BitShares Forum
Main => General Discussion => Topic started by: Globally Distributed on December 18, 2014, 12:08:12 am
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Many people have been subtly bringing up how CH could help bring BTS to the world, and I want to show my support for him. I think our group really appreciates his prowess in this field and wish we could harness his value despite development disagreements in the past.
The opportunity to take the world by storm is ripening fast.
I would vote for him in a heartbeat.
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I would vote for him too if the proposal was coming from him (and fleshed out a little with details of what he was offering to accomplish).
But since the proposal is coming from a "Newbie" who just signed up for a forum account today, I don't know what to think
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I would vote for him, (assuming he posted a decent proposal).
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I would consider voting for him as well.
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I watched his TED talk the other day:
https://www.youtube.com/watch?v=97ufCT6lQcY (https://www.youtube.com/watch?v=97ufCT6lQcY)
I don't know much about the details that led to the earlier parting of ways with the team here, or with Ethereum for that matter, but he's a great communicator if the talk above is anything to go by.
I'd certainly pay close attention to a more detailed delegate proposal.
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I don't take this as a proposal. It's an invitation for him to make a proposal. OP, it might have more impact if you used your real identity.
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I think many share the sentiment. There are few on the same level. I believe Charles has a tremendous amount to offer wherever he directs himself. I would love to see his skills directed in this way. Given proper interest on his part to take it on, he has my support.
and I want to show my support for him.
Use your real account if you want to show support.
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I would vote for him!
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If he has a delegate, I will vote for!
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Wow this really does come as a surprise. First thank you global for taking the time to draft this thread. It does mean a lot that someone in the bitshares community thinks so highly of me. I didn't really think that was the case.
Succinctly, I don't have any intentions to run a delegate for three reasons. First, the board of Invictus made a decision without debate or my input back in October of last year that my services were no longer required. I really don't think I can have an effective working relationship with the people who made that decision moving forward. I'd be happy to collaborate where it makes sense and I always promote good technology if it's open source, high quality and solves real problems. Thus I'd be happy to pitch Bitshares as it evolves just like I do Eris, Counterparty and other platforms.
Second, I'm currently involved in several ventures as an adviser and I'm also starting an education venture in 2015 that requires some degree of objectivity. To avoid conflicts of interest, I can't really take a paid advocacy role.
Third, after spending roughly $250,000 on US legal research via Pryor Cashman while at Ethereum, I've come to the opinion that ICOs like angelshares pass the Howey test and thus agents of the company are exposed to unnecessary legal liability. Delegates as fiduciaries are not immune to this liability and it isn't just a fine from the SEC. Furthermore, even if AGS is considered a donation, it seems to me to be a donation solicited with an implicit expectation of return, yet without any accountability from the solicitor (as evidenced by numerous examples, the most recent being the Brian Page audit thread). As I've written in my recent whitepaper, I feel these events are predatory and result in bad outcomes.
As bitshares the technology gets further disintermediated from I3 the company, then I'd be happy to become more involved. This will no doubt happen over the coming months and years and I believe everyone is in this for the long haul anyway. Anyway, thanks again for the consideration.
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Wow this really does come as a surprise. First thank you global for taking the time to draft this thread. It does mean a lot that someone in the bitshares community thinks so highly of me. I didn't really think that was the case.
Succinctly, I don't have any intentions to run a delegate for three reasons. First, the board of Invictus made a decision without debate or my input back in October of last year that my services were no longer required. I really don't think I can have an effective working relationship with the people who made that decision moving forward. I'd be happy to collaborate where it makes sense and I always promote good technology if it's open source, high quality and solves real problems. Thus I'd be happy to pitch Bitshares as it evolves just like I do Eris, Counterparty and other platforms.
Second, I'm currently involved in several ventures as an adviser and I'm also starting an education venture in 2015 that requires some degree of objectivity. To avoid conflicts of interest, I can't really take a paid advocacy role.
Third, after spending roughly $250,000 on US legal research via Pryor Cashman while at Ethereum, I've come to the opinion that ICOs like angelshares pass the Howey test and thus agents of the company are exposed to unnecessary legal liability. Delegates as fiduciaries are not immune to this liability and it isn't just a fine from the SEC. Furthermore, even if AGS is considered a donation, it seems to me to be a donation solicited with an implicit expectation of return, yet without any accountability from the solicitor (as evidenced by numerous examples, the most recent being the Brian Page audit thread). As I've written in my recent whitepaper, I feel these events are predatory and result in bad outcomes.
As bitshares the technology gets further disintermediated from I3 the company, then I'd be happy to become more involved. This will no doubt happen over the coming months and years and I believe everyone is in this for the long haul anyway. Anyway, thanks again for the consideration.
LOL!! This is a good one. I think it is cool you are thinking about running...but I DEFINITELY Resonate with this comment:
But since the proposal is coming from a "Newbie" who just signed up for a forum account today, I don't know what to think
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There's the love I'm used to :) Thanks Fuzzy glad to have you around.
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There's the love I'm used to :) Thanks Fuzzy glad to have you around.
The Dude Abides ...
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IMHO, you can have a helper delegate with low pay rate if you want, all payment except server cost and tips for helper being burned.
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The Dude Abides ...
Have you ever met Bruno from bitcoin talk? You, bruno and me have to have lunch sometime.
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The Dude Abides ...
Have you ever met Bruno from bitcoin talk? You, bruno and me have to have lunch sometime.
Well when I run a delegate I might be in prison shortly thereafter, so it would need to be soon. :D
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Probably not going to happen; however, given my situation as the co-founder of the company and also the architect of the largest ICO in history, I'm under a bit more scrutiny.
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Probably not going to happen; however, given my situation as the co-founder of the company and also the architect of the largest ICO in history, I'm under a bit more scrutiny.
Well let's hope noone has to go to prison over attempting to change the world for the better.
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S
Sent from my iPhone using Tapatalk
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Succinctly, I don't have any intentions to run a delegate for three reasons. First, the board of Invictus made a decision without debate or my input back in October of last year that my services were no longer required. I really don't think I can have an effective working relationship with the people who made that decision moving forward. I'd be happy to collaborate where it makes sense and I always promote good technology if it's open source, high quality and solves real problems. Thus I'd be happy to pitch Bitshares as it evolves just like I do Eris, Counterparty and other platforms.
Second, I'm currently involved in several ventures as an adviser and I'm also starting an education venture in 2015 that requires some degree of objectivity. To avoid conflicts of interest, I can't really take a paid advocacy role.
Third, after spending roughly $250,000 on US legal research via Pryor Cashman while at Ethereum, I've come to the opinion that ICOs like angelshares pass the Howey test and thus agents of the company are exposed to unnecessary legal liability. Delegates as fiduciaries are not immune to this liability and it isn't just a fine from the SEC. Furthermore, even if AGS is considered a donation, it seems to me to be a donation solicited with an implicit expectation of return, yet without any accountability from the solicitor (as evidenced by numerous examples, the most recent being the Brian Page audit thread). As I've written in my recent whitepaper, I feel these events are predatory and result in bad outcomes.
As bitshares the technology gets further disintermediated from I3 the company, then I'd be happy to become more involved. This will no doubt happen over the coming months and years and I believe everyone is in this for the long haul anyway. Anyway, thanks again for the consideration.
Where can we find out more information? I would appreciate any pointers to it.
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I would consider voting for him as well.
+5%
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Wow this really does come as a surprise. First thank you global for taking the time to draft this thread. It does mean a lot that someone in the bitshares community thinks so highly of me. I didn't really think that was the case.
Succinctly, I don't have any intentions to run a delegate for three reasons. First, the board of Invictus made a decision without debate or my input back in October of last year that my services were no longer required. I really don't think I can have an effective working relationship with the people who made that decision moving forward. I'd be happy to collaborate where it makes sense and I always promote good technology if it's open source, high quality and solves real problems. Thus I'd be happy to pitch Bitshares as it evolves just like I do Eris, Counterparty and other platforms.
Second, I'm currently involved in several ventures as an adviser and I'm also starting an education venture in 2015 that requires some degree of objectivity. To avoid conflicts of interest, I can't really take a paid advocacy role.
Third, after spending roughly $250,000 on US legal research via Pryor Cashman while at Ethereum, I've come to the opinion that ICOs like angelshares pass the Howey test and thus agents of the company are exposed to unnecessary legal liability. Delegates as fiduciaries are not immune to this liability and it isn't just a fine from the SEC. Furthermore, even if AGS is considered a donation, it seems to me to be a donation solicited with an implicit expectation of return, yet without any accountability from the solicitor (as evidenced by numerous examples, the most recent being the Brian Page audit thread). As I've written in my recent whitepaper, I feel these events are predatory and result in bad outcomes.
As bitshares the technology gets further disintermediated from I3 the company, then I'd be happy to become more involved. This will no doubt happen over the coming months and years and I believe everyone is in this for the long haul anyway. Anyway, thanks again for the consideration.
Don't be surprised Charles, the forum is the tip of the iceberg. What binds us all together is far deeper and more complicated than the forum allows our network to articulate effectively at times.
With regards to your legal research (i have zero expertise,) do you not think the point here is that laws can and will be changed or ignored or enforced depending on the interest of those with the power? Decentralization of influence is the only reasonable protection as compliance seems to be an exercise in futility or tacit support of tyranny.
If you wanted to, you could choose to let go of the past and work with BM and all the others surely :) You can see what they are trying to achieve. Is there any other project so close to delivering the freedom that Satoshi's invention seems to have intended? In campaigning to become a delegate, you will be actively helping to shape the character of the network.....after all the 101 delegates are the expression of the network's values. It is the perfect way to test and refine your ideas within the community.
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Wow this really does come as a surprise. First thank you global for taking the time to draft this thread. It does mean a lot that someone in the bitshares community thinks so highly of me. I didn't really think that was the case.
Succinctly, I don't have any intentions to run a delegate for three reasons. First, the board of Invictus made a decision without debate or my input back in October of last year that my services were no longer required. I really don't think I can have an effective working relationship with the people who made that decision moving forward. I'd be happy to collaborate where it makes sense and I always promote good technology if it's open source, high quality and solves real problems. Thus I'd be happy to pitch Bitshares as it evolves just like I do Eris, Counterparty and other platforms.
Second, I'm currently involved in several ventures as an adviser and I'm also starting an education venture in 2015 that requires some degree of objectivity. To avoid conflicts of interest, I can't really take a paid advocacy role.
Third, after spending roughly $250,000 on US legal research via Pryor Cashman while at Ethereum, I've come to the opinion that ICOs like angelshares pass the Howey test and thus agents of the company are exposed to unnecessary legal liability. Delegates as fiduciaries are not immune to this liability and it isn't just a fine from the SEC. Furthermore, even if AGS is considered a donation, it seems to me to be a donation solicited with an implicit expectation of return, yet without any accountability from the solicitor (as evidenced by numerous examples, the most recent being the Brian Page audit thread). As I've written in my recent whitepaper, I feel these events are predatory and result in bad outcomes.
As bitshares the technology gets further disintermediated from I3 the company, then I'd be happy to become more involved. This will no doubt happen over the coming months and years and I believe everyone is in this for the long haul anyway. Anyway, thanks again for the consideration.
If it's a gift then it's not going to pass the Howey test. Doesn't the Howey test only apply to investments?
And according to the actual consequences (not speculation) the punishments are a fine. No one in the community has gone to prison because of an unregistered security. I know you are good at math and assessing the risk and at this time the risk of the SEC is objectively not very high.
That doesn't mean there aren't risks at all. Angelshares could have been handled better but I think it has to do with the language you use and the expectations of your audience. If they see themselves as investors because you use the language of investment then maybe it is a security but if you make it a donation or a gift then there is no security. If it's a sale then they are pre-ordering the tokens and again it isn't a security.
So it seems that it is a security or not depending on the language you use and the interpretations of the audience. The solution is to change the language but I can understand if you decide it's just too much risk due to how Invictus was originally set up.
No, I'm not a lawyer. I'm just someone who did and who continues to do a risk assessment based on the behavior of the SEC to this point. So far all of the consequences have been fines in a range from $10,000 to $100,000. This means there is risk but it can be managed and if you paid $250,000 in legal fees you might have been better off just paying the fine if it were to come.
Succinctly, I don't have any intentions to run a delegate for three reasons. First, the board of Invictus made a decision without debate or my input back in October of last year that my services were no longer required. I really don't think I can have an effective working relationship with the people who made that decision moving forward. I'd be happy to collaborate where it makes sense and I always promote good technology if it's open source, high quality and solves real problems. Thus I'd be happy to pitch Bitshares as it evolves just like I do Eris, Counterparty and other platforms.
Second, I'm currently involved in several ventures as an adviser and I'm also starting an education venture in 2015 that requires some degree of objectivity. To avoid conflicts of interest, I can't really take a paid advocacy role.
Third, after spending roughly $250,000 on US legal research via Pryor Cashman while at Ethereum, I've come to the opinion that ICOs like angelshares pass the Howey test and thus agents of the company are exposed to unnecessary legal liability. Delegates as fiduciaries are not immune to this liability and it isn't just a fine from the SEC. Furthermore, even if AGS is considered a donation, it seems to me to be a donation solicited with an implicit expectation of return, yet without any accountability from the solicitor (as evidenced by numerous examples, the most recent being the Brian Page audit thread). As I've written in my recent whitepaper, I feel these events are predatory and result in bad outcomes.
As bitshares the technology gets further disintermediated from I3 the company, then I'd be happy to become more involved. This will no doubt happen over the coming months and years and I believe everyone is in this for the long haul anyway. Anyway, thanks again for the consideration.
Where can we find out more information? I would appreciate any pointers to it.
There is no evidence I've seen that the SEC views it like that but it is definitely within the range of possibility if they really were determined to make something of it. I don't think the SEC would start doing more than a fine because Burnside, Vorhees, and others all got a fine after a settlement. If you cooperate with the SEC then you get a fine so far.
Different lawyers have different stuff to say. So far I would say if you accept donations or do crowd sales it's legal. If you call it an ICO then it is questionable because now you're using investor language which doesn't help. A crowd sale is a pre-sale of the tokens and donations don't count as investments.
But the developers have to be clear in all of their website material that it is a donation. Invictus might have been open to something due to the fact that in the beginning it wasn't so clear. People who got involved in the very beginning might have thought of themselves as investors in Invictus but that is all I can see.
When Angelshares launched I remember them saying it was a donation (not an investment). I remember Bytemaster changing the "social contract" into the "social consensus" and talking about a contract free society. The SEC at most could go after the original members of Invictus but that wouldn't apply to the delegates anymore than it would if the SEC would go after miners of Bitcoin.
So I don't really see where he got that idea from but I do understand that ICO's can dangerous. The way to do it is to accept donations, track donations on a ledger, treat the donations as gifts, and reward your patrons at a later date out of courtesy.
Not only do you not have any securities involved but it would seem that you would lower your taxes as well. It's experimental though, and most of us here are not lawyers. We would have to try it and see just as how we did not know the status of Bitcoin mining for years until the IRS told us.
Probably not going to happen; however, given my situation as the co-founder of the company and also the architect of the largest ICO in history, I'm under a bit more scrutiny.
Why call it an ICO? That language seems like it would attract additional scrutiny. Why not call it a crowd sale or pre-mine?
I think you have a point about being under scrutiny. I just don't know why we as a community choose to use language which would bring scrutiny.
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Why are you not posting under your normal forum name Globally Distributed?
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Wow this really does come as a surprise. First thank you global for taking the time to draft this thread. It does mean a lot that someone in the bitshares community thinks so highly of me. I didn't really think that was the case.
Succinctly, I don't have any intentions to run a delegate for three reasons. First, the board of Invictus made a decision without debate or my input back in October of last year that my services were no longer required. I really don't think I can have an effective working relationship with the people who made that decision moving forward. I'd be happy to collaborate where it makes sense and I always promote good technology if it's open source, high quality and solves real problems. Thus I'd be happy to pitch Bitshares as it evolves just like I do Eris, Counterparty and other platforms.
Second, I'm currently involved in several ventures as an adviser and I'm also starting an education venture in 2015 that requires some degree of objectivity. To avoid conflicts of interest, I can't really take a paid advocacy role.
Third, after spending roughly $250,000 on US legal research via Pryor Cashman while at Ethereum, I've come to the opinion that ICOs like angelshares pass the Howey test and thus agents of the company are exposed to unnecessary legal liability. Delegates as fiduciaries are not immune to this liability and it isn't just a fine from the SEC. Furthermore, even if AGS is considered a donation, it seems to me to be a donation solicited with an implicit expectation of return, yet without any accountability from the solicitor (as evidenced by numerous examples, the most recent being the Brian Page audit thread). As I've written in my recent whitepaper, I feel these events are predatory and result in bad outcomes.
As bitshares the technology gets further disintermediated from I3 the company, then I'd be happy to become more involved. This will no doubt happen over the coming months and years and I believe everyone is in this for the long haul anyway. Anyway, thanks again for the consideration.
Don't be surprised Charles, the forum is the tip of the iceberg. What binds us all together is far deeper and more complicated than the forum allows our network to articulate effectively at times.
With regards to your legal research (i have zero expertise,) do you not think the point here is that laws can and will be changed or ignored or enforced depending on the interest of those with the power? Decentralization of influence is the only reasonable protection as compliance seems to be an exercise in futility or tacit support of tyranny.
If you wanted to, you could choose to let go of the past and work with BM and all the others surely :) You can see what they are trying to achieve. Is there any other project so close to delivering the freedom that Satoshi's invention seems to have intended? In campaigning to become a delegate, you will be actively helping to shape the character of the network.....after all the 101 delegates are the expression of the network's values. It is the perfect way to test and refine your ideas within the community.
^ This...except while I said it my face would be melting. :P
However, we don't know why he left so it might not be a matter of being able to "let go of the past". Unfortunately none of us will ever know because BM is a damned vault with these reasons. Charles just wants to eat lunch with you when you ask--though don't get me wrong, I'm sure a couple brewskies with him would be a good time!
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Succinctly, I don't have any intentions to run a delegate for three reasons. First, the board of Invictus made a decision without debate or my input back in October of last year that my services were no longer required. I really don't think I can have an effective working relationship with the people who made that decision moving forward. I'd be happy to collaborate where it makes sense and I always promote good technology if it's open source, high quality and solves real problems.
Relationships are like blockchains, to avoid forks one must upgrade or downgrade, then rescan.
edit: It would obviously be great for this initiative if the olive branch were extended to you
edit: Perhaps it should not matter.
As bitshares the technology gets further disintermediated from I3 the company, then I'd be happy to become more involved.
Looking forward to the day you do.
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Succinctly, I don't have any intentions to run a delegate for three reasons. First, the board of Invictus made a decision without debate or my input back in October of last year that my services were no longer required. I really don't think I can have an effective working relationship with the people who made that decision moving forward. I'd be happy to collaborate where it makes sense and I always promote good technology if it's open source, high quality and solves real problems.
Relationships are like blockchains, to avoid forks one must upgrade or downgrade, then rescan.
edit: It would obviously be great for this initiative if the olive branch were extended to you
As bitshares the technology gets further disintermediated from I3 the company, then I'd be happy to become more involved.
Looking forward to the day you do.
Hey Global. We are all adults here...why not just post under your real alias? You harm your cause posing as a nublet.
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Succinctly, I don't have any intentions to run a delegate for three reasons. First, the board of Invictus made a decision without debate or my input back in October of last year that my services were no longer required. I really don't think I can have an effective working relationship with the people who made that decision moving forward. I'd be happy to collaborate where it makes sense and I always promote good technology if it's open source, high quality and solves real problems.
Relationships are like blockchains, to avoid forks one must upgrade or downgrade, then rescan.
edit: It would obviously be great for this initiative if the olive branch were extended to you
edit: Perhaps it should not matter.
As bitshares the technology gets further disintermediated from I3 the company, then I'd be happy to become more involved.
Looking forward to the day you do.
Hey Global. We are all adults here...why not just post under your real alias? You harm your cause posing as a nublet.
I seek to tap the collective consciousness, better to clear everyone's minds when doing so.
As many have brought up in this thread, any proposal would need to be vetted and voted on by the community. I think this is the most important thing. Anything less than excellence would not be accepted.
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Succinctly, I don't have any intentions to run a delegate for three reasons. First, the board of Invictus made a decision without debate or my input back in October of last year that my services were no longer required. I really don't think I can have an effective working relationship with the people who made that decision moving forward. I'd be happy to collaborate where it makes sense and I always promote good technology if it's open source, high quality and solves real problems.
Relationships are like blockchains, to avoid forks one must upgrade or downgrade, then rescan.
edit: It would obviously be great for this initiative if the olive branch were extended to you
As bitshares the technology gets further disintermediated from I3 the company, then I'd be happy to become more involved.
Looking forward to the day you do.
Hey Global. We are all adults here...why not just post under your real alias? You harm your cause posing as a nublet.
I seek to tap the collective consciousness, better to clear everyone's minds when doing so.
As many have brought up in this thread, any proposal would need to be vetted and voted on by the community. I think this is the most important thing. Anything less than excellence would not be accepted.
Tapping the collective consciousness requires that "consciousness" have clarity regarding your motives, affiliations and associated biases. Posting like this harms your ability to "clear others' minds".
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There is no evidence I've seen that the SEC views it like that but it is definitely within the range of possibility if they really were determined to make something of it. I don't think the SEC would start doing more than a fine because Burnside, Vorhees, and others all got a fine after a settlement. If you cooperate with the SEC then you get a fine so far.
The SEC has a set of tests from the Howey test to the Hawaii Market Center test to judge whether something falls under the jurisdiction of the security exchange act of 1933 via the investment contract section. Generally speaking, vocabulary doesn't matter nor marketing material rather the substance of the transaction from which parties financially benefited, expectation of return, the medium upon which funds were solicited and the nature of the enterprise. It's a complex topic and generally is resolved by either a formal legal opinion (a more likely than not letter) or a no action letter directly from the SEC.
The SEC cannot arrest people, nor can it pursue criminal conduct. This is done typically either at the state level or via the DOJ. Usually actions are multi-agency with the IRS and SEC examining one plank and state law enforcement examining another. Also they tend to bundle enforcement together with emerging industries. A great example would be the crackdown on online gambling back in the early 2000s. There is also the ability to pursue international enforcement via treaty. The SEC can reach into over 80 countries if there was provable American participation in the event in question. How enforcement could be done would be for the SEC to issue a ruling on ICOs and apply it retroactively giving them the mandate to pursue anyone within some window (up to ten years, usually five or so). Most will be given the option to settle for a fine and some restrictions. Others will become the poster child of the enforcement action.
In terms of personal liability for running a delegate, if the person was connected to invictus during or before the AGS event, then it could invite additional scrutiny from the relevant bodies. The bigger issue is if a bitasset is considered a derivative under US law and subject to CFTC regulation. Bitshares cannot work without delegates under the current design therefore the CFTC can argue that its under their jurisdiction and pursue enforcement against the delegates for operating the network. The same could be said about mining perhaps; however, bitcoin does not permit complex financial derivatives or arbitrary code to be run. Also miners are not elected nor are paid a salary for providing a host of network services beyond block validation.
I think the community should strongly consider a delegate indemnity fund to cover legal costs associated with operating a delegate. It's an added layer of security and support for the role.
However, we don't know why he left so it might not be a matter of being able to "let go of the past". Unfortunately none of us will ever know because BM is a damned vault with these reasons. Charles just wants to eat lunch with you when you ask--though don't get me wrong, I'm sure a couple brewskies with him would be a good time!
Let's have lunch.
Why call it an ICO? That language seems like it would attract additional scrutiny. Why not call it a crowd sale or pre-mine?
I actually call these events DCCMs to avoid this very issue: https://docs.google.com/document/d/1xG1hkPbk0uuavjPc_gt_eWxEUbWM1SlsxNmhGdRIUtg/edit
I think you have a point about being under scrutiny. I just don't know why we as a community choose to use language which would bring scrutiny.
People are practical and have to communicate complex concepts to others. It doesn't help much to add a layer of legal obfuscation as a CYA. I suppose it is necessary, however.
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And as the "architect" of the largest ICO in history, Charles, in your estimation, does Ethereum's bake sale pass the sniff test?
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And as the "architect" of the largest ICO in history, Charles, in your estimation, does Ethereum's bake sale pass the sniff test?
Yes, ethereum received a more likely than not letter on whether the sale of ether passes the Howey test. I left prior to the final draft; however, the drafts I saw indicated that ether is not a security. This makes implicit sense considering that ether is required to operate the network. It's infrastructure as a service with a tremendous potential for cost savings. Ultimately, however, the SEC can argue whatever it wants. But we worked and had discussions with a lot of people including a former commissioner of the SEC to try to structure things in a way that made our business goals align with the regulatory reality. Even a no action letter doesn't provide complete protection. It's just the nature of current US Securities law.
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There is no evidence I've seen that the SEC views it like that but it is definitely within the range of possibility if they really were determined to make something of it. I don't think the SEC would start doing more than a fine because Burnside, Vorhees, and others all got a fine after a settlement. If you cooperate with the SEC then you get a fine so far.
The SEC has a set of tests from the Howey test to the Hawaii Market Center test to judge whether something falls under the jurisdiction of the security exchange act of 1933 via the investment contract section. Generally speaking, vocabulary doesn't matter nor marketing material rather the substance of the transaction from which parties financially benefited, expectation of return, the medium upon which funds were solicited and the nature of the enterprise. It's a complex topic and generally is resolved by either a formal legal opinion (a more likely than not letter) or a no action letter directly from the SEC.
The SEC cannot arrest people, nor can it pursue criminal conduct. This is done typically either at the state level or via the DOJ. Usually actions are multi-agency with the IRS and SEC examining one plank and state law enforcement examining another. Also they tend to bundle enforcement together with emerging industries. A great example would be the crackdown on online gambling back in the early 2000s. There is also the ability to pursue international enforcement via treaty. The SEC can reach into over 80 countries if there was provable American participation in the event in question. How enforcement could be done would be for the SEC to issue a ruling on ICOs and apply it retroactively giving them the mandate to pursue anyone within some window (up to ten years, usually five or so). Most will be given the option to settle for a fine and some restrictions. Others will become the poster child of the enforcement action.
In terms of personal liability for running a delegate, if the person was connected to invictus during or before the AGS event, then it could invite additional scrutiny from the relevant bodies. The bigger issue is if a bitasset is considered a derivative under US law and subject to CFTC regulation. Bitshares cannot work without delegates under the current design therefore the CFTC can argue that its under their jurisdiction and pursue enforcement against the delegates for operating the network. The same could be said about mining perhaps; however, bitcoin does not permit complex financial derivatives or arbitrary code to be run. Also miners are not elected nor are paid a salary for providing a host of network services beyond block validation.
I think the community should strongly consider a delegate indemnity fund to cover legal costs associated with operating a delegate. It's an added layer of security and support for the role.
However, we don't know why he left so it might not be a matter of being able to "let go of the past". Unfortunately none of us will ever know because BM is a damned vault with these reasons. Charles just wants to eat lunch with you when you ask--though don't get me wrong, I'm sure a couple brewskies with him would be a good time!
Let's have lunch.
There are many issues at play here: AGS is one issue and the only people on the hot seat here are Stan & I as far as I can tell. The funds have been spent the results have been produced and if it was deemed a security for a period of time (between when funds were received and when product delivered) it would no longer be a security because there is nothing to deliver. It would be like a company issuing a corporate bond without SEC approval and then paying off that bond within the same year. SEC can only pursue civil matters and cannot dole out criminal punishment.
The other parties (DOJ, IRS) care about fraud and taxes. Fraud requires intent and actual harm and considering everyone who gave has received equal or greater value as a result it is kind of hard to argue fraud. Taxes are being done in full compliance with IRS codes with expectation of an audit. In this case Invictus is in the hot seat and given the extent to which we have gone to comply with the law, the corporation should shield Stan and I from liability.
Now comes the question of BitShares which could just as easily be Sparkle (or any number of alts). In my opinion Delegates are legally identical to miners or mining pool operators. They are mere employees serving a term and can be replaced at will by those who hold the BTS. They have no individual power to stop or stop the network though collectively they do have have the power to stop the network. Their role is limited to processing transactions just like Bitcoin. They decide whether or not the transaction is valid, but the public who views the transaction ledger ultimately interprets the result. It would be a stretch to claim the delegates are executing market orders.... they merely include bids, asks, transfers, cancels operations into the public record. Any implied result or outcome or change in ownership is not their job.
All of that said, I firmly believe the BTS community and other delegates will support any individual delegate which comes under attack out of the interest of defending the network and ensuring the network can retain high quality public delegates.
As far as that lunch goes... bring extra salt.
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Now comes the question of BitShares which could just as easily be Sparkle (or any number of alts). In my opinion Delegates are legally identical to miners or mining pool operators. They are mere employees serving a term and can be replaced at will by those who hold the BTS.
Miners cannot be replaced. No one in bitcoin can vote out a miner. It's true we can switch from mining pool to pool; however, a miner can't be fired. Second, miners aren't paid a predictable salary from the network. They are performing incentivized action. But there are no guarantees of returns.
All of that said, I firmly believe the BTS community and other delegates will support any individual delegate which comes under attack out of the interest of defending the network and ensuring the network can retain high quality public delegates.
Then why not have a reserved indemnity fund? It turns belief into reality.
Their role is limited to processing transactions just like Bitcoin.
This doesn't seem to be factually correct. Aren't delegates also responsible for price feeds? Won't bitusd fail to work properly without them?
The other parties (DOJ, IRS) care about fraud and taxes. Fraud requires intent and actual harm and considering everyone who gave has received equal or greater value as a result it is kind of hard to argue fraud. Taxes are being done in full compliance with IRS codes with expectation of an audit. In this case Invictus is in the hot seat and given the extent to which we have gone to comply with the law, the corporation should shield Stan and I from liability.
One can certainly argue that calling something a donation to avoid securities regulation is fraudulent especially if there is evidence that the founders believed so. At the very least, it invites a fishing expedition from the relevant authorities.
As far as that lunch goes... bring extra salt.
Don't worry you'll get a surprise invitation while visiting family. We'll order for you. And you're buying of course.
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This doesn't seem to be factually correct. Aren't delegates also responsible for price feeds? Won't bitusd fail to work properly without them?
Delegates may publish a feed, but that is just free speech and they are not required to publish a feed.
Delegates are not guaranteed any more than miners in a pool are guaranteed.
In our case the "miner" is the the BTS holder and the delegate is the pool. BTS holders cannot be replaced any more than miners can, but they can switch pools.
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Delegates may publish a feed, but that is just free speech and they are not required to publish a feed.
Is there a mechanism for non-delegates to publish feeds?
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If governments regard BitUSD as currency and want to summon its issuer, who will be responsible for this? Delegates who publish price USD feed or people who short BitUSD?
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BitUSD as currency
The argument isn't is it a currency, which is clearly not. The argument is if it is a true CfD subject to CFTC regulation. Those that take place in facilitating the markets would be the people exposed to liability namely delegates.
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BitUSD as currency
The argument isn't is it a currency, which is clearly not. The argument is if it is a true CfD subject to CFTC regulation. Those that take place in facilitating the markets would be the people exposed to liability namely delegates.
logically, bitEUR or bitGOLD could be considered CFD-like in the US. Similarly, bitUSD resembles a CFD if viewed out of Europe. However, it should be possible to defend that bitUSD isn't CFD-like in the US where the value is measured in USD. If so, then bitUSD delegates should be in the US, bitEUR delegates in Europe, and bitGOLD ... hmmm ... somewhere underground...
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However, it should be possible to defend that bitUSD isn't CFD-like in the US where the value is measured in USD.
Really? How?
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However, it should be possible to defend that bitUSD isn't CFD-like in the US where the value is measured in USD.
Really? How?
CFD investor receives profit or suffers a loss (measured in USD) if the value of the "CFD underlying asset" (e.g. Gold) moves as quoted in USD.
bitUSD issuer or holder is by its very design expected not to receive profit or suffer a loss as measured in USD. Here, profit or loss as measured in USD results out of deviations from parity, which is the opposite to"tracking" underlying asset value, as in case of CFD.
So the liability, if any, should be for bitUSD deviation from parity with USD, and not for offering a speculative security... Would the SEC care? Potentially yes, if they consider that holders or issuers of bitUSD are subject to risk of USD losses. Certainly, SEC is looking to ensure that CFD providers track value of underlying assets closely enough...One could argue that BTS collateralization and bitUSD rules reduce such risk. But perhaps legally most important point is that bitUSD is designed to experiences NO changes in its USD value ;)
Disclosure: This is not legal analysis, just back-of-the-envelope logic.
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BM you mentioned in mumble weeks ago plans to dissolve I3, Is that still the plan?
It would make it that much harder for any regulator body if their was no company to attack.
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Delegates may publish a feed, but that is just free speech and they are not required to publish a feed.
Is there a mechanism for non-delegates to publish feeds?
Yes, anyone registered as a delegate can publish a feed even if they are not in top 101.
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BM you mentioned in mumble weeks ago plans to dissolve I3, Is that still the plan?
It would make it that much harder for any regulator body if their was no company to attack.
I3 will continue to exist as a legal entity for the sole purpose of handling any future regulatory inquiry, tax audits, etc. In other words, fully dissolving I3 makes things far more difficult than mothballing the company and putting it on minimal life support. After a few years pass and it becomes clear the government is done with I3 then we can close it down for good.
Starting 2014 I3 will have no full time employees and will no longer be involved in the crypto currency space.
These statements should not be taken as binding, we remain free to use I3 as necessary.
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The SEC has a set of tests from the Howey test to the Hawaii Market Center test to judge whether something falls under the jurisdiction of the security exchange act of 1933 via the investment contract section. Generally speaking, vocabulary doesn't matter nor marketing material rather the substance of the transaction from which parties financially benefited, expectation of return, the medium upon which funds were solicited and the nature of the enterprise. It's a complex topic and generally is resolved by either a formal legal opinion (a more likely than not letter) or a no action letter directly from the SEC.
The SEC cannot arrest people, nor can it pursue criminal conduct. This is done typically either at the state level or via the DOJ. Usually actions are multi-agency with the IRS and SEC examining one plank and state law enforcement examining another. Also they tend to bundle enforcement together with emerging industries. A great example would be the crackdown on online gambling back in the early 2000s. There is also the ability to pursue international enforcement via treaty. The SEC can reach into over 80 countries if there was provable American participation in the event in question. How enforcement could be done would be for the SEC to issue a ruling on ICOs and apply it retroactively giving them the mandate to pursue anyone within some window (up to ten years, usually five or so). Most will be given the option to settle for a fine and some restrictions. Others will become the poster child of the enforcement action.
The SEC can do all of this but it would seem like an utterly stupid waste of money, damaging to both their reputation and to the US economy. Why would the SEC want to crush innovation, hurt the people who have good intentions in the crypto-space?
They can do it but a lot of different agencies have similar powers which they decide not to use. Why would the SEC go all out?
In terms of personal liability for running a delegate, if the person was connected to invictus during or before the AGS event, then it could invite additional scrutiny from the relevant bodies. The bigger issue is if a bitasset is considered a derivative under US law and subject to CFTC regulation. Bitshares cannot work without delegates under the current design therefore the CFTC can argue that its under their jurisdiction and pursue enforcement against the delegates for operating the network.
Wouldn't this also work for Bitcoin and all of it's Counterparty/Mastercoin type functionality? I don't see how a delegate is any different from a miner so if they did attack delegates then delegates would go anonymous. Why would they want to push the delegates underground? It's not going to kill the Bitshares protocol and all it would do is remove a level of transparency.
I understand in your case because you were involved from the very beginning. I don't understand why they would go after delegates who were not involved with Invictus from the beginning.
The same could be said about mining perhaps; however, bitcoin does not permit complex financial derivatives or arbitrary code to be run. Also miners are not elected nor are paid a salary for providing a host of network services beyond block validation.
Bitcoin has scripting as well and permits all sorts of functions which aren't used. I would say we'll find out by how they treat Bitcoin but from what we know so far I don't see how being a delegate is a significantly higher risk for most people than being a miner in Bitcoin.
I'll admit I haven't rushed to become a delegate myself so I understand your concerns.
I think the community should strongly consider a delegate indemnity fund to cover legal costs associated with operating a delegate. It's an added layer of security and support for the role.
I agree with this.
I actually call these events DCCMs to avoid this very issue: https://docs.google.com/document/d/1xG1hkPbk0uuavjPc_gt_eWxEUbWM1SlsxNmhGdRIUtg/edit
Good call. I'm preferring at least at this time to promote the concept of a gift economy. It should be free speech to give a gift to another with no strings attached.
People are practical and have to communicate complex concepts to others. It doesn't help much to add a layer of legal obfuscation as a CYA. I suppose it is necessary, however.
I guess this is how lawyerts make money. They can basically make the law so confusing and have so many laws that no one can do anything without breaking some obscure archaic law from the 1930s. It's a situation where it's death by legal complexity unless we repeal and reform a lot of these outdated laws.
But I realize it's very easy to create many pages of laws which never get read and very difficult to repeal them. Obamacare is a good example. No one I know to this day has read all the pages of Obamacare and this means think tanks/politicians can exploit a bug in the system (attention scarcity) to put esoteric complex laws in place which we have to follow. They do this to create barriers to economic opportunity for people who cannot afford to consult with a lawyer for their every decision.
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The SEC can do all of this but it would seem like an utterly stupid waste of money, damaging to both their reputation and to the US economy. Why would the SEC want to crush innovation, hurt the people who have good intentions in the crypto-space?
They can do it but a lot of different agencies have similar powers which they decide not to use. Why would the SEC go all out?
I've dealt with the SEC in a prior case involving my ex-gf's dad. They are a bizarre and fickle bunch. I have no idea why they pursue certain companies while missing the fraud of the banksters. The recent Chase issues and the long history of goldman sachs misconduct is an example of why government regulation is hazardous to a free society.
Wouldn't this also work for Bitcoin and all of it's Counterparty/Mastercoin type functionality? I don't see how a delegate is any different from a miner so if they did attack delegates then delegates would go anonymous. Why would they want to push the delegates underground? It's not going to kill the Bitshares protocol and all it would do is remove a level of transparency.
Like they've done with online gambling, the DEA with the war on drugs, and the FDA has done with those that drink unpasteurized milk? Unfortunately, the outcome isn't the focus. Its the act of doing something that only seems to matter. Regardless of the human consequences.
Bitcoin has scripting as well and permits all sorts of functions which aren't used. I would say we'll find out by how they treat Bitcoin but from what we know so far I don't see how being a delegate is a significantly higher risk for most people than being a miner in Bitcoin.
Bitcoin has some complexity in its scripting system via the P2SH, but this pales to something that codius or ethereum is capable of also bitcoin scripts have no notion of state.
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I find it funny that when I ask some people why they don't trust Bitcoin, Bitshares and Ethereum they bring up the point that they cannot read the source code.
But these same people can't read the laws on the books either. So they are willing to trust lawyers but not willing to trust people like us? Why is that?
In general most people aren't going to be reading smart contracts, Bitcoin source code, Bitshares source code, or Ethereum source code. But at least with source code it can be interpreted only one way (the correct way) and every other interpretation is incorrect. The law is so vague that for a while it can be interpreted one way and then in the future the same law can be reinterpreted in another way.
In a lot of cases I have an easier time trusting the code than I have trusting the law. Of course I have to follow both for different reasons but the source code at least follows some rules of logic.
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You should see Harvard's law lab. They are doing some really interesting things in private, algorithmic law. http://lawlab.org/
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You should see Harvard's law lab. They are doing some really interesting things in private, algorithmic law. http://lawlab.org/
+5%
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Regarding indemnity/legal aid fund - excellent idea.
I know there was a rather involved discussion about a certain percentage of BTS revenue being allocated to a reserve fund, the primary purpose of which would be to self-insure/provide liquidity in the event of some catastrophic market event.
Could the devs confirm the status of this fund? Has it been implemented or abandoned?
If abandoned we should give serious consideration to reinstating a reserve fund with very specific rules for use.
I do understand that a bunch of 100% pay delegates could be voted in to pay for legal costs if needed, but a dedicated reserve would be a very novel feature for a crypto-finance platform and would further the credibility/resiliency of BTS.
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BitUSD as currency
The argument isn't is it a currency, which is clearly not. The argument is if it is a true CfD subject to CFTC regulation. Those that take place in facilitating the markets would be the people exposed to liability namely delegates.
I don't think you can actually argue that bitUSD is a CFD. It is not a contract between buyer and seller and there is no date of settlement. It is not a derivative but rather it is its own asset just like BTS or BTC.
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BitUSD as currency
The argument isn't is it a currency, which is clearly not. The argument is if it is a true CfD subject to CFTC regulation. Those that take place in facilitating the markets would be the people exposed to liability namely delegates.
I don't think you can actually argue that bitUSD is a CFD. It is not a contract between buyer and seller and there is no date of settlement. It is not a derivative but rather it is its own asset just like BTS or BTC.
If anything, viewed from the U.S., bitUSD can be called CFND = Contract For No Difference...
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BitUSD as currency
The argument isn't is it a currency, which is clearly not. The argument is if it is a true CfD subject to CFTC regulation. Those that take place in facilitating the markets would be the people exposed to liability namely delegates.
I don't think you can actually argue that bitUSD is a CFD. It is not a contract between buyer and seller and there is no date of settlement. It is not a derivative but rather it is its own asset just like BTS or BTC.
If anything, viewed from the U.S., bitUSD can be called CFND = Contract For No Difference...
I'd say BitUSD is a contract for difference but it is settled in BTS not in USD. Actually it is not really settled in BTS. Settling happens only virtually as the exchange rate of BTS and USD varies and BitUSD holders are exposed to the volatility of BTS but never get to own BTS since there is no expiration date.
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BitUSD as currency
The argument isn't is it a currency, which is clearly not. The argument is if it is a true CfD subject to CFTC regulation. Those that take place in facilitating the markets would be the people exposed to liability namely delegates.
I don't think you can actually argue that bitUSD is a CFD. It is not a contract between buyer and seller and there is no date of settlement. It is not a derivative but rather it is its own asset just like BTS or BTC.
If anything, viewed from the U.S., bitUSD can be called CFND = Contract For No Difference...
I'd say BitUSD is a contract for difference but it is settled in BTS not in USD. Actually it is not really settled in BTS. Settling happens only virtually as the exchange rate of BTS and USD varies and BitUSD holders are exposed to the volatility of BTS but never get to own BTS since there is no expiration date.
Yeah, but SEC doesn't care if people lose or make BTS, as long as their invested USD are safe...
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BitUSD as currency
The argument isn't is it a currency, which is clearly not. The argument is if it is a true CfD subject to CFTC regulation. Those that take place in facilitating the markets would be the people exposed to liability namely delegates.
I don't think you can actually argue that bitUSD is a CFD. It is not a contract between buyer and seller and there is no date of settlement. It is not a derivative but rather it is its own asset just like BTS or BTC.
If anything, viewed from the U.S., bitUSD can be called CFND = Contract For No Difference...
I'd say BitUSD is a contract for difference but it is settled in BTS not in USD. Actually it is not really settled in BTS. Settling happens only virtually as the exchange rate of BTS and USD varies and BitUSD holders are exposed to the volatility of BTS but never get to own BTS since there is no expiration date.
Yeah, but SEC doesn't care if people lose or make BTS, as long as their invested USD are safe...
Everything else would be a weird.
Something else to consider: Regulatory institution regulate financial instruments in order to protect customers (aside from the tendency of any organisation to sustain itself through whatever means). The biggest threat to customers would be the default risk the CFD platform company poses. A major reason for regulation here is the non transparency about the amount of collateral the CFD company holds (the customer has no easy way to verify that). In that sense regulators should like BitShares a lot where the amount of collateral is transparent and there is no individual that could change the amount of collateral or run away with it.
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Delegates may publish a feed, but that is just free speech and they are not required to publish a feed.
Is there a mechanism for non-delegates to publish feeds?
Yes, anyone registered as a delegate can publish a feed even if they are not in top 101.
count these feeds? Count all feeds published from standby delegates if yes?
Sent from my ALCATEL ONE TOUCH 997D
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Delegates may publish a feed, but that is just free speech and they are not required to publish a feed.
Is there a mechanism for non-delegates to publish feeds?
Yes, anyone registered as a delegate can publish a feed even if they are not in top 101.
count these feeds? Count all feeds published from standby delegates if yes?
Sent from my ALCATEL ONE TOUCH 997D
only feeds by active delegates count to the overall median feed. but feeds by standby delegates are relevant in sofar as they are an argument for voting that stand by delegate in and as a backup.