Topic: Bitcoin Investment Vehicles Beware – The SEC is Watching (Read 1412 times)

I would say he was very bright.  He convinced the SEC that he only gained $15K from the sale of unregistered securities and got them to accept an agreement where he voluntarily paid fines which were a rounding error on the actual profits.  The buyback of Satoshi's dice was $3.8M and it represented a fraction of the total company valuation.    That agreement now shields him from further civil and criminal prosecution on this "wrongdoing".  You think that is "not very bright"?  Honestly I have no idea why the SEC agreed to those terms (maybe difficulty in securing evidence) but I doubt Erik is broken up over it.

Directly? No.  US regulators do routinely work with law enforcement in a number of foreign countries, just ask Full Tilt Poker


http://en.wikipedia.org/wiki/United_States_v._Scheinberg

I guess Erik Voorhees isn't very bright after all. He got caught doing the same thing that idiot Pirate got caught doing AFTER he got in hot water doing it. For all of his libertarian written presentations on history and correcting the mistakes he can't learn from history. lol

The SEC has no power outside of the USA, no?

About 76 bank accounts in 14 countries were then frozen, preventing players from accessing balances held by the companies, according to the FBI's New York office.[29] That Full Tilt and Pokerstars accepted a total of $500 million in total player deposits is a conservative estimate

thats my mindset too.. SEC only presumes their actions are correct but they have the power to set fines and penalties at leisure without the victim even having a chance in court to plead a defense.

its a simple
"we think we are right, so pay up or we ask for more, you have 20 days"

As far as these two cases, it appears the SEC has a defensible legal argument:

Having said that, in my mind 'defensible' does not equate to 'legitimate'. But there are many things ensconced in the legal structure that are illegitimate.

http://bakerlaw.com/alerts/bitcoin-investment-vehicles-beware-the-sec-is-watching


How is any of the above different from all of the following?

http://www.coinware.io/

WTF

bitcoins are not government property.

The SEC most recently initiated an enforcement action earlier this month against the operator of a purported Bitcoin investment scheme in Voorhees.[8] The SEC action was based on the unregistered offerings of shares of FeedZeBirds and SatoshiDICE, two separate entities co-owned by Voorhees and others. In May 2012, FeedZeBirds offered and sold 30,000 shares, and raised 2,600 Bitcoins in connection with that unregistered offer and sale. At the time of the FeedZeBirds offering, the value of the Bitcoins raised was approximately $15,000. From August 2012 through February 2013, in two separate offerings, SatoshiDICE offered and sold 13 million shares, and raised 50,600 Bitcoins in connection with those unregistered offers and sales.

NimbusMining is a cloud-mining company enabling all individuals to benefit from mining bitcoins without having to purchase or operate any hardware. Until now bitcoin mining operations have been benefitting mostly tech-savvy people, but now with the NimbusMining “Managed Mining-Cloud” the average consumer can also conduct an effective bitcoin mining operation. This business model requires the consumer to purchases the data processing services for a fixed amount of time. NimbusMining then comfortably places the consumer in the driving seat, making the consumer the miner, with ownership of the bitcoins mined. For more information visit: www.nimbusmining.com

HashTrade is a cloud-hashing company aimed at sophisticated miners and investors willing to benefit from Bitcoins mining operations without having to purchase or operate any hardware. Miners and investors can buy a "HashTrade Contract" and through HashTrade’s “Managed Hashing Cloud” they are seamlessly provided with all the information they need to virtually conduct their Bitcoin mining operations. When miners or investors are ready to sell part or all of their hashing contract the HashTrade Marketplace will be the place to go. HashTrade is currently waiting for regulatory approval. For more information visit www.hashtrade.com.

LiquidBits Inc., is a data processing company that focuses on the long term potential associated with Bitcoin mining operations. The company purchases and hosts hardware mining equipment and then wholesales cloud data processing services to clients. Its specialty comes from building solid relationships with hardware manufacturers and datacenter operations to achieve best, low cost solutions to increasingly complex hardware requirements for the Bitcoin Network. LiquidBits is currently one of the leading bitcoin hardware purchasers in the world and operates in four (soon to be six) data-centers that are geographically distributed for optimum performance and redundancy.

Netsolus brings more than 14 years of experience providing cost-effective IT solutions to market. Netsolus proven experience in data center / cloud services, bitcoin services and IT staff augmentation help deliver innovative and reliable end-to-end solutions with integrity. Netsolus provides mining gear cloud hosting and co-location services for bitcoin customers, which is an important step in making bitcoin accessible to the masses..

"We believe that bitcoin can transform the world for the better and we are making every effort to help it happen."

Greg Bachrach, CEO & Co-Founder

The court applied the three-part test articulated by the U.S. Supreme Court in SEC v. W.J. Howey Co.[12], to determine whether an offering, contract, transaction, or scheme constitutes an investment contract.[13] Under the Howey test, a contract, transaction, or scheme is an “investment contract” if it involves: (i) the investment of money; (ii) in a common enterprise; and (iii) with the expectation of profits to come solely from the efforts of others.

The court in Shavers held that all three prongs of the Howey test were satisfied and, thereby, the sale of interests in the trust constituted the sale of securities.[14] In its analysis, the court found:

    That because Bitcoin can be used as money to purchase goods or services and also can be exchanged for conventional currencies, that Bitcoin was in fact a currency or form of money;
    That the investors and the promoter were interdependent because the investors were dependent on Shavers’s expertise in Bitcoin markets and his local connections; in addition, Shavers allegedly promised a substantial return on their investments as a result of his trading and exchanging Bitcoin; and
    Investors participating in the BST investments were expecting profits from the efforts of Shavers.

Based on these findings, the court concluded that the BST investments met the definition of “investment contract,” and as such, were securities.

"financial law" doesn't mean civil law. This "finical law" as you call it is criminal law. The SEC has no grounds to charge civil crimes because they are a government agency. Swindling money can be both a criminal and civil offense. Your victim can civilly sue and state/government can press criminal charges.

understandable thats why shavers should be in prison for theft of property. but voorhees should not be touched because they are trying to use financial law, not property law against him.

the SEC securities act

you cant discipline someone that has not registered themselves to be regulated. you can only discipline someone that agree's to the corporations terms and policies by registering..

am i to assume that voorhees registered to the securities commission and then decided not to play by their rules?

franky please don't give unsound legal "advice" speaking as if your opinions carry any legal weight.   Why not read what the judge in the Shavers case ruled.   He didn't rule on any property law.   

“It is clear that Bitcoin can be used as money,” writes Judge Mazzant in a ruling on Tuesday. “It can be used to purchase goods or services, and as Shavers stated, used to pay for individual living expenses. .. The only limitation of Bitcoin is that it is limited to those places that accept it as currency. However, it can also be exchanged for conventional currencies, such as the U.S. dollar, Euro, Yen, and Yuan,” writes Mazzant. “Therefore, Bitcoin is a currency or form of money, and investors wishing to invest in BTCST provided an investment of money.”

governments can still press felony charges for crimes. That's not limited to just their government issued money. The fact it is BTC is irrelevant. They don't have to own the financial instrument thats used in order to press charges...... If hacked into a server and stole say, 7 million EURO thats still a criminal offense (and a civil as well).

BTC doesn't make you immune to jurisdictions of governments

The Act also identifies and prohibits certain types of conduct in the markets and provides the Commission with disciplinary powers over regulated entities and persons associated with them.

WTF

bitcoins are not government property. why is voorhees even playing into their hands. doesn't he realise that its a civil matter not a criminal matter. thus he can just decline any contract with such corporation.

as for shavers. that is theft. which is criminal. and he should be in court and imprisoned for stealing other peoples 'property'

Bitcoin Investment Vehicles Beware – The SEC is Watching

http://bakerlaw.com/alerts/bitcoin-investment-vehicles-beware-the-sec-is-watching