Topic: [....] ART issue - The Mug #004 included - crowdfunding the project... - page 2. (Read 7106 times)

hmm...that site needs a way to find all the assets that have been issued. Like a charts site or something.

Yes, current draft read like it reads and is not attractive at all, unless spreading coin makes you feel good and this is all you want. 
This is a 'work in progress' and the goal is to figure out how to structure it so that all participants are happy.  As you can see, we are not there yet.
In last few pages we have attempted to figure out how to share the profit but not share the profit Sounds absurd, I know.
Problem is, that  security definition is directly connected to contract to share the profit.

I am trying to put together a "contract" where ones who donate via purchase of ART-OTC tokens, get back more than they donated.

So we don't get any share of profits and we don't own any equity?  But we might get back the second-hand value of equipment IF it's sold?

Not quite seeing what the benefits of investing are - seems like we're being asked to donate money to help a "friend" of yours, without even being told where this art studio is so we can actually see the benefits our funding provides.  Is that a fair summary?

Bitcoin Address embossed into it - Yes, this can be done.
QR code - There is a way to do it but I am not sure it can stay readable  so I am not going to promise this.
Every cup will be hand made - not poured to the mold. What do you think is a reasonable price?
100 tokens of ART-OTC? 200? Shipping will be extra.  
If you want your name or Bitcoin Address embossed into it, please send it to me via PM.

If this investment is not offered to those in the U.S., it doesn't matter if the U.S. Securities and Exchange Commission approves or not.




That's where my suggestion of using a simple revenue contract might be preferable.  The studio needs equipment.  A supporter/investor of the studio project can buy the equipment (or provide the funds to buy the equipment and then becomes the owner of the equipment), and then the equipment located at the studio earns revenue when it is used, or when items constructed using that equipment are sold.

But seriously, these laws are ridiculous for someone trying to raise investment money for an art studio.  The crowdfunding ammendment let the genie out of the bottle and it is only a matter of time before the laws are either ignored en mass or repealed and that some day an art studio operator that wants to tap an online social circle for investment (measuring in thousands of dollars) can do so without concern over breaking securities laws.

Why are you people so happy buying fake and illegal securities in non existing (fake) entities?
Why even issue this illegal stuff and call yourself a corporation, while you know, you are not representing any legally existing Co.
If your company is registered, and you offer shares to general public - you are breaking the laws in most of the countries that have internet access.

Obviously this opens the ugly door of SEC/FSA/OSC/... etc, who will start cracking down on this sooner or later and make everyone's life really miserable.

（Posted by: EskimoBob.. last week.)

Sounds like EskimoBob started to believe his own delusions that everyone was a scammer and decided to set up his own scam. After all, everyone's doing it, right EskimoBob?

Your friend's art studio you say? And who are these people exactly? Do they even exist? I mean come on. EskimoBob has friends? Ha! Tell me another one.

Could we get our Bitcoin Address embossed into it, as text or a QR code?  If reasonably priced, I'd bet at least half of the CoinLab office would want to order one.


Acceptable to who?  The SEC?  Probably not.

*DISCLAIMER* I'm not a lawyer.  Assume everything I say is wrong, get your own legal counsel before doing anything based off this information.

As far as I understand, the SEC classifies pretty much any passive investment as a security. If you put money in, and have a chance to get more than your initial deposit back out, it is a security (by the SEC's definition).

Read this for some examples of things that the SEC says are and are not securities:
http://www.wcl.american.edu/sba/outline_databank/outlines/SecuritiesRegulation_Quinn_Fall2004_Cases.pdf

From that doc:

It seems like you could get around SEC regulations by:

- Require investors to somehow contribute non-monetarily as well (not solely on the efforts of others)

- Don't pay dividends, but allow asset holders to either sell shares at their buy price, or redeem them for goods/services (no expectation of profit)

- Don't sell to US investors, locate outside of the US (outside of SEC jurisdiction)

Tonight (after UTC 19.00) I am going send out a small gratuity to those brave, who have show support to this project by purchasing support tokens from assets-otc.com

 

I've purchased a few, its a nice test of the #assets-otc system, and a nice to encourage and help artisans, and really nice to keep Bob busy so he doesn't troll other threads

Go ahead and throw a coin at this project.

I guess all the screaming and yelling of how the SEC/FSA is breaking down imaginary doors of imaginary corporations and is threatening to hang bazaars owners has had it's effects on me too

One option is to say, fuck that hysteria and advertise the dividends, get some pople to sign up and get this project off the ground.
I rather keep it low key and go the other way.
There will be no participation in any profit-sharing agreement so we can end this "this is a security" nonsense for good.
 


We can and will do all that but first we need to get this project going  - buy or lease the equipment to make the "product".

I know that there is a hand made tea/coffee mug in making. It has a nice bas-relief of a bitcoin logo on it.
This is not a printed/decal crap from China or from your local "gifts" shop.
How it looks? I have no idea at the moment.   I know that you can get your name embossed in to it until the material is still soft. 

What I was thinking is this:
ART-OTC is a open cooperative that buys the equipment.
Coin used for the purchase of this equipment is donated by the purchase of ART-OTC tokens.
Equipment is leased to "Open Art Studio Project ART-OTC"
Open Art Studio Project pays for the equipment to ART-OTC like lease payments.
Coin starts to flow back to ART-OTC tokens holders.

Is that acceptable?

This product seems a little too confusing for my wallet.  It seems like you're trying so hard not to be a security, that the investor has lost all assurances of any benefit from purchasing "tokens".  I suggest looking into a different model where returns aren't BTC, but in goods.

I am interested in purchasing art with Bitcoin.  You should get your artist friend(s) to make some pieces around the theme of Bitcoin (money, cyberpunk, anonymity, electronics, etc).

Still life of some 7970's in a basket of fruit anyone?

Maybe you could hold a monthly/quarterly art auction, where all bids must be made with Tokens?

The problem is how to have supporters of the project contribute bitcoins toward the cause, in a way most likely to be considered "legal" by aggressive governments. Donations is one way, but how to reward the supporters legally?

Interesting idea indeed. I think this is a big step in right direction and probably makes the whole idea more attractive to participants.

So the art studio has the need for equipment.  The studio doesn't need to own the equipment but the equipment needs to be located in the studio and made available for use by the artists.  

Then just come up with an offer.  

The studio operator can offer to host the equipment, and then pay to the owner of the equipment a certain amount (a fixed monthly amount, or based on usage?).

That way there is no capital at risk by the owner of the equipment.  And for the owner of the equipment, the revenues (equipment rental or usage fees paid) could exceed the expenses (maintenance on the equipment, cost of the capital to purchase and install the equipment).

Does this help towards solving the problem?

[Edited for clarity]

I asked a simple question and you could not answer it. Instead, you attacked me. You're not only a hypocrite and a troll, based on the contract you wrote and what you've said about me here, you're a scammer as well.

Here's a hint. You mention I lost 7,000 BTC. That's a lie, I didn't. I didn't lose anywhere near that much. In fact, I didn't lose anything. You're a liar and a troll, and now that it's coming back to bite you on the ass, you're sore about it?

I have a great idea EskimoBob. Go apologize for the shit you've caused to other people, and stop trying to scam the shit out of these forums, and maybe, just maybe, when you ask for money for your friend's art studio (O RLY?) people will believe you instead of laughing in your face.

Usagi, you are an embarrassment to the whole BTC community.
If you have any scam accusations, please post your delusional rants to proper sub forums.

Thank you.

PS! Why are you so angry at me? Are you accusing me of your own stupid mistakes that cost over 7000 BTC to your investors? Usagi, you are the scumbag who swindled hundreds if not thousands of coins of your investors money and wasted it of who knows what. Not me.
And now, please, take your meds and go.

Oh come now EskimoBob! You should know better than anyone -- I'm not being a dick, I'm merely... asking questions! Isn't that what you like to call it?


By selling something with the promise of future value, for an unspecified product or service, you are creating a security.

If you are honestly trying not to scam people, just sell pre-orders. There is no law that says a commissioned product must be completed within 30 days (as some have suggested).


Never put a clause like #8 in a contract. I'm sure guruvan or some lawyer will chip in and tell you why, but in general it's a little like saying "We will not murder anyone on, before, or after July 19th, 2015."


Clauses #10 and #11 states that token holders control equity because they have rights to the equipment.


Meaningless and unenforceable.


Investment?


'Investors' cannot have a loss if their tokens do not represent equity. Sorry EskimoBob but it's pretty clear you are trying to sell a fake (scam) security here.


Illiquidity? Why don't you just come out and say your tokens will be traded on a secondary market? Hot shit EskimoBob, you're selling a security here.


Lol you're insane. So let me get this straight. If I sold a security and said people were not allowed to trade it or I would not be responsible.. that would be okay? You can't be that stupid.


Pay careful attention people because this is where EskimoBob is blatantly attempting to scam you. After he sells these "tokens" all he has to do is say "oh look.. it's illegal. silly me!" and you will have NO RECOURSE AGAINST HIM. Watch out! You were warned... EskimoBob is a scammer!



... like not even trying to pull this bullshit in the first place.

This is a nice peice of work EB, too bad no one will buy your scam asset.

No, I am not trying to scam you nor anyone else here.
Usagi, stop being a dick now. 

This is anew contract (draft)
All grammar corrections are welcome.

Sale of ART-OTC virtual Support Tokens


This is a rewards-based crowdfunding project. Project supporters (aka buyer of ART-OTC issue of virtual Support Tokens - ST’s) are offered, as a reward, the virtual Support Tokens.
As a perk to ST holders, virtual tokens can be used at later date for discounts on product and services offered by the project in the future.  No equity is offered to ST holders.


A. WHY AND WHAT IS OFFERED
1. ART-OTC virtual Support Tokens (later: STs) represents your participation in the "Open Art Shop Project ART-OTC" as a supporter by helping us to purchase new equipment for the project
2. Proceeds from the sale of virtual Support Tokens are used to buy equipment, materials, parts and cover other equipment related expenses.
3. Equipment will be insured against the theft or destruction by fire or similar incident.
4. Equipment is used to generate additional income for the project.
5. Most of the equipment is usable for long periods of time (years).
6. Up to 34 000 virtual Support Tokens will be sold at 0.05 BTC per token.
7. Support Tokens do not represent any share (equity) in "Open Art Shop Project" or in its managing entity(s). 
8. Support Tokens are not financial securities nor do they represent any financial security whatsoever.
9. The project does not promise any profits and there will be no profit sharing with holders of virtual ART-OTC Support Tokens.
10. If the purchased equipment is sold at later date, proceeds will be divided up between token owners at that time.
11. ARTS-OTC Support Tokens can (but do not have to) be bought back by the issuer.


B . LIMITATIONS TO STs BUYERS


1. If your (STs buyer) annual income or the net worth of is less than USD 100000, your maximum aggregate purchase of STs in 12 month period can not exceed the greater of USD 2000 or 5 percent of your annual income.
2. If your annual income or the net worth of is more than USD 100,000, your maximum aggregate purchase of STs in 12 month period can not exceed 10 percent of your annual income.

C. RISKS


1. By purchasing any number of STs you positively affirm that you understand that you are in risking of losing your entire investment -
2. and that you could bear such a loss; and
3. you understand the level of risk generally applicable to investments in startups, emerging businesses, and small issuers;
4. and you understand the risk of illiquidity
5. If the project fails, ART-OTC Support Tokens issuer or project manager (persons or legal entity(s) can not be held liable.
6. Issuer can not be held liable for any of STs holders actions or for any of the results from STs holders actions.
7. Issuer can not be held liable for STs holders actions like selling, trading, destroying or anything else you (STs holder) plan or can imagine doing with your STs.
8. Issuer reserve the right to make minor changes to this contract.
9. All sales of ART-OTC virtual Support Tokens are considered final after you have transferred your coin to address give to you by the issuer.

D. FORCE MAJEURE

1. Issuer or manager(s) shall not be liable for any failure to perform its obligations where such failure is as a result of Acts of Nature (including fire, flood, earthquake, storm, hurricane or other natural disaster), war, invasion, act of foreign enemies, hostilities (whether war is declared or not), civil war, rebellion, revolution, insurrection, military or usurped power or confiscation, terrorist activities, nationalisation, government sanction, blockage, embargo, labour dispute, strike, lockout or interruption or failure of electricity [or telephone service], and no other Party will have a right to terminate this Agreement under Clause 19 (Termination) in such circumstances."

2. Any Party asserting Force Majeure as an excuse shall have the burden of proving that reasonable steps were taken (under the circumstances) to minimize delay or damages caused by foreseeable events, that all non-excused obligations were substantially fulfilled, and that the other Party was timely notified of the likelihood or actual occurrence which would justify such an assertion, so that other prudent precautions could be contemplated.

guruvan, thank you for a constructive comments. I am working on this right now. I probably have to rewrite the contract and recall the current issue. Little inconvenience, but nothing complicated.

"Problematic" point in contract are:
Those do leave room for wrong interpretations and I like to eliminate this.   
I like CharlesPonzi idea and additional feedback on this is appreciated.

I am going to post a new draft of the contract soon. I need to refresh my memory on relevant sections in 1933 Act and see how the JOBS Act can help me structure this deal properly. Damn USA, you guys way are over-regulated DO something about it (not in this forum thread)

To everyone: Please tell me how can I make this project more attractive to you.
Please keep it civilized.

NB! Anything unrelated must go to different thread. If you like to accuse me of something you have dreamed up, please use appropriate subforums or PM me. Thread crapping and trolling will not make you in to real a man It only makes you look like a total loser and an idiot.   

Cheers!