Topic: Nefario GLBSE (Read 28552 times)

Its the same reason taxi plates cost $250 000 plus.

Going to be interesting when you can issue securities using bitcoin itself or open transactions.

The law is an ass basically.

Like Fox Mulder, they want to believe.  If reality is different from what they want to believe, then all of their dreams of easily gained wealth go down the toilet.

Thank you, I was about to cite something along the same lines.  Where do people think that you need to buy something with "fiat" to break laws?   Just because it is hard to trace something to you doesn't mean you not break the law in how you use it.

It's honestly pretty useless to simply quote legislation.  What really matters is the case law - ie, how that legislation has been interpreted by courts in the past.  It's further complicated by the fact that many cases involving violation of financial services regulations don't even get to court.  Service providers agree to civil forfeiture in return for not being prosecuted - this is not surprising as not only is the cost of defending against prosecutions significant, the maximum penalties which a court could impose are staggering (literally in the millions per offence).

I would just caution anyone thinking Reg D (Sec rules 504-506) is an easy loophole to think again.  It is a legal mine field and in the US one is subject to both federal securities law and state securities law.  If the company is in VA, the potential investor is in NJ then that is three sets of securities laws (Federal, NJ, and VA) that the offering needs to be compliant with.   Often the states have incompatible requirements.  In VA for example it is simply defacto impossible to offer anything under Rule 504 due to the way the federal and state regulaitons conflict.  Lastly I would point out that Reg D is intended for PRIVATE securities.  Running a trading exchange is going to blow any cover under Reg D wide open.

Generally Reg D really only makes sense if you are looking to raise $5M or more in equity because because the legal and regulatory costs you are going to spend a couple hundred grand just getting the offering off the ground.  Hopefully the "crowdfunding" provision of the Jobs Act will make it easier to RAISE capital but it was never intended to allow to make it as easy as "ebay for stocks" or allow any type of public trading.

Everyone should keep in mind that, while securities are regulated, governments usually allow for exemptions in certain cases. For example, in the US you can incorporate and start raising funds while still being exempt from certain reporting and insurance requirements, see SEC rules 504-506.

What a crock of shit.

If you apply to register a security a number of things can happen.  It can be approved for registration.  It can be exempted from the need for registration. It can be given a special classification, such as being made available only to sophisticated investors and not being offered to the general public.  And it can be outright classed as a product which can't be legally offered.

The law is not obliged to provide you with a remedy if it's accusing you of a crime.  It's not obliged to provide you with a legal means of doing anything you want.  The onus is always on you to be aware of the legality or otherwise of your business activities and failure to seek legal advice is always going to be interpreted as having no intention of complying with any regulations and laws applying to your business operations.

Even apart from the securities issues, most of these entities are likely breaking a ton of tax laws by not sending information about their users' financial activity to their country's taxation authority and for not not with-holding tax where inadequate user information has been provided.  They're likely also required to issue their users with financial activity summaries in a specific format at the end of the financial year, too.  I haven't seen a single Bitcoin related financial service mention making such statements available for their users.  I suspect that at least some Bitcoin related services would refuse to issue such a statement even if a user requested one so they could include Bitcoin stuff on their tax return.

No they don't have to be bought with fiat. They can be bought with anything of value, or else anyone could get around this law by buying corn/cows/bitcoin and trading with that. It's not fiat so it doesn't count isn't gonna fly.

If you think the govt hasn't thought this through and don't have a plan or law in place for loopholes you're sorely mistaken.

With the tiny detail that I knew just yesterday that he never consulted a lawyer. I did not expect that since it is a too big blooper.
BTW: now that I learned to never trust anyone in BTC-related matters, I will keep my coins in cold storage until I sell them. Guess the impact on the BTC economy if most do the same.

Exactly and if you involved yourself in his operation still you have none other than yourself to blame.
Risk it's yours.

You must have missed something. If he wanted to stay beyond the law as he always said, he should have gone the silkroad way on the .onion network or at least offshore hosting. Instead he made a huge mess announcing to the world to be beyond the law and registering an LLC at the same time (and not asking a lawyer about it). How can one be so retard?

Hello, this is after Friday.

What we have going on in Bitcoin community is an epidemic of ignorance and oblivion. Most were trading, IPOing, investing, and speculating without any due diligence, without research of legal implications, and ultimately without knowing what they were getting themselves into.  Some even suffer from mental inability to distinguish their own ideological views and fantasies from reality.

Nefario may be doing the right thing for himself and for the Bitcoin in the long run. Time will tell.

I agree, and thats why I think people like GigaVPS are in a lot of trouble (particularly since he happens to be American and not anonymous).

Thats not what I read in the securities act of 1933. They have to be traded for value.

(3) The term ‘‘sale’’ or ‘‘sell’’ shall include every contract of
sale or disposition of a security or interest in a security, for
value. The term ‘‘offer to sell’’, ‘‘offer for sale’’, or ‘‘offer’’ shall
include every attempt or offer to dispose of, or solicitation of
an offer to buy, a security or interest in a security, for value.
http://www.sec.gov/about/laws/sa33.pdf

It doesnt mention fiat and good luck making a point for court that bitcoins have no value.

Well take a deep breath then you'll be alright.

That's a long sentence.

But unregistered securities havent been sold thats the point, because it has to be bought with fiat, therefore nothing was officaly sold if nothing was offical bought, the law must provide a remedy if its accusing you of a crime, therefore if you had approached the alleged authroitys and said I need to register these security's they would of turned you away because they would not recognise them as security's therefore you would have had no remedy in law for the accused crime. 

GLBSEX did not sell these securities, the issuers did.

It's equivalent to operating an unregistered whorehouse in the financial world. As TPTB want to monopoly this very profitable industry, they make the license fee prohibitively  expensive.