Latest Bitcoin news - Caution Alert

[santaclause102]

Do you have an example of such behavior / statements?

The community defense team is why so few people who aren't true believers bother with this forum.  It's why there's now talk of if the forum is even a good place for anybody new because posting questions as a new user are often ridiculed or attacked as trolls or sockpuppets.

I read a thread recently about tonyk and this exact behavior, sorry I don't have a link it wasn't something I saved.

Tonyk is one individual. Everyone has his own opinions. Btw he rants against pretty much anything new users or BitShares Music like here https://bitsharestalk.org/index.php?topic=8652.0 Let's keep the discussion based on facts (not the emotional bias that we ALL have)

[hpenvy]

1. I like some of the points Adam makes about a sometimes hostile environment.
2. The same could be said about alt currencies on Bitcointalk, Litecoin, Nxt etc...  It's not an excuse, just a call to reality as you requested.
3. Leading by example is great.
4. I would love to see a list of changes you would make ranging from marketing to keeping an open environment while catering to all.
5. I appreciate your contributions, however, I have no issue calling people out in a respectful manner.

[AdamBLevine]

Do you have an example of such behavior / statements?

The community defense team is why so few people who aren't true believers bother with this forum.  It's why there's now talk of if the forum is even a good place for anybody new because posting questions as a new user are often ridiculed or attacked as trolls or sockpuppets.

I read a thread recently about tonyk and this exact behavior, sorry I don't have a link it wasn't something I saved.

Edit: here you go https://bitsharestalk.org/index.php?topic=9375.0;topicseen

[santaclause102]

Do you have an example of such behavior / statements?

The community defense team is why so few people who aren't true believers bother with this forum.  It's why there's now talk of if the forum is even a good place for anybody new because posting questions as a new user are often ridiculed or attacked as trolls or sockpuppets.

[AdamBLevine]

IMO if the others fit this definition, Dogeparty and Counterparty would also be in violation.

1 - investment of money due to - "Burned" Bitcoins could be construed as investment of money. Just because they didn't use the money doesn't mean that others didn't invest money via the burn process to get their respective stake.
2- an expectation of profits arising from - Again, I don't think they burned their Bitcoins expecting nothing or coins of similar value in return.
3- a common enterprise - The common enterprise being Dogeparty/Counterparty
4- which depends solely on the efforts of a promoter or third party - Dependent on the developers developing the software.

If a cryptocoin 2.0 protocol relied on some sort of crowd funding, whether it be via a more traditional-style crowdfunding or burning of cryptocurrency, there is the same end result. The difference being the projects that burned crypto just wasted money needlessly. Users invested money (burned/ICO/IPO)  to get an equity in the project (common enterprise) with an expectation of profit from said projects (rise in token value), the developments of which relied on promoters/third parties (developers/organizers).

This is a slippery slope, a very slippery slope indeed. I could probably name at least 20 different projects that this could be applicable to. All of which just happen to be the most innovative cryptocurrency projects in existence, which is very sad for the sake of innovation and development of different use cases of blockchain technology other than specifically for currency. I hope that the Feds just leave these projects alone and let the industry grow and mature on its own. They will get their cut somewhere down the line one way or the other, it doesn't have to be through the SEC. The money will trickle down to them into their pockets eventually.

Basically the question is whether it is possible to Invest in something by destroying the value.  We don't have an answer to this, my belief is no and you may be right, it may be construed as investment because if it looks like a duck and quacks like a duck, the feds are going to treat it like a duck analog

Either way it seems clear to me Invictus is under the gun on this one, we'll have to wait and see on Dogeparty.  LTBcoin is pretty straightforward and there was no IPO or burn, with distribution based on contribution it shouldn't fall under this but just like with Dogeparty if you get broad enough with your interpretation anything is possible.

It's funny how some people seem to think I take some sort of pleasure in this, I don't.  I'm just trying to keep people focused on reality at least a little since its easy to let what you wish reality to be dictate what you believe will happen.  Focus on the reality for Bitshares, why does it matter what happens to anybody else?  It's obvious deflecting.

PS: Guys, lets be nice to Adam. LTB and its subsidiaries have done a lot of good press for Bitshares and we don't want to burn that bridge. Everyone is entitled to their own opinions.

They can't be nice to me because I question what they wish to be true and I don't have time to beat around the bush when I see a problem or have a question.  They don't want to answer the question, they want it to stop being asked.

  The community defense team is why so few people who aren't true believers bother with this forum.  It's why there's now talk of if the forum is even a good place for anybody new because posting questions as a new user are often ridiculed or attacked as trolls or sockpuppets.

Like you said, I actually do some important work for Bitshares in addition to my commenting and provide a platform along with access to the LTB community many of whom after which joined the I3 community.  Given that I could stop all that and invest my time and money elsewhere, If they're willing to attack my questions, what kind of user wouldn't they be willing to attack?

[CoinHoarder]

"(2) with an expectation of profits arising (3) from a common enterprise "

AGSer expect BTS and dacs allocation from Bitshares-Opensource-Software,which is not a legal entity ,so Bitshares DACs are not  "a common enterprise".

Therefore,AGSer only fits this 4 tests when they expected profits arising from a common enterprise-----Invictus and not Bitshares DAC,which clearly AGSer expect gain from the latter.

This is a good point. The situation is so complicated that I'm sure even the lawyers don't know exactly how it will play out. Cryptoequity is such new territory for everyone, and the SEC has not issued any guidance on the matter. I don't think it is a cause for concern though.. not for end users, the DACs, or "investors."

Worst case scenario is the "promoters"/"third parties" get fined and everyone goes about their business from there on out like normal. It's not like the SEC can kill a decentralized protocol. I think anyone interested in funding a project in cryptoequity should tread cautiously in the future though. Hopefully I3 "invested" enough in their project to easily cover any fines that may be imposed.. I have a feeling they did.

PS: Guys, lets be nice to Adam. LTB and its subsidiaries have done a lot of good press for Bitshares and we don't want to burn that bridge. Everyone is entitled to their own opinions.

[oco101]

IMO if the others fit this definition, Dogeparty and Counterparty would also be in violation.

Seriously  Dogecoin it is Adam coin therefore could not be touch ....In the other hand Bitshares it is screwed : 

I'll be shocked if Invictus is not getting a knock on the door come raid day for Angelshares

. For sure we don't wanna shock Adam.

 

[CoinHoarder]

IMO if the others fit this definition, Dogeparty and Counterparty would also be in violation.

1 - investment of money due to - "Burned" Bitcoins could be construed as investment of money. Just because they didn't use the money doesn't mean that others didn't invest money via the burn process to get their respective stake.
2- an expectation of profits arising from - Again, I don't think they burned their Bitcoins expecting nothing or coins of similar value in return.
3- a common enterprise - The common enterprise being Dogeparty/Counterparty
4- which depends solely on the efforts of a promoter or third party - Dependent on the developers developing the software.

If a cryptocoin 2.0 protocol relied on some sort of crowd funding, whether it be via a more traditional-style crowdfunding or burning of cryptocurrency, there is the same end result. The difference being the projects that burned crypto just wasted money needlessly. Users invested money (burned/ICO/IPO)  to get an equity in the project (common enterprise) with an expectation of profit from said projects (rise in token value), the developments of which relied on promoters/third parties (developers/organizers).

This is a slippery slope, a very slippery slope indeed. I could probably name at least 20 different projects that this could be applicable to. All of which just happen to be the most innovative cryptocurrency projects in existence, which is very sad for the sake of innovation and development of different use cases of blockchain technology other than specifically for currency. I hope that the Feds just leave these projects alone and let the industry grow and mature on its own. They will get their cut somewhere down the line one way or the other, it doesn't have to be through the SEC. The money will trickle down to them into their pockets eventually.

[oco101]

Adam we are all so happy that Dodgecoin is not affected. And thank for your help here at Bitshare ......

[AdamBLevine]

@Adam

did you actually read the chatlogs?  Dogeparty is listed in there as well.   

Dogeparty didn't solicit funds that are used to fund the endeavor, so I'll be shocked if there is an issue with the SEC.  I also suspect Counterparty will be fine because of this.  In order for something to be a security, it must be purchased which means it must be sold.  Neither XDP or XCP were purchased or sold because nobody benefitted from the money.  Point 1 and 2 don't work for Dogeparty or Counterparty (because there is no pooling of capital) but they seem to very much work for Invictus

Here's the Howie Test

Justice Murphy, writing for the majority, identified the major legal issue in this case as whether or not the contracts Howey was selling (which in substance were basically leaseback agreements) constituted an "investment contract" within the meaning of § 2(a)(1) of the Securities Act of 1933. Murphy reasoned that while the term "investment contract" was left undefined by the Act, it had been used in state blue sky laws to cover a broad array of contracts and other schemes to raise capital in a way to secure some income or profit from the use thereof. Thus, the Court concluded, Congress had written the term into the statute in recognition of its previously adopted common law meaning.

Murphy then formulated one of the U.S. Supreme Court's earliest tests to determine whether an instrument qualifies as an "investment contract" for the purposes of the Securities Act (which later came to be referred to as the Howey test):

1 - investment of money due to
2- an expectation of profits arising from
3- a common enterprise
4- which depends solely on the efforts of a promoter or third party

Murphy determined that the contracts in issue here met all four prongs of this test, and thus W. J. Howey could be held liable for violating § 5 of the Securities Act of 1933. Furthermore, Murphy held that the fact that some of the investors chose to use services other than those of Howey-in-the-Hills to tend to the groves was irrelevant, because §5 forbids the offer of unregistered securities, as well as the sale of them.

[Ben Mason]

Code: [Select]

[6:17:07 PM] Wendell: SWARM… Who else?
[6:17:15 PM] Wendell: Is SWARM even incorporated?
[6:17:52 PM] Xavier  Hawk: Hmmm....CP, Bitshares, Swarm, mastercoin,
[6:18:09 PM] Xavier  Hawk: Ethereum
[6:18:13 PM] Gavin Knight: ethereum would be a likely target do to the mass volume, but they seemed to have tight legal
[6:18:17 PM] Xavier  Hawk: Storj
[6:18:23 PM] Xavier  Hawk: Maidsafe

Most of these companies are not based in the US from what I can tell. I know that Swarm, Ethereum, BitsharesX, and Maidsafe are not at least. CP didn't do an IPO, but burned Bitcoins to get genesis stake.. I'm not sure that would be counted either even though they do seem to be based in the US. Mastercoin probably falls under this category, unfortunately for them. The projects that have launched since them have been more cautionary in terms of regulatory issues.

This is still bad news over all though... just when Bitcoin/crypto is starting to rebound too. The powers that be can't stand it when the 99% have easy access to investing in disruptive technologies when they were blissfully unaware of their existence.

SWARM is US based, and I'll be shocked if Invictus is not getting a knock on the door come raid day for Angelshares.

and before you say "They're not based in the US", they were when they were collecting money for angelshares and that's what matters.

Why would you be shocked Adam?  Angel shares is a private record of a donation of cryptographic digital information....in return for which, those who donated will receive several allocations of cryptographic digital information within open-source software products.  On what basis could someone come after them?  Are we not free to gift an arrangement of harmless digital information to whomever we choose and receive harmless digital information in return?

Try not to panic....this technological innovation cannot be un-invented.  The writing is on the wall.  One way or another, blockchain technology will redistribute the power of money and transform our societies.  It's already happening.  Decentralization is and has always been the key.  Bitshares will endure.

Ben, I'm not sure how long you've been around this community but Angelshares has morphed in "what it is" several times.  It has been a donation, an investment, a trust, etc.  All these words were used in official material and in communications to people who were asked to give money by the people who were recieving it.   Take a look at the disclaimer in posts by Daniel or Stan, you'll notice the disclaimer saying anything they say on these forums is non-binding.  Well, that's great but it was a bit late and much was said in the interim. 

I totally agree none of this can be uninvented, I've never claimed that and *I'm* not panic-ing or really even concerned, but it's naive to say that Invictus won't be on the list because they're "not based in the US".  If you're panic-ing, it probably means you are too vested in the bitshares ecosystem and your incentives are screwed up because of it.   Our viewpoints should be guided by the way things are, not the way we wish they were.

Sorry Adam, the second paragraph was not mean't for you personally, it was a general statement.

I've been around from very early on and have the privilege of being a founder.  I always accepted that the language used to describe the technology would change and evolve.  I am very comfortable with my investment in Bitshares and have a deep conviction that I3 & Bitshares & the community will take us where we need to go.  I just don't see what the attack vector is with regards to Angelshares in the present.  Please enlighten me if you don't mind.....I have always valued your insight and integrity.

[blahblah7up]

@Adam

did you actually read the chatlogs?  Dogeparty is listed in there as well.   

[CoinHoarder]

No one is freaking out and there is no need to freak out. Just trying to re evaluate some possible risks, although I am pretty confident that III have much more dedicated people to do that instead of us.

What I am not so sure is that if these risks are identified and solutions are in place how and if these would be communicated to us in order to take as well the necessary precautions...

So we need a decentralized private and secure communication system that no government can't spy on us...

How can they be sure you are not one of the government's agent even on a secure channel ?   

If you're not one of the devs,if there is a real threat and need a secure channel for communication,you and I wouldn't be part of it.

Lol.. well, it looks like I may be wrong about the jurisdiction thing. The SEC has some pretty complicated regulations, you need to be a security lawyer to understand them all. There are certain cases in which foreign companies need to register with the SEC. It is not immediately apparent if this is one of them though. Judging by the trust document, I3 has a few lawyers on their side whom hopefully gave solid legal guidance. I hope the government doesn't set a precedent starting with I3/Ethereum/Swarm/etc.

http://www.sec.gov/divisions/corpfin/internatl/foreign-private-issuers-overview.shtml#II

Unfortunately Stan signs on the Trust's document I linked earlier. The "executives" of I3 being US citizens may mean that AGS did need to file with the SEC. See under "Business Contacts Tests".

a) Citizenship and Residency

Under the foreign private issuer definition, a foreign company must determine whether a majority of both its executive officers and directors are either U.S. citizens or U.S. residents. The citizenship and residency of each of the foreign company’s executive officers and directors must be analyzed separately. The terms “executive officer” and “director” may have different meanings in jurisdictions outside of the United States; therefore, foreign companies should refer to the definition of “executive officer” contained in Securities Act Rule 405 and Exchange Act Rule 3b-7 (a person or position involved in performing policy making functions for the issuer) to determine the individuals for which they should perform the analysis. When performing the analysis for “directors,” foreign companies should consider individuals that perform the functions generally performed by a board of directors of a U.S. company.

One other thing.. AGS funds were coined as donations, and DACs do not pay dividends in the traditional sense of a business since shares are burned as shareholder compensation. This may be another saving grace. They just traded A coins for X Y and Z coins, with no promise of income as they do not pay dividends and the value of X Y and Z coins are not under their control.. it is up to the free market. I think it is too early to tell if/when/how I3 or AGS or any Bitshares DACs are affected.

To the SEC jackasses if they're reading this: how about you release that crowd funding guidance you've been sitting on for years... since 2012... so people can easily crowdfund their start ups without jumping through hoops like circus animals... http://www.forbes.com/sites/devinthorpe/2014/09/09/grassroots-lobbying-effort-asks-sec-to-issue-final-crowdfunding-rules/

I still think the worst they can do is fine I3 even if they did need to file. Erik Vorhees got off with a slap on the wrist.. a $50,000 fine for running a security that sold for $11.5 Million (126,315 BTC) and that is not even counting profits or dividends. I3 is not even close as blatant as a security as SatoshiDice was, they were smarter when setting everything up.

http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370541972520#.VDffyfldWiE
http://www.coindesk.com/bitcoin-company-acquisitions-begin-gambling-site-satoshidice-sells-for-11-5m-126315-btc/

[AdamBLevine]

I think we may be freaking out about nothing.

After a quick assessment, it seems that the AGS funding was done via the "Bitshares Trust", a Hong Kong company. Meaning that the SEC would not have jurisdiction. http://bitshares.org/wp-content/uploads/2014/07/BitShares-Trust-Published%20July-18-2014.pdf

yeah,even 3i and DACSun shareholders can not use this fund for their own financial gain,they have to devote the fund for Bitshares future projects for the public.So AGS is not considered as company property.

Even some shareholder want to cash in their shares,they can't touch the AGS fund.

But on second thought.....3I itself still has 60000 PTS and the allocated BTSX,that one would be DACSun's property.

What exactly do you think Invictus has done, and is doing with the Angelshares funding?   They are paying employee salaries. It is definitely an asset of the company.

Whether it can be siezed technically is another matter but legally I see no reason why the funds being used to entirely finance the operation of the company, at the direction of the company and completely under the control of the company's officers wouldn't be considered Invictus's property.

I think its far more likely there will be fines and possibly civil charges against the US part of the company, since that was the part that solicited, took in in and spent AGS funds.  For what its worth , all of this applies to Mastercoin to a lesser degree as well (they raised less than 1 million usd)

It'll be interesting to see what other projects get swept up and tell us a lot about what methods moving forward make sense.

[AdamBLevine]

Code: [Select]

[6:17:07 PM] Wendell: SWARM… Who else?
[6:17:15 PM] Wendell: Is SWARM even incorporated?
[6:17:52 PM] Xavier  Hawk: Hmmm....CP, Bitshares, Swarm, mastercoin,
[6:18:09 PM] Xavier  Hawk: Ethereum
[6:18:13 PM] Gavin Knight: ethereum would be a likely target do to the mass volume, but they seemed to have tight legal
[6:18:17 PM] Xavier  Hawk: Storj
[6:18:23 PM] Xavier  Hawk: Maidsafe

Most of these companies are not based in the US from what I can tell. I know that Swarm, Ethereum, BitsharesX, and Maidsafe are not at least. CP didn't do an IPO, but burned Bitcoins to get genesis stake.. I'm not sure that would be counted either even though they do seem to be based in the US. Mastercoin probably falls under this category, unfortunately for them. The projects that have launched since them have been more cautionary in terms of regulatory issues.

This is still bad news over all though... just when Bitcoin/crypto is starting to rebound too. The powers that be can't stand it when the 99% have easy access to investing in disruptive technologies when they were blissfully unaware of their existence.

SWARM is US based, and I'll be shocked if Invictus is not getting a knock on the door come raid day for Angelshares.

and before you say "They're not based in the US", they were when they were collecting money for angelshares and that's what matters.

Why would you be shocked Adam?  Angel shares is a private record of a donation of cryptographic digital information....in return for which, those who donated will receive several allocations of cryptographic digital information within open-source software products.  On what basis could someone come after them?  Are we not free to gift an arrangement of harmless digital information to whomever we choose and receive harmless digital information in return?

Try not to panic....this technological innovation cannot be un-invented.  The writing is on the wall.  One way or another, blockchain technology will redistribute the power of money and transform our societies.  It's already happening.  Decentralization is and has always been the key.  Bitshares will endure.

Ben, I'm not sure how long you've been around this community but Angelshares has morphed in "what it is" several times.  It has been a donation, an investment, a trust, etc.  All these words were used in official material and in communications to people who were asked to give money by the people who were recieving it.   Take a look at the disclaimer in posts by Daniel or Stan, you'll notice the disclaimer saying anything they say on these forums is non-binding.  Well, that's great but it was a bit late and much was said in the interim. 

I totally agree none of this can be uninvented, I've never claimed that and *I'm* not panic-ing or really even concerned, but it's naive to say that Invictus won't be on the list because they're "not based in the US".  If you're panic-ing, it probably means you are too vested in the bitshares ecosystem and your incentives are screwed up because of it.   Our viewpoints should be guided by the way things are, not the way we wish they were.