this Request to the extent it seeks information protected

by the attorney-client privilege, the work product doctrine, or any other applicable evidentiary

privilege or immunity.



responds as follows: Kik admits that Peter Heinke entered into a consulting agreement with Kik

on July 1, 2018, and that such consulting agreement was in effect as of September 20-21, 2018.

Except as expressly admitted herein, Kik denies this Request.


Admit that Peter Heinke provided investigative testimony on September 20 and 21, 2018,

as part of his consulting agreement with Kik.



objects to the use of the terms “as part of his consulting agreement” as vague and ambiguous,


-32-

overbroad, and unintelligible in the context of this Request. Kik further objects to the extent this

Request calls for a legal conclusion. Kik further objects to this Request to the extent it seeks

information protected by the attorney-client privilege, the work product doctrine, or any other

applicable evidentiary privilege or immunity.



responds as follows: Kik admits that Peter Heinke provided testimony to the Commission on

September 20 and 21, 2018. Except as expressly admitted herein, Kik denies this Request.


Admit that Peter Heinke’s investigative testimony on September 20 and 21, 2018,

concerned matters within the scope of his employment by Kik, and Mr. Heinke’s statements during

such testimony were the statements of Kik under Federal Rule of Evidence 801(d)(2).







Request as it fails to identify specific statements by Mr. Heinke, and instead seeks the wholesale


objects on the basis that Mr. Heinke was not employed by Kik at the time these statements were








-33-





Admit that Eran Ben-Ari’s October 23, 2018, investigative testimony concerned matters

within the scope of his employment by Kik, and Mr. Ben-Ari’s statements during such testimony

were the statements of Kik under Federal Rule of Evidence 801(d) (2).







Request as it fails to identify specific statements by Mr. Ben-Ari, and instead seeks the wholesale


objects on the basis that Mr. Ben-Ari was not employed by Kik at the time these statements were











-34-


Admit that between February 22, 2017 and September 17, 2018, Kik was a privately-held

Canadian corporation with headquarters in Waterloo, Ontario and offices in New York City and

Tel Aviv.



objects to the use of the terms “was a privately-held Canadian corporation” as vague and

ambiguous, overbroad, and unintelligible in the context of this Request.



responds as follows: Kik admits that, between February 22, 2017 and September 17, 2018, Kik

was a privately-held Canadian corporation with its headquarters in Waterloo, Ontario and offices

in New York and Tel Aviv. Except as expressly admitted herein, Kik denies this Request.


Admit that the document produced by Kik with Bates number KIK000001-28 is a complete

and accurate copy of the Kin white paper.


Kik incorporates its General Responses and Objections by reference herein. Further, Kik

objects that this Request represents an improper and inefficient use of this procedural mechanism.

However, even if this Request was a proper use of this procedural mechanism, Kik objects to the

extent this Request refers to a document that was produced outside the scope of this Action during

the Investigation.

Subject to and without waiving the foregoing General Objections, and based on Kik’s

understanding and reasonable interpretation of this Request, Kik responds as follows: Kik admits

this Request.


-35-


Admit that Kik released the Kin white paper with Bates number KIK000001-28 to the

public on or about May 25, 2017.


Kik incorporates its General Responses and Objections by reference herein. Further, this

is an improper and inefficient use of this procedural mechanism. However, even if this were a

proper use of this procedural mechanism, Kik objects to the extent this Request refers to a

document that was produced outside the scope of this Action during the Investigation.



that Kik released the Kin white paper with Bates number KIK00000l-28 to the public on or about

May 25, 2017, by simultaneously publishing the white paper online and releasing a press release

announcing the Kin project. Except as expressly admitted herein, Kik denies this Request.


Admit that the document produced by Kik with Bates number KIK0000029-36 is a

complete and accurate copy of a Frequently Asked Questions document created by Kik.






the Investigation. Kik further objects to this Request to the extent it seeks information protected





this Request.


-36-


Admit that Kik released the Frequently Asked Questions document with Bates number

KIK0000029-36 to the public in or around August 2017.











this Request.



and accurate copy of the private placement memo that Kik provided to SAFT participants.



objects to the use of the terms “SAFT participants” as vague and ambiguous, overbroad, and




document that was produced outside the scope of this Action during the Investigation. Kik further

objects to this Request to the extent it seeks information protected by the attorney-client privilege,

the work product doctrine, or any other applicable evidentiary privilege or immunity.


-37-



that the document produced by Kik with Bates number KIK000037-65 is a complete and accurate

copy of the private placement memo that Kik provided to pre-sale participants. Except as expressly

admitted herein, Kik denies this Request.


Admit that Kik provided the private placement memo with Bates number KIK000037-65

to SAFT participants.



objects to the use of the terms “SAFT participants” as vague and ambiguous, overbroad, and









responds as follows: Kik admits that Kik provided the private placement memo with Bates number

KIK000037-65 to pre-sale participants. Except as expressly admitted herein, Kik denies this

Request.



and accurate copy of the SAFT that entitled purchasers to receive Kin in the event of a Network

Launch (defined in the SAFT) upon the terms set forth in the SAFT.


-38-



objects to the use of the term “the SAFT” as vague and ambiguous, overbroad, and unintelligible

in the context of this Request. Further, Kik objects that this Request represents an improper and

inefficient use of this procedural mechanism. However, even if this Request was a proper use of

this procedural mechanism, Kik objects to the extent this Request refers to a document that was

produced outside the scope of this Action during the Investigation. Kik further objects to this

Request to the extent it seeks information protected by the attorney-client privilege, the work

product doctrine, or any other applicable evidentiary privilege or immunity.



responds as follows: Kik admits that the document produced by Kik with Bates number

KIK000066-72 is a complete and accurate copy of the form Simple Agreement for Future Tokens

(“SAFT”), under which pre-sale participants would be issued 50 percent of their Kin tokens if and

when a Network Launch occurred and a number of other conditions were satisfied, and the

remaining 50 percent of their Kin tokens on the one-year anniversary of the Network Launch.



Admit that Kik provided the SAFT contract with Bates number KIK000066-72 to SAFT

participants, and SAFT participants executed the SAFT contract.



objects to the use of the terms “SAFT participants” and “the SAFT contract” as vague and



even if this Request was a proper use of this procedural mechanism, Kik objects to the extent this

Request refers to a document that was produced outside the scope of this Action during the


-39-

Investigation. Kik further objects to this Request to the extent it seeks information protected by

the attorney-client privilege, the work product doctrine, or any other applicable evidentiary




responds as follows: Kik admits that Kik provided individualized SAFTs to pre-sale participants,

and pre-sale participants chose whether to execute their individualized SAFTs. Except as

expressly admitted herein, Kik denies this Request.



and accurate copy of the Form D that Kik filed with the U.S. Securities and Exchange Commission

on or about September 11, 2017.











responds as follows: Kik admits this Request.



complete and accurate copy of the User Registration Guide drafted by Kik for the public sale.


-40-



objects to the use of the terms “drafted by Kik” as vague and ambiguous, overbroad, and









responds as follows: Kik admits that the document produced by Kik with Bates number

KIK000098-108 is a complete and accurate copy of the User Registration Guide drafted by Kik

for the Token Distribution Event (the “TDE”). Except as expressly admitted herein, Kik denies

this Request.


Admit that Kik released the User Registration Guide document with Bates number

KIK000098-108 to the public in August 2017.










-41-



this Request.


Admit that the document produced by Kik with Bates number KIK 00007193-7229 is a

complete and accurate copy of Kik’s audited financial statements for the fiscal year that ended

June 30, 2016.



objects to the use of the terms “audited financial statements” as vague and ambiguous, overbroad,

and unintelligible in the context of this Request. Further, Kik objects that this Request represents

an improper and inefficient use of this procedural mechanism. However, even if this Request was

a proper use of this procedural mechanism, Kik objects to the extent this Request refers to a






this Request.



complete and accurate copy of Kik’s audited financial statements for the fiscal year that ended

June 30, 2017.






-42-







this Request.


Admit that Kik did not provide Kik’s audited financial statements to SAFT participants

before the participants entered the SAFTs.



objects to the use of the term “SAFT participants” as vague and ambiguous, overbroad, and


seeks information protected by the attorney-client privilege, the work product doctrine, or any

other applicable evidentiary privilege or immunity.



responds as follows: Kik admits that it did not provide any of its audited financial statements to

SAFT participants prior to entering into the SAFTs because the pre-sale was conducted pursuant

to Rule 506(c), Kik was not obligated to disclose information regarding its financial condition,

budget, or use of proceeds to pre-sale participants. Except as expressly admitted herein, Kik denies

this Request.


Admit that Kik did not provide Kik’s audited financial statements to potential Kin

purchasers before the public sale.


-43-



objects to the use of the term “public sale” as vague and ambiguous, overbroad, and unintelligible

in the context of this Request.



responds as follows: Kik admits that, because the TDE did not fall under the purview of the federal

securities laws, Kik was under no obligation to disclose information regarding its financial

condition, budget, or use of proceeds or revenue to potential participants in the TDE. Except as



Admit that upon entering a SAFT, a SAFT participant paid U.S. dollars to Kik as set forth

in the SAFT.



objects to the use of the terms “SAFT participant” and “upon entering a SAFT” as vague and




responds as follows: Kik admits that pre-sale participants paid U.S. dollars to Kik in exchange for

the conditional rights as set forth in their particular SAFT. Except as expressly admitted herein,

Kik denies this Request.


Admit that under the terms of the SAFT, Kik would issue to SAFT participants a certain

number Kin tokens in the event of a Network Launch (defined in the SAFT) upon the terms set

forth in the SAFT. In such an event, Kik would deliver to the SAFT participants the required

amount of Kin automatically, without further action required by the SAFT participants.


-44-



objects to the use of the terms “the SAFT” and “automatically, without further action required by

the SAFT participants,” as vague and ambiguous, overbroad, and unintelligible in the context of

this Request. Kik further objects to this Request to the extent it seeks information protected by the

attorney-client privilege, the work product doctrine, or any other applicable evidentiary privilege

or immunity.



responds as follows: Kik admits that, in the event of a Network Launch, pre-sale participants

would receive the amount of Kin they were entitled to under the terms of their SAFT per the terms

of their particular SAFT. Except as expressly admitted herein, Kik denies this Request.


Admit that under the terms of the SAFT, SAFT participants would receive Kin tokens at a

discounted price of 70 percent of the maximum price per Kin sold by Kik during the public sale.



objects to the use of the terms “SAFT participants” and “the SAFT” as vague and ambiguous,

overbroad, and unintelligible in the context of this Request. Kik further objects to this Request to

the extent it seeks information protected by the attorney-client privilege, the work product doctrine,

or any other applicable evidentiary privilege or immunity.



responds as follows: Kik admits that, under the terms of the form SAFT with Bates number

KIK000066-72, pre-sale participants would ultimately receive Kin tokens at a discounted price of

70 percent of the maximum price per Kin sold by Kik during the TDE upon the occurrence of a

number of conditions. Except as expressly admitted herein, Kik denies this Request.


-45-


Admit that under the terms of the SAFT, Kik would issue to SAFT participants 50 percent

of Kin tokens at the time of the public sale and the remaining 50 percent on the one-year

anniversary of the public sale.



objects to the use of the terms “the SAFT,” “SAFT participants,” “public sale,” and “one-year

anniversary of the public sale,” as vague and ambiguous, overbroad, and unintelligible in the

context of this Request. Kik further objects to this Request to the extent it seeks information

protected by the attorney-client privilege, the work product doctrine, or any other applicable

evidentiary privilege or immunity.



responds as follows: Kik admits that, under the terms of the form SAFT and upon the occurrence

of a number of conditions, pre-sale participants would be issued 50 percent of their Kin tokens if

and when a Network Launch occurred, and the remaining 50 percent of their Kin tokens on the

one-year anniversary of the Network Launch. Except as expressly admitted herein, Kik denies

this Request.


Admit that the SAFT participants’ contractual obligations were set forth in the terms of the

SAFT, which explained when and how Kin would be distributed, if at all.



objects to the use of the terms “SAFT participants’ contractual obligations” and “the SAFT” as





-46-



responds as follows: Kik admits that each pre-sale participant’s contractual obligations were set

forth in each participant’s SAFT. Except as expressly admitted herein, Kik denies this Request.


Admit that in the public sale, the purchasers paid Ether and received Kin tokens.




in the context of this Request.



responds as follows: Kik admits that participants in the TDE paid Ether in exchange for Kin tokens.



Admit that Kik conducted KYC and AML processes to screen participants who desired to

purchase Kin. Once that process was complete and participants in the public sale received tokens,

Kik imposed no resale or use restrictions on Kin distributed at the time of the public sale. Upon

vesting pursuant to the terms of the SAFT, the SAFT participants receiving Kin were not, and will

not be, subject to transfer or use restrictions on Kin.



objects to the use of the terms “the SAFT,” “SAFT participants,” “resale or use restrictions,” and

“transfer or use restrictions” as vague and ambiguous, overbroad, and unintelligible in the context

of this Request. Kik further objects to this Request to the extent it seeks information protected by

the attorney-client privilege, the work product doctrine, or any other applicable evidentiary



-47-



responds as follows: Kik admits that Kik conducted KYC and AML processes to screen potential

participants who desired to purchase Kin. Kik further admits that, with respect to the TDE, and

consistent with the Terms of Use, which state that Kin tokens were sold “as is,” Kik did not impose

resale or use restrictions on Kin. With respect to the pre-sale, Kik further admits that it did not

impose resale or use restrictions on Kin distributed to pre-sale participants pursuant to the terms

of each participant’s SAFT, as pre-sale participants also received full ownership over their Kin.



Admit that Kik barred prospective Kin purchasers in some countries from the public sale

based on information about the locations of those prospective purchasers that had been gathered

through Kik’s KYC and AML processes.



objects to the use of the terms “barred,” “location,” and “public sale” as vague and ambiguous,






responds as follows: Kik admits that, in the TDE, Kik declined to sell Kin to potential participants

from certain countries, including China, Canada, Cuba, and North Korea. Kik further admits that

it relied on the KYC and AML processes to identify potential participants’ citizenship, as well as

their country or state of residence, in deciding which potential participants were or were not

eligible to purchase Kin. Except as expressly admitted herein, Kik denies this Request.


-48-


Admit that by entering into SAFTs and selling Kin tokens during the public sale, Kik

received about $100 million in U.S. dollars and Ether.




in the context of this Request. Kik further objects to this Request to the extent it seeks information





responds as follows: Kik admits that, Kik received $49.05 million in U.S. dollars from selling the

conditional contractual rights created by SAFTs in the pre-sale, and that Kik separately received

Ether then worth $49.2 million by selling Kin tokens in the TDE. Except as expressly admitted

herein, Kik denies this Request.


Admit that from July 2017 to September 11, 2017, Kik entered into SAFTs with SAFT

participants who paid U.S. dollars to Kik. Kik sold to about 50 total purchasers for about $49.48

million.



objects to the use of the terms “SAFT participants” and “about” as vague and ambiguous,







-49-

responds as follows: Kik admits that, in the pre-sale, Kik sold the conditional contractual rights in

the form of individualized SAFTs in exchange for U.S. dollars from June 2017 through September

11, 2017. Kik further admits that it sold the conditional contractual rights in individualized SAFTs

to 50 pre-sale participants for a total of $49.05 million. Except as expressly admitted herein, Kik

denies this Request.


Admit that KIK001187 and KIK000283 contain an address column, listing 10 addresses in

the State of New York with approximately $9.045 million contributed collectively.



objects to the use of the term “collectively” as vague and ambiguous, overbroad, and unintelligible

in the context of this Request. Further, Kik objects to the extent this Request refers to a document

that was produced outside the scope of this Action during the Investigation. Kik further objects to

this Request to the extent it seeks information protected by the attorney-client privilege, the work




that a document purportedly bates-labeled KIK001187, which was reproduced by the Commission

as EPROD-SEC-KIK-000043407, and a document purportedly bates-labeled KIK000283, which

was reproduced by the Commission as EPROD-SEC-KIK-000043109 contain an address column,

listing 10 addresses in the State of New York with approximately $9.050 million contributed

collectively. Except as expressly admitted herein, Kik denies this Request.


Admit that to the best of Kik’s knowledge, the document produced by Kik with Bates

number KIK001187 is a complete and accurate list of the people and entities who entered into

SAFTs with Kik, the amount of the purchase, and the date on which the SAFT was executed.


-50-



objects to the use of the term “the SAFT” as vague and ambiguous, overbroad, and unintelligible

in the context of this Request. Further, Kik objects to the extent this Request refers to a document

that was produced outside the scope of this Action during the Investigation. Kik further objects to

this Request to the extent it seeks information protected by the attorney-client privilege, the work




responds as follows: to the best of Kik’s knowledge, Kik admits that document purportedly bates-

labeled KIK001187, which was reproduced by the Commission as EPROD-SEC-KIK-000043407,

is a complete and accurate list of the people and entities who entered into SAFTs with Kik in the

pre-sale, the amount of the purchase, and the date on which the particular SAFT was executed.




number KIK000283 is a complete and accurate list of people and entities who entered into SAFTs

with Kik and the document contains columns with the following titles: amount, address, email,

and phone.



objects to the extent this Request refers to a document that was produced outside the scope of this

Action during the Investigation. Kik further objects to this Request to the extent it seeks




-51-



this Request.


Admit that in the public sale, Kik sold Kin tokens for Ether from September 12 to 26, 2017.

Kik sold to about 10,000 total purchasers for about $49.176 million in Ether. Of those purchasers,

3,456 who contributed a total of about $16.785 million in Ether, provided addresses with postal

codes in the U.S. as part of the KYC process.



objects to the use of the term “about” as vague and ambiguous, overbroad, and unintelligible in

the context of this Request. Kik further objects to this Request to the extent it seeks information





responds as follows: Kik admits that, in the TDE, Kik sold Kin tokens for Ether from September

12 to 26, 2017. Kik further admits that it sold Kin to about 10,000 participants for what was then

$49.2 million worth of Ether. Of those participants, Kik admits that 3,456 contributed a total of

$16.8 million in Ether, and provided addresses with postal codes in the U.S. as part of the KYC

process. Except as expressly admitted herein, Kik denies this Request.


Admit that the public sale of Kin tokens was not registered under the Securities Act of

1933.





-52-

in the context of this Request. Kik further objects to the extent the information Requested is

equally available to the Commission. Kik further objects to the extent this Request calls for a legal

conclusion. Kik further objects to this Request to the extent it seeks information protected by the


or immunity.



responds as follows: Kik admits that, because Kik’s sale of Kin tokens was not a sale of securities

under the federal securities laws, the sale of Kin tokens in the TDE was not registered under the

Securities Act of 1933. Except as expressly admitted herein, Kik denies this Request.



number KIK001188 is a complete and accurate list of the people who purchased Kin tokens in the

public sale portion of the Kin token offering, with Ether address, Kin, amount of Ether, amount in

U.S. dollars, IP address, age, postal country, and country of those individuals and whether the

person linked their wallets holding Kin to their Kik accounts as of November 2017.



objects to the use of the terms “public sale portion” and “Kin token offering” as vague and

ambiguous, overbroad, and unintelligible in the context of this Request. Kik further objects to the

extent this Request calls for a legal conclusion. Further, Kik objects to the extent this Request

refers to a document that was produced outside the scope of this Action during the Investigation.

Kik further objects to this Request to the extent it seeks information protected by the attorney-

client privilege, the work product doctrine, or any other applicable evidentiary privilege or

immunity.


Objections, and based on Kik’s understanding and reasonable interpretation of this Request, to the


-53-

best of Kik’s knowledge, Kik responds as follows: Kik admits that the document produced by Kik

in the Investigation with Bates number KIK001188 is a complete and accurate list of the people

or entities who purchased Kin tokens in the TDE, along with the Ether address, Kin received,

amount of Ether paid, amount paid in U.S. dollars, IP address, age, postal country, and country, as

well as a column indicating whether the person linked their wallet to their Kik accounts as of

November 2017. Except as expressly admitted herein, Kik denies this Request.


Admit that on or about September 26, 2017, Kik delivered to SAFT participants one-half

of the Kin tokens that they were entitled to receive under the terms of the SAFT.



objects to the use of the terms “SAFT participants,” “the SAFT,” and “entitled to receive” as vague

and ambiguous, overbroad, and unintelligible in the context of this Request. Kik further objects

to this Request to the extent it seeks information protected by the attorney-client privilege, the

work product doctrine, or any other applicable evidentiary privilege or immunity.



responds as follows: Kik admits that, on or about September 26, 2017, Kik delivered to pre-sale

participants one-half of the Kin tokens that they were entitled to receive under the terms of their

particular SAFT. Except as expressly admitted herein, Kik denies this Request.


Admit that on or about September 26, 2017, Kik delivered to public sale participants the

Kin tokens that they were entitled to receive under the terms of the public sale. Kik itself received

three trillion Kin tokens at the time of the public sale.





-54-






responds as follows: Kik admits that, on or about September 26, 2017, TDE participants

automatically received the Kin tokens that they were entitled to receive under the terms of the TDE

pursuant to a smart contract that was created by a third party. Kik further admits that it received

three trillion Kin tokens at the time of the TDE. Except as expressly admitted herein, Kik denies

this Request.


Admit that Kik received payments from the public sale in Ether, in its Ether wallet.

Subsequent to the public sale, Kik converted some of the Ether into U.S. dollars, which were

deposited in its account at Silvergate Bank, which is located in California. The payments received

from SAFT participants were deposited in U.S. dollars in Kik’s account at TD Bank, located in

Canada.



objects to the use of the terms “SAFT participants” and “public sale” as vague and ambiguous,






responds as follows: Kik admits that Kik received revenue from the TDE in Ether, in its Ether

wallet. Kik further admits that, subsequent to the TDE, Kik converted some of the Ether into U.S.

dollars, which were deposited in Kik’s account at Silvergate Bank, located in California. Kik


-55-

further admits that proceeds from the pre-sale was deposited in U.S. dollars in Kik’s account at

TD Bank, located in Canada. Except as expressly admitted herein, Kik denies this Request.


Admit that Kik has used a portion of the sale proceeds that were deposited in its California

and Canadian bank accounts as working capital to fund Kik’s business operations.



objects to the use of the terms “sale proceeds,” “working capital,” and “business operations” as






that it has used proceeds generated by the pre-sale and revenue generated by the TDE, which were

first deposited in Kik’s California and Canadian bank accounts, as working capital to fund Kik’s

business operations. Except as expressly admitted herein, Kik denies this Request.


Admit that Kik has used a portion of the sale proceeds that were deposited in its California

and Canadian bank accounts to develop the Kin Ecosystem and to complete tasks described in the

Kin white paper.



objects to the use of the terms “sale proceeds,” “develop,” and “tasks” as vague and ambiguous,





-56-



responds as follows: Kik admits that it used funds that were first deposited in Kik’s Silvergate

Bank account to further its efforts as a participant in the Kin Ecosystem. Except as expressly



Admit that to start to create the Kin Ecosystem and to complete tasks described in the Kin

white paper, Kik used, among other funds, funds from its account at Silvergate Bank into which

proceeds from the public sale had been deposited.



objects to the use of the terms “proceeds,” “public sale,” “create,” and “tasks” as vague and

ambiguous, overbroad, and unintelligible in the context of this Request. Kik further objects to this





responds as follows: Kik admits that it used funds that were first deposited in Kik’s Silvergate

Bank account to further its efforts as a participant in the Kin Ecosystem. Except as expressly



Admit that Kik exchanged most, but not all, of the Ether that it received in its Ether Wallet

from the public sale for U.S. dollars, which were deposited in Kik’s account at Silvergate Bank.



objects to the use of the terms “most, but not all” and “public sale” as vague and ambiguous,



-57-





responds as follows: Kik admits that Kik received revenue from the TDE in Ether, in its Ether

wallet. Subsequent to the TDE, Kik converted some of the Ether into U.S. dollars, which were

then deposited in Kik’s account at Silvergate Bank, which is located in California. Except as



Admit that to start to create the Kin Ecosystem and to complete tasks described in the Kin

white paper, Kik used, among other funds, funds from its account at TD Bank into which proceeds

from SAFT participants had been deposited.



objects to the use of the terms “start,” “proceeds,” “create,” “tasks,” and “SAFT participants” as






responds as follows: Kik admits that it used funds from Kik’s TD Bank account to further its efforts

as a participant in the Kin Ecosystem. Except as expressly admitted herein, Kik denies this

Request.


Admit that all Kin tokens distributed at the time of the public sale are fungible.


-58-



objects to the use of the term “public sale” and “fungible” as vague and ambiguous, overbroad,

and unintelligible in the context of this Request. Kik further objects to this Request to the extent

it seeks information protected by the attorney-client privilege, the work product doctrine, or any




that, like all currencies, Kin tokens distributed at the time of the TDE were fungible. Except as



Admit that Kik did not publish Kik’s financial statements to SAFT or public sale

participants.



objects to the use of the terms “publish” and “SAFT or public sale participants” as vague and


Request to the extent it is duplicative of Request Nos. 50 and 51. Kik further objects to this Request

to the extent it seeks information protected by the attorney-client privilege, the work product

doctrine, or any other applicable evidentiary privilege or immunity.



responds as follows: Kik admits that it did not provide any of its audited financial statements to

SAFT participants prior to entering into the SAFTs because the pre-sale was conducted pursuant

to Rule 506(c), Kik was not obligated to disclose information regarding its financial condition,

budget, or use of proceeds to pre-sale participants. Kik further admits that, because the TDE did

not fall under the purview of the federal securities laws, Kik was under no obligation to disclose


-59-

information regarding its financial condition, budget, or use of proceeds to potential participants

in the TDE. Except as expressly admitted herein, Kik denies this Request.


Admit that the Kin Ecosystem Foundation was founded on September 12, 2017.




to the extent it seeks information that is outside of Kik’s personal knowledge. Kik further objects





responds as follows: Kik admits that, to the best of its knowledge, the Kin Ecosystem Foundation

was founded on September 12, 2017. Except as expressly admitted herein, Kik denies this

Request.


Admit that from its founding through May 9, 2018, the Kin Ecosystem Foundation had two

directors – Kik CEO Ted Livingston and Kik’s CFO and SVP Corporate Development Peter

Heinke.



objects to this Request to the extent it seeks information that is outside of Kik’s personal

knowledge. Kik further objects to this Request to the extent it seeks information protected by the


or immunity.




-60-

responds as follows: Kik admits that, effective May 9, 2018, William Mougayar was appointed to

the Kin Ecosystem Foundation’s Board and Peter Heinke resigned from the Board. Except as



Admit that from its founding through May 9, 2018, the Kin Ecosystem Foundation had no

members.



objects to the use of the term “members” as vague and ambiguous, overbroad, and unintelligible


that is outside of Kik’s personal knowledge. Kik further objects to this Request to the extent it





respond as follows: Kik lacks sufficient personal knowledge to either admit or deny this Request,



Admit that from its founding through at least September 17, 2018, the Kin Ecosystem

Foundation had no employees.


-61-











Kik REQUEST FOR ADMISSION NO. 82:

Admit that from its founding through at least December 31, 2017, the Kin Ecosystem

Foundation’s only asset was the six trillion Kin tokens it received on September 26, 2017.












Admit that from its founding through September 17, 2018, the Kin Ecosystem Foundation

entered into contracts relating to insurance coverage, with consultants, and a Services Contract

with Kik.


-62-









responds as follows: Kik admits that the Kin Ecosystem Foundation entered into a Services

Contract between Kik and the Foundation. Kik is without personal knowledge sufficient to either

admit or deny the remainder of this Request, and on that basis denies the remainder of the Request.


Admit that on behalf of the Kin Ecosystem Foundation, under a Services Contract and

Agency Agreement with Kik, Kik employees created social media accounts under the Kin

Ecosystem Foundation’s name and wrote posts on those media channels that appear under the

Foundation's name, including Twitter, Reddit, and Telegram.









responds as follows: Kik admits that, on behalf of the Kin Ecosystem Foundation, and under a

Services Contract between Kik and the Foundation, Kik employees created social media accounts

under the Kin Ecosystem Foundation’s name and wrote posts on those media channels that appear


-63-

under the Kin Ecosystem Foundation’s name, including Twitter, Reddit, and Telegram. Except as



Admit that Kik controls the Kik messaging application, and, from its founding through at

least September 17, 2018, the Kin Ecosystem Foundation had no right or power to make changes

to the Kik messaging application.



objects to the use of the terms “make changes” and “Kik messaging application” as vague and








Admit that from its founding through September 17, 2018, the Kin Ecosystem Foundation

did not compensate Kik for services provided to the Kin Ecosystem Foundation by Kik pursuant

to the Services Contract with Kik.



objects to the use of the term “compensate” as vague and ambiguous, overbroad, and unintelligible

in the context of this Request. Kik further objects to the extent this Request calls for a legal

conclusion. Kik further objects to this Request to the extent it seeks information that is outside of

Kik’s personal knowledge. Kik further objects to this Request to the extent it seeks information




-64-



responds as follows: Kik denies this Request.



Foundation did not make changes to the Kik messaging application. That work was done by Kik

Interactive or Kik’s other agents.



objects to the use of the terms “make changes” and “Kik messaging application” as vague and



product doctrine, or any other applicable evidentiary privilege or immunity. Kik further objects

to this Request to the extent it is duplicative of Request No. 85. Kik further objects to this Request

as it is compound.






Foundation did not make changes to any blockchain on which Kin could be transferred or

exchanged. That work was done by Kik or Kik’s other agents.



objects to the use of the terms “make changes” and “that work” as vague and ambiguous,




-65-

information that is outside of Kik’s personal knowledge. Kik further objects to this Request to the

extent it seeks information protected by the attorney-client privilege, the work product doctrine,

or any other applicable evidentiary privilege or immunity. Kik further objects to this Request as

it is compound.



respond as follows: Kik denies this Request.



Foundation did not develop, or make changes to, any transaction service on which Kin could be

transferred or exchanged. That work was done by Kik or Kik’s other agents.



objects to the use of the terms “develop, or make changes to, any transaction service” as vague and


extent this Request calls for a legal conclusion. Kik further objects to this Request to the extent it

seeks information that is outside of Kik’s personal knowledge. Kik further objects to this Request


doctrine, or any other applicable evidentiary privilege or immunity. Kik further objects to this

Request as it is compound.



responds as follows: because this Request is so vague and ambiguous as to be unintelligible, Kik

lacks sufficient personal knowledge to either admit or deny this Request, and on that basis, among

others, denies the Request.


-66-


Admit that none of the companies that were contacted by the investment banker that Kik

hired in late 2016, as referenced in your Answer to paragraph 6 of the Complaint, made an offer

to buy Kik.



objects to the use of the terms “the investment banker that Kik hired in late 2016” and “made an

offer to buy Kik” as vague and ambiguous, overbroad, and unintelligible in the context of this

Request. Kik further objects to the extent this Request calls for a legal conclusion. Kik further








Admit that in the communication from Kik’s consultant to Kik that you quote in your

Answer to Paragraph 17 of the Complaint, Kik’s consultant discussed whether a crypto currency

“[i]n the case of community currency” potentially could be a security.



objects to the use of the term “discussed” as vague and ambiguous, overbroad, and unintelligible


that is outside of Kik’s personal knowledge. Kik further objects to this Request to the extent it




-67-





Admit that from May through September 2017, Kik offered Kin to people in the United

States.



objects to the use of the terms “offered” as vague and ambiguous, overbroad, and unintelligible in

the context of this Request. Kik further objects to the extent this Request calls for a legal

conclusion. Kik further objects to this Request to the extent it seeks information protected by the


or immunity.



responds as follows: Kik admits that it commenced its sale of Kin on September 12, 2017, and that

its sale continued through September 27, 2017, and that it ultimately sold about $50 million in Kin

to approximately 10,000 TDE participants, less than one third of whom were residents of the

United States. Except as expressly admitted herein, Kik denies this Request.


Admit that from July through September 11, 2017, Kik entered into SAFTs with persons

or entities located in the United States.






-68-



that, from July through September 11, 2017, Kik entered into individualized SAFTs with pre-sale

participants across the globe, including the United States. Except as expressly admitted herein,

Kik denies this Request.


Admit that in at least September 2017, Kik sold Kin to people in the United States.






or immunity.



that, from September 12, 2017 through September 27, 2017, Kik sold Kin to participants from over

117 countries in the TDE, including those from in the United States. Except as expressly admitted



Admit that between May and September 2017, members of Kik’s management travelled to

multiple cities in the United States to market Kin to prospective purchasers.



objects to the use of the terms “Kik’s management” and “market Kin” as vague and ambiguous,

overbroad, and unintelligible in the context of this Request.




-69-

that, between May and September 2017, members of Kik’s management team from Canada

travelled to certain cities around the world, including in the United States, to talk about the Kin

project. Except as expressly admitted herein, Kik denies this Request.


Admit that starting in early July 2017 and continuing through September 11, 2017, Kik

entered into SAFTs.



objects to the use of the terms “entered into SAFTs” as vague and ambiguous, overbroad, and






that it entered into individualized SAFT agreements with certain pre-sale participants.


Admit that all SAFT participants received the Kin they were due under the SAFT.



objects to the use of the terms “SAFT participants,” “received the Kin they were due,” and “the

SAFT” as vague and ambiguous, overbroad, and unintelligible in the context of this Request. Kik

further objects to the extent this Request calls for a legal conclusion. Kik further objects to this







-70-

that all pre-sale participants received Kin pursuant to the terms of their particular SAFT. Except

as expressly admitted herein, Kik denies this Request.


Admit that no SAFT participant declined to receive Kin that the participant was owed under

the SAFT.



objects to the use of the terms “declined,” “SAFT participant,” “Kin that the participant was owed,”

and “the SAFT” as vague and ambiguous, overbroad, and unintelligible in the context of this

Request. Kik further objects to the extent this Request calls for a legal conclusion. Kik further




or immunity.



this Request.


Admit that once a SAFT participant complied with all requirements for entering the SAFT

– namely, executing and delivering all transaction documents, providing Kik with a network

address for the allocation of Kin, and making the required payment to Kik – the participant’s

receipt of Kin under the SAFT was not contingent upon any additional action by the participant.



objects to the use of the terms “SAFT participant,” “contingent upon any additional action,”

“executing and delivering all transaction documents,” “network address,” and “the SAFT” as



-71-

objects to this Request to the extent it is duplicative of Request No. 53. Kik further objects to this





responds as follows: Kik admits that once a pre-sale participant satisfied all of the requirements

set forth in that participant’s particular SAFT, that participant would receive Kin tokens upon the

occurrence of the remaining contingencies set forth in their SAFT. Except as expressly admitted



Admit that under the SAFT, if the network launch did not occur by the SAFT’s deadline,

Kik was obligated to return 70 percent of the purchase amounts previously paid by the SAFT

participants.



objects to the use of the terms “deadline,” “the SAFT,” and “SAFT participants” as vague and






responds as follows: Kik admits that, if the Network Launch did not occur, Kik would have been

required to return 70 percent of the amount paid by SAFT participants. Except as expressly



Admit that Kik and SAFT participants were in a common enterprise.


-72-



objects to the use of the term “SAFT participants” as vague and ambiguous, overbroad, and


a legal conclusion. Kik further objects to this Request to the extent it seeks information that is

outside of Kik’s personal knowledge. Kik further objects to this Request to the extent it seeks





that the terms of the form SAFT state that the SAFT is a security. Except as expressly admitted



Admit that the Kin delivered to SAFT participants on September 26, 2017 were no different

than the Kin delivered to public sale participants on that same date.



objects to the use of the terms “SAFT participants” and “no different than” as vague and







that all Kin that were distributed were fungible. Except as expressly admitted herein, Kik denies

this Request.


-73-


Admit that the Kin tokens that Kik retained in September 2017 were no different than the

Kin tokens delivered to public sale participants and SAFT participants.



objects to the use of the terms “SAFT participants” and “no different than” as vague and




other applicable evidentiary privilege or immunity. Kik further objects to the extent this Request

is duplicative of Request No. 102.



responds as follows: Kik admits that all Kin that were distributed were fungible. Except as



Admit that each Kin token obtained by public sale participants or SAFT participants had

equal value and had a value that was equal to each and every other Kin token that was issued.



objects to the use of the terms “SAFT participants” and “equal value and had a value that was

equal to each and every other Kin token that was issued” as vague and ambiguous, overbroad, and




privilege or immunity. Kik further objects to the extent this Request is duplicative of Requests

Nos. 102-103.


-74-






Admit that no individual Kin token has greater rights or value than any other Kin token.



objects to the use of the terms “greater rights” as vague and ambiguous, overbroad, and




privilege or immunity. Kik further objects to this Request to the extent it is duplicative of Request

Nos. 102-104.






Admit that any change in the market value of Kin after Kin’s distribution on September

26, 2017, equally affected the value of each Kin token held by public sale participants, SAFT

participants, and Kik.



objects to the use of the terms “affected” and “SAFT participants” as vague and ambiguous,




-75-



or any other applicable evidentiary privilege or immunity. Kik further objects to this Request to

the extent it is duplicative of Request Nos. 102-105.






Admit that the description of the risk factors that appears in the PPM (KIK000051- 57) did

not appear in substantially the same form in the Terms of Use, to which you refer in your Answer

to paragraph 79 of the Complaint.



objects to the use of the terms “description of the risk factors” and “substantially the same form”

as vague and ambiguous, overbroad, and unintelligible in the context of this Request. Kik further



doctrine, or any other applicable evidentiary privilege or immunity. Kik further objects to the


the Investigation.



responds as follows: Kik admits that the descriptions of the risk factors that appear in the PPM are

different from those that are contained in the Terms of Use, precisely because of the numerous

differences between Kik’s sale of contractual rights pursuant to SAFT agreements and the TDE.



-76-


Admit that between May 25 and September 26, 2017, Kik promoted the offer and sale of

Kin through thousands of statements made in hundreds of speaking engagements, conferences,

interviews, blog posts, articles, and other public communications.



objects to the use of the terms “offer and sale” as vague and ambiguous, overbroad, and


calls for a legal conclusion. Kik further objects to this Request to the extent it seeks information





responds as follows: Kik admits that between May 25 and September 26, 2017, Kik made many

statements in numerous speaking engagements, conferences, interviews, blog posts, articles, and

other public communications regarding Kin. Except as expressly admitted herein, Kik denies this

Request.


Admit that between May 25 and September 26, 2017, Kik made multiple public statements

that Kik would take steps to encourage increased demand for Kin after Kin was issued.



objects to the use of the terms “Kik made multiple public statements” and “would take steps to

encourage increased demand” as vague and ambiguous, overbroad, and unintelligible in the

context of this Request. Kik further objects to the extent this Request calls for a legal conclusion.

Further, Kik objects to the Commission’s characterization of Kik’s purported statements. Kik


-77-

further objects to this Request to the extent it seeks information protected by the attorney-client

privilege, the work product doctrine, or any other applicable evidentiary privilege or immunity.






that, after Kin was issued, Kik would try to generate interest in adoption of Kin by consumers as

a medium of exchange.



objects to the use of the terms “Kik made multiple public statements” and “generate interest in

adoption of Kin by consumers as a medium of exchange” as vague and ambiguous, overbroad, and


a legal conclusion. Further, Kik objects to the Commission’s characterization of Kik’s purported

statements. Kik further objects to this Request to the extent it seeks information protected by the


or immunity.






that either Kik expected Kin to trade on exchanges or exchanges had indicated they would list Kin.



objects to the use of the terms “Kik made multiple public statements,” “expected,” “indicated,”


-78-

and “list Kin” as vague and ambiguous, overbroad, and unintelligible in the context of this Request.

Further, Kik objects to the Commission’s characterization of Kik’s purported statements.



responds as follows: Kik admits that, between May 25 and September 26, 2017, Kik made at least

one public statement that Kik understood that Kin could trade on exchanges, or that exchanges had

independently indicated they would list Kin. Kik further admits that any such statements were

made in the context of Kik’s additional statements that whether Kin was listed on exchanges was

up to the exchanges, not Kik. Except as expressly admitted herein, Kik denies this Request.



that Kik would be involved in building the underlying infrastructure for Kin after Kin was issued.



objects to the use of the terms “involved” and “building the underlying infrastructure” as vague

and ambiguous, overbroad, and unintelligible in the context of this Request. Further, Kik objects

to the Commission’s characterization of Kik’s purported statements.



responds as follows: Kik admits that, between May 25 and September 26, 2017, Kik stated publicly

that, while Kik was involved as a participant in the Kin Ecosystem, Kik alone would not and could

not support the Kin economy, the success of which depended on a diverse community of

consumers and developers, aside from Kik, adopting Kin as a medium of exchange in this new

digital economy. Except as expressly admitted herein, Kik denies this Request.


-79-



that Kik would be involved in trying to address the technological limitations of the Ethereum

blockchain after Kin was issued.



objects to the use of the terms “multiple public statements,” “involved,” and “trying to address the

technological limitations” as vague and ambiguous, overbroad, and unintelligible in the context of

this Request. Further, Kik objects to the Commission’s characterization of Kik’s purported

statements.



responds as follows: Kik admits that it publicly stated that it “welcomed the opportunity to work

with the blockchain technology community” in addressing the limitations of the Ethereum

blockchain. Except as expressly admitted herein, Kik denies this Request.



that Kik would work to integrate Kin with Kik Messenger after Kin was issued.



objects to the use of the terms “Kik made multiple public statements” and “work to” as vague and

ambiguous, overbroad, and unintelligible in the context of this Request. Further, Kik objects to

the Commission’s characterization of Kik’s purported statements.



responds as follows: Kik admits that, as in the White Paper, Kik publicly stated that “[t]he

foundation will commence the [TDE] once Kik has completed the technology upgrade to integrate


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with Kin, and the cryptocurrency can be used functionally within Kik.” Except as expressly




that work on the Rewards Engine would occur after Kin was issued.



objects to the use of the term “work on” as vague and ambiguous, overbroad, and unintelligible in

the context of this Request. Further, Kik objects to the Commission’s characterization of Kik’s

purported statements.





Admit that between May 25 and September 2017, Kik made multiple public statements

that it would limit the supply of Kin.



objects to the use of the terms “Kik made multiple public statements” and “limit the supply” as

vague and ambiguous, overbroad, and unintelligible in the context of this Request. Further, Kik

objects to the Commission’s characterization of Kik’s purported statements.



responds as follows: Kik admits that Kik publicly stated that, when Kin was minted, there would

be a fixed supply of 10 trillion tokens. Except as expressly admitted herein, Kik denies this

Request.


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that, if the supply of Kin were capped, an increase in the demand for Kin would lead to an increase

in the value of Kin.



objects to the use of the terms “Kik made multiple public statements” and “capped” as vague and

ambiguous, overbroad, and unintelligible in the context of this Request. Further, Kik objects to

the Commission’s characterization of Kik’s purported statements.



responds as follows: Kik admits that, between May 25 and September 26, 2017, Kik executives

made public statements that Kin token prices could increase or decrease based on basic economic

principles of supply and demand that apply to any asset. Except as expressly admitted herein, Kik




that Kik hoped to benefit alongside other Kin holders from an increase in the value of Kin.



objects to the use of the terms “Kik made multiple public statements,” “benefit,” and “hoped” as





responds as follows: Kik admits that, between May 25 and September 26, 2017, Kik publicly stated


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that, if Kin’s price increased, the price of the collective Kin it owned would increase as well since

Kin were fungible. Except as expressly admitted herein, Kik denies this Request.



that the funds raised in the offer and sale of Kin would be used to develop the Kin Ecosystem.



objects to the use of the terms “Kik made multiple public statements,” “offer and sale of Kin,” and

“develop” as vague and ambiguous, overbroad, and unintelligible in the context of this Request.

Further, Kik objects to the Commission’s characterization of Kik’s purported statements.



responds as follows: Kik publicly stated that the revenue from the TDE would at least be used in

part to further its participation in the Kin Ecosystem. Except as expressly admitted herein, Kik




that Kik would support or influence the Kin Ecosystem Foundation after Kin was issued.



objects to the use of the terms “Kik multiple public statements” and “support or influence” as







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Admit that between May 25 and September 26, 2017, Kik did not make any public

statement that identified a good or service that could then be bought with Kin.



objects to the use of the terms “good or service” and “could then be bought” as vague and




responds as follows: Kik denies this Request because Kin had not yet been launched between May

25 and September 26, 2017, and there were therefore no goods or services that could be bought

with Kin.



statement that identified a good or service that Kin holders would be able to buy with Kin in the

future.



objects to the use of the term “a good or service” as vague and ambiguous, overbroad, and

unintelligible in the context of this Request.






statement that identified an application through which, at the time Kin was to be distributed to

public sale participants, a Kin holder would be able to purchase goods or services with Kin.


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objects to the use of the terms “Kik did not make any public statement that identified an application

through which” and “purchase goods or services” as vague and ambiguous, overbroad, and





that Kin would be integrated into Kik Messenger at the time of the TDE. Except as expressly




statement that identified an application other than Kik Messenger through which, at the time Kin

was to be distributed to public sale participants, a Kin holder would be able to purchase goods or

services with Kin.



objects to the use of the terms “Kik did not make any public statement that identified an application

through which” and “purchase goods or services” as vague and ambiguous, overbroad, and





that other companies and developers would be able to integrate Kin into their applications once

the Kin token was distributed. Except as expressly admitted herein, Kik denies this Request.


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statement that identified a company other than Kik which, at the time Kin was to be distributed to

public sale participants, would sell goods or services for Kin.



objects to the use of the terms “Kik did not make any public statement” and “goods or services”

as vague and ambiguous, overbroad, and unintelligible in the context of this Request.



responds as follows: Kik admits that between May 25 and September 26, 2017, Kik publicly stated

that other companies and developers would be able to integrate Kin into their applications once

the Kin token was distributed. Except as expressly admitted herein, Kik denies this Request.


Admit that from May 25 to September 26, 2017, Kik’s website did not contain information

about declining usage of the Kik messenger app.



objects to the extent this Request exceeds the scope of permissible discovery and seeks irrelevant

information not proportional to the needs of the case.



admits that, while Kik’s website did not contain information about declining usage of the Kik

Messenger app, Kik made public statements disclosing that fact. (See, e.g.,

https://www.vox.com/2016/9/29/13099924/kik-messenger-growth-total-users). Except as



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Admit that Kik employees have worked on the Kin Rewards Engine.



objects to the use of the terms “Kik employees” and “worked on” as vague and ambiguous,







Services Contract between Kik and the Foundation, Kik employees have performed various

services for the Kin Ecosystem Foundation, including work on the Kin Rewards Engine. Kik

further admits that the Kin Rewards Engine would initially be administered by the Kin Ecosystem

Foundation, and that, over time, the Kin Rewards Engine would run autonomously on smart

contract technology. Except as expressly admitted herein, Kik denies this Request.


Admit that Kik instructed certain of its employees to work on the Kin Rewards Engine with

the goal of providing a financial incentive for developers which over time would “create a network

effect.”



objects to the use of the terms “work on,” “financial incentive,” and “create a network effect” as





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services for the Kin Ecosystem Foundation, including work on the Kin Rewards Engine. Kik

further admits that the Kin Rewards Engine was designed to compensate developers for the work

the provided. Except as expressly admitted herein, Kik denies this Request.


Admit that through at least August 2018, the only individuals who worked on the Kin

Rewards Engine were Kik employees or agents, or persons working under the direction of Kik

employees or agents.



objects to the use of the terms “worked on” and “under the direction of” as vague and ambiguous,









Services Contract between Kik and the Foundation, Kik employees or agents have performed

various services for the Kin Ecosystem Foundation, including work on the Kin Rewards Engine.



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Admit that Kik CEO Edward Livingston read the DAO report within days of its issuance

on July 25, 2017.



objects to the use of the terms “within days of its issuance” as vague and ambiguous, overbroad,

and unintelligible in the context of this Request. Kik further objects to the extent this Request calls

for a legal conclusion. Kik further objects to this Request to the extent it seeks information that is






responds as follows: Kik admits that Edward Livingston was aware of and reviewed the DAO

Report within days of its issuance. Except as expressly admitted herein, Kik denies this Request.


Admit that persons from the United States who purchased Kin in the public sale included:

(a) two purchasers who paid Ether then worth about $1.6 million and about $970,000

respectively;(b) 20 purchasers who paid Ether then worth about or more than $100,000; (d) 223

who paid Ether then worth about or more than $10,000; and (d) 1,853 purchasers who paid Ether

then worth about or more than $1,000.



objects to the use of the terms “about” and “about or more than” as vague and ambiguous,





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responds as follows: (a) Kik admits that, to the best of Kik’s knowledge, two TDE participants

paid Ether then worth roughly $1.553 million and $970,231, respectively; (b) that roughly 21 TDE

participants paid roughly $100,000 in Ether; (d) that roughly 223 TDE participants paid Ether then

worth roughly $10,000; and (d) roughly 1,866 TDE participants paid Ether then worth roughly

$1,000. Except as expressly admitted herein, Kik denies this Request.


Admit that Kik converted most of the Ether that it received from the public sale of Kin into

U.S. Dollars.



objects to the use of the term “most” as vague and ambiguous, overbroad, and unintelligible in the

context of this Request. Kik further objects to the extent this Request is duplicative of Requests

No. 70 and 74.







Admit that at the time Kin was distributed on September 26, 2017, it was impossible for a

user of Kik Messenger who obtained Kin to create a digital wallet inside the Kik app.



objects to the use of the term “create a digital wallet inside the Kin app” as vague and ambiguous,





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Admit that at the time Kin was distributed on September 26, 2017, there was no digital

wallet within Kik Messenger that would enable users to hold or conduct transactions with Kin.



objects to the use of the terms “no digital wallet within Kik Messenger” as vague and ambiguous,

overbroad, and unintelligible.






Admit that at the time Kin was distributed on September 26, 2017, it was impossible for

users of Kik Messenger to exchange Kin for a good or service inside the Kik app.



objects to the use of the terms “good or service” as vague and ambiguous, overbroad, and


Subject to and without waiving the forgoing General and Specific Responses and

Objections, Kik responds as follows: Kik admits that, at the time Kin was distributed in the TDE

on September 26, 2017, there was initial functionality to utilize Kin to access premium content in

the form of sticker packs. Kik further admits that the functionality to exchange Kin for a “good or

service” existed from the moment Kin were distributed in the TDE. Except as expressly admitted



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Admit that at the time Kin was distributed on September 26, 2017, Kin could not be used

to purchase digital stickers inside the Kik Messenger app.



objects to the use of the terms “used to purchase digital stickers” and “Kik Messenger app” as

vague and ambiguous, overbroad, and unintelligible in the context of this Request.



responds as follows: Kik admits that, at the time Kin was distributed in the TDE on September 26,

2017, Kin could be used to access digital stickers inside the Kik Messenger app. Except as



Admit that at the time Kin was distributed on September 26, 2017, Kin’s functionality

within Kik Messenger was limited to the ability of Kin holders (a) to link their external digital

wallets to their Kik accounts and display their Kin balances; and (b) to access sticker that were

unlocked depending on the amount of Kin owned.



objects to the use of the term “functionality” as vague and ambiguous, overbroad, and






Admit that neither the purchase nor ownership of Kin gave Kin holders any authority or

control over the Kin Ecosystem Foundation.


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objects to the use of the terms “authority” and “control” as vague and ambiguous, overbroad, and



outside of Kik’s personal knowledge.





Admit that neither the purchase nor ownership of Kin gave Kin holders any authority or

control over any other person’s work to develop the Kin Ecosystem.



objects to the use of the terms “authority” and “control” as vague and ambiguous, overbroad, and



outside of Kik’s personal knowledge.



responds as follows: Kik admits that it does not have control over third party consumers and

developers who chose to participate in the Kin economy. Kik further admits that owning or

holding Kin does not convey any associated right of control over other participants in the Kin

economy. Except as expressly admitted herein, Kik denies this Request.


Admit that Kik is aware of no good or service that could be bought with Kin at the time

Kin was distributed on September 26, 2017.


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objects to the use of the terms “good or service” and “bought with Kin” as vague and ambiguous,



information that is outside of Kik’s personal knowledge.



responds as follows: Kik admits that Kin could be used as a medium of exchange at the time it was

distributed in the TDE on September 26, 2017, and could be used to purchase goods or services

with peer-to-peer transactions at that time. Except as expressly admitted herein, Kik denies this

Request.


Admit that the sunglasses that you contend could be purchased using Kin were not

available for sale using Kin when Kin was distributed on September 26, 2017.



objects to the use of the terms “could be purchased” and “available for sale using Kin” as vague

and ambiguous, overbroad, and unintelligible in the context of this Request. Kik further objects

to the extent this Request calls for a legal conclusion. Kik further objects to this Request to the

extent it seeks information that is outside of Kik’s personal knowledge.






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Admit that at the time Kin was distributed on September 26, 2017, the Kin Rewards Engine

did not autonomously run on smart contract technology.



objects to the use of the term “autonomously run on smart contract technology” as vague and








that, at the time Kin was distributed in the TDE on September 26, 2017, to the best of Kik’s

knowledge, the Kin Rewards Engine would have to have been operated through manual

distributions of Kin to developers. Kik further admits that although the smart contract technology

was being incorporated within the Kin Rewards Engine at the time of the TDE, it had not yet been

launched within the economy. Except as expressly admitted herein, Kik denies this Request.


Admit that at the time Kin was distributed on September 26, 2017, the only available

method for rewarding a developer with Kin was to manually distribute Kin to the developer.



objects to the use of the terms “manually distribute” as vague and ambiguous, overbroad, and




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responds as follows: Kik admits that, at the time of the September 26, 2017 TDE, to the best of its

knowledge, Kik believes that the Kin Rewards Engine would have to have been operated through

manual distributions of Kin to developers. Except as expressly admitted herein, Kik denies this

Request.


Admit that at the time Kin was distributed on September 26, 2017, the Kin Foundation did

not employ any individual who could manually distribute Kin.



objects to the use of the terms “employ” and “manually distribute” as vague and ambiguous,








respond as follows: Kik admits that, on behalf of the Kin Ecosystem Foundation, and under a


services for the Kin Ecosystem Foundation, including the manual distribution of Kin. Except as



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Admit that at no time before Kin was distributed on September 26, 2017 did Kik publicly

announce a date by which the Kin Foundation would be “fully autonomous” or “totally

independent” of Kik.



objects to the use of the terms “fully autonomous” and “totally independent” as vague and








responds as follows: admits that, prior to the TDE on September 26, 2017, Kik did not publicly

announce a specific date by which the Kin Foundation would be “fully autonomous,” but only that

the Kin Ecosystem Foundation would be fully decentralized as soon as it could be safely operated

as a “fully autonomous” entity. Kik further admits that the Kin Ecosystem Foundation was

independent from its inception. Except as expressly admitted herein, Kik denies this Request.


Admit that after receiving Ether in its Ether Wallet during the public sale, Kik treated the

Ether interchangeably and did not track the Ether by Kin purchaser.



objects to the use of the terms “interchangeably” and “track” as vague and ambiguous, overbroad,

and unintelligible in the context of this Request. Kik further objects to the extent this Request calls

for a legal conclusion. Kik further objects to this Request to the extent it seeks information that is


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Admit that after receiving Ether in its Ether Wallet during the public sale, Kik used the

Ether for corporate purposes and without regard to which Kin purchaser had paid the Ether to Kik.



objects to the use of the terms “used” and “corporate purposes” as vague and ambiguous,











Admit that after Kik converted Ether that it had received during the public sale into U.S.

dollars and deposited the dollars into Kik’s account at Silvergate bank, Kik used the funds

interchangeably for corporate purposes and without regard to which Kin purchaser had sourced

the funds.


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objects to the use of the terms “interchangeably for corporate purposes” as vague and ambiguous,








responds as follows: Kik admits that it converted Ether into U.S. dollars and thereafter deposited

the dollars into Kik’s account at Silvergate bank. Except as expressly admitted herein, Kik denies

this Request.


Admit that under the current composition of the Kin Foundation’s board of directors, where

the only directors are Edward Livingston and William Mougayar, Mr. Livingston alone can veto

any Kin Foundation action being considered by the board.



objects to the extent this Request calls for a legal conclusion. Kik further objects to the extent this

Request exceeds the scope of permissible discovery and seeks irrelevant information not

proportional to the needs of the case. Kik further objects to this Request to the extent it seeks







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responds as follows: to the best of Kik’s knowledge, Mr. Livingston could not approve any action

without Mr. Mougayar approving it as well, and vice-versa, unless a conflict of interest caused

either board member to recuse himself. Except as expressly admitted herein, Kik denies this

request.


Admit that under the current composition of the Kin Foundation’s board of directors, where

the only directors are Edward Livingston and William Mougayar, Mr. Livingston alone can

approve any Kin Foundation action for which Mr. Mougayar has a conflict of interest.









responds as follows: to the best of Kik’s knowledge, Mr. Livingston could not approve any action

without Mr. Mougayar approving it as well, and vice-versa, unless a conflict of interest caused

either board member to recuse himself. Except as expressly admitted herein, Kik denies this

request.


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Dated: October 7, 2019

Respectfully submitted,

By: /s/ Patrick E. Gibbs Patrick E. Gibbs (183174) Sarah M Lightdale (4395661) Luke T. Cadigan (561117) Brett H. De Jarnette (292919) Cooley LLP 3175 Hanover Street Palo Alto, CA 94304-1130 Phone: (650) 843-5000 Fax: (650) 849-7400 Email: [email protected]; [email protected]; [email protected]; [email protected]

Attorneys for Defendant KIK INTERACTIVE INC.


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I, Jenna Bailey, am over the age of eighteen years, and not party to the within action. I

solemnly swear and state that on October 7, 2019, KIK’S RESPONSES TO THE COMMISSION’S

FIRST SET OF REQUESTS FOR ADMISSION (NOS. 1-150) was served by email on the following:

Stephan J. Schlegelmilch David S. Mendel Laura M. D’Allaird U.S. Securities and Exchange Commission 100 F Street, N.E. Washington, DC 20549-5971 202.551.4418 (Mendel) [email protected]

Attorneys for Plaintiff

Dated: October 7, 2019

/s/ Jenna Bailey

Jenna Bailey
