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Offline Riverhead

CFTC Chairman claims oversight on BTC Derivatives
« on: December 11, 2014, 02:09:58 PM »

https://www.coindesk.com/cftc-chairman-oversight-bitcoin-derivatives/

Perhaps delegates with servers located in the US had best move them elsewhere.

Offline Troglodactyl

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Re: CFTC Chairman claims oversight on BTC Derivatives
« Reply #1 on: December 11, 2014, 05:01:34 PM »
One day, as Billy is lounging in a perfect vacuum, he idly tosses a quarter vertically at an initial velocity of exactly 50 m/s.  As it sails through nothing in particular, he ponders what he may spend it on when it returns.

1. What is the total flight time of Billy's quarter?
2. During this time, how much value can Billy anticipate will be lost to inflation?
3. Does Billy's action constitute a futures contract?

Offline sschechter

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Re: CFTC Chairman claims oversight on BTC Derivatives
« Reply #2 on: December 11, 2014, 05:04:11 PM »
I do see why there is cause for concern, but I don't think it will be an issue.  The reason being - what does the CFTC have to gain?  They may be terribly corrupt, and protect the players they are supposed to be investigating, but they are not in the business of looking stupid.  First, there's no money in fining delegates.  They are just employees, not business owners.  Second, catching a delegate will do nothing to shut down the network.  Any publicity brought by catching delegates will only shine a light on how versatile the network is and immune from overzealous regulators.  This would be one of the worst ways of attempting to sabotage BitShares, and at the same time would be one of the best advertisements that no money can buy.

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Offline Ander

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Re: CFTC Chairman claims oversight on BTC Derivatives
« Reply #3 on: December 11, 2014, 09:44:17 PM »
One day, as Billy is lounging in a perfect vacuum, he idly tosses a quarter vertically at an initial velocity of exactly 50 m/s.  As it sails through nothing in particular, he ponders what he may spend it on when it returns.

1. What is the total flight time of Billy's quarter?
2. During this time, how much value can Billy anticipate will be lost to inflation?
3. Does Billy's action constitute a futures contract?

1: 10.20 sec.
2: .0000001375 cents.  (Based on official government inflation rate).
3: No.
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Offline fuzzy

Re: CFTC Chairman claims oversight on BTC Derivatives
« Reply #4 on: December 11, 2014, 09:59:25 PM »
https://www.coindesk.com/cftc-chairman-oversight-bitcoin-derivatives/

Perhaps delegates with servers located in the US had best move them elsewhere.

I guess my argument against having others run delegates for me are growing weaker...

CFTC is bullshit.  All these agencies are so terrible...sucks that there seems no choice but to work with the Cartels or go to prison indefinitely without trial or charge. 
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Offline maqifrnswa

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Re: CFTC Chairman claims oversight on BTC Derivatives
« Reply #5 on: December 11, 2014, 10:05:47 PM »
http://www.cftc.gov/PressRoom/SpeechesTestimony/opamassad-6

INAL, but there are no contracts/underlying deliverable assets in bitshares, so they aren't derivatives

BitShares is basically a coin, like bitcoin, that has two bins of two different coins inside of it. The network only lets you trade one type for coins the other at a ratio determined by the network. Delegates are thus miners processing transactions, just like bitcoin.

Can someone explain why this is a problem for delegates in the US? Maybe I'm not seeing it.

Quote
We also continue to respond to market developments such as new products. Virtual currencies, such as bitcoin, are an example. Virtual currencies may raise issues for a number of governmental agencies. The CFTC's jurisdiction with respect to virtual currencies will depend on the facts and circumstances pertaining to any particular activity in question. While the CFTC does not have policies and procedures specific to virtual currencies like bitcoin, the agency’s authority extends to futures and swaps contracts in any commodity. The CEA defines the term commodity very broadly so that in addition to traditional agricultural commodities, metals, and energy, the CFTC has oversight of derivatives contracts related to Treasury securities, interest rate indices, stock market indices, currencies, electricity, and heating degree days, to name just a few underlying products.

Derivative contracts based on a virtual currency represent one area within our responsibility. Recently, for example, a SEF registered with us made such a contract available. Innovation is a vital part of our markets, and it is something that our regulatory framework is designed to encourage. At the same time, our regulatory framework is intended to prevent manipulation and fraud, and to make sure our markets operate with transparency and integrity. Our responsibilities at the CFTC in this regard are ongoing. It is important to emphasize that the existence of contract does not mean the CFTC endorses it. As with all new developments, we must remain vigilant to ensure market integrity, and will continue to evaluate these new contracts over time. We will also continue to coordinate with other regulatory authorities regarding the issues raised by virtual currencies as appropriate.

he does mention "the CFTC has oversight of derivatives contracts related to Treasury securities, interest rate indices, stock market indices, currencies, electricity, and heating degree days, to name just a few underlying products." But what if there are no contracts nor underlying assets (and no one underwriting or executing the trades?)
« Last Edit: December 11, 2014, 10:10:10 PM by maqifrnswa »
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Online Frodo

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Re: CFTC Chairman claims oversight on BTC Derivatives
« Reply #6 on: December 11, 2014, 10:43:09 PM »
http://www.cftc.gov/PressRoom/SpeechesTestimony/opamassad-6

INAL, but there are no contracts/underlying deliverable assets in bitshares, so they aren't derivatives

BitShares is basically a coin, like bitcoin, that has two bins of two different coins inside of it. The network only lets you trade one type for coins the other at a ratio determined by the network. Delegates are thus miners processing transactions, just like bitcoin.

Can someone explain why this is a problem for delegates in the US? Maybe I'm not seeing it.

Quote
We also continue to respond to market developments such as new products. Virtual currencies, such as bitcoin, are an example. Virtual currencies may raise issues for a number of governmental agencies. The CFTC's jurisdiction with respect to virtual currencies will depend on the facts and circumstances pertaining to any particular activity in question. While the CFTC does not have policies and procedures specific to virtual currencies like bitcoin, the agency’s authority extends to futures and swaps contracts in any commodity. The CEA defines the term commodity very broadly so that in addition to traditional agricultural commodities, metals, and energy, the CFTC has oversight of derivatives contracts related to Treasury securities, interest rate indices, stock market indices, currencies, electricity, and heating degree days, to name just a few underlying products.

Derivative contracts based on a virtual currency represent one area within our responsibility. Recently, for example, a SEF registered with us made such a contract available. Innovation is a vital part of our markets, and it is something that our regulatory framework is designed to encourage. At the same time, our regulatory framework is intended to prevent manipulation and fraud, and to make sure our markets operate with transparency and integrity. Our responsibilities at the CFTC in this regard are ongoing. It is important to emphasize that the existence of contract does not mean the CFTC endorses it. As with all new developments, we must remain vigilant to ensure market integrity, and will continue to evaluate these new contracts over time. We will also continue to coordinate with other regulatory authorities regarding the issues raised by virtual currencies as appropriate.

he does mention "the CFTC has oversight of derivatives contracts related to Treasury securities, interest rate indices, stock market indices, currencies, electricity, and heating degree days, to name just a few underlying products." But what if there are no contracts nor underlying assets (and no one underwriting or executing the trades?)

I think I get your point. The peg is merely maintained by free market forces. And it can thus fluctuate around the price of the asset it is pegged to. There is no contract that actually defines 1bitUSD=1USD. Its value is just determined by the majority belief of traders.

Although right now with the use of price feeds this argumentation is a bit limited. The feeds enforce the peg from outside. This is still no contract but it isn't completely free market either.

Well, interesting times are ahead of us. There are so many completely new approaches in the crypto 2.0 space, that we will have to rethink many fundamental models, rather than trying to apply old ones to this vastly different architecture.
Just like the internet changed the way we look at flow of information, this might change the way we look at flow of financial values.

Offline Markus

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Re: CFTC Chairman claims oversight on BTC Derivatives
« Reply #7 on: December 12, 2014, 08:24:04 AM »
One day, as Billy is lounging in a perfect vacuum, he idly tosses a quarter vertically at an initial velocity of exactly 50 m/s.  As it sails through nothing in particular, he ponders what he may spend it on when it returns.

1. What is the total flight time of Billy's quarter?
2. During this time, how much value can Billy anticipate will be lost to inflation?
3. Does Billy's action constitute a futures contract?

1: 10.20 sec.
2: .0000001375 cents.  (Based on official government inflation rate).
3: No.

Why do people always assume gravity is 9.81 m/s²? In most parts of the universe it is actually quite different - especially when that part is a perfect vacuum :)

Offline xeroc

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Re: CFTC Chairman claims oversight on BTC Derivatives
« Reply #8 on: December 12, 2014, 02:43:48 PM »
Hug? What does vacuum have to do with gravity ???
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Offline Chuckone

Re: CFTC Chairman claims oversight on BTC Derivatives
« Reply #9 on: December 12, 2014, 03:44:29 PM »
One day, as Billy is lounging in a perfect vacuum, he idly tosses a quarter vertically at an initial velocity of exactly 50 m/s.  As it sails through nothing in particular, he ponders what he may spend it on when it returns.

1. What is the total flight time of Billy's quarter?
2. During this time, how much value can Billy anticipate will be lost to inflation?
3. Does Billy's action constitute a futures contract?

1: 10.20 sec.
2: .0000001375 cents.  (Based on official government inflation rate).
3: No.

Why do people always assume gravity is 9.81 m/s²? In most parts of the universe it is actually quite different - especially when that part is a perfect vacuum :)

People assume it's 9.81 m/s² because everywhere you go on earth that's pretty much the acceleration you'll get from gravity. Vacuum or not.

Anywhere in the universe you'll get a different value (depending which massive stellar object is closer), you just even have to be at a couple of thousands miles from earth to get a different value. Anyway, for what it's worth, earth gravity on its surface can be measured by the force exerted on any object (acceleration * mass), with the acceleration being pretty much constant anywhere you are.

Edit: The only difference a vacuum will make compared to the normal atmosphere will be the terminal speed the object will be able to reach, and the measured acceleration of the object while falling
« Last Edit: December 12, 2014, 03:47:01 PM by Chuckone »
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Offline robrigo

Re: CFTC Chairman claims oversight on BTC Derivatives
« Reply #10 on: December 12, 2014, 05:50:07 PM »
https://www.coindesk.com/cftc-chairman-oversight-bitcoin-derivatives/

Perhaps delegates with servers located in the US had best move them elsewhere.

VPS running delegate.robrigo moved to Singapore. Thanks for the heads up Riverhead!

Offline fuzzy

« Last Edit: December 13, 2014, 03:55:49 AM by fuzzy »
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