The truth is that many ICOs are going be securities, but moreover, there's a massive universe of traditional securities that can benefit from blockchain. I'm working on a project now that's looking to do just that. You can find the ANN post here and take a look.
https://bitcointalksearch.org/topic/m.35980123
Topic: Which crypto-coins are "investment securities"? Implications? (Read 6079 times)
I'm not affiliated with CoinCenter, but this topic interests me so I thought I'd share a helpful resource:
https://coincenter.org/entry/framework-for-securities-regulation-of-cryptocurrencies
I am very new to this ecosystem, so at the risk of embarrassing myself, I'll give my 2 cents. Disclaimer is that I'm not sure if there are any 'right' answers currently, because the statues and rules promulgated by the SEC together with caselaw re: securities clearly did not specifically contemplate the decentralized retail-investor crowdfunding of 'systems' run by computer code. As mentioned previously though, the securities laws in this respect are drafted for broad interpretation, and the caselaw often isn't convinced by innovative attempts to "thread-the-needle" if in fact the economic reality indicates something is a security.
Firstly, to me, some of these alt-coin ICOs resemble a sort of currency exchange where the 'investor' is essentially subsidizing the development of the currency they purchase. I'm sure there are holes in this analogy, but to my layperson eyes, it looks like a new blockchain (like Lisk) is analogous to someone creating a country, minting their own coin (in each case asking outsiders to subsidize it), and in some cases encouraging others to form federations/states (ie. sidechains) within their country where they too can mint their own coins.
Maybe that's way off, this can be confusing. Putting aside my personal opinion of "subsidizing the development of a currency I hope to later use is a bad investment," it could be argued that these are commodities and not securities. I'm not sure how persuasive such an argument would be, but it would center on the 4th prong of Howey (ie. your profits in purchasing an oil futures contract is based on a host of macro-economic factors, not just the efforts of a collective group):
For other alt-coins/tokens, you really have to take it on a case-by-case basis:
There are other big ones (e.g., Waves, Augur) and seemingly new ICOs with each passing week. I think the SEC is taking a "wait and see" approach, which I think is commendable. Most of the investors in this space are sophisticated (as it relates to the ecosystem) and there is much less information asymmetry between the Developer-Promoter and the investor (ie, forums like this and Github expose scammers, flaws in code, etc.) than there historically has been between Companys/promoters and investors. It was largely the information asymmetry and lack of investor sophistication that led to the Securities Act being implemented in the first place. Here, it's arguable that, at least for the time being, investors in this ecosystem need less of the somewhat paternal protections afforded by the securities laws. In my opinion that would certainly change later on and the regulators will justifiably become more active if the ecosystem is really going to scale to reaching mom and pop investors.
All of these are just my own personal thoughts. Not legal advice. I haven't had anyone to bounce the thoughts off of, so I welcome critiques (constructive hopefully) in my approach to thinking about the issue (or even more importantly to my understanding of the tokens/coins and their attributes).
https://coincenter.org/entry/framework-for-securities-regulation-of-cryptocurrencies
I am very new to this ecosystem, so at the risk of embarrassing myself, I'll give my 2 cents. Disclaimer is that I'm not sure if there are any 'right' answers currently, because the statues and rules promulgated by the SEC together with caselaw re: securities clearly did not specifically contemplate the decentralized retail-investor crowdfunding of 'systems' run by computer code. As mentioned previously though, the securities laws in this respect are drafted for broad interpretation, and the caselaw often isn't convinced by innovative attempts to "thread-the-needle" if in fact the economic reality indicates something is a security.
Firstly, to me, some of these alt-coin ICOs resemble a sort of currency exchange where the 'investor' is essentially subsidizing the development of the currency they purchase. I'm sure there are holes in this analogy, but to my layperson eyes, it looks like a new blockchain (like Lisk) is analogous to someone creating a country, minting their own coin (in each case asking outsiders to subsidize it), and in some cases encouraging others to form federations/states (ie. sidechains) within their country where they too can mint their own coins.
Maybe that's way off, this can be confusing. Putting aside my personal opinion of "subsidizing the development of a currency I hope to later use is a bad investment," it could be argued that these are commodities and not securities. I'm not sure how persuasive such an argument would be, but it would center on the 4th prong of Howey (ie. your profits in purchasing an oil futures contract is based on a host of macro-economic factors, not just the efforts of a collective group):- investment of money
- in a common enterprise (horizontal/vertical)
- is led to expect profits
- solely (later modified to require only "primarily" or "substantially") from the efforts of others
For other alt-coins/tokens, you really have to take it on a case-by-case basis:
- Ethereum ICO - investors exchanged $18,439,086 of bitcoin for "Ethers." I haven't read in full the SWARM working paper posted earlier (will do, thanks for the resource!), but I note they make a point on the exhaustibility of ethers being an argument against their being a security (ie, ethers are analogous to oil, and thus aren't securities). That argument has merit, but (i) the value of Ethers as an exhaustible product is "primarily" or "substantially" dependent upon the developers who wrote the code supporting that blockchain, so they aren't entirely analogous to oil and (ii) even if you went with that argument, they would then be commodities, and thus regulated by the CEA.
- The DAO - investors exchanged $152,000,000 worth of Ethers for 'DAO Tokens'. DAO token holders have voter rights in the DAO and are entitled to their pro-rata share of dividend income from the organization's profits. Since the DAO isn't incorporated and it's arguably just a big general partnership (by default, under US laws that's kinda how it works), the voting interest component of DAO Tokens probably takes it out of the realm of 'security' (again, see 4th prong - you are contributing to the direction of the DAO, so less likely that what you're holding is a security/passive investment). Ha, but that would also mean that any holder of a DAO Token is liable for actions taken by the DAO. For example, if the DAO hacker sued and a court found that they were entitled to the amount they hacked (under the argument they were just utilizing the contractual nature of the code), then that DAO hacker could go theoretically go after any DAO Token holder with deep pockets (if he can identify them..)
There are other big ones (e.g., Waves, Augur) and seemingly new ICOs with each passing week. I think the SEC is taking a "wait and see" approach, which I think is commendable. Most of the investors in this space are sophisticated (as it relates to the ecosystem) and there is much less information asymmetry between the Developer-Promoter and the investor (ie, forums like this and Github expose scammers, flaws in code, etc.) than there historically has been between Companys/promoters and investors. It was largely the information asymmetry and lack of investor sophistication that led to the Securities Act being implemented in the first place. Here, it's arguable that, at least for the time being, investors in this ecosystem need less of the somewhat paternal protections afforded by the securities laws. In my opinion that would certainly change later on and the regulators will justifiably become more active if the ecosystem is really going to scale to reaching mom and pop investors.
All of these are just my own personal thoughts. Not legal advice. I haven't had anyone to bounce the thoughts off of, so I welcome critiques (constructive hopefully) in my approach to thinking about the issue (or even more importantly to my understanding of the tokens/coins and their attributes).
enforcing worldwide spread is not easy, and perhaps not doable.
They tried doing it with porn in the 90's, file sharing in 2000's and so on...
and servers kept over heating and got fried up
They tried doing it with porn in the 90's, file sharing in 2000's and so on...
and servers kept over heating and got fried up
As I explained the key distinction upthread, those are free markets because they are decentralized and there is no significant asymmetry of information which makes it otherwise.
It pisses me off when readers waste my expensive time by ignoring what I already wrote twice in this thread. This makes three times. Please readers don't make me teach this again by writing another post which ignores my prior points.
I still dont understand why your'e calling waves a scam only cuz it made an ico (like everyone now).
Its devs are legit, real names with real work behind them.
So they thought charles and kushti are friends which will support them, and were wrong, apologized and moved on.
everyone got their asses covered legaly ofc..
so if you think all ico's are scams, you got lots of work now not just on waves bro
Please clearify. tnx
Its devs are legit, real names with real work behind them.
So they thought charles and kushti are friends which will support them, and were wrong, apologized and moved on.
everyone got their asses covered legaly ofc..
so if you think all ico's are scams, you got lots of work now not just on waves bro
Please clearify. tnx
1. I already provided the link to the thread two or three times in this thread, which explains that ICOs sold to non-accredited USA investors are ostensibly illegal.
I hate ICOs by now for other reasons:
2. They contribute to the mainstream thinking that crypto-currency is a scam and thus we will have great difficulty getting CC widely adopted if don't put a stop to these scams.
3. They extract capital to a few scammers, which could be better used to build our real ecosystems which are not vaporware and have real decentralized designs, such as Bitcoin and Monero.
4. They prey on the ignorance of n00b speculators, thus can never be a free market.
5. They can never attain adoption because they destroy the Nash equilibrium and decentralization of the ecosystem:
As an example: I can show that dash is an oligarchy, whether intentional or not, due to the way their paynode scheme works. These systems are designed to work trustlessly, so any hiccups (intentional or not) should be invalidated by the design, not left-up to the good or bad intentions of those who are engaged with it.
did the monero wrote that fact about infinite supply in their ann Huh if i was an investard in monero i would feel cheated if it isnt
No one can fork Monero without the support of the decentralized miners. The distinction from the Dash masternode scam, is that a masternode is staked only once with DRK (Dash tokens) and earns 50+% ROI per annum forever after for the largest holders of Dash tokens, thus further centralizing the coin meaning there is a centralized oligarchy which the investors are relying on for their future expecation of profits which afaics fulfills the Howey test for what is an investment security that is regulated by the Securities Act. A decentralized PoW miner is constantly expending on electricity in a competitive free market. Owning a lot of Monero doesn't give you any leverage as a miner.
New post to better articulate why permissioned ledger, closed entopy systems likely have no value:
The problem with Emunie, as I talked about in the IOTA thread, is that any system that doesn't have permanent coin turnover via mining, removes mining completely, or puts some type of abstraction layer between mining and block reward (as in the case of IOTA), is a permissioned ledger. People got too caught up in trying to improve on consensus mechanisms and forgot what actually constitutes a decentralized currency in the first place.
When Maxwell said he "proved mathematically that Bitcoin couldn't exist" and then it did exist, it was because he didn't take open entropy systems into account. He already knew stuff like NXT or Emunie could exist, but nobody actually considered them to be decentralized. They're distributed but not decentralized. Basically stocks that come from a central authority and then the shareholders attempt to form a nash equilibrium to...siphon fees from other shareholders in a zero sum game because there is no nash equilibrium to be had by outsiders adopting a closed entropy system in the first place...
Take for example the real world use case of a nash equilbrium in finance. There's many rival nations on earth and they're all competing in currency wars, manipulating, devaluing, etc. They would all be better off with an undisputed unit of account that the other can't tamper with for trade. In order to adopt said unit, it would have to be a permissionless system that each nation has access to where one of the group isn't suspected to have an enormous advantage over the others, otherwise they would all just say no.
This is why gold was utilized at all. Yea, some territories had more than others, but nobody actually knew what was under the ground at the time. Everyone just agreed it was scarce, valuable, and nobody really had a monopoly on it. There are really no circumstances where people on an individual level or nation-state level can come together to form any kind of nash equilibrium in a closed entropy system. The market is cornered by design, and for value to increase, others need to willingly submit to the equivalent of an extortion scheme. The only time systems like that have value at all is when governments use coercion to force them onto people.
When Maxwell said he "proved mathematically that Bitcoin couldn't exist" and then it did exist, it was because he didn't take open entropy systems into account. He already knew stuff like NXT or Emunie could exist, but nobody actually considered them to be decentralized. They're distributed but not decentralized. Basically stocks that come from a central authority and then the shareholders attempt to form a nash equilibrium to...siphon fees from other shareholders in a zero sum game because there is no nash equilibrium to be had by outsiders adopting a closed entropy system in the first place...
Take for example the real world use case of a nash equilbrium in finance. There's many rival nations on earth and they're all competing in currency wars, manipulating, devaluing, etc. They would all be better off with an undisputed unit of account that the other can't tamper with for trade. In order to adopt said unit, it would have to be a permissionless system that each nation has access to where one of the group isn't suspected to have an enormous advantage over the others, otherwise they would all just say no.
This is why gold was utilized at all. Yea, some territories had more than others, but nobody actually knew what was under the ground at the time. Everyone just agreed it was scarce, valuable, and nobody really had a monopoly on it. There are really no circumstances where people on an individual level or nation-state level can come together to form any kind of nash equilibrium in a closed entropy system. The market is cornered by design, and for value to increase, others need to willingly submit to the equivalent of an extortion scheme. The only time systems like that have value at all is when governments use coercion to force them onto people.
6. Because they are not decentralized and rely on expectation of profits based on the performance of a core group, ICOs turn what should be a competition for creating the best technology into a fist fucking fest of ad hominem and political games:
Let's psychoanalyze those want to troll me with a thread like this. Actually I have no censorship motivated objection about making a thread about me (I wish so much, it was possible to do something great without attaining any personal fame), it just feels really stupid because I (the idealist in me) think the technology is more important than the person, which is one of the main reasons I hate vaporware ICOs.
+1 for conscious reason.
The subconscious reason this thread exists is the psychological phenomenon that it is better to destroy everyone, than to fail alone.
"I dropped my ice cream in the mud, so now I am throwing mud on your ice cream so we are the same, because God hates us equally".
This is what socialism built. Equality is prosperity, because fairness is the uniformity of nature's Gaussian distribution. Equality is a human right! Didn't you know that!
They would rather waste the time of important coders whose time would be better spent coding a solution for humanity, so as to satisfy their inability to accept their mistakes and jealousy.
This thread serves mainly to deflect attention away from Dash's instamine scam.
+1 for conscious reason.
The subconscious reason this thread exists is the psychological phenomenon that it is better to destroy everyone, than to fail alone.
"I dropped my ice cream in the mud, so now I am throwing mud on your ice cream so we are the same, because God hates us equally".
This is what socialism built. Equality is prosperity, because fairness is the uniformity of nature's Gaussian distribution. Equality is a human right! Didn't you know that!
They would rather waste the time of important coders whose time would be better spent coding a solution for humanity, so as to satisfy their inability to accept their mistakes and jealousy.
7. ICOs have less liquidity because they are not widely distributed and due to #5:
The salient quote is of course:
Why litecoin? Liquidity. These guys own 5 and 6 digits amount of BTC. They need massive liquidity to increase their holdings by any significant degree. And as such litecoin has been a blessing. Will history repeat itself?
I've had that in my mind for a loooong time. Liquidity is absolutely necessary for the design, marketing, and distribution of crypto-currency, if you want to succeed.
i nominate TPTB_need_war for Chief Judge of the Super Court of Cryptolandistan
i nominate Spoetnik as Chief Prosecutor for the State of Bitcoin
i nominate Spoetnik as Chief Prosecutor for the State of Bitcoin
Most alt coins are scam coins right?
February 02, 2016, 09:51:26 AM
NONE
And the US doesn't control the world, even though they try.
And the US doesn't control the world, even though they try.
In terms of legalities, I would consider it illegal if you were selling an ICO and then promptly dumping all ICO coins, releasing firmware with wallet stealing virus's.
Selling ICO coins in "presale" where the code isn't fully developed and the ICO funds are allegedly going to be used to pay for development, and where the buyers reasonably expect to make a profit on the ICO once the coin launches (assuming all goes well), is very clearly going to fall within the scope of securities law. Anyone who denies this is delusional.
Dumping or not dumping is completely irrelevant.
As you get farther away from this pattern, the conclusions may (or may not) differ, but the fact that some very high profile projects have done this and gotten away with it (so far) does not change that as a starting point it falls squarely within the scope of securities law.
Correct.
If the tokens are represented as shares or stock in a company, or any type of investment scheme that promises to pay dividends, then it's just operating as a typical investment company - except it isn't licensed or registered.
Some people ask, "Why should I buy this coin if it doesn't pay dividends?"
But they're no longer talking about cryptocurrency. You should buy a coin as a store of value, a payment method, or because you want to use it for the things it can do. Whether it's defined as a currency or a commodity, either way it should be an asset that is worth owning for its own sake.
If you want dividends from an unregulated stock, just send the devs some money and wait for them to send you back some money if their business does well. That is all you're doing with "coins" that pay dividends, but somehow people think it's different because it's dressed-up like cryptocurrency.
We have consulted some of the biggest law firms in New York, Washington and Virginia.
Okay I read that very long document.
I am claiming you are bullshitting, because if you understood the following working paper, then you would understand it does not state that you no culpability under the Howey test. There is no way an attorney has advised you that you are not culpable.
What it says is that only in the case that non-tradeable tokens are issued for DAOs, does it appear to not be an investment security. Whereas, you guys issues tradeable tokens where there is an expectation of profit and the investors are depending on your development actions to generate the expected gains.
Get a real attorney to advise you and stop bullshitting.
Do you not realize what kind of serious trouble you could be in? Securities law is not a joke. There are many people in Federal prison for violating securities law.
I'll refer you to the following white paper.
Members of policy group Coin Center, law firm Perkins Coie as well as Harvard and MIT have released a new working paper that aims to illuminate legal questions surrounding the non-financial use of the bitcoin:
...and this higher level Coindesk article: Token Security Research Analyzes Blockchain US Law
These top tier firms explicitly considered Howie and what we and others are doing. Quoting from the above Working Paper:
Members of policy group Coin Center, law firm Perkins Coie as well as Harvard and MIT have released a new working paper that aims to illuminate legal questions surrounding the non-financial use of the bitcoin:
...and this higher level Coindesk article: Token Security Research Analyzes Blockchain US Law
These top tier firms explicitly considered Howie and what we and others are doing. Quoting from the above Working Paper:
Quote
The nomenclature of “Distributed Organizations” is derived from pre-existing work on these topics. The original concept, a“Decentralized Autonomous Corporation” (DAC),was coined by Daniel Larimer. The second permutation, “Decentralized Autonomous Organization,” (DAO) was coined by Vitalik Buterin. Contrary to the DAC concept , a DAO does not necessarily pursue its own profit and may represent some sort of collective or non-profit interest. The third phase, “Distributed Collaborative Organizations,” was created by Joel Dietz and refers to a specific type of DAO that provide sits members with a defined set of rights that may be programmatically ensured and linked to the existing legal system.
You did not quote any relevant text to our discussion, instead you hype Dan. The mention of Dan there is irrelevant to our discussion. Focus on the legalities of the Howey test.
Cryptonomex does not issue tokens or operate any blockchain.
Dan was involved in the issuance of the tokens. If by now you have created some legal structure to obfuscate the economic reality, the Howey test specifically said those obfuscations of form will be ignored and the economic reality will prevail.
We publish and maintain open source accounting software that others are free to use for public and private applications.
We also provide consulting services to help others develop public and private blockchains with all kinds of different specs for their own purposes. This is no different than companies that sell accounting software to banks and firms on wall street. It is those banks and firms that are regulated.
There are multiple independent software providers contributing to the body of open source software and multiple organizations using it for their own businesses. We do not restrict, nor are we able to control, what others do with that public domain software.
We scrupulously adhere to this bright line limitation to our activities.
People who use the public domain software are naturally presumed to comply with all applicable regulations in their various jurisdictions.
We also provide consulting services to help others develop public and private blockchains with all kinds of different specs for their own purposes. This is no different than companies that sell accounting software to banks and firms on wall street. It is those banks and firms that are regulated.
There are multiple independent software providers contributing to the body of open source software and multiple organizations using it for their own businesses. We do not restrict, nor are we able to control, what others do with that public domain software.
We scrupulously adhere to this bright line limitation to our activities.
People who use the public domain software are naturally presumed to comply with all applicable regulations in their various jurisdictions.
Daniel and you are promoting Bitshares 2.0 all over the place, such as even Let's Talk Bitcoin sitdowns.
The Howey test includes when the investors in the tokens are relying on the promotional efforts of others.
I can't believe you are this clueless.
I see you claim are not indemnifying others who build products on your system. And it appears you haven't even done your legal due diligence. I don't want to get involved in such a potential legal mess. If I am mistaken and you have an official legal document on your website which clarifies matters, then please enlighten me. Also seeing you reveal the name of a respected law firm would also add some credibility to your claims that you should not be subject to the Howey test. I assume you won't lie about that, because I believe that could be illegal to claim you've been advised by a specific legal firm when you haven't.
I 100% agree with smooth's statement.
Here is a link to the other thread on this same topic where I quote a key phrase from Howey test Supreme Court decision which pertains to the definition of "investment contract".
For the investor, the implication appears to not be as risky as for those who considered the entity (entitites/group) that was relied upon by the investors, and appears the worst that can happen to the investors if they have to hold for one year before they sell. I forgot which post in which of these two threads I had quoted the law on that. Also the investor would consider the impact to the value of the investment should some SEC action be initiated.
When I write "group", I think this could possibly include those who are shrilling in forums talking about the great investment a coin is, as they would then be considered promoters which the investors relied upon. I don't think disclaimers such as those posted by AmericanPegasus will suffice and instead be looked at by the court as a gimick and rather I believe the court will ascertain whether other investors were reacting to his posts and investing, which is clearly the case if you read the Aeon thread.
I have also considered that even a coin distributed by PoW could make the lead developers and community promoters liable for jail time, because it can't be proven that they are not profiting from buying the coin, promoting/developing it, and selling anonymously to investors. And the case can be made that the investors were depending on them for their future returns.
I think the only coins which are probably not "investment securities" are those which were distributed initially not to investors but only to users (i.e. the users didn't have to put up any significant capital nor effort to attain them... which btw was the case for the early stage of Bitcoin because you could mine with your laptop!) and in which before the investment capital started pouring in then the ecosystem had diversified and no one could point to reliance on one specific group for expectation of return on the investment. Remember right when Bitcoin hit the news big time, Satoshi disappeared, so he made sure he wasn't culpable once the investment capital started pouring in.
I am not a lawyer so this is not legal advice. Consult your own attorney.
Note this thread was moved here in Altcoin discussion from Bitcoin discussion thread. That is why there are now two threads on the same topic in the Altcoin discussion. It wasn't intentional on my part to create duplicate threads in the same subforum.
P.S. smooth I am all for you working on a coin. I would just like to see you working on one that already has a diversified ecosystem and wide distribution. Because any way you are so talented and deserve to not waste your time in anything that has even a minuscule chance of making you liable for slap on wrist by the SEC. I realize you probably find working on Aeon interesting and hoping to achieve some new features which you think are innovative. I have not been following your work there, but I am doubting you have solved the major problems of crypto unequivocally. You could work on something where you make a lot of money and really help the world, if there was design that had truly revolutionized as compared to Bitcoin. I am trying to lead you there. If I fail, then I fail. But for me there is no other point to this. Any way, I am not your guardian. Thanks for all the interaction over these past 2 years. It has been very helpful. There are other ways of looking at it though. The experience you are gaining working on Aeon, some of the code, etc.. could end up being very useful even if Aeon itself didn't end up being the major breakthrough we all need. Also I can't know for sure the future of Aeon. I just want to clarify my statement in the linked post above. As you may know, I am also doing a frank reassessment of my future in crypto.
Here is a link to the other thread on this same topic where I quote a key phrase from Howey test Supreme Court decision which pertains to the definition of "investment contract".
For the investor, the implication appears to not be as risky as for those who considered the entity (entitites/group) that was relied upon by the investors, and appears the worst that can happen to the investors if they have to hold for one year before they sell. I forgot which post in which of these two threads I had quoted the law on that. Also the investor would consider the impact to the value of the investment should some SEC action be initiated.
When I write "group", I think this could possibly include those who are shrilling in forums talking about the great investment a coin is, as they would then be considered promoters which the investors relied upon. I don't think disclaimers such as those posted by AmericanPegasus will suffice and instead be looked at by the court as a gimick and rather I believe the court will ascertain whether other investors were reacting to his posts and investing, which is clearly the case if you read the Aeon thread.
I have also considered that even a coin distributed by PoW could make the lead developers and community promoters liable for jail time, because it can't be proven that they are not profiting from buying the coin, promoting/developing it, and selling anonymously to investors. And the case can be made that the investors were depending on them for their future returns.
I think the only coins which are probably not "investment securities" are those which were distributed initially not to investors but only to users (i.e. the users didn't have to put up any significant capital nor effort to attain them... which btw was the case for the early stage of Bitcoin because you could mine with your laptop!) and in which before the investment capital started pouring in then the ecosystem had diversified and no one could point to reliance on one specific group for expectation of return on the investment. Remember right when Bitcoin hit the news big time, Satoshi disappeared, so he made sure he wasn't culpable once the investment capital started pouring in.
I am not a lawyer so this is not legal advice. Consult your own attorney.
Note this thread was moved here in Altcoin discussion from Bitcoin discussion thread. That is why there are now two threads on the same topic in the Altcoin discussion. It wasn't intentional on my part to create duplicate threads in the same subforum.
P.S. smooth I am all for you working on a coin. I would just like to see you working on one that already has a diversified ecosystem and wide distribution. Because any way you are so talented and deserve to not waste your time in anything that has even a minuscule chance of making you liable for slap on wrist by the SEC. I realize you probably find working on Aeon interesting and hoping to achieve some new features which you think are innovative. I have not been following your work there, but I am doubting you have solved the major problems of crypto unequivocally. You could work on something where you make a lot of money and really help the world, if there was design that had truly revolutionized as compared to Bitcoin. I am trying to lead you there. If I fail, then I fail. But for me there is no other point to this. Any way, I am not your guardian. Thanks for all the interaction over these past 2 years. It has been very helpful. There are other ways of looking at it though. The experience you are gaining working on Aeon, some of the code, etc.. could end up being very useful even if Aeon itself didn't end up being the major breakthrough we all need. Also I can't know for sure the future of Aeon. I just want to clarify my statement in the linked post above. As you may know, I am also doing a frank reassessment of my future in crypto.
In terms of legalities, I would consider it illegal if you were selling an ICO and then promptly dumping all ICO coins, releasing firmware with wallet stealing virus's.
Selling ICO coins in "presale" where the code isn't fully developed and the ICO funds are allegedly going to be used to pay for development, and where the buyers reasonably expect to make a profit on the ICO once the coin launches (assuming all goes well), is very clearly going to fall within the scope of securities law. Anyone who denies this is delusional.
Dumping or not dumping is completely irrelevant.
As you get farther away from this pattern, the conclusions may (or may not) differ, but the fact that some very high profile projects have done this and gotten away with it (so far) does not change that as a starting point it falls squarely within the scope of securities law.
Oh yeah I remember this crazy ass topic. All altcoins and btc itself are speculative tools but I wouldn't call them securities as they're not equit or debt.
I did not read the entire thread.
Thought I'd post this link to the WhyCoin reddit post
"Please read this and understand why the PREMINED COINS are protected by US LAW!"
https://www.reddit.com/r/whycoin/comments/3pw3z0/please_read_this_and_understand_why_the_premined/
Thought I'd post this link to the WhyCoin reddit post
"Please read this and understand why the PREMINED COINS are protected by US LAW!"
https://www.reddit.com/r/whycoin/comments/3pw3z0/please_read_this_and_understand_why_the_premined/
November 17, 2015, 08:01:33 PM
In terms of legalities, I would consider it illegal if you were selling an ICO and then promptly dumping all ICO coins, releasing firmware with wallet stealing virus's.
I wouldn't consider the Bitshares2.0 upgrade as anything illegal as investors receive the same thing they initially paid for and understand how the system works before taking part in it.
Sadly, until regulations can clearly define what is illegal and why, nothing is illegal but would be best to try to stay away from anything that could be defined as selling an unregistered security (such as cloudmining shares).
I wouldn't consider the Bitshares2.0 upgrade as anything illegal as investors receive the same thing they initially paid for and understand how the system works before taking part in it.
Sadly, until regulations can clearly define what is illegal and why, nothing is illegal but would be best to try to stay away from anything that could be defined as selling an unregistered security (such as cloudmining shares).
There is no forum for discussing both together, but the topic of alts is barely tolerated at all by the forum mods and operator; they certainly don't want this in the Bitcoin section, and never have.
Good luck to them when the most popular forum for crypto no longer begins with "bitcoin___".
But you should limit (or at least focus) the discussion there to the properties of Bitcoin itself.
It would be very unwise of me to handicap my research and discussion thus wasting time conforming to the priorities of those who think it is wise to put all their eggs in one basket.
They could just throw this thread in "Other" then at least it wouldn't be a failure of set logic.
I see this very long thread just got moved from the Bitcoin Discussion forum to the Altcoin Discussion forum. Moving an established thread is very disruptive.
The moderators are really paranoid. This thread discusses how Bitcoin relatives to securities law. The mods have deprived the Bitcoin Discussion readers the information about Bitcoin's legality.
Any way no problem. More motivation.
The moderators are really paranoid. This thread discusses how Bitcoin relatives to securities law. The mods have deprived the Bitcoin Discussion readers the information about Bitcoin's legality.
Any way no problem. More motivation.
More likely the reason they moved it is your prominent reference to "Which crypto-tokens" meaning you are discussing various coins, not just Bitcoin specifically.
Logic fail. Bitcoin is a subset of crypto-tokens. Bitcoin is not an element of set altcoins.
Correct. Discussing the larger set in the Bitcoin section of the forum is obviously seen as off topic, as opposed to discussing Bitcoin specifically. There is no forum for discussing both together, but the topic of alts is barely tolerated at all by the forum mods and operator; they certainly don't want this in the Bitcoin section, and never have.
Quote
Your somewhat slanderous implication of a redundant thread in the Legal subforum requires a citation on your part, otherwise it can be taken as veiled slander.
I don't believe there is such a thread, as I googled this entire site (site:bitcointalk.org securities) before I started my thread.
I don't believe there is such a thread, as I googled this entire site (site:bitcointalk.org securities) before I started my thread.
I'm surprised if there are no threads that discussion Bitcoin and securities law as this is certainly not the first time the topic has come up in the greater Bitcoin community, but if that is the case then perhaps you want to start one. But you should limit (or at least focus) the discussion there to the properties of Bitcoin itself.
I see this very long thread just got moved from the Bitcoin Discussion forum to the Altcoin Discussion forum. Moving an established thread is very disruptive.
The moderators are really paranoid. This thread discusses how Bitcoin relatives to securities law. The mods have deprived the Bitcoin Discussion readers the information about Bitcoin's legality.
Any way no problem. More motivation.
The moderators are really paranoid. This thread discusses how Bitcoin relatives to securities law. The mods have deprived the Bitcoin Discussion readers the information about Bitcoin's legality.
Any way no problem. More motivation.
More likely the reason they moved it is your prominent reference to "Which crypto-tokens" meaning you are discussing various coins, not just Bitcoin specifically.
Logic fail (maybe not yours unless you are agreeing with the logic of what you wrote). Bitcoin is a subset of crypto-tokens. Bitcoin is not an element of set altcoins.
A thread about the legality of Bitcoin specifically would probably stay there, or in the Legal subform. However, there are probably existing threads that cover this, so you might just reply to one of those and reduce duplication.
They did not move it to the Legal subforum. If had done that and that is the correct place to discuss legality of crypto, then that would be fine by me. But moving to altcoin discussion is not consistent with logic[1].
Your somewhat slanderous implication of a redundant thread in the Legal subforum requires a citation on your part, otherwise it can be taken as veiled slander.
I don't believe there is such a thread, as I googled this entire site (site:bitcointalk.org securities) before I started my thread.
| [1] | If the mods have decided that threads that discuss both Bitcoin and all tokens, can't go in Bitcoin Discussion nor in Legal, then if they dump that into Altcoin Discussion, then they are hiding Bitcoin information from Bitcoin focused readers. Bitcoin is not an Altcoin. Since that is a logical quagmire they may have created by forming a conjunction of sets which is not universal, then they are in a dilemma. I suggest just move it to Legal (if they are really paranoid about what goes into Bitcoin Discussion), as legality is the most relevant theme of this thread, not the fact that it discusses all tokens as well as specifically discussing Bitcoin. I suppose one might take the stance from my conclusion of my interpretation that since altcoins may be more implicated legally then it is not very strongly information relevant to Bitcoin. I disagree because only the reader can interpret legality as IANAL. Also the lack of on-chain anonymity for Bitcoin was raised as a factor. |
Edit:
This thread discusses the legality of all crypto-tokens (including and specifically Bitcoin is discussed) w.r.t. securities regulation (with a focus on USA law but some mentions of EU law).
How can we put discussion of Bitcoin into the Altcoin Discussion thread when Bitcoin is not an altcoin?
Even though all crypto-tokens are discussed, for as long as Bitcoin is also prominently discussed, then it can't fit into the Altcoin subset.
How do we unconflate a general legal discussion that affects Bitcoin and altcoins and which prominently mentions issues that are specific to Bitcoin?
Seems to me the thread must go in either Bitcoin Discussion or Legal.
I had made another thread in the altcoin discussion forum to reference this thread, to be more specific to altcoin readers and posters. This thread was moved from Bitcoin Discussion to Altcoin Discussion thus creates a duplicate thread in the Altcoin Discussion forum. And I was trying to be somewhat careful to keep the thread at Bitcoin Discussion more general and also with specific interpretations for Bitcoin.
It makes me look silly (as if I was trying to create multiple threads in the same forum but I didn't) with two threads on similar issue both in the Altcoin Discussion forum.
How can we put discussion of Bitcoin into the Altcoin Discussion thread when Bitcoin is not an altcoin?
Even though all crypto-tokens are discussed, for as long as Bitcoin is also prominently discussed, then it can't fit into the Altcoin subset.
How do we unconflate a general legal discussion that affects Bitcoin and altcoins and which prominently mentions issues that are specific to Bitcoin?
Seems to me the thread must go in either Bitcoin Discussion or Legal.
I had made another thread in the altcoin discussion forum to reference this thread, to be more specific to altcoin readers and posters. This thread was moved from Bitcoin Discussion to Altcoin Discussion thus creates a duplicate thread in the Altcoin Discussion forum. And I was trying to be somewhat careful to keep the thread at Bitcoin Discussion more general and also with specific interpretations for Bitcoin.
It makes me look silly (as if I was trying to create multiple threads in the same forum but I didn't) with two threads on similar issue both in the Altcoin Discussion forum.
I see this very long thread just got moved from the Bitcoin Discussion forum to the Altcoin Discussion forum. Moving an established thread is very disruptive.
The moderators are really paranoid. This thread discusses how Bitcoin relatives to securities law. The mods have deprived the Bitcoin Discussion readers the information about Bitcoin's legality.
Any way no problem. More motivation.
The moderators are really paranoid. This thread discusses how Bitcoin relatives to securities law. The mods have deprived the Bitcoin Discussion readers the information about Bitcoin's legality.
Any way no problem. More motivation.
More likely the reason they moved it is your prominent reference to "Which crypto-tokens" meaning you are discussing various coins, not just Bitcoin specifically.
A thread about the legality of Bitcoin specifically would probably stay there, or in the Legal subform. However, there are probably existing threads that cover this, so you might just reply to one of those and reduce duplication.
I see this very long thread just got moved from the Bitcoin Discussion forum to the Altcoin Discussion forum. Moving an established thread is very disruptive.
The moderators are really paranoid. This thread discusses how Bitcoin relates to securities law. The mods have deprived the Bitcoin Discussion readers the information about Bitcoin's legality.
Any way no problem. More motivation.
The moderators are really paranoid. This thread discusses how Bitcoin relates to securities law. The mods have deprived the Bitcoin Discussion readers the information about Bitcoin's legality.
Any way no problem. More motivation.
Again I argue these definitions are useful only until the crypto platform of the tokens becomes a significant ecosystem on the order of where Bitcoin is now, after which point I think it is futile for the government to go against the popular activity on the technicality (pretense) of protecting the investor. In my opinion, the main risk is to small Altcoin communities that die leaving huge losses for investors. Prominent people involved with such failed crypto platforms might find themselves in legal trouble.
I think as Bitcoin becomes bigger the "invest to get it" step will not be as needed because people will see benefits in getting paid for Bitcoin by services. For example I know a lot of coders doing freelance jobs for Bitcoin which allow them to get payments from anywhere in the world while also remaining anonymous and they trust a legit escrow more than paypal.
When this get bigger a real economy will flourish where people work for Bitcoin instead of having to buy it all the time. I know people who own 100% stacks of Bitcoin which are from jobs (and small extra of sig campaigns).
It might really help if all the coins are anonymous so that downstream graphs for coins issued (or sold) during the period where the coin was predominately an illegal, unregistered investment security can't be identified or traced with block chain analysis. So thus once the platform ecosystem has reached the stage where the SEC can't attack all the coins as being an illegal, unregistered investment securities, then it has lost the ability to attack any of the coins. Note this might not be a defense though for those who want to report their taxable capital gains.
Referring to the currency itself (i.e. even physical cash notes have this property):
anonymous ⊂ fungible
fungible ⇒ anonymous
Bitcoin has no built-in on-chain anonymity. I invented the best on-chain anonymity currently known to exist.
I think as Bitcoin becomes bigger the "invest to get it" step will not be as needed because people will see benefits in getting paid for Bitcoin by services. For example I know a lot of coders doing freelance jobs for Bitcoin which allow them to get payments from anywhere in the world while also remaining anonymous and they trust a legit escrow more than paypal.
When this get bigger a real economy will flourish where people work for Bitcoin instead of having to buy it all the time. I know people who own 100% stacks of Bitcoin which are from jobs (and small extra of sig campaigns).
When this get bigger a real economy will flourish where people work for Bitcoin instead of having to buy it all the time. I know people who own 100% stacks of Bitcoin which are from jobs (and small extra of sig campaigns).
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