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SEC Charges Bitcoin Entrepreneur For Share Offering

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Re: SEC Charges Bitcoin Entrepreneur For Share Offering

#21

Post by citricsquid »

dustcoin wrote: post #9

Voorhees agreed to settle the SEC’s charges by paying full disgorgement of the $15,843.98 in profits plus a $35,000 penalty for a total of more than $50,000. Voorhees later sold S.DICE for 126k BTC ($12.4M at the time). Sounds like a good deal.

He did not own the majority of S.DICE and he lost 550 BTC (>10% of his holdings) when MtGox fell apart, he's certainly well off but he is far from 8 figure rich.

http://www.reddit.com/r/Bitcoin/comments/1yx2t5/erik_voorhee...

http://www.reddit.com/r/Bitcoin/comments/1yv6ph/some_words_f...

Re: SEC Charges Bitcoin Entrepreneur For Share Offering

#22

Post by gnopgnip »

kintamanimatt wrote: post #7
tinkerrr wrote: post #4

Earlier quoted context omitted.

If they are raising money from American individuals (not Qualified Institutional Buyers) they would need to be registered with the SEC irrespective of where they are headquartered. They might, at most, qualify as foreign private issuer, so they can file with the SEC in private, but I strongly doubt they did it. http://www.sec.gov/info/smallbus/qasbsec.htm Edit: For those asking why the American laws apply to this sit…

So long as they aren't domiciled in the US, American laws don't (or shouldn't) apply outside the US any more than British laws apply in the US.

US law applies to products being sold to us citizens.

Re: SEC Charges Bitcoin Entrepreneur For Share Offering

#23

Post by gnaritas »

citricsquid wrote: post #21
dustcoin wrote: post #9

Voorhees agreed to settle the SEC’s charges by paying full disgorgement of the $15,843.98 in profits plus a $35,000 penalty for a total of more than $50,000. Voorhees later sold S.DICE for 126k BTC ($12.4M at the time). Sounds like a good deal.

He did not own the majority of S.DICE and he lost 550 BTC (>10% of his holdings) when MtGox fell apart, he's certainly well off but he is far from 8 figure rich. http://www.reddit.com/r/Bitcoin/comments/1yx2t5/erik_voorhee... http://www.reddit.com/r/Bitcoin/comments/1yv6ph/some_words_f...

Maybe, but it certainly appears he's 7 figure rich which still ain't bad.

Re: SEC Charges Bitcoin Entrepreneur For Share Offering

#24

Post by gnaritas »

wdewind wrote: post #5
tinkerrr wrote: post #4

Earlier quoted context omitted.

If they are raising money from American individuals (not Qualified Institutional Buyers) they would need to be registered with the SEC irrespective of where they are headquartered. They might, at most, qualify as foreign private issuer, so they can file with the SEC in private, but I strongly doubt they did it. http://www.sec.gov/info/smallbus/qasbsec.htm Edit: For those asking why the American laws apply to this sit…

Why would this matter to them if they are based in Scotland?

Where they're based is far less relevant than where they do business. If you do business in American with American customers you need to obey American laws.

Re: SEC Charges Bitcoin Entrepreneur For Share Offering

#25

Post by logfromblammo »

dllthomas wrote: post #20
logfromblammo wrote: post #15

Earlier quoted context omitted.

I do not like the implication that the SEC somehow owns potential American investors. At some point, you have to treat me like a big boy, point at the "caveat emptor" sign, and let me be on my way. Any claims that the SEC is vital to protecting Americans from financial fraud, maintain fair and orderly markets, and facilitate new capital are all quite soundly countered with a variety of phrases, such as "credit defaul…

'Any claims that the SEC is vital to protecting Americans from financial fraud, maintain fair and orderly markets, and facilitate new capital are all quite soundly countered with a variety of phrases, such as "credit default swaps", "AIG", "MERS", "collateralized debt obligations", "naked short", "Bernie Madoff", "matters under inquiry", etc.' Your reasoning here is fallacious - the question is the current situation…

Your question is fundamentally unanswerable. We cannot isolate the operation of the SEC in the market as a variable, any more than we can swim twice in exactly the same river.

With respect to the question, "can the SEC protect Americans from financial fraud?" the answer is no. Fraud occurs frequently, and of greatest recent notoriety and severity are the examples I alluded to. The SEC cannot protect; it can only punish. Just like Chief Wiggum.

As always, in free markets as well as regulated ones, you have to do your own research into your trade partners before deciding to trust them (caveat emptor). The SEC is just part of the institutional stagecraft that keeps the market from becoming paralyzed by mutual suspicion.

And since we cannot have two markets, one for control and one for experimentation, we cannot say with any reasonable certainty whether the malfeasance eliminated by the SEC is of greater or lesser magnitude than the malfeasance enabled by it. But we can say that the latter is most certainly not zero.

Re: SEC Charges Bitcoin Entrepreneur For Share Offering

#26

Post by dllthomas »

logfromblammo wrote: post #25
dllthomas wrote: post #20

Earlier quoted context omitted.

'Any claims that the SEC is vital to protecting Americans from financial fraud, maintain fair and orderly markets, and facilitate new capital are all quite soundly countered with a variety of phrases, such as "credit default swaps", "AIG", "MERS", "collateralized debt obligations", "naked short", "Bernie Madoff", "matters under inquiry", etc.' Your reasoning here is fallacious - the question is the current situation…

Your question is fundamentally unanswerable. We cannot isolate the operation of the SEC in the market as a variable, any more than we can swim twice in exactly the same river. With respect to the question, "can the SEC protect Americans from financial fraud?" the answer is no. Fraud occurs frequently, and of greatest recent notoriety and severity are the examples I alluded to. The SEC cannot protect; it can only puni…

It's not "fundamentally unanswerable" any more than any other question about a complex system over which we have limited control. It's hard to answer - this is not the same thing. That the question is hard to answer is no reason to substitute irrelevant alternatives. The appropriate thing to do is 1) answer it as best we can, and 2) recognize that there remains substantial uncertainty.

Re: SEC Charges Bitcoin Entrepreneur For Share Offering

#27

Post by driverdan »

There is a lot of fraud going on in the cryptocoin "IPO" space. It's strange that the SEC went after one of the cases that wasn't fraud. Maybe it was because they knew who he was. Either way they really need to crack down on these unregistered securities. People are being fleeced left and right.

Re: SEC Charges Bitcoin Entrepreneur For Share Offering

#28

Post by TwoFactor »

DennisP wrote: post #8
tinkerrr wrote: post #2

Wonder what the implications are for the other companies/altcoins that go the IPO route. There are a number of well-known companies in the space that IPO without registering with the SEC, most recently MaidSafe [1] from the SAFE network that got a lot of publicity but no questions asked about the IPO (except boasting in their press release that they raised $5 million in the first 5 hours [2]) [1]: http://www.business…

I'm not convinced a presale of a currency falls under the same regulations as equity in a company.

It definitely falls under money transmission - which could be worse as far as penalties go

Re: SEC Charges Bitcoin Entrepreneur For Share Offering

#29

Post by mabbo »

rayiner wrote: post #6

It's interesting, but not surprising. If you offer to sell securities to the U.S. public, and meet certain other requirements, you need to register with the SEC. It doesn't matter if you take payment for the stock in dollars or Bitcoin or cupcakes.

That's it. I'm selling securities via cupcakes.

Cupcakes represent a stable, decentralized currency with a proof-of-work (you had to bake a cupcake to get one!). No government can stop my cupcake transactions.

This is the future.

Re: SEC Charges Bitcoin Entrepreneur For Share Offering

#30

Post by arjunnarayan »

mabbo wrote: post #29
rayiner wrote: post #6

It's interesting, but not surprising. If you offer to sell securities to the U.S. public, and meet certain other requirements, you need to register with the SEC. It doesn't matter if you take payment for the stock in dollars or Bitcoin or cupcakes.

That's it. I'm selling securities via cupcakes. Cupcakes represent a stable, decentralized currency with a proof-of-work (you had to bake a cupcake to get one!). No government can stop my cupcake transactions. This is the future.

You're too late. We're past Peak Cupcake (http://marginalrevolution.com/marginalrevolution/2013/04/gou...), and well into the Cupcake Deflation (https://twitter.com/JustinWolfers/status/335017341295419394) era.
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