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Statement on Cryptocurrencies and Initial Coin Offerings

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Re: Statement on Cryptocurrencies and Initial Coin Offerings

#101

Post by jessriedel »

Jd wrote: post #100
jessriedel wrote: post #97

Earlier quoted context omitted.

No, your definition is based on the textbook definition of speculation, i.e., that the owner values the thing not because of its intrinsic value to him but only insofar as he can sell it to someone else later. As Kadin points out, the actual definition of a security is (basically) a claim on property or future profits, which is logically distinct. A tulip can be speculative, but it's not a security. A non-transferabl…

The textbook definition of a security is expecting to profit based on the efforts of a third party.

The definition in Kadin's comment that I reference is more exact.

Re: Statement on Cryptocurrencies and Initial Coin Offerings

#102

Post by sah2ed »

derefr wrote: post #84
lojack wrote: post #21

Earlier quoted context omitted.

I don’t understand why being premined makes any difference? A company could easily create an equity pool and a new mineable currency, and make that currency worth a proportional amount of equity. That would very clearly fall under the umbrella of security. Similarly someone could create a premined currency and evenly distribute it to anyone who asked for it, in exchange for nothing with no guarantees about it being r…

If anyone can mine a thing for themselves (i.e. create more supply of it), then that thing is a commodity . (Gold, for example, is a commodity.) By definition, no one entity can really restrict the supply or trade of a commodity; and thus the government can't really make useful laws about what any one entity does with their holdings of a commodity. Any valuable thing that isn't a commodity, is a security. Every fiat…

Not disagreeing with your observation, but to extract gold, you need a mining license which is typically required by law, so in a way governments can still make useful laws that regulate the scarcity or abundance of gold as a commodity by pricing mining licenses accordingly.

Gold ownership was outlawed in the US in 1933 by FDR.

Re: Statement on Cryptocurrencies and Initial Coin Offerings

#103

Post by sah2ed »

AlexCoventry wrote: post #82
phaed wrote: post #79

Earlier quoted context omitted.

> Basically, almost all ICOs so far are illegal. They are only illegal in the US if they allow US citizens to participate, and the majority ban US citizens. So I think you have it backward.

Unless they're using expensive KYC procedures, I doubt that many ICOs have done enough to exclude US investors that the law will excuse them from SEC regulations.

Filecoin's ICO seems to be one of the few exceptions to follow securities law.

https://www.cryptocoinsnews.com/filecoin-ico-raises-record-2...

Re: Statement on Cryptocurrencies and Initial Coin Offerings

#104

Post by Jd »

Kadin wrote: post #93
zemo wrote: post #80

Earlier quoted context omitted.

> almost all ICOs so far are illegal. a lot of them are offering to sell you an asset that they advertise as being sure to appreciate, with the subtext that you will sell the asset at a later point for a gain. Selling something purely to be a store of value and appreciation is basically the textbook definition of a security, isn't it?

This is the (literal) textbook definition of a security: any note, stock, treasury stock, security future, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undi…

Here's the earliest legal work on this stuff which will probably interest you:

https://coincenter.org/entry/reporting-back-from-the-blockch...

Re: Statement on Cryptocurrencies and Initial Coin Offerings

#105

Post by scotty79 »

ars wrote: post #90
Kiro wrote: post #87

Earlier quoted context omitted.

Why would I care what the SEC thinks if I'm outside the US?

Most countries have securities laws, not just the US. Are you sure your country doesn't?

Most countries define security as either equity or fixed income instrument and that's all. Nothing of the US "maybe it is, maybe it isn't ... is there expectatiom of profits? ... so maybe it is or it isn't"

My country has a list of things that are securities written into the law. Until they write in there crypto tokens they are not securities.

Re: Statement on Cryptocurrencies and Initial Coin Offerings

#106

Post by AnkhMorporkian »

couchdive wrote: post #20
everdev wrote: post #15

Earlier quoted context omitted.

Important second line to that quote: "A change in the structure of a securities offering does not change the fundamental point that when a security is being offered, our securities laws must be followed" They're saying it's fantastic, just do it legally. And for any offering that passes the Howey Test, that means registering with the SEC.

and probably requiring Accredited Investors only at some point, which probably 90 percent of crypto folks aren't, myself included. Accredited investors must make 200 to 300k annual (dual income allowed) and/or have 5 mill in tied up assets and/or a net worth of over 1 mill.

90 percent? Probably close to 99. While a significant portion of crypto is probably owned by rich people, the vast majority of actual owners of crypto is owned by people who make far less than that.

For every millionaire out there who is investing in crypto, there are a few hundred people who just want to buy things off the dark web.

Re: Statement on Cryptocurrencies and Initial Coin Offerings

#107

Post by killjoywashere »

Kiro wrote: post #87
AlexCoventry wrote: post #82

Earlier quoted context omitted.

Unless they're using expensive KYC procedures, I doubt that many ICOs have done enough to exclude US investors that the law will excuse them from SEC regulations.

Why would I care what the SEC thinks if I'm outside the US?

You should be aware that the decision of jurisdiction can pull you into courts you never knew existed, in jurisdictions you wouldn't imagine could exist. Finding a country that won't extradite you may become an issue of treaty, or even a string of treaties. IANAL, but I sat in on one of my brother's international law classes, which quickly convinced me to not fuck around in that arena. Lawyer up early.

Re: Statement on Cryptocurrencies and Initial Coin Offerings

#108

Post by idibidiart »

rahulrrixe wrote: post #94
idibidiart wrote: post #50

I think the rate of technological change will force the SEC regulatory system to adopt an RFC process open to the public (bypassing Congress), similar to IETF, and I think Direct Democracy is an inevitable outcome of such disruption.

That's a really strong statement. RFC structured this way because they needed people to contribute whereas SEC and Congress don't want people involvement.

The regulatory process is not scalable relative to the rate of technology driven disruption.

It cannot scale.

It can either fall behind or adapt to change, IMO.

Re: Statement on Cryptocurrencies and Initial Coin Offerings

#109

Post by beagle3 »

Kiro wrote: post #87
AlexCoventry wrote: post #82

Earlier quoted context omitted.

Unless they're using expensive KYC procedures, I doubt that many ICOs have done enough to exclude US investors that the law will excuse them from SEC regulations.

Why would I care what the SEC thinks if I'm outside the US?

Because of FATCA and friends, essentially all financial institutions in the world now report to the US and follow its rules. If you are not a US taxpayer, and outside the US, they don't directly apply to you, but they have already affected the regulations that do apply to you.

Re: Statement on Cryptocurrencies and Initial Coin Offerings

#110

Post by Smith_seth »

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