Topic: The altcoin topic everyone wants to sweep under the rug - page 13. (Read 24377 times)

i have lie nothing. you are just coming out of a rat hole, you have no reputation or credential in my book

Dude you are hallucinating. My username history has nothing to do with coin names. I never held any coin but BTC in my entire life thus far. You are a liar and you are breaking the law by writing false statements attempting to destroy my reputation with lies.

from your signature i can see you have quite a lot of coins/id under your belt
this OP is just another way for you to explore ways to creating scams

The former is not the same as the latter. I have not sold anything about my own coin yet. Stop your lying. Selling my contracting services privately on some technical work I did is perfectly legal and normal activity for any software developer. And go make these posts in an appropriate thread. You are entirely disrespecting the topic of this thread. How many times have you been warned, then you reply you don't care about the topic of the thread. Are you trying to get banned from the forum.

you have said you have created a coin or a dev of a coin. whatever that shitcoin is not my concern or waste time to look into it but i'm sure you already have created some coins.
now you selling your tech or already sold your tech to someone else instead implementing this tech into your shitcoin.

Who has bought into anything I have done? You are lying. So the scammer is you apparently.

What is wrong with you man? Are you delusional and insane? You continue to accuse me of things I have never done. Please take your meds.

the practice of a crook, dishonesty and scammer wannabe. the people who are bought into his shitcoin now have nothing he's promised them. i have seen many many of them in this forum section alone. crypto world bringing all the crooks into one world.

You clearly have mental problems. How many times have I explained to you that I am not yet at testnet and I am not accepting any sales on my token project before testnet. As for selling my Zero Knowledge Transactions design and offering to help other altcoins implement it, the sale has already taken place with a private party.   I no longer have cash flow issues.

i don't give a crap anyway. only dumb morons would fall for your shzit. creating a shit coin, think he already creating something special call zk but don't want to implement with his shitcoin rather want to sell it. the guy never heard of anything call testnet.

It was entirely off-topic (noise) to this thread which is why I reported to the moderator and both your comments and mine replying to you were deleted. And I will report your off-topic post again. This thread is not about me nor my coin. You are posting your personalized slander of me in the wrong thread. Did you not even comprehend this thread is about analyzing the law for regulation of securities as it applies to crypto-tokens.

I agree with your logic. I didn't intended to imply otherwise. I inserted a parenthetical in the last paragraph of my prior post to clarify.

Also I didn't intend to imply that other forms of investment fraud wouldn't still apply to Bitcoin, such as insider trading, etc.. I was only writing specifically to whether crypto-coins are illegal securities or not securities at all.


Agreed. Note Ponzi schemes are not the only activity that cause shares of crypto-currency to fall under the securities law, as I explained about the implied investment contract.


You are reinforcing my point! If you are predominantly/prominently discussing with the community about speculating on the exchange value of the created tokens, and not exclusively (or at least predominantly) to users of the currency, then evidently you have not yet created a currency and have instead created a share in an investment and thus an implied investment contract.


You have shown nothing to contradict my interpretation, and you have shown no statements nor actions from the SEC that contradict my interpretation. In fact, I clearly highlighted in bold, red from your quote of the SEC and they specifically disavow the assumption that their regulatory powers are inhibited in the case of cryptocurrencies.


The law is clear enough. They allow you to willfully incriminate yourself in the meantime.

How much simpler can the SEC vs. Howey Supreme Court decision be? Promote to investors shares in any common enterprise (i.e. any collective) that are unregistered then go to jail. Enjoy.

I think the biggest flaw in your legal reasoning is that you say that if an asset gets to a certain size then all entities will be free to legally and openly speculate on it.  
  
But if something is an illegal security to start with, it doesn't suddenly become legal just because it gets big enough.  Illegal is always illegal, regardless of size.  
  
In this case the SEC merely has a bigger case to bust.  If something is illegal, it will always be illegal.  If you run a ponzi, you can rest assured from the moment you accept funds from others you are in violation of the law and even if your scheme grows to be worth billions of dollars you will still be in violation of the law.  
  
On the contrary, a pure PoW cryptocurrency is a legal currency from inception onward and does not fit any of the "illegal activities" that the SEC has outlined in *any* communication thus far.  
  
You are claiming that people should worry based on your interpretation of a law that doesn't even apply here, and which the SEC by its actions and statements have shown they do not intend to pursue.  
  
But I do agree it's time for the SEC to clarify laws regarding cryptocurrency, and once such clarification takes place I will be happy to comply with it.  

In my reading and remember the disclaimer that IANAL, the existence of a "centralized issuer" (or assumption that "issuer" must directly receive the buyer's funds) does not appear to be the key finding of the 1946 SEC vs. Howey Supreme Court decision which clarified the meaning of "investment contract" from the original Securities Act of 1933.

It appears that the implicit "investment contract" (which is created when the shares are offered and/or issued) is created when the investor is able to form "reasonable expectations" of future profit or gain that depend on or are based on the promotion or efforts of the entity which is in the position to create this level of expectation. In other words, if there are shares issued (by any means) and there are individuals or legal entities who for what ever reason are interpreted by investors to be capable of creating a reasonable expectation of future gains or profits from the said shares, then those shares are now securities because in effect the investors's capital (and expectations thereof) are being secured by these "promotion or efforts". This is all of course w.r.t. to a "common enterprise" meaning for example in our case a cyptocurrency, but the decision specifically disavows that any particular circumstances would weaken the general rule, so the cryptocurrency's protocol and issuance between decentralized or centralized is irrelevant. What is relevant is whom do investors believe is in control and who was actually in control? Evidence that can be presented would include the ability to move prices in small markets with their pronouncements (a form of promotion), being a lead developer or in the lead developers' primary channel of public communication and making representations to potential investors in the coin.

In short, my interpretation is that if you want your cryptocoin to not be an illegal unregistered, investment security (due to an implied investment contract), then the developers and affiliates or close associates and key community members, should make no discussions at all about investment in the coin except to state that the coin is not for investors and losses should be expected. And to instead communicate with users and potential users of the coin. And if any money is raised from the community, make sure this clearly selling software to users where the tokens are required to use the software and protocol (or donations for development of the software with no tokens given in return) and that the project is for users of the software. Avoid any association with investing, except of course for free market activities that no one can control, e.g. that investors buy your tokens on a decentralized exchange. And all public communication should disclaim any investing purpose nor expectation of gains.

What is not clear to me is that if when the shares are created (i.e. issued) there is no implied investment contract and thus the shares do not fall under any regulation of the Securities Act, but later some outside party is able to create "promotions or efforts" that cause new buyers of those existings shares to have "reasonable expectations" of gain, do those pre-existing shares become securities. So far until I see case law otherwise or other convincing arguments, I assume the courts would rule that only the state at the time of issuance matters. But as in most things, it will probably depend on the specific circumstances. For example, if the developer is not able to squelch such outsider from creating such expectations amongst the investment community by for example threatening to do actions would could destroy the perceived control of the outsider (e.g. threatening to quit developing so the outsider's promotion is ignored and refuting the claims of the outside promoter), then perhaps it can be said the developer has been derilict in maintaining the perception that the software is not for investors. And note that the typical lockup period for shares that are unregistered, legal securities is 1 year, so after 1 year I think the developer wouldn't have to do anything assuming that the original issuance (and perhaps also the entire 1 year hence) was devoid of any implied investment contracts on those shares.

Again to make sense of this, refer to my reply to americanpegasus, wherein I explained that when shares are issued/created and they are securities (due to for example an implied investment contract), then all those shares transferred (by any means including mining) that did not comply with the exemptions to registration, are ostensibly ILLEGAL forever (but I have yet to verify this except the law doesn't seem to make sense otherwise). Any one who touches those (especially those promoting them to other investors) is apparently committing wire fraud and other crimes, but please check with an attorney to verify. Whereas, when shares are issued/created and there is no implied investment contract (only a relationship with users of the software in our crypto-token application as I suggest), then my interpretation is these are not securities and thus not illegal even if they are transferred in any quantity to users (of our software our case) who would otherwise be non-accredited and non-sophisticated investors if there did exist an implied investment contract.

Once the cryptocurrency has become bigger and uncontrollable by any group (and assuming the original issuance did not create illegal, unregistered securities) and no one believes any one can effect the price appreciably with any efforts or promotion, then investing discussions can be freely held without any risk of creating an implied investment contract as specified above. I do believe Bitcoin has reached this level. The altcoins not yet. And the way the altcoins are being managed, all of them so far are probably unregistered, ILLEGAL, investment securities.

What's most fucked up us we are here worried about this petty bullshit, yet members of Congress openly engage in the highest forms of insider trading and then flaunt their 'untouchable' status. 
 
The Oligarchy is official. 
 
http://www.activistpost.com/2015/10/12-days-before-08-crash-congress-was-secretly-told-to-sell-off-their-stocks.html

IANAL, but IMHO anything with centralised issuance (i.e. Ripple) is likely to fall under these laws, although it does depend on whether anyone cares enough to do anything about it. Personally I don't mine, so any coins I have are either bought or donated, which I think covers us fairly well, but obviously that requires a volunteer dev team.

It sounds like all of your arguements (which I still don't agree with) revolve around me selling Aeon or Monero after my efforts.  
  
I haven't sold any to date, only bought, and will simply continue to buy and hold.  It seems impossible, even in the most draconian interpretations of laws that don't even exist (which you seem predisposed to invent and then maliciously apply) that someone who does not sell - only buys - would be liable for any misconduct.  
  
Should the time come that I would actually like to trade some of my Monero for Bitcoin, the currencies would be so widespread that this would be a non issue. (A Winklevoss twin selling some Bitcoin isn't going to get them brought up on any charges).  
  
As well, it's likely that by that point I would simply choose to spend them directly with a merchant (also a succinct way of proving no wrongdoing).  
  
I feel like you are grasping for straws on this topic, and while being a little paranoid is healthy, it makes no sense to worry about complying with laws that don't even exist yet.  If you were right, then there would be no way for anyone to buy or help promote any new cryptocurrency legally, and to date *nothing* they have done has shown they are taking this stance.  If your flawed interpretations were correct, no US citizens could legally contribute to new cryptocurrency.
  
Since that's obviously not going to happen in my case, the issue is a nonstarter for me.  I'm going to be part of the cryptocurrency movement, even if all the laws regarding it aren't finalized yet; please remember that this isn't 2011; this is 2016 and things are much more certain now. 
 
Also, it is a reasonable conclusion that considering the SEC continues to refer to these as currencies, and US based exchanges are being allowed to continue operating as long as they comply with KYC laws, and there is no way to legal way to register your involvement with them despite their obvious legality, no reasonable citizen would be expected to comply with measures which don't exist.  
  
Please realize that an even stronger precedent has already been set with Ethereum, which major players like Goldman Sachs have invested money into even while the "insiders" have cashed out of.  This would be what would put me on edge, but since private citizens can observe this happening loudly and publicly without even so much as a statement against it by the SEC (while they have chosen to rapidly respond to other issues in this space) then again the precedent is set that cryptocurrencies cannot have any 'insiders' who are subject to these provisions.  
  
You can imagine all you like how they *might* have tried to leverage these laws against crypto, but they haven't, leaving individuals with no way to comply with them and still be involved in promoting a cryptocurrency..  
  
But sure, perhaps if Monero takes off then it would be a wise use of $1000 to hire a lawyer to write a letter to SEC inquiring about my situation, just to show I had made an attempt to comply with laws above and beyond what is expected.  It can't hurt, but I maintain that you are grasping at straws here.
  

In my opinion, you have some egregious errors in your analysis, presumably because you are moving too fast trying to digest a few google searches and haven't taken the time to read carefully the other thread in the Bitcoin Discussion forum that is linked from this thread?

 

In your first quote, that is not the SEC's opinion, but rather a letter to the SEC. You misunderstood the SEC's guidance in second quote you provided.


See the SEC vs Howey Supreme Court decision (which I covered in detail in the other thread in the Bitcoin Discussion forum that is linked from this thread); if you create an implicit investment contract where investors have reasonable expectations of future gains secured by your (collectively the insider group's) efforts and promotions, then you have caused the cryptocurrency be a security which is secured by you all. The implication on you if you are not the "issuer" (and the SEC has more leeway as to definition of "issuer" than you are thinking due to your misunderstanding of the SEC guidance you quoted), then you can't sell the restricted coins for 1 year. However, what you are failing to grasp is that Rule 144 only applies to restricted, unregistered securities, i.e. those sold to accredited investors or one of the other exemptions from registration. If any of the unregistered securities (the coins) were sold to non-accredited investors (and did not qualify for any other exemption from registration) and thus are in an illegal state, then afaik purchasing and reselling these implicates you in many forms of fraud, such as wire fraud. Rule 144 applies to restricted securities that were sold only under the allowed exemptions and not securities that were sold without an exemption and thus are entirely illegal. If you perpetuate that crime (even you were not the issuer) especially with your willful promotion and efforts securing the gullible investors' expectations and the investors lose money, you are possibly in for a whole lot of hurt in the future. IANAL, I suggested you consult with an attorney. This is no matter that you can be certain from 15 minutes of googling.


Afaik, the SEC has not issued any such guidance. You misread what you quoted below. The SEC vs. Howey Supreme Court decision and case law hence specifically disavow any schemes employed to obfuscate the actual implied investment contract.


Haha, afaics you totally miss the point. This person is complaining to the SEC and making the argument that cryptocurrency will be used to circumvent securities regulation. He is essentially challenging the SEC that if they don't go after cryptocurrency then the SEC will be irrelevant because instead of complying with Rule 144 and 145 as not admended the way he is requesting, he argues people will just use cryptocurrency to try to circumvent the requirements entirely by arguing the cryptocurrencies are not securities. But all he is doing is inciting the SEC to crack down on cryptocurrency at some point in the future. The SEC is likely using this as an exhibit of their need to crack down in the future.

Also don't be confused by the underlined sentence. It is does not say an issuer is only one who sells coins directly to buyers. If you think it says that then you have serious english comprehension failure and also failure of the context of the SEC vs. Howey Supreme Court decision and subsequent case law.


And you need to read that document more slowly and carefully.


You have serious reading comprehension failure if you don't see that the above says nothing to support your incorrect summary.


And afaics you don't have a clue. And this is the last time I am going to suggest to you that you be get serious and study this properly.

Please I don't have enough free time go through all your sloppy research again if you do it again. Please if you want to rebut, at least properly read both threads and really immerse yourself in the issue properly.


Oh my. The law doesn't work that way son. Ignorance of the law is not a valid form of criminal defense. The SEC warning against Ponzi does nothing to absolve your culpability under the law for being involved in promoting, offering, and selling illegal, unregistered securities.
  

And if they listen to you, they are in for potentially a world of future hurt.


No it does not. Going for low hanging fruit doesn't mean they aren't biding their time before they destroy the crypto-currency wildwest. They are probably letting it run for now because the Winklevoss twins haven't cashed out yet and also because the phenomenon is not big enough yet. After the next super bubble and then the global crash of the USA into the economic abyss after 2017.9 is when the witch hunts are likely to come flying from every direction.


I don't think Bitcoin is a security, plus Coinbase has backing from the global elite and is thus likely shielded from the SEC. Poloniex is a poignant example because they trade so many different kinds of altcoins. But I think they can argue that they have complied with every legal guideline they've been made aware of and they are not promoting any altcoins (rather than just offering a service for trading that is indifferent as to which coin is better than the other). Those who are both promoting and securing the securities with their efforts, while also reselling ILLEGAL, unregistered securities are potentially much more culpable. Poloniex can get a slap on the wrist later perhaps or just be liable at the corporate level and not personal incrimination of the principles. Whereas, you as an individual and as a promoter...falling directly under the SEC vs. Howey Supreme Court decision...
  

You think...are you sure you have thought?

Ok TPTB, your concerns have caused me to do a search of the SEC website to determine my best interpretation of current law and guidance as issued by the SEC themselves.  I'll quote what I think are the most interesting sections of each.  tl;dr: As long as none of the 'insiders', as you call us (mods, devs, public personalities) are directly offering these assets for sale, are calling them "investment opportunities", or claiming they carry no risk I think everyone is in the clear.  I would expect non-'insiders' would be even further in the clear as the SEC has firmly established by precedent that as long as cryptocurrencies don't claim to represent ownership in any venture, they are exempt from classification as securities. 
 
To the details, I found this "concern" letter published: https://www.sec.gov/comments/s7-06-13/s70613-504.pdf 
 
 
 
Here's a direct link to Rules 144 and 145 elaboration: http://www.sec.gov/info/smallbus/secg/rules144-145-secg.htm 
 
Second, here's an article directly written by the SEC warning investors of Ponzi schemes conducted with cryptocurrencies.  The smoking gun here is that by the SEC's own language they make clear distinctions in the language they use between cryptocurrencies and the "investments" that can be made with these currencies:  http://www.sec.gov/investor/alerts/ia_virtualcurrencies.pdf 
 
 
 
From what I can tell here, as long as you are a promoting an actual cryptocurrency which acknowledges the risks you face, doesn't claim to represent ownership in anything, and doesn't propose to be its own trading platform you are good.  Especially considering they have already released guidance on this (so if you run a Bitcoin ponzi now you have no excuse; you will face charges) then it would seem they have established legal precedent for people innocently speculating in actual currencies themselves. 
 
I can't find any dangerous language there; everything makes me feel like everyone involved in building and promoting a cryptocurrency is on legally solid ground. 
 
Finally, another link where the SEC has moved to prosecute someone who ran an exchange that sold crypto-stocks (not the raw currencies): http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370543655716 
 
This further draws the line in the sand between what is defined as a security and what is not.  The fact that US based exchanges such as Poloniex and Coinbase have not had to register as securities exchanges is enough to draw conclusions to this fact, and consistent language like we see here just solidifies the case. 
 
I feel confident and comfortable that no rational decision by the SEC can come to the conclusion that the currencies I'm involved with: Monero or Aeon are anywhere near a Security.  For sure no other users are affected and should feel free to speculate as much as they like, but I'm not a lawyer so this is a non-professional opinion.  As I have said, going forward I personally will abide by some self-imposed rules (even though I suspect I would be fine even if I did not).  I will not refer to either of these as an "investment opportunity" or being "without risk" and will publicly disclose that I own significant amounts (if I can ever *acquire* significant amounts of either!  ).  I also will not be offering any cryptocurrency for sale. 
 
I think if the SEC wanted to put their foot down and classify any of these as securities they would have done it already, and their 6-year hesitance will cost them the ability to pursue that route even if they ever tried it. 

I don't think you understand the key essence of the thread.

The Howey decision clarifies the "investment contract" clause of the Securities Act, that promoting a reasonable expectation of gains where the investors have any reason to base their decisions to purchase on those pronouncements has converted what they are promoting into an "investment security", because of the implicit "investment contract" created by those pronouncements and the resultant "reasonable expectations" of investors.

My interpretation is that you are overemphasizing the "common enterprise" because Howey decision and court decisions hence have stated all special cases will still apply to the economic reality that the Securities Act's (stated) purpose is to protect unsophisticated (unaccredited) investors from losses due to faulty disclosure.  Just because the shares are coordinated in a decentralized protocol, doesn't mean the promoters have not created an implied investment contract with the buyers. The "common enterprise" is the mutual participation in the decentralized system of shares. Participation as a user does not in my view cause the shares to be "investment securities", as any game token wouldn't be an investment security if the tokens are not promoted to investors (and especially if there are disclaimers from the "controlling or influential entities" stating no investment gains should be expected at all and that the tokens are intended for users only). Rather it is the promotion of the shares to investors that does. And IMO it is much more likely to be prosecuted when those doing the promoting are "controlling or influential entities" in that "common enterprise", i.e. the developer(s) who can introduce new features and whose reputation drives investor confidence and ditto influential community members or foundation, especially those endorsed by the lead developer(s).

I did review the thread; nowhere did I see how a cryptocurrency (a network of bankers that will accept and use a token) can be considered a "common enterprise" because a cryptocurrency is essentialy a resource (bank). The promoters do not operate a business; no one can expect anything of them.

Yes, the courts could classify your crypto as a security, but take a look at the TOS page on banx.io regarding BANX shares and you will see that these crypto-shares are really just 'donations to a for-profit company'. As far as other cryptos go, it is quite a stretch to say that they represent interest in a company, business, or enterprise.