Bitcoin Forum

Hello,

To any of the lawyers on here. All the securities listed on BTCT, and these virtual stock exchanges are these legal in the USA? Are they exempt from SEC regulations, especially now with the new crowd funding rules? Do they not fall under any SEC regulation as it's in BitCoins?

Thanks

watching...

i thought that owning stock is legal as is person to person transfer of ownership (if you have a physical certificate), however the solicitation and exchange part is regulated

would love to get it straight from a securities lawyer, and one familiar with the new crowd fund rules (though they haven't been actually put together by the SEC?)

As far as I can tell 'legal' in the US these days has more to do with how the various 'law enforcement agencies' feel on any given day than what may or may not be in the body of laws/rules/regulations.
In 50k or so laws/rules/regulations I am sure you can find justification for anything - for or against.

Many participants in the Bitcoin securities market are violating US law. Not all, but many.

Some US Issuers are selling unregistered, restricted securities by means of general advertisements*.

Some exchanges are unlicensed, but US-based.

Some purchasers are reselling their unregistered, restricted securities to unsophisticated, unaccredited investors within one year of purchasing.

Part 3 of Bitcoin Law, my multi-part series on Coindesk will address this.

Edit: The general solicitation rules are lifted as of today, but that doesn't make legal the sale of an unregistered restricted security to unlimited numbers of unaccredited and unsophisticated investors.

I just read up on it Today, the crowdfunding portion of the law has not yet taken effect, when it does you will still have to do some minor things, but then you can legally solicit investments to unaccredited investors. As of right now only accredited investors can invest, also given the fact that the US Supreme court, recently classified it as pretty much money, it is governed by SEC securities rules.

Santori, Can you expound upon then what would happen once the crowdfunding rules do get approved, then pretty much soliciting on here for securities to unaccredited investors would be fine correct?

The US Supreme Court has done such thing  - its not even in session.

Legal in the sense that no rules have been set out to regulate it yet
But when companies like Emgateway are swarmed with barriers to entry the bitcoin securities market would piss off the government.
Simply because they won't be able to decide who funds the investing directly to private investors.
Or in other words people who are not angel investors are able to invest in companies and governments hate that.

Although in actuality, they just have to ask you and you have to sign off on it. You do not have to prove your net worth or income.

Pretty much hit the bullet unless you have a big wallet they don't want small investors building up companies

I guess also in recent news possibly related to btct this announcement came out of forbes recently
(we wont know till he explains the rationale in detail though)
http://www.forbes.com/sites/tanyaprive/2013/09/23/general-solicitation-ban-lifted-today-three-things-you-must-about-it/

Title II of the JOBS Act as it takes effect today.

A public profile on a startup investment platform

It might not be a coincidence that this area was specifically mentioned in the act but I am just posturing for now.

What would this mean
Simply put any US transactions would be banned to make it simple.

Yes, currently not much has changed, besides general solicitations to accredited investors. Also, in doing so it becomes more of a burden to verify their accredited status, you need bank statements, noterized statements ect, instead of the simple self certification.

True enough but I am still curious what the wording of the recent changes will equate to when it comes to bitcoin securities
Till burnside explains why btct is closing not much else to do but postulate

The wording has nothing to do witb bitcoin just general securities solicitations, and since the Federal court lumped bitcoin securities solicitations under regular solicitations, under investment contracts they must follow the same laws.

An investment contract is any contract, transaction, or scheme involving (1) an investment of money, (2) in a common enterprise, (3) with the expectation that profits will be derived from the efforts of the promoter or a third party.

http://www.forbes.com/sites/jordanmaglich/2013/08/07/court-green-lights-bitcoin-lawsuit-rules-investments-constitute-securities/

Basically the judge said since bitcoin can be exchanged for Fiat its considered money,  and therefore falls under that category.

Until crowdfunding rules take effect we're out of luck. By early 2014 crowdfunding should be approved.

looking forward to seeing this

have you, or can you address any legal issues that would occur if a company were to issue stocks in the form of "coins" (for lack of a better term, someone help me out here I am getting tired of using this term)

specifically do shares always need to be registered? what are registration requirements?

are there securities classes which are not restricted to the 1 year rule?  

if trading was down through a p2p blockchain network would all market participants would need to be registered (at least for US issuers)?  what about foreign holders of equity?

I have a thread on this topic here, more from a technical persepective but it would be great to get your take/comment

stock coins? p2p virtual stock equity / cryptostocks
https://bitcointalk.org/index.php?topic=292384.msg3222781#msg3222781

did you notice that Atlantis is shutting down also... the overlap in timing, the LTC connection ...  makes one wonder... i'm not a conspiracy theorist, but just sayin´...

By its nature conspiracy theories are trying to explain the action of why something is going on, and to make sense of it even if the methods can be unusual.
In essence we are still looking at the idea of what is going on so conspiracy theorist or not if it can logically be explained it works as we are searching for relationships.

(If they didn't make that promotional video and put it up on youtube a few months ago  ;))

maybe i should go watch The Princess Bride for clues lol

Indirectly blames hollywood perhaps they are scared of people using bitcoin to buy DVD's snickers XD
But true enough the conspiracy theory needs a good logic line :)

Questionable.

Currently the securities of the securities is the main problem as bitcoin is a two-face thing which calculated correctly with the specific arithmetic.

If you obtain money service license, Then the BTC security can be legal, in Hong Kong. 796.com obtains the permission to run pure of the pure.

who going to hold them accountable ?

If you sell a "bitcoin security" to an American, the SEC will eventually get involved if it peaks their curiosity.

Can I just take this opportunity to point out something exceedingly weird.

Apparently, Second Market can sell many stocks.
But we can't.

Why? Because they only deal with accredited investors.
I.e, people with a $1,000,000 or more in assets.

So, a money making opportunity is legally reserved only for those with $1,000,000 or more in assets.

Doesn't that sound weird to you?

Not at all.  It's regulated that way in order to reduce availability of risky investments to people that have enough money to handle that risk.

There's also some rules about how much of your net worth you can invest, for the same reason.

That is a very bad excuse for a very bad law.

Going to agree that claiming ignorance of investors in the digital age is not logical reasoning under current law
But that does not mean that the rules are still rules

The origin of the rule is from a hundred years ago where "fake" security and ponzis schemes where everywhere. It was there to protect your great-great-grandmother from the door-to-door stock salesmen peddling junk bonds.

But today, It's there to limit the real wealth to the 1% and corporations. There is a reason why the vast majority of US citizens don't own a single security outside of their heavily restricted retirement funds.

You mean that ponzi schemes do not exist in bitcoin land?


There are ways around this, such as doing reverse mergers with pink sheet companies,  etc.

Or just not locate the HQ of the company in the USA.

Release company "coins", and as long as they can trade them for other virtual currency or goods...