Topic: [BTC-TC] Virtual Community Exchange [CLOSED] - page 24. (Read 316534 times)

Im talking about the definition of bitcoin and the governments jurisdiction over it. BTCT had no contracts, everything was "SIMULATED" as according to their terms and conditions. You cant compare "theft" with trading in btc.

Yes, Im familiar with the Securities Act of 1933 but you realize that judges cant legislate from the bench right?

Further, from your logic, the SEC can regulate my Pokemon card trading game if I sell contracts and speculate the value of rare Pokemon cards? No, there is a line between private property and government control. You ceding your rights to the government will make Bitcoin fail.

Indeed. tradable contracts issued again anything of value is a security. That can be gold, oil, bread or bitcoins.


The law doesnt mention rembrandt paintings either, you think that makes it legal to steal, vandalize or counterfeit ?


Read the context. The foreign currency swap is one of many examples of objects of the contract. But try reading the rest of the phrase too, like this part:
,he term ‘‘security’’ means any note, stock, treasury
stock, security future, security-based swap, bond, debenture,
evidence of indebtedness, certificate of interest or participation .

Note the absence of the words coal, corn, dollars, oil.
And bitcoin.

Doesnt mean it doesnt apply.

Value can be interpreted in any way shape and form. Craigslist lists items that are worth in value, all private sales.

Im not sure how you can say that something is illegal when it's not even law.

Im not sure what "law" you're referring to. I assume the Securities Act of 1933, which does mention "FOREIGN" Currency.

The law doesnt need to mention bitcoin. The law doesnt mention dollar or money either, it mentions "value". For something to be considered a security, it has to be a contract thats tradeable for value. That bitcoin has value is both obvious and established by a court (cf Pirate's SEC trial).


Thats what Pirate tried and failed. As posted earlier:

Shavers argues that the BTCST investments are not securities because Bitcoin is not money, and is not part of anything regulated by the United States
So Shavers essentially tried to say that Bitcoin is a bauble and that he was taking in digital points and giving out digital points that had no real world value. The prosecutors at the SEC disagree, arguing that Bitcoins “are both investment contracts and notes, and, thus, are securities.”
..
the judge sided with the SEC, giving Bitcoin his stamp of approval as real world money.

http://www.forbes.com/sites/kashmirhill/2013/08/07/federal-judge-rules-bitcoin-is-real-money/

It's time for decentralised exchanges or coloured coins.

I haven't read up on the coloured coins concept for a long time.

I have wondered why a new blockchain (same as an alt) couldn't be created and issued as a stock where the coins represent shares.

Of course minting would be restricted to a single central authority instead of miners - the company who issues the shares. There would be no miners and the central authority (floated company) would issue new blocks into the network as required to meet transfers between holders on it's own blockchain.

A separate blockchain could be used for each company offering shares as an IPO.

Shares could be transferred around and traded between owners just like any other coin.

If someone built a generic centrally controlled coin that could be used in this manner then there should really be no stopping it and anyone could create their own. Maybe there's some overlap in this approach with the coloured coins approach.

Firstly, I doubt his lawyers would say it was "illegal". No precedent. No law on the books regarding bitcoin and securities.

...
Firstly, I doubt his lawyers would say it was "illegal". No precedent. No law on the books regarding bitcoin and securities.

Further, you would WANT any litigation because if any federal judge said, this is just a virtual game as BTCT stated in their policy blah blah blah then that would be a win for bitcoin. Something the government does NOT want at all.

Chances are either he's just tired of doing it (doubt it) or he got a letter from SEC. Rather than caving he should challenge.

Firstly, I doubt his lawyers would say it was "illegal". No precedent. No law on the books regarding bitcoin and securities.

Further, you would WANT any litigation because if any federal judge said, this is just a virtual game as BTCT stated in their policy blah blah blah then that would be a win for bitcoin. Something the government does NOT want at all.

Let me explain what the most likely scenario is - and what the answers are then to your question and some other common ones.

Burnside retained legal counsel to advise on what to do to ensure BTC-TC was legally fine (that's already known).
His lawyers advised that there was no way he should continue doing what he's doing and that he needed to stop doing it.  And that he needed to stop doing it without creating further liability for himself.

• At that point he CAN'T explain what his lawyers advised him - as to do so involves admitting that he was breaking the law.
• And he can't sell the exchange as a going concern to anyone else - because if his lawyers told him BTC-TC was illegal then they'd also have told him that he couldn't sell it (as a going concern) to anyone else.  It's a bit like if you'd been dealing drugs : your lawyer would very strongly advise you NOT to sell your stock to some other dealer.
• And once your lawyers have told you that you must not do something then you lose the ability to claim that you believe it to be OK.  As if your lawyers strongly advise you on a course of action and you choose not to follow it they are typically going to ask you sign a statement that they advised you NOT to do what you're doing - so their ass is covered.
• He MAY be able to sell the code-base - as that isn't illegal.  But obviously he's not going to even consider doing that until the exchanges are fully shut down.

It seems highly unlikely to me that he's been told to close down by the SEC or any LE.  Were that to have happened then closure would have been more of a case of pulling the plug out than the gradual winding down that has been announced.  This feels far more like being told to stop by his own lawyers than a cease-and-desist or seizure by some government agency - they don't give you a month to sort things out in, they want immediate cessation of activity.

Although I ran multiple securities on LTD-Global/BTC-TC I was provided with no more information than the rest of you (and that IS how it should be).  As recently as yesterday I was in contact with him about sorting out a problem with the locking state of a new security I was working on.  I had, of course, already realised there was a pretty decent likelihood of BTC-TC closing or removing access from US investors/issuers - that became evident as a possibility as soon as signups/creation of securities was disabled without any explanation (plus the rushed addition of withdrawal addresses for issuers).

Can we still make deposits? Before last trading day?

Can we still make deposits? Before last trading day?

I would encourage those who are attacking Burnside with anger to turn their attention to the "regulators" that are apparently threatening to bring force into a situation that is peaceful and consensual. It's hard to do this because we don't know exactly who they are. We do know that they feel they can't compete in a free market unlike Burnside who eagerly endeavored to do so. They feel they must threaten force to maintain their position instead of enticing people to cooperate as Burnside has. For this reason I wish the best for Burnside and the worst for the aggressors.

We should take our emotions regarding this failure and channel them into a sustained effort to architect a better securities exchange system. Bitcoin has worked so well because the architecture was decentralized and Satoshi was anonymous. We need apply these principles to the development of a more resilient securities market.