Bitcoin Forum

So it looks like GLBSE was shut down due to legal issues.

What if we could set up such an exchange were no laws and regulations existed?

What do you think of this idea?

There are no laws and regulations in bitcoins so have at it.

No laws or regulations?  International waters!  Who wants to help fund the S.S. Bitcoin?

What do you mean have at it?

There may be no rules and regulations in Bitcoin, although that does not mean rules and regulations cannot be enforced on Bitcoin.

Actually it does mean that no rules or regulations can be enforced upon bitcoins, that is beauty of bitcoins that is why they are amazing!

What I meant was rules and regulations can be imposed on business using bitcoin depending where they are.

And just to clarify , by exchange I meant an exchange similar to GLBSE

Actually you can't impose regulations on a business that has no fiat currency. If you deal with fiat currency and bitcoins then you have to pay taxes, and do everything by the book. But if you use only bitcoins then you don't have to worry.

The men with guns can enforce whatever regulations on you that they wish. To think otherwise is fantasy.

Is it right that they do this? No, but they do it anyway.

How about in the case of GLBSE?

I suspect the companies would need to be real corporations or LLCs in real jurisdictions (i.e., not Wirtland) -- just none that happen to have  securities laws that prohibit sales to the [online] public.  There probably is one or two of these countries that exist.

The thing is though that this is a righteous fight.  The laws to protect little old ladies from using their pensions to invest in "ocean front" swampland in Florida are no longer necessary.

Had it been possible that you or I, as a venture operating out of the U.S., could have IPO'd on GLBSE without that action likely being illegal to do then think of how many legitimate investment opportunities would have appeared.  Sure there would still be some risk chasers still putting coins in scams, but within two minutes of time on the forum, or IRC, a person can know roughly what type of warning flags exist.

The Crowdfunding ammendment in the U.S. still won't allow trading of shares purchased for one year after buying them.  The genie is aleady out of the bottle though.  Kickstarter is not an equity platform but gave people a taste of what they want -- the ability to buy and trade equity in startups.   So if they can't get that from the U.S., they'll buy bitcoins and send them to wherever this service (equity crowdfunding) is offered.

[Edit: And, of course, it would be beneficial if that capital were to remain within the country.  Thus there will be a push to relax the regulation (to allow secondary markets, to allow foreign ownership of U.S. crowdfunded equity, etc.) or to apply tiers where micro-companies, under some threshold of equity valuation, can be formed with more leeway than firms above that threshold.]

Yes, unfortunately it comes down to who has the biggest guns. I concur.

He never claimed any agency shut him down, and to be honest he thought he could be jailed but he obviously can't since there is no fiat currency and no bitcoin laws. Remember if bitcoins get shutdown or a business operating in the realm of bitcoins with no fiat currency gets shutdown, then second life, blizzard, and any virtual currency would be subject to being shutdown as well. So basically it will never happen.

If you setup your company in the middle of the ocean and access it trought a fiber cable from 10Mm (mega meters, just for fun of scientific notions, 10000km) away, lets say you connect from Iceland, you would still have to comply with Iceland laws.

So the location really dosent matter, if not from a fiscal point of view.

I am pretty sure that would violate many amendments and laws, and if that was true, why have no companies been shutdown or brought to trial?

That's bullshit. Having internet connectivity with a country does not subject you to their laws. What if you connect to the internet via satellite?

Im talking about a country with no rules.

The men with guns make the laws and determine how they are applied. There probably have been some that were shut down, though I don't know who off the top of my head. More common is for them to fall in line and comply with all regulations the regulators say apply, under threat of violence.

Until there is any court case, your arguments is invalid, and the people who fall in line are just not strong enough to handle bleeding edge communities like this.

Just move all the legal stuff around Bitcoins to Honduras. The government overthere is eager to set up "charter cities". Honduras is set to host one of the world's most radical neo-liberal economic experiments under a plan to build from scratch the rules, roads and rafters of a "charter city" for foreign investors.

The Central American nation hopes the plan for model development zones, which will have their own laws, tax system, judiciary and police, will emulate the economic success of city states such as Singapore and Hong Kong.

More info (http://www.guardian.co.uk/world/2012/sep/06/honduras-new-city-laws-investors?newsfeed=true):

If you think a court would agree that economic activity does not fall under the jurisdiction of the country in which it takes place, merely because the medium of exchange is bitcoin, you are both sadly mistaken and extremely naive.

Economic activity actually falls to the currency that is being used, and bitcoins isn't a currency recognized by the global world. So your sadly mistaken.

IN MY OPINION, history has shown that:
The state is always trying to make money out of you and control you. If they see the potential, they will pull out the big guns if its worth it to them.

Where is the proof that they are controlling bitcoin business? Your opinion is invalid no facts to even prove that.

I never said they were controlling, nor do I have any proof. All I'm saying is, that it is a possibility.

very slim possibility, you have a better chance of meeting an alien

Are you claiming that barter, being economic activity that doesn't use a medium of exchange (or currency), is not regulated (let's say, in the United States)?

I hope so, because I'd rather meet an alien. A friendly one,  :D

Bartering is regulated to some degree by the united states, i am claiming a currency that isn't recognized globally can't be regulated.

Good luck with that, and I hope nobody listens to your advice, because you are wrong. See: gold and every other private currency.

In Utah  last year, they made silver a legal tender. I don't know why they did that, there must be some incentive...

Gold is a commodity and what other private currencies there are none.

http://en.wikipedia.org/wiki/Principality_of_Sealand

The problem is, we don't live in countries with no rules... eventually citizens of regulated countries want to cash in their bitcoins for trade (ideally), or fiat currency (more often ATM). Those of us attempting to operate legal, tax paying corporations that profit from and help develop bitcoins legally have to develop ways to work within the existing legal structures, and we have to do our best to influence further regulation/interpretation of laws. This is why I currently support the bitcoin foundation. Bitcoins are essentially a commodity, not a traditional currency. I don't see why we can't trade it like rice.

I work with the Internet, a service provider has to withstand the law of its own country where the society is based, the one that hosts his gear and the ones that whatever the clients connect from.

If you connect from satellite staying in space you can do whatever you want. If you stay on earth you will be required to follow the same of above.

We cant trade like rice because rice is a source of nutrition and thats why its valuable to all people.

We give bitcoin its value. And the more we trade it the more valuable it gets.

I just think that it is amazing how we are watching the institution of the nation state become obsolete before our eyes.

These are exciting times.

Bitcoins cannot be controlled by a government, but the use of them certainly can. By trading in bitcoins you do not escape any regualtions of economic activity. They may be harder to enforce, but the laws still apply. Can I go to Canada and use USD and not pay taxes because the government there does not control the currency? No, that is absurd. Likewise, I cannot get around US law by trading in Euros.

If you are looking for a new place to start, how about setting up a city in Antarctica? You would not have a problem cooling your bitcoin mining rigs there!

Or to Venezuela, the corruption shitfest around here would make that easy, lawless country here.

The Rock has a platform capable to handle Bitcoin Companies.

It is just enough to ask your companies to move at our exchange and you’ll be able to freely trade again 24/7.

We are small but been around since 2007 in the virtual worlds.

Please, check our site  at: www.therockexchange.com

Thank you!

Did you forget your URL?

 - https://www.therocktrading.com

:-) thank you!

In what way(s) are no you susceptible to a situation similar to that which has occurred to GLBSE, namely coercion by state authorities?

First of all are we sure coercion happened?

At the present time there are no laws forbidding bitcoins trades or the use of a bitcoin stock exchange.  Of course, in the future, someone somewhere may decide to try to regulate it and, in that case, we will apply for any license required if need it or worth it.

A business that is a legitimate business is formed and operates under laws pertaining to various things. In the United States, a business must follow Federal law and State law appropriate to both where the business is registered, headquartered, and operates (which may be one State or include many States).

So to suggest that operating exclusively in Bitcoins puts the business outside of laws regulations is like saying a business located in the U.S. that only operates in Euro or Yuan does not have to follow the appropriate laws and regulations.

After all, Bitcoins is a currency, is it not? Perhaps if the concept of Bitcoin was not a currency, but just a tradable good, then a business would have much greater flexibility and would only really have legal scenarios pop up when dealing with gains created from cashing out of said good.

But a bitcoin business does not necessarily operate in any physical place.  It does not really "exist" at all.

There is no jurisdiction for realms of the mind, and I declare war on any that propose it.

Bitcoin is not yet a Currency.

However, I agree with the fact that a Company must follow local laws.  But, for example, if I have a Company which pays its taxes, follow local laws and trades Bitcoins (I could trade Monopoly money as well), there is no reason why local Gov. should close me or request to be registered as a financial company/brokerage company.

Take a look at Linden Lab.  They have been in business in the State of California for years now and they do have their own "virtual Currency, The Linden"  moving millions..... but, because Linden is not a Fiat Currency, they do have to follow the Law like any other company without being considered a Financial institution.

I don't understand. All definitions I have ever seen state Bitcoin is a currency. Even if only two people use it, it still is a currency, right (accepted medium of exchange). But I'm also not suggesting a business should be closed down. I'm just stating that the Bitcoins need to have a value associated with the local currency. Think accounting assets, liabilities, stockholder/blah blah blah. If you own a truck in a business, you have to give it a value whether as an expense involving cost for purchase or asset as far as a value associated with it, or maybe it has a car loan. You could "trade" the truck as medium of exchange, but it still has to have a value associated with it.

Also to comment on the bitcoin business does not need a physical place, that may be true BUT I keep seeing over and over again how people want existing businesses to accept bitcoins to help grow the bitcoin market. Well MOST businesses, whether they physically exist or not from a retail standpoint still need a physical registered location to legally operate.

Why does that URL get re-directed here: http://www.alex-silva.com/    ?

3 options to do something without as much risk as GLBSE:

1 - Setup a proper incorporated company, get all government licensing etc - this may not be popular in these parts, but it's actually perhaps the best way to avoid unwelcome regulatory attention - appease rather than fight

2 - Setup a tor hidden service - this makes things a lot more shady-looking, and also means the service can't be trusted by investors either (you could disappear without being tracked down, taking everyone's funds with you)

3 - Some kind of P2P setup - this could possibly be done using an alternate blockchain where each unit is a share, the problem is that the semantics of mining don't quite make sense - you'd have to buy "blank" shares from a mined block and that would cost money - which defeats the purpose of fundraising - there's probably a more clever way to handle this problem but it'll require a lot of thought

2 + 3, where 3 is something like this: https://bitcointalk.org/index.php?topic=92421.0;all (https://bitcointalk.org/index.php?topic=92421.0;all)

Well, having the initial share purchase be at some cost would give miners a reason to mine that blockchain. There could also be small transaction costs. The initial purchase price could be very small compared to the IPO price.

For example, Acme Rockets could buy 10,000 blank shares from Miner B for 0.0001btc each, mark them somehow as being Acme Rocket shares (perhaps as part of the initial purchase process), and resell them as now properly branded shares for 0.01btc each. Investor C buys 500@0.01btc, paying an additional 0.00005btc/share which goes to the miner that confirms the block.

I am still wondering how splits would work though, as well as what price and transaction cost levels would suffice for miners.

You can connect from space.

A related thread:

Crowdfunding: Potential Legal Disaster Waiting To Happen
 - http://bitcointalk.org/index.php?topic=119845.0

Someone had this problem, so if he just gave his application to an unknown, and that person hosted in an anonymous hosting site, under his responsibility,  then there is a change not to worry?