I don't understand exactly what this implies. If DAO is a C Corp, will it pay taxes on USD equivalent value of their coin holdings (150$ million going by the report?), or only on what they ultimately convert to USD? What if they use the coins to make purchases directly? If I own a C Corp, can I hide earnings in USD from being taxed by exchanging them for coins I make using some open source block chain?
SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities
261–270 of 360 posts
Re: SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities
#262Earlier quoted context omitted.
>but to protect U.S. citizens from being scammed all the time. US citizens shouldn't be treated like children that need to protected from their own stupidity.
Extreme libertarian views like yours have been rejected almost everywhere in the world. Maybe it's your opinion that allowing scammers to manipulate people is their basic right, but no one seems to share that sentiment.
If you don't want to deal with those scammers, no one is forcing you to do so.
Just don't use cyptocurrencies. The only purpose of crytocurrencies is to get rid of a central authority in charge of everything.
If you don't care about the fundamental feature and premise of crytocurrencies, then you are much better off using the regular financial system.
Re: SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities
#263Re: SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities
#264Earlier quoted context omitted.
I think there might be a gotcha there. SEC rulings only apply to dealings within the United States. Being that Ethereum is [at least in general, if arguably not] decentralized, and largely pegged to a Canadian, and started in Switzerland it might not be so simple. The Ethereum Foundation itself is a Swiss nonprofit. Of course, it remains to be seen what this will turn into. Even if it comes crashing down in the Unite…
It doesn't matter if Ethereum is a crypto-decentralized-blockchain-p2p-network-thingamagig. If the Ethereum Foundation sold their thing to US residents, it is under the purview of the SEC. The only question is if the Ethereum Foundation's token sale passes the Howey Test. An analysis of this must be done like was done in their report of the DAO. I'm not qualified to do this analysis, which is why I ask. I know they s…
If you read the sec document carefully enough, they singled out the DAO because it's unambiguously a security. Shares in a thingymajig blockchain blah blah corp are still shares, therefore, securities. Most tokens are not shares and have uses other than profit motive, therefore, they are not securities
Re: SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities
#265Earlier quoted context omitted.
Then we should limit who people can vote for, since voters are so easy to manipulate into voting against their own interests. The basic principles of liberal democracy assume that a person has an absolute right to make decisions for their own life. These kinds of restrictions are unconscionable restrictions on the right of free people to their personal autonomy.
There is simply a massive difference between the theory of democracy and its actual implementation. Your personal autonomy is restricted by the government, massively, period, generally for everyone's own good. They decide what and how much medicine you can put in your body. Whether you can gamble, and where, and on what, and how much. What drugs you can take. What speed you can drive. Whether you must go to school or…
Yeah, it is just the way thing are.
And till now, you had no other option.
But it looks like things are changing with regards to finance.
Because now, it is going to be much more difficult for the government to regulate your financial activities.
The "way things are" is changing, and changing for the better.
Don't like it? Then the government can send in its men with guns and attempt to stop it.
The technology is getting better and better, though. So it will soon become extremely difficult for those men with guns to do anything at all with your untraceable, untraceable, and unstoppable financial activities.
May the best group win. The government will need all the luck it can get.
Re: SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities
#266If you read the actual report ( https://www.sec.gov/litigation/investreport/34-81207.pdf ), you may notice that the SEC is careful to apply securities law DAO specifically. In particular, they apply the security test: "did investors invest money with a reasonable expectation of profits derived from managerial efforts of others?" Since DAO was a wisdom-of-crowd VC fund, the answer is a clear YES. On the other hand, th…
I attended https://www.meetup.com/SFLegalHackers/events/240629913/ and sat in on a conversation where a lawyer was talking about issues like this. She specializes with working to help ICOs comply with existing regulations. From what I heard, SEC is not the only agency involved, and each ICO is different. Interesting stuff.
Re: SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities
#267If you read the actual report ( https://www.sec.gov/litigation/investreport/34-81207.pdf ), you may notice that the SEC is careful to apply securities law DAO specifically. In particular, they apply the security test: "did investors invest money with a reasonable expectation of profits derived from managerial efforts of others?" Since DAO was a wisdom-of-crowd VC fund, the answer is a clear YES. On the other hand, th…
Is it still ok to use ICOs as as glorified Patreon or Kickstarter without worrying you'll run afoul of the securities laws? As long as no one is expecting profits from the tokens they buy from you. Where it gets strange is if your tokens are picked up by an exchange. What happens if someone buys your tokens with the expectation that they can sell them to someone else? Then the price of your tokens might rise, and the…
Secondary sales involve person A selling to person B. At that point it's person A's problem, not the issuer's. The exchange, however, could get into trouble for trading securities without being registered
Re: SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities
#268Earlier quoted context omitted.
Is it still ok to use ICOs as as glorified Patreon or Kickstarter without worrying you'll run afoul of the securities laws? As long as no one is expecting profits from the tokens they buy from you. Where it gets strange is if your tokens are picked up by an exchange. What happens if someone buys your tokens with the expectation that they can sell them to someone else? Then the price of your tokens might rise, and the…
They defined profits broadly in the scope of the release. Secondary sales have different rules.
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Re: SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities
#269Earlier quoted context omitted.
You realize that's not in the slightest bit true, don't you? For example: Under contract law, there are certain rights that _you are legally not permitted to give away_. You can't actually sell yourself into slavery. You can't contractually disclaim gross negligence on your part. You can't have a contract that unilaterally benefits one party without consideration provided for the other. You can't accept a contract wh…
>You realize that's not in the slightest bit true, don't you? What isn't true? >For example: Under contract law, there are certain rights that _you are legally not permitted to give away_. You can't actually sell yourself into slavery. A court will void contractual provisions like this, based on a comprehensive body of case law that establishes what constitutes consent. This is a universe away from what you're defend…
You wrote:
> Of course. We don't restrict the rights of the entire population to engage in voluntary interactions to preempt crime.
I gave one example of many of the ways in which we absolutely do restrict the rights of the entire population to engage in voluntary interactions to preempt crime. We limit the types of contracts that everyone can engage in, to prevent a subset of them that would be used abusively. As another example, we place restrictions on freedom of assembly -- voluntary interactions of groups of people -- based upon location and time of day because of the potential to create a disturbance, not the fact of having done so. And so on.
Re: SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities
#270Earlier quoted context omitted.
Is it still ok to use ICOs as as glorified Patreon or Kickstarter without worrying you'll run afoul of the securities laws? As long as no one is expecting profits from the tokens they buy from you. Where it gets strange is if your tokens are picked up by an exchange. What happens if someone buys your tokens with the expectation that they can sell them to someone else? Then the price of your tokens might rise, and the…
Secondary sales involve person A selling to person B. At that point it's person A's problem, not the issuer's. The exchange, however, could get into trouble for trading securities without being registered
This is not really true. Once a company exceeds a certain threshold of non-accredited owners, it automatically becomes a public company, and faces the same disclosure and controls requirements as a company that became public via IPO. That is why all competently written private stock offerings sell stock with heavy transfer restrictions, so that shareholders can't force management to take the company public.