Topic: a few questions about GLBSE (Read 3892 times)
So, why not just comply with the SEC and make GLBSE legal? I know easier said than done, but doable, right?
Yeah, they should really do that before someone from the government shuts them down...oh wait! 
The investment club sounds like it might work for Moderately Multiplayer online games, though creating networks of such entities that between them accomodate many more people than the 100 maximum any one of them needs to restrict itself to could be tricky.
The matter of having passive members is often built into even to simple PHP-using-MySQL web based games, in the automatic removal of idle players. Fail to play for some number of days and poof, you are no longer a player thus if the game is to be construed as an investment club you are no longer a member of the club.
Take a simple often-cloned game idea such as "O-Game clones" such as 2Moons, XNova, Xnova Redesigned and suchlike.
Each player chooses whether to "invest" in power plants, metal mines, crystal mines, deuterium sythesisers, defenses, attack fleets, cargo fleets and so on. They are not even forced to all "invest" in a co-ordinated way, they can all individually choose different "investments"...
-MarkM-
The matter of having passive members is often built into even to simple PHP-using-MySQL web based games, in the automatic removal of idle players. Fail to play for some number of days and poof, you are no longer a player thus if the game is to be construed as an investment club you are no longer a member of the club.
Take a simple often-cloned game idea such as "O-Game clones" such as 2Moons, XNova, Xnova Redesigned and suchlike.
Each player chooses whether to "invest" in power plants, metal mines, crystal mines, deuterium sythesisers, defenses, attack fleets, cargo fleets and so on. They are not even forced to all "invest" in a co-ordinated way, they can all individually choose different "investments"...
-MarkM-
It's the offering of securities to Americans that triggers SEC jurisdiction. The offeror has to comply with US law to do that. Many of the GLBSE listed "companies" are in the United States.
GLBSE itself is hosted in Portugal, not China. Portugal is part of the European Union, and so the common European regulations on securities, enforced by the European Securities and Markets Authority, apply.
GLBSE itself is hosted in Portugal, not China. Portugal is part of the European Union, and so the common European regulations on securities, enforced by the European Securities and Markets Authority, apply.
I guess this means that the next innovation in self clearing of electronic securities will be happening outside of the US and EU. And, hopefully this innovation can break the monopoly of DTC http://www.dtcc.com/. The future holds self offering , buying, selling and clearing of shares with no corporations just stakeholders in ideas and projects.
So, why not just comply with the SEC and make GLBSE legal? I know easier said than done, but doable, right?
Not enough: money, brains, business acumen, future revenue, etc. Not doable at all with the current executive team and the current board of directors.This actually applies to a lot of Bitcoin ventures offering financial products/services, not just GBLSE.
So, why not just comply with the SEC and make GLBSE legal? I know easier said than done, but doable, right?
Not enough: money, brains, business acumen, future revenue, etc. Not doable at all with the current executive team and the current board of directors.Kramerica Industries!
So, why not just comply with the SEC and make GLBSE legal? I know easier said than done, but doable, right?
Not enough: money, brains, business acumen, future revenue, etc. Not doable at all with the current executive team and the current board of directors.
So, why not just comply with the SEC and make GLBSE legal? I know easier said than done, but doable, right?
close the business before a first audit and return all solicited funds. This is a supreme defense.
Well, looks like some variation of that is underway. (Or, not ... )
Nefario has, without a shareholder motion and in violation of the bylaws and GLBSE ToS, decided to close down GLBSE.
[...]
He is also illegally using user deposits to pay for his lawyer.
[...]
Since Nefario refuses to give complete details about his legal concerns and he has been acting strangely, I feel that it is somewhat possible that Nefario is working under some sort of plea bargain and is gathering IDs for future prosecution.
[...]
He is also illegally using user deposits to pay for his lawyer.
[...]
Since Nefario refuses to give complete details about his legal concerns and he has been acting strangely, I feel that it is somewhat possible that Nefario is working under some sort of plea bargain and is gathering IDs for future prosecution.
I particularly like the portions about fraudulent sale practices.
Implying that these portions are applicable to GLBSE? In what way?
In my opinion bitcoin by itself should be suitable for trading under the OTC BB rules in the USA.
Whoopty do, some of us don't care.
But currently it is impossible to detangle "bitcoin by itself" from the mass of false information about it.
False information, such as?
It is really hard to separate honest mistakes from intentional fraud. The underlying source code is complex and very little is known about its behaviour under stress.
I don't understand what this has to do with GLBSE.
Courts and lawyers will have interesting tasks ahead of them.
It's always interesting watching them try to criminalize more and more non violent behavior.
Have you considered the possibility that the law is complete and utter bullshit?
In general I think that US securities regulation is decently good. I particularly like the portions about fraudulent sale practices.Edited to add: The other thing that I find neatest is that non-trading entities have by law free access to the full market information just for the cost of the pipe. Many universities take advantage of it. This is really outstanding feature of the American regulation.
In my opinion bitcoin by itself should be suitable for trading under the OTC BB rules in the USA.
But currently it is impossible to detangle "bitcoin by itself" from the mass of false information about it. It is really hard to separate honest mistakes from intentional fraud. The underlying source code is complex and very little is known about its behaviour under stress. Courts and lawyers will have interesting tasks ahead of them.
For US persons and companies, raising money on GLBSE is a felony under the Securities Act of 1934. To create a publicly traded investment, you have to register with the Securities and Exchange Commission first, and file forms like SEC Form 1-A.
I really hope this isn't true.
Asked on Stack Exchange and Quora.
Have you considered the possibility that the law is complete and utter bullshit?
Not that they won't try and possibly succeed in enforcing it, but that it is still complete and utter bullshit?
If so, do you think they want to change it? I don't. I see attempting to circumvent it as a valid alternative.
Not that they won't try and possibly succeed in enforcing it, but that it is still complete and utter bullshit?
If so, do you think they want to change it? I don't. I see attempting to circumvent it as a valid alternative.
What underwriter? GLBSE doesn't have underwriters.
GLBSE is kind of an agglomeration of underwriter, sales agent and exchange. In the normal finance those functions would be spread amongst separate entities. GLBSE provides some of each, with the additional mix-in of possible conflits of interest.The issuer is the one responsible for the issue.
This is the typical situation. But sometimes a security that is issued and sold completely legally becomes a subject of litigation purely because of subsequent illegal sales practices over which they had no control. There's some case law about incorrectly issued ADRs for which the entire culpability was placed on the underwriter and sales agent in the USA, not on the original issuer. There were also cases related to reverse-buyout where the pre-buyout directors were found innocent and the entire culpability was placed on the post-buyout directors and executives.For over 10-years now I'm involved in a privately-run enterprise and no longer have any contact with the lawyers that I worked with in the past in the publicly-traded company. I thus apologise for not providing a proper legal citations. Its a complex and very interesting subject, where the quick one-liners are raraly a full answer.
Is there more risk for the issuer, or for the investor?
I think neither. The underwriter has the most risk of being prosecuted.The issuer is the one responsible for the issue.
Is there more risk for the issuer, or for the investor?
I think neither. The underwriter has the most risk of being prosecuted. 
Very interesting posts on this thread. Perhaps the GLBSE has quite a few risks involved that might cause issuers to demand a substantial premium over the assets they hold...
It is a typically U.S.-centric stance that the SEC, etc. would have any say at all in these global markets.
The "glbse.com" domain is owned by
James McCarthy, White Rock Cottage, Hacketstown, Carlow, IE.
+353.13870661095
That's a real house in Ireland, owned by Frances Hackett, email "[email protected]". Might be a relative. Ireland is in the European Union, so European securities laws apply.
Ireland has a tough legal code in some areas. Bankruptcy in Ireland is severe.. A creditor can force an individual into involuntary bankruptcy if they owe more than EUR2000 and can't pay. "All the debtor’s assets and property vest automatically in the Official Assignee. The Bankruptcy Act 1986 allows the bankrupt to retain “such articles of clothing, household furniture, bedding, tools or equipment of his trade or occupation or other necessaries for himself, his wife, children and dependent relatives residing with him, as he may select, not exceeding in value [€3,175] or such further amount as the Court on an application by the bankrupt may allow."
For the next 12 years, an Irish bankrupt cannot "act as an officer of or directly or indirectly take part or be concerned in the promotion, formation or management of any Irish company or even of any foreign company which has an established place of business in Ireland. " The bankrupt's name and other information is published in newspapers. And they can't borrow more than EUR630.
I once had to collect a few hundred thousand dollars from an Irish company. They paid once I mentioned involuntary bankruptcy. Merely being far away does not insulate you from debt collection any more.
I like the argument that they are just game tokens. See, it's just monopoly money.
The amounts involved on GLBSE are currently tiny. The SEC probably won't bother. However, many US states have their own "blue sky" securities laws, and some of them will prosecute little guys, especially if they rip off individuals for a substantial amount and someone complains.
(Mt. Gox, on the other hand, is now moving around enough money that they really need to get their act together, register as a money transfer service, and comply with Japan's financial regulations. If they did that, they'd probably be having less trouble with HSBC, Technocash, and Paxum.)
I like the argument that they are just game tokens. See, it's just monopoly money.
Which are you saying that the operators of the GLBSE are trying to do: decieve, defraud, or otherwise disobey the law?
All of them, and probably something else. Its just not yet ripe for prosecution. The prosecution can start building the case and gathering the evidence once there's a first signature under the sacramental "I certify under the penalty of perjury that the foregoing financial statements are true and correct".Which are you saying that the operators of the GLBSE are trying to do: decieve, defraud, or otherwise disobey the law?
Until then the Gavin Anderson's way is still available: close the business before a first audit and return all solicited funds. This is a supreme defense.
By the way: the monopoly money is clearly marked as such in a big type. Some people may think that the tiny-type pale grey on white discalimer will protect them. I'm thinking it wont.
Jump to: