Author Topic: Legality of Prediction Markets and Dacs  (Read 11974 times)

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Offline bytemaster

here is some interesting thinking from the bitcointalk forum:

Re: Why Bitcoin is doomed to fail, and there's nothing you can do about it.
Today at 06:12:19 PM

If you are interested about how to bypass government, consider this. The constitution, Article 1, Section 10, Clause 1 has a statement in it that says: "No State shall ... make any ... Law impairing the Obligation of Contracts ..." The Federal Government has been adjudicated to be a state. See: Enright v. U.S., D.C.N.Y., 437 F.Supp. 580, 581.

Here's what to get pushed through the courts. Form contracts for any business that you do with other people. Let the contracts invoke the above Article 1 wording along with wording stating that it is the intent of the contract and the parties to the contract that no state laws apply except upon an explicit allowance by the parties to the contract that they are accepting certain stated laws. Throw in the wording that the Federal Government is a state. Say, also, that not answering a challenge by some some state authority in no way waives any part of the contract.

Apply the above with enumerations of specific laws that you do not want to apply to the contract or the parties thereof - IRS taxation, and business licensing, for example.

Doing this will make your Bitcoin transacting to match your terms and not government terms.

Smiley


This is a wonderful strategy and mirrors what I have been talking about at the conference: the post-contract society.   Eliminate contracts from every interaction you engage in and the government loses all jurisdiction over the agreement.   It no longer becomes a security, etc. 
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline onceuponatime

here is some interesting thinking from the bitcointalk forum:

Re: Why Bitcoin is doomed to fail, and there's nothing you can do about it.
Today at 06:12:19 PM

If you are interested about how to bypass government, consider this. The constitution, Article 1, Section 10, Clause 1 has a statement in it that says: "No State shall ... make any ... Law impairing the Obligation of Contracts ..." The Federal Government has been adjudicated to be a state. See: Enright v. U.S., D.C.N.Y., 437 F.Supp. 580, 581.

Here's what to get pushed through the courts. Form contracts for any business that you do with other people. Let the contracts invoke the above Article 1 wording along with wording stating that it is the intent of the contract and the parties to the contract that no state laws apply except upon an explicit allowance by the parties to the contract that they are accepting certain stated laws. Throw in the wording that the Federal Government is a state. Say, also, that not answering a challenge by some some state authority in no way waives any part of the contract.

Apply the above with enumerations of specific laws that you do not want to apply to the contract or the parties thereof - IRS taxation, and business licensing, for example.

Doing this will make your Bitcoin transacting to match your terms and not government terms.

Smiley

Offline bytemaster

Fortunately this market is using play money and thus legal.   Only prediction markets that deal in fiat have had problems.   See hollywood stock exchange for an example.

H$ is play money. Crypto currencies aren't play money. You can't cash out of H$, whereas you can cash out of bitshares or bitcoin or any other alt coin with tangible profits. That is what governments are concerned about, particularly with crypto currencies. People stand to profit from them while governments are uncertain of how to take a piece of that profit.

Calling crypto currencies play money is a very questionable response to my question...

You can cash out of Linden Dollars too.   Whether it is legal or not in your jurisdiction does not change the fact that it is perfectly legal to develop open source software and publish it as free speech.   

The laws do not compile and there are 1000 ways to interpret everything as either legal or illegal.


Second life contains a virtual economy, it does not constitute a platform for betting, which is precisely how the us government will look at bitshares and any other prediction markets that result from its development. From an investors point of view this presents significant risk. If your product does not comply with the regulations of major governments I don't believe it will be adopted. If you cannot assuage these concerns how can I or anyone else rationally invest in your product?

Second Life has gambling platforms built into the game.  Just because you can use a currency for 'gambling' doesn't mean it is regulated.
For one thing betting is just one way of looking at this, another is that it operates no differently than a Credit Union or Bank.  It lends dollars into existence based upon collateral (stock in the bank).  In this sense it is little different than Bitcoin or any 'regulated' bank except that it is entirely transparent and 200% reserve rather than fractional reserve.

I would contend that whether you call it a prediction market, a bank, a currency, an equity, or anything else that the regulators rules do not accurately apply.   It should really be considered a "math-based digital asset" as the W. Twins filed in their application with the SEC.   These instruments are entirely NEW.

Worst case scenario the US government outlaws even running the application as an end user, it will become like drugs inside the US and likely result in the banning of Bitcoin as well.   The US market is only 4% of the worlds population and the benefits offered by our products can produce trillions of dollars of value to other parts of the world where it will be legal.   

As someone giving to our cause ("Capitalism takes more people out of poverty than Aid") by donating to one of our addresses or buying PTS you should be considering the global impact of these technologies and not just US centric regulatory views.  We are focused on keeping our legal exposure as small as possible so we can impact the masses who are unbanked. 



"Bono says capitalism takes more people out of poverty than aid."
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

clout

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Fortunately this market is using play money and thus legal.   Only prediction markets that deal in fiat have had problems.   See hollywood stock exchange for an example.

H$ is play money. Crypto currencies aren't play money. You can't cash out of H$, whereas you can cash out of bitshares or bitcoin or any other alt coin with tangible profits. That is what governments are concerned about, particularly with crypto currencies. People stand to profit from them while governments are uncertain of how to take a piece of that profit.

Calling crypto currencies play money is a very questionable response to my question...

You can cash out of Linden Dollars too.   Whether it is legal or not in your jurisdiction does not change the fact that it is perfectly legal to develop open source software and publish it as free speech.   

The laws do not compile and there are 1000 ways to interpret everything as either legal or illegal.


Second life contains a virtual economy, it does not constitute a platform for betting, which is precisely how the us government will look at bitshares and any other prediction markets that result from its development. From an investors point of view this presents significant risk. If your product does not comply with the regulations of major governments I don't believe it will be adopted. If you cannot assuage these concerns how can I or anyone else rationally invest in your product?

Offline bytemaster

Fortunately this market is using play money and thus legal.   Only prediction markets that deal in fiat have had problems.   See hollywood stock exchange for an example.

H$ is play money. Crypto currencies aren't play money. You can't cash out of H$, whereas you can cash out of bitshares or bitcoin or any other alt coin with tangible profits. That is what governments are concerned about, particularly with crypto currencies. People stand to profit from them while governments are uncertain of how to take a piece of that profit.

Calling crypto currencies play money is a very questionable response to my question...

You can cash out of Linden Dollars too.   Whether it is legal or not in your jurisdiction does not change the fact that it is perfectly legal to develop open source software and publish it as free speech.   

The laws do not compile and there are 1000 ways to interpret everything as either legal or illegal. 

For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

clout

  • Guest
Fortunately this market is using play money and thus legal.   Only prediction markets that deal in fiat have had problems.   See hollywood stock exchange for an example.

H$ is play money. Crypto currencies aren't play money. You can't cash out of H$, whereas you can cash out of bitshares or bitcoin or any other alt coin with tangible profits. That is what governments are concerned about, particularly with crypto currencies. People stand to profit from them while governments are uncertain of how to take a piece of that profit.

Calling crypto currencies play money is a very questionable response to my question...


Offline valtr

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What about the possibility of shorting shares of a company via Bitshares and then attacking that company in the real world making the price of the company shares drop? Due to the anonymous nature of BTS the attacker with his short position could get away with it and take huge profits... Think of airlines....
I think it is not possible because on Bitshares such a share is not real share but only CFD.
CFD is something like bet on price.

https://en.wikipedia.org/wiki/Contract_for_difference

But if reflects the price of the real share....
It reflects the price, otherwise it would have no sence. Shorting CFD when real share price is going up means that you lose money.
My opinion is that real shares do not care about CFD, but CFD are fully dependend on real shares price.
Off course if you short real share and the share is going up, you lose money too.
But provided you are a big player (funds, banks etc.) you may set a new trend or at least make money on cheaper buyback.

It is my view, maybe it is more complex problem.

Offline santaclause102

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What about the possibility of shorting shares of a company via Bitshares and then attacking that company in the real world making the price of the company shares drop? Due to the anonymous nature of BTS the attacker with his short position could get away with it and take huge profits... Think of airlines....
I think it is not possible because on Bitshares such a share is not real share but only CFD.
CFD is something like bet on price.

https://en.wikipedia.org/wiki/Contract_for_difference

But if reflects the price of the real share....

Offline valtr

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What about the possibility of shorting shares of a company via Bitshares and then attacking that company in the real world making the price of the company shares drop? Due to the anonymous nature of BTS the attacker with his short position could get away with it and take huge profits... Think of airlines....
I think it is not possible because on Bitshares such a share is not real share but only CFD.
CFD is something like bet on price.

https://en.wikipedia.org/wiki/Contract_for_difference

Offline santaclause102

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What about the possibility of shorting shares of a company via Bitshares and then attacking that company in the real world making the price of the company shares drop? Due to the anonymous nature of BTS the attacker with his short position could get away with it and take huge profits... Think of airlines....

Offline Markus

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I agree but thats not how the us government operates. They have shut down all prediction markets other than the Iowa Electronic Market and thats only because this market is heavily regulated and is used for academic purposes. Additionally governments can shut down bitcoin. Crypto currency adoption depends upon exchanges which are centralized establishments that must work within the confines of the law.

There are so many investments around where the cover page of the brochure boldly states "Not for dissemination in the United States of America". Some people might miss out, but I don't think it would be a problem for BitShares adoption or other DACs.

Do you care about BitCoins being illegal in Thailand?
Do you think most Thai care?
Do you think this significantly hinders BitCoin dissemination in Thailand?

Offline Amazon

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Fortunately this market is using play money and thus legal.   Only prediction markets that deal in fiat have had problems.   See hollywood stock exchange for an example.

+1 to the question

from the newest update in http://www.dfi.wa.gov/cs/money-services-providers.htm, crypto-currency is included in the definition of "Money".

Quote
Virtual Currency
Virtual currency, also known as digital currency or crypto-currency, is a medium of exchange not authorized or adopted by a government. There are many different digital currencies being used over the internet, the most commonly known being Bitcoin. In Washington, digital currency is included in the definition of "Money" in the Uniform Money Services Act (UMSA), chapter 19.230 RCW:

"Money means a medium of exchange that is authorized or adopted by the United States or a foreign government or other recognized medium of exchange. "Money" includes a monetary unit of account established by an intergovernmental organization or by agreement between two or more governments."

Companies wishing to transmit money for Washington residents in a digital currency form can contact DFI for a determination whether licensure under the UMSA is required. If it is, a license is required before the company can engage in the activity.
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Offline bytemaster

Fortunately this market is using play money and thus legal.   Only prediction markets that deal in fiat have had problems.   See hollywood stock exchange for an example.
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

clout

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I think that the logical response would be to recognize that people ought to be free to participate in whichever market they choose.

I'd guess that it's not condemned and criminalized immediately. The decentralized nature of the platform will take regulators longer to come to terms with. The US government would have shut down bitcoin long ago if they could simply just condemn and criminalize it.

Given that the platform is fraud proof I think they'll initially leave it alone and any eventual regulation we see will be for all crypto-assets in general.

I agree but thats not how the us government operates. They have shut down all prediction markets other than the Iowa Electronic Market and thats only because this market is heavily regulated and is used for academic purposes. Additionally governments can shut down bitcoin. Crypto currency adoption depends upon exchanges which are centralized establishments that must work within the confines of the law.

Offline weiry

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I think that the logical response would be to recognize that people ought to be free to participate in whichever market they choose.

I'd guess that it's not condemned and criminalized immediately. The decentralized nature of the platform will take regulators longer to come to terms with. The US government would have shut down bitcoin long ago if they could simply just condemn and criminalize it.

Given that the platform is fraud proof I think they'll initially leave it alone and any eventual regulation we see will be for all crypto-assets in general.