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SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities

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Re: SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities

#81

Post by tptacek »

oneplane wrote: post #30
dmitrygr wrote: post #5

Good. This should help bring some sanity and accountability. they were both quite needed

Why? Nobody is forcing crypto currenency on anyone. I get that registered companies might have some other deal with the govenment and with hacker organisations, but a free and open (and non-country-bound) system should really not be 'managed' by some random organisation in a random country.

Is there some way we can just replace these kinds of threads with a link to some canonical thread about why the concept of security laws is fundamentally unjust or unwise? This discussion really has nothing to do with the topic at hand.

Re: SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities

#82

Post by ilaksh »

The SEC should show that it protects everyone's rights and not just large firms with piles of cash to pay to them and to pay expensive lawyers. Otherwise we have to assume that this is largely about trying to tax things.

The way they can do this is by making a real effort to update their technical, documentation, and regulatory programs.

Is there a straightforward way to do an Edgar filing that doesn't require a bunch of training? Is there a web page that clearly lists the requirements for these types of securities in plain English?

How much do the company registrations and filings actually cost? What is the basis for these costs? Because an ICO can be created at no cost. Are the excessive fees due to a lack of modernization or streamlining of the processes, or they simply bribes that line officials' pockets and protect the incumbent firms from poorly funded startups?

In recent cases, how would fees and filings have actually protected anyone? Does the SEC have technical staff or software capable of evaluating Ethereum contracts for validity or safety? If not, how does their regulatory effort provide any benefit, except as an opportunity for them to collect a type of tax and make it harder for startups to compete with large firms where SEC officials have friends working?

Re: SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities

#84

Post by JumpCrisscross »

iMuzz wrote: post #71

> The SEC's Report of Investigation found that tokens offered and sold by a "virtual" organization known as "The DAO" were securities and therefore subject to the federal securities laws. The Report confirms that issuers of distributed ledger or blockchain technology-based securities must register offers and sales of such securities unless a valid exemption applies. > The agency has decided not to bring charges in th…

> AFAIK the SEC only cares about securities sold in the U.S.

Or to American residents. The Treasury also claims jurisdiction over securities transactions done overseas using U.S. dollars.

Re: SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities

#85

Post by EGreg »

joeyspn wrote: post #76
EGreg wrote: post #64

Earlier quoted context omitted.

Serious question: Do you know any countries AT ALL that have no securities commission, or one that doesn't strictly regulate sale of securities, while at the same time the country allows formation of a company? Being that token sales are international, it would seem there is absolutely nothing illegal about opening a company in that country and offering securities. Even if the owners of the company are US citizens. T…

> or one that doesn't strictly regulate sale of securities There's a reason why some crypto-companies (and not crypto actually) are based in the Cayman Islands (BitMEX), British Virgin Islands (Bitfinex), etc... Crypto Valley [0] in Switzerland is also gaining momentum. BTW, Fred Wilson wrote an interesting piece about this recently [1]. But the issue here is that if you plan to sell "tokens" to US nationals, you now…

But can't their securities commission also pass such a resolution?

Re: SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities

#86

Post by JumpCrisscross »

Cshelton wrote: post #77
iMuzz wrote: post #71

> The SEC's Report of Investigation found that tokens offered and sold by a "virtual" organization known as "The DAO" were securities and therefore subject to the federal securities laws. The Report confirms that issuers of distributed ledger or blockchain technology-based securities must register offers and sales of such securities unless a valid exemption applies. > The agency has decided not to bring charges in th…

The SEC cares about U.S. citizens. If you marketed and/or sold to a U.S. investor, you are now under the SEC's jurisdiction. There are countries you can go to of course, but not many left. Grand Caymans... Switzerland is no longer a safe haven from U.S. jurisdiction either.

> The SEC cares about U.S. citizens

Residents. Noncitizen American residents are protected by the SEC. Though even that is a leaky boundary [1].

[1] http://clsbluesky.law.columbia.edu/2017/04/11/proskauer-rose...

Disclaimer: I am not a lawyer and this is not legal advice. Do not take legal advice from my Internet comments.

Re: SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities

#87

Post by bitmapbrother »

I was watching a YouTube video of a popular Ethereum blogger and he mentioned that one of his acquaintances was charged with tax evasion for not reporting his cryptocurrency income. This person thought he could just pay what he owed and be done with it. Unfortunately, it doesn't work like that. Once they catch you for tax evasion you'll pay whatever you owe in addition to facing tax evasion charges.

Re: SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities

#88

Post by ThrustVectoring »

brucephillips wrote: post #14
robbiet480 wrote: post #4

This appears to only applies to ICOs that offer something that is like a security, such as the DAO, not voucher based ICOs like Primalbase or Storj EDIT: Added appears to since IANAL

It does seem to be ambiguous. If you read the qualifications in section III: https://www.sec.gov/litigation/investreport/34-81207.pdf , they seem to apply to voucher tokens as well. Especially "A reasonable expectation of profit".

If Valve decided to fund the creation of Team Fortress 3 in part with exclusive pre-order hats, would that now violate securities law?

Re: SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities

#89

Post by darawk »

dmitrygr wrote: post #39
oneplane wrote: post #30

Earlier quoted context omitted.

Why? Nobody is forcing crypto currenency on anyone. I get that registered companies might have some other deal with the govenment and with hacker organisations, but a free and open (and non-country-bound) system should really not be 'managed' by some random organisation in a random country.

Same reason SEC exists. Because many people are easy to manipulate, and plenty of malicious people out there will convince (not force) them to invest in their ICO, etc.

Trying to protect everyone all the time from everything quashes innovation. I've lost money in ICOs. I lost money in the DAO, too. I'd lose that money 10x over again to prevent the SEC from squashing this nascent space like this.
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