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Statement on Potentially Unlawful Online Platforms for Trading Digital Assets

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Re: Statement on Potentially Unlawful Online Platforms for Trading Digital Assets

#251

Post by [deleted] »

gwbas1c wrote: post #115
TallGuyShort wrote: post #8

So if some anonymous person invents cryptocurrencies, at what point are you supposed to be considered securities? If the first exchange had gone to SEC to register as a securities exchange, would the SEC not have laughed in their face? The headline itself really captures the ambiguity and uncertainty of all of this: "potentially unlawful".

The reason why many cryptocurrencies are considered securities is because there's a certain group of people promoting them as in investment. They are claiming that their cryptocurrencies will rise in value. If you study the definition of money, and what makes a good currency, there's no kind of money that rises in value merely because you own it. Money is meant to be spent or invested, not hoarded. (Adam Smith's "Wea…

[deleted]

Re: Statement on Potentially Unlawful Online Platforms for Trading Digital Assets

#252

Post by flowctrl »

A lot of people on this thread are conflating Bitcoin and other cryptocurrencies for what the SEC is talking about in this statement: tokens that are acting as securities. They do not mean Bitcoin and similar tokens (ETH, LTC, ADA, NEO, etc). If you've been following the SEC's other statements, testimonies, and senate committee hearings, you would know that they do not have a problem with digital currencies per se. That is outside of their mandate (those fall under the CFTC's purview). What the SEC is concerned with is companies that issue digital tokens which act as securities. That is to say, the reason people buy the tokens is the expectation that the work of the company that issued the tokens will cause the value of the tokens to increase, and that is the motivation for people to buy them.

This differs from Bitcoin, which is not issued by any company and has no central organization that does any work or promotion of the token.

The response from American cryptocurrency exchange Bitfinex expresses the distinction between securities and other types of tokens:

“As a U.S.-based digital currency exchange, Bittrex is committed to incubating new blockchain technology projects and offering innovative, compliant digital tokens to our customers. Bittrex uses a robust digital token review process to ensure the tokens listed on the exchange are compliant with U.S. law and are not considered securities. Bittrex is committed to helping advance the United States’ global leadership in this emerging industry, and we look forward to continuing our proactive dialogue with the SEC and other regulators on how to build a secure, fully-regulated environment for blockchain that encourages innovation and economic growth.”

https://support.bittrex.com/hc/en-us/articles/360001525152-B...

They seem to be prepared to meet the SEC in court to argue that the assets they facilitate trading for are not securities.

Re: Statement on Potentially Unlawful Online Platforms for Trading Digital Assets

#253

Post by flowctrl »

scblock wrote: post #108
crypt1d wrote: post #52

Earlier quoted context omitted.

by allowing u to transact wealth without the control and oversight of the oppressive regime.

Is this the same oppressive regime that surveils, firewalls and filters the internet and other forms of communication that this idea depends on?

Except it doesn't depend on any particular means of communication. You can print out Bitcoin on paper and physically trade it. You can embed it in an image and trade that. You can physically scan QR codes on each others phones to transmit it. Bitcoin and other cryptos can be transferred via sat phone. The Internet and exchanges are just conveniences.

There are also numerous projects to work around Internet censorship in the crypto space. Such as the Substratum Network (https://substratum.net) and Mysterium Network (https://mysterium.network).

Re: Statement on Potentially Unlawful Online Platforms for Trading Digital Assets

#254

Post by flowctrl »

hackcasual wrote: post #62
TallGuyShort wrote: post #8

So if some anonymous person invents cryptocurrencies, at what point are you supposed to be considered securities? If the first exchange had gone to SEC to register as a securities exchange, would the SEC not have laughed in their face? The headline itself really captures the ambiguity and uncertainty of all of this: "potentially unlawful".

Securities are well defined, see https://en.wikipedia.org/wiki/Securities_Exchange_Act_of_193... Really anything that gains value soley due to being promoted would be considered a security SEC v. WJ Howey Co: > [a]n investment contract for purposes of the Securities Act means a contract, transaction or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the effort…

The second half is important too: that the expected profits are from the efforts of the promoter. In other words if a company is doing work of some kind, and they are selling a token on the basis that it will go up in value due to the work that they are doing, then it is a security.

Re: Statement on Potentially Unlawful Online Platforms for Trading Digital Assets

#255

Post by flowctrl »

loceng wrote: post #139
cal5k wrote: post #77

I'm flabbergasted by how much disinformation is infecting this threat. If you look at the list of legal actions the SEC has pursued at the bottom of the article, they are all flagrant violations of securities law and clearly unethical practices. For example, in "SEC v. Jon E. Montroll and Bitfunder", the individual in question was accepting "investments" in his exchange that were clearly securities (probably fitting…

How can something structured as a Pyramid-Ponzi scheme be considered a legitimate new industry? I've yet to see anyone address - while referencing the Pyramid-Ponzi structures of the most popular crypto-assets - and give reason as to why this is okay (when traditional Ponzi schemes are not legal, and for good reason).

Here you go. This chart breaks down the differences between Pyramid schemes, Ponzi schemes, and open public cryptocurrencies such as Bitcoin. By "open public" I mean that there is no central authority or organization. Bitcoin is a decentralized open source project run by community participation (anyone can run a node or miner, and millions of people do).

https://i.redd.it/6zz58uq57n601.png

Re: Statement on Potentially Unlawful Online Platforms for Trading Digital Assets

#256

Post by [deleted] »

pembrook wrote: post #202
vanattab wrote: post #194

Can anyone tell me if Valve's Steam Marketplace would constitute a "securities" platform. What is the diffrence between Valve facilitating the buying/selling some ingame currency for arbitrary amounts of real dollars between users and facilitating the buying/selling of a cryptocurrency?

No. The difference here is 99% of people holding crypto assets are doing so as (and literally calling them “Investments”). People putting money into steam are knowingly doing so for the purpose of playing games. The former represents a significant threat to the stability of American households when a large portion of the population thinks they are “investing” in something that is also not required to follow the safeg…

[deleted]

Re: Statement on Potentially Unlawful Online Platforms for Trading Digital Assets

#257

Post by CryptoPunk »

ianai wrote: post #245
CryptoPunk wrote: post #220

Earlier quoted context omitted.

>>I, for one, welcome our PonziCoin-banning overlords. That's a pretty totalitarian outlook. You're not content with not using cryptocurrency yourself. You want to prevent everyone else, with punitive measures, from using it too.

And bidding all gaming GPUs up isn’t punitive?

Of course not. Two parties coming to an agreement in a free market to trade currency for a GPU is not a violation of a third party's right to buy that GPU. Putting two people behind bars because they traded some 1s and 0s that happen to be valued by some set of people is a flagrant violation of rights.

Re: Statement on Potentially Unlawful Online Platforms for Trading Digital Assets

#258

Post by snissn »

gwbas1c wrote: post #115
TallGuyShort wrote: post #8

So if some anonymous person invents cryptocurrencies, at what point are you supposed to be considered securities? If the first exchange had gone to SEC to register as a securities exchange, would the SEC not have laughed in their face? The headline itself really captures the ambiguity and uncertainty of all of this: "potentially unlawful".

The reason why many cryptocurrencies are considered securities is because there's a certain group of people promoting them as in investment. They are claiming that their cryptocurrencies will rise in value. If you study the definition of money, and what makes a good currency, there's no kind of money that rises in value merely because you own it. Money is meant to be spent or invested, not hoarded. (Adam Smith's "Wea…

Your comment makes me think of beanie babies during the bubble. They hardly seem like securities, or do they? Your definition implies they are if there are folks assuring you they will go up in value. Also less cray example, old cars, classic records, guitars, art etc. Is a van gogh a security? An antique first printing of moby dick? Thanks!

Re: Statement on Potentially Unlawful Online Platforms for Trading Digital Assets

#259

Post by chrisco255 »

nosuchthing wrote: post #231
WikipediasBad wrote: post #183

Earlier quoted context omitted.

Very interesting idea. Have you heard about Basecoin and Seigniorage shares? They are trying to do exactly that: http://www.getbasecoin.com/ Are these coins securities in your opinion?

Stablecoins are effectively digital money laundering tools. See: https://en.wikipedia.org/wiki/Liberty_Reserve#Criminal_inves... Why bother using a convoluted blockchain stablecoin rube goldberg machine where you need to jump though several hoops just to use it, when you could use a service like venmo, square, stripe, etc? What use case would justify the need for a stable coin if not for evading the law?

Simple, just look at ETH. ETH is fully programmable currency. It can be locked away in a smart contract and programmed to disburse based on various conditions. A stable ERC20 token would have all the benefits of ETH coupled with the stability of the dollar. That's an incredibly powerful concept, much, much more powerful than a simple payments API with 2-3% fees BTW.

Re: Statement on Potentially Unlawful Online Platforms for Trading Digital Assets

#260

Post by thinkmassive »

gwbas1c wrote: post #115
TallGuyShort wrote: post #8

So if some anonymous person invents cryptocurrencies, at what point are you supposed to be considered securities? If the first exchange had gone to SEC to register as a securities exchange, would the SEC not have laughed in their face? The headline itself really captures the ambiguity and uncertainty of all of this: "potentially unlawful".

The reason why many cryptocurrencies are considered securities is because there's a certain group of people promoting them as in investment. They are claiming that their cryptocurrencies will rise in value. If you study the definition of money, and what makes a good currency, there's no kind of money that rises in value merely because you own it. Money is meant to be spent or invested, not hoarded. (Adam Smith's "Wea…

> You will need to figure out how to keep the value stable on a day-to-day and year-to-year basis.

This is a difficult problem that's being tackled by multiple projects, such as MakerDAO[1] (DAI) and Bitshares[2] (BTS). Also less reputable implementations like Tether[3] (USDT).

A good article for more detail is An Overview Of Stablecoins[4]

[1] https://makerdao.com/

[2] https://bitshares.org/

[3] https://tether.to/

[4] https://multicoin.capital/2018/01/17/an-overview-of-stableco...

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