Topic: DNotes 2.0 - Staking, CRISP Interest, DNotes Pay - page 213. (Read 148848 times)

I'm pretty sure the direction this is going is that it will become official that ICOs *are* securities, and as such need to be registered appropriately. If I wanted to run an ICO, I would be making that assumption.

It should not be a surprise that, “The Securities and Exchange Commission is expanding its focus from the companies developing initial coin offerings to the hundreds of lawyers who are guiding them through regulatory gray areas.” That warning bell has been sounded a few times.

Unfortunately, regulating the virtual currency world is easier said than done. There are no quick or easy solutions. Until now, the SEC and CFTC’s enforcement actions have been focused on bad actors involved in frauds and Ponzi schemes. They pledged to “continue to work together to bring transparency and integrity to these markets and, importantly, to deter and prosecute fraud and abuse.” Most certainly. more enforcement actions are expected.

Some regulations may be healthy for our industry. But how do we go about regulating leaderless decentralized entities? Who would be responsible in filing disclosure statements  and keep up with the reporting requirements? 

Russian Scientists Detained for Attempt to Use Supercomputer for Crypto Mining

https://dcebrief.com/russian-scientists-detained-for-attempt-to-use-supercomputer-for-crypto-mining/

No surprise here:


The SEC Man Cometh for ICO Attorneys

Lawyers advising the booming cryptocurrency and token industry may soon face a reckoning from the federal government, former SEC officials told Bloomberg Law.

The Securities and Exchange Commission is expanding its focus from the companies developing initial coin offerings to the hundreds of lawyers who are guiding them through regulatory gray areas. The industry argues it doesn’t fit neatly into existing legal frameworks as global regulators consider whether virtual tokens might be securities — which require strict regulatory compliance.

Attorneys that intentionally misadvised clients or failed to advise disclosure that a token was a security to investors could be fined, prohibited from practicing before the SEC, disbarred, or criminally charged, attorneys told Bloomberg Law.

“I can’t imagine this will end pretty for our sector,” said Aaron Wright, a professor at Yeshiva University’s Cardozo School of Law and chairman of the Enterprise Ethereum Alliance legal industry working group. “It could be pretty gruesome.”

The pressure on practitioners stems from their role in classifying the new digital assets created by ICOs at a time when the industry is experiencing explosive growth. Coin offerings raised between $4 billion to $6 billion in 2017 alone. There are no regulations or case law that guide digital asset designation, so attorneys have relied on decades-old precedent — such as the Howey Test — to help companies decide if their assets will function like a currency, security, or a utility token, which can be redeemed for future access to a product or service such as a game.

SEC Chairman Jay Clayton and other regulators have said most ICOs they’ve observed create securities, which require sellers to register with the commission and comply with more stringent laws.

Clayton has repeatedly targeted ICO attorneys in recent remarks, and signaled potential action against practitioners. In at least three instances since December, he has said attorneys need to act more responsibly to uphold securities laws when advising projects and not mislead investors about the nature of a token.

Clayton signaled that more token offerings should be registered, and that ICO attorneys may be failing their clients in that primary analysis because the clients are willing to take the risk. “These lawyers appear to provide the ‘it depends’ equivocal advice, rather than counseling their clients that the product they are prompting likely is a security,” Clayton said Jan. 22 in a speech to the Securities Regulation Institute in Washington.
 
....

Some attorneys practicing in the crowded securities space have worked aggressively to market their services to the burgeoning ICO industry. A suspension or prohibition from representing clients before the SEC could be a major blow.

full article - https://www.bna.com/sec-man-cometh-n57982088366/


"There are no regulations or case law that guide digital asset designation, so attorneys have relied on decades-old precedent — such as the Howey Test "
 
Something doesn't add up here. Applying the Howey Test to virtually any of them, casts little doubt they are securities. Perhaps the "experts" didn't know as much as they thought they did, which is often the case. Or, they are basing their decision on the 'facts' they have been given... I guess we will find out when the gavel falls.

For the next few days, and likely on and off for a while thereafter, I will be working on the white paper. Tim has gotten most of the information in there, and has done a great job describing how DNotes and DNotes Global Inc will work together as a system. Now it will be a matter of refining the text, the story, and the flow to make it easy to understand. Formatting, which we have decided to use a web page format for its flexibility and ease of sharing. Graphics and visual aids to explain complex concepts.

The goal, after reading our white paper, will be ensure the reader understands the whole system, the business model, and how all of the components work together and make sense as a entire system to make DNotes a globally accepted supplemental digital currency for the benefit of everyone.

As it stands now, DNotes stakeholders really have zero vested interest in the fate of ICO's. It would be a foolish waste of resources to lobby for lenient ICO regulation, when we have already charted a path to do an IPO that is legal by todays standards. I do agree that the ability for the little guy to invest and raise capital is important, but not when it involves do nothing schemes that sell mystery and deception to make their founders rich beyond belief. I don't think I've seen 10 projects out of the hundreds and hundreds of ICO's that have even come close to accomplishing what they set out to do.

Arizona Senate Passes Bill Allowing Crypto Use for Payment of State Taxes

https://dcebrief.com/arizona-senate-passes-bill-allowing-crypto-use-for-payment-of-state-taxes/

Got you, will let him know.

Tim, that must be a very exciting project to get involved. We are all proud of your involvement. It is vital that the political and regulatory leadership gained a good working knowledge of this generational opportunity that could truly change the world if we can work collaboratively together, instead of against one another.

Again, I was impressed and deeply encouraged by last Tuesday CFTC and SEC Cryptocurrency Senate Banking Committee hearing testimony. Everyone involved was quite knowledgeable, forward-looking, and supportive of innovation. Chairman of the CFTC said it best, “We owe it to this new generation to respect their enthusiasm for virtual currencies, with a thoughtful and balanced response, and not a dismissive one.”

Thanks for your support and encouragement, RJF. As our industry becomes more matured, I believe that more investors will appreciate that "trust" is still a very important factor when hard-earned money is at stake.

" It would also require securities exchange rules that fall outside of existing requirements "  Right! As I outlined above, this would be a different animal entirely. And due to the elastic nature of crypto, it would need to be flexible in all directions. I think it can be done with some effort and assistance of the crypto community, in fact, that part is mandatory!

PS: Pool's front end is down.

Great work Tim, you are helping to shape our future and build an amazing network.

I believe one day ICO can be regulated and exist in the centralized world. A light touch regulatory framework initially would be helpful to allow things to come together. This has to be very carefully planned from the side of the regulators, as a mistake could have dire consequences. This light touch framework could include, the ICO issuers would have to be responsible for ensuring the reporting of allowing users on the network only after they have verified themselves and met the outlined requirements. It would also require securities exchange rules that fall outside of existing requirements for those that exchange securities today. I don't see how it could happen without cooperation from many parties, and could take a long time to get to that point, as well as a period of time thereafter to bring it in line with existing regulations.

Allow me to deviate slightly here due to what you were saying about regulations. I wonder, how hard would it be for the SEC to create a seperate class for crypto ICOs? The regulatory structures already in place for IPOs could be culled and realigned while being repurposed to fit ICOs without an inordinate amount of work I would think. Something like "Crypto IPO Lite" for online companies. The regulations could be rather simple I would think, something along the lines of verification of the principles, some sort of bond (maybe depends on amount to be raised and final score for the project), proof of concept and usefulness of the end product along with a real white paper and business plan.  

Add background checks and proof of concept and permit them to raise some preset figure depending on scoring those items. Really not much work involved but the pre-qual would show commitment and follow through. It's really a shame that most of these ICOs start out with good intentions but get derailed or smothered in the amount of work required to bring their product to market. Perhaps an online ICO incubator could be available to assist with all the ins and out of turning a crypto idea into an online business. An incubator could also score a project in advance and help in making a decision to proceed or not.

Just some thoughts. I like to take real world systems and project them into the crypto world. I think this will become a speciality and a profitable venture soon enough!


 

I absolutely love that comment RJF. In my view, success can be boiled down to the expression of one's vaunted principles and virtue. Many projects will likely fall by the wayside when they realise that institutional and user reluctance to use their products is the result of them taking an easy route, that has led to regulatory hurdles that can't be overcome but to begin again. Many in the ICO realm have gone with the 'easy route', that doesn't necessarily guarantee long-term success. The messaging in this forum has always praised the novelty and benefits that Initial Coin Offerings may offer, though we have always remained cautious on them with respect to our expectations of regulator responses to security checks that ICO's have historically circumvented. We have often discussed the need for sensible cryptocurrency regulation, and DCEBrief was created to aid these stakeholders as an education tool.

Earlier today I submitted a proposal to one of the largest New Zealand public-sector organizations that is trying to increase their capability in the cryptocurrency space. The consultation document was created in response to a request forwarded to me that originated via the commissioner of the organization themselves, and it is my current understanding that my early session(s) may involve educating executives from other organisations / sitting board of directors. I am very privileged to be in a position to at least help out however I can in my corner of the world. The benefits of getting countries to one-by-one take sensible steps to understanding and making room for cryptocurrencies are enormous, and it is much better to get involved when the policies are being drafted, rather than after the fact. I think that New Zealand could become a huge market for DNotes, given that no cryptocurrency but NAV have a presence in the country, and all applications built in the country are created on proxy platforms like ethereum or outsourced to overseas firms, which mean less control and customizability for those organizations that commission development.

That said, the first step is getting the regulations right.

Absolutely Alan! In order to maintain integrity, you have to "practice what you preach". Ignoring this is the downfall of so many startups and small, growing companies. In all fairness, yes, things always deviate from the the original plan but, I will argue, unless it is regulatory or legal, there is always a way to bend and reposition without loosing site of what attracted investors and customers in the first place. So many startups make the usually fatal mistake of abandoning their guiding principles and loosing site the goal when confronted with problems they see as insurmountable.

It's always easier to give up or, compromise your principles to survive, but, in the long run there are no true rewards on that path.

Crypto Supporter Running for Congress in CA

https://dcebrief.com/crypto-supporter-running-for-congress-in-ca/

I share your values and sentiments that even small investors should be given the opportunity to invest in situations they see fit and not be deprived of those rights by limiting them only to accredited investors. As part of consumer protection, I am less concerned about limiting their investment to 10% of their annual earnings or net-worth.

As you may know, DNotes Global has selected the more demanding funding program using Reg. A+ Mini-IPO Title IV Tier 2 to raise up to $50 million from accredited and non-accredited investors worldwide. We could use Reg. D 506(c) to raise unlimited amount only from accredited investors. That is the most common funding vehicle at a significantly lower cost. But then, "DNotes - the inclusive digital currency, for everyone."

I like the points being made here by RJF and MiningHabit that far too many people are excluded from private equity funding stages of the business cycle. Everybody should be able to participate. That is one reason why I have so much respect for the DNotes approach, and why I'm absolutely certain we have taken the right path. Just like the tag line we have adopted in our videos going forward:

"DNotes - the inclusive digital currency, for everyone."

Today DNotes costs $0.038 price.  I think this coin can do more over the coming years

It is a conflict as there is good and bad on both sides. After talking to Alan and all the research he has done in the crowdfunding arena, I am much more comfortable that we are moving in the right direction and these types of investments will be more open to everyone, and not just the rich, in the future. You are absolutely right, you should have been able to make an investment in a company you believe in, and risk your own money to do so. History teaches us that having it wide open can lead to catastrophe, however those catastrophic events were in a very different time, today it could be handled in a different way to ensure risks are well known and documented as well as promotion and representation efforts are tempered.