Link please?
It seems to violate Paypal TOS, but that doesnt make it illegal, nor does it expose customers to extra risk, quite the contrary.

You know what becoin, lets make it a bet that serves a purpose. You can request the SEC issue no-action letters if you are convinced a certain security is except from regulation. You can do so here:

https://www.sec.gov/forms/corp_fin_noaction

I thought there was a $200 fee, though I cant find that stated anywhere, so perhaps its even free. If you describe Gigamining bonds in a way that we both agree  is a fair and complete description, and you do indeed receive a no-action recommendation from the SEC for it, I will refund your fee (and Im sure GigaVPS and many other asset issuers will gladly chip in to make it worth your while).

How often do we need to quote the law before you will bother to read it? The law defines ANY bond,  transferable share, evidence of indebtedness, profit sharing agreement etc as a security. It doesnt matter if the debt is denominated in Dollar, Yen, oil, bitcoin or peanut butter. It doesnt matter if the profit is generated in dollars, yen, bitcoins or barrels of oil The law mentions none of them, but applies to all of them. It doesnt matter if the asset itself relates to drilling oil, growing banana's or mining bitcoins, the law states none of them. but applies to all of them. It  doesnt matter if you trade those securities against fiat, bitcoins or coconuts, because selling is defined as trading these securities for anything of value.

FFS, you argue like a 5 year old that has fingers in his ears yelling "LALALALALA,  it doesnt say bitcoin in the law, so it doesnt apply". Do you really think law makers and judges are as stupid as you are?

It was brought up several times, but too many people, including Nefario, thought (and some still think) that because it relates to bitcoins, somehow laws dont apply to it. The "bitcoin isnt money" fallacy,  failing to understand the issue is the security itself, not the means with which its purchased or traded against (ie bitcoin) .

But the question would be best directed towards asset issuers, as they are the ones taking on the biggest legal risk. Most of these laws exist to protect investors, and if this were to come for court, I wouldnt be surprised that on top of any fines,  asset holders had to be fully reimbursed by the issuers - even if rolling back all trades will likely be an administrative nightmare.

Anyway, it may not come to that, all things considered, GLBSE is small potatoes and the SEC/FSA is not likely interested in going to court with each and every asset issuer over this (they may go after Nefario though), and they may be content with some reasonable settlement as long as going forward,  the law is no longer broken.  But if you as an investor, feel that you are not compensated fairly, you probably stand a good chance in court, or at least you will have serious stick to threaten asset issuers with to come to a reasonable settlement in case the SEC does nothing.

You could go for a cheap chinese knock-off. They are surprisingly good, the only problem with them is usually the software (crappy android ports), but if you dont mind rooting and using custom ROMs, thats not that big of a problem. You can find qHD dual sim phones on ebay for $150-170. Search for  MTK6575 or MTK6577 (latter being dual cores). They are very decent performers (way faster than the phones you are looking at), I have one myself,  biggest issue is poor battery life. It struggles to last a day.

Unfortunately, as I have to keep repeating over and over, the law that defines securities doesnt even mention "money", let alone legal tender, it mentions value, and its hard to argue bitcoin has no value.

What are you blabbering about? It doesnt matter if you traded your gigamining bonds with me for bitcoin, swapped them for other securities,  sold them for fiat. a pack of smokes or a date with your sister. As the owner of the bond, you could  sell them to whoever you want for whatever you want. GigaVPS would have  no say, yet his obligation would remain to the bondholder.  Thats a security. And bitcoin doesnt change a bloody thing about it.

please, stop acting so stupid. They are not. You can sell your gigamining bonds to me or anyone you want, and gigaVPS wouldnt have a clue, wouldnt have to agree, he wouldnt  even have to know,  his obligations would remain to the bond holder, whoever that is. Thats a tradeable security.

Try the same with for instance a rental contract, or a work contract. Can you sell your house rental agreement or work contract to me, and would your employer then owe me your salary? No. so thats a non tradeable contract. Its not a security.

If you can really not see the difference, then i cant help you.

You are talking about bitcoins again and no one is arguing they are illegal.  The topic of this thread is a stock exchange and GLBSE assets are not in your name, you can trade them freely with anyone and the asset issuers obligations trade with them. Those are therefore securities and trading unregistered securities is (almost always) illegal.

Are you really that stupid or just doing a terrible job of playing devil's advocate?

No one here is saying bitcoins are illegal. No one is saying you cant use them to purchase goods or services, heck, you can almost certainly even use them to buy registered securities.

What you cant seem to comprehend is that trading unregistered securities is almost always unlawful. It doesnt matter what you pay these securities with, it doesnt matter if these securities are about  fiat, oil, gold, corn, bitcoins or chicken feed.

As to what constitutes a security, Ive give you the legal definition. If thats too hard to understand, consider that any contract that is publicly tradable is usually a security. You can make your own private contract between you and  Giga to rent his mining rigs, pay for it in bitcoins, and AFAIK, that would be fine. But if that contract is not in your name, and you can sell that contract and giga's obligations are to anyone owning that contract, ie, if giga sells tradable contracts to the public against anything of value, then it becomes a security and subject to regulation. Bitcoins dont have anything to do with it, it would be the exact same thing if giga's bonds pertained  to producing cows and were traded for bales of hay.

If you issue securities about them, yes.

Nor does it mention gold, electrical power or corn. It doesnt even mention Euros or dollars, or anything really. Therefore, securities dont exist?


You are an idiot; that case is definitely closed.

Sigh.
The law itself doesnt even mention money. It doesnt appear anywhere in the definition of a security (spare me the comment on the foreign currency exchange which is explicitly mentioned).
As for selling securities, it doesnt mention money in that definition either, It mentions trading the security for VALUE. I even bolded it for you.
Is your point that bitcoins have no value?

Thats my point exactly. The same goes for GLBSE.


I posted that a million times already:

 The term ‘‘security’’ means any note, stock, treasury
stock, security future, security-based swap, bond, debenture,
evidence of indebtedness, certificate of interest or participation
in any profit-sharing agreement, collateral-trust certificate,
preorganization certificate or subscription, transferable share,
investment contract, voting-trust certificate, certificate of de-
posit for a security, fractional undivided interest in oil, gas, or
other mineral rights, any put, call, straddle, option, or privilege
on any security, certificate of deposit, or group or index of secu-
rities (including any interest therein or based on the value
thereof), or any put, call, straddle, option, or privilege entered
into on a national securities exchange relating to foreign cur-
rency, or, in general, any interest or instrument commonly
known as a ‘‘security’’, or any certificate of interest or partici-
pation in, temporary or interim certificate for, receipt for, guar-
antee of, or warrant or right to subscribe to or purchase, any
of the foregoing.


The term ‘‘sale’’ or ‘‘sell’’ shall include every contract of
sale or disposition of a security or interest in a security, for
value. The term ‘‘offer to sell’’, ‘‘offer for sale’’, or ‘‘offer’’ shall
include every attempt or offer to dispose of, or solicitation of
an offer to buy, a security or interest in a security, for value.

www.sec.gov/about/laws/sa33.pdf

As for legal interpretation:

The definition for each of these securities is either listed in the Act under A.R.S. Section 44-1801 or provided by judicial interpretations and tests.[8] In determining whether a certain instrument is a security, a court will consider the substance rather than the form of the instrument.[9] “Essentially, if the purchaser will be a passive owner―relying on someone else’s efforts or conduct in order to make money on the investment―the instrument is probably a security.”[10]
http://www.mitchell-attorneys.com/legal-articles/securities-registration-and-exemption/

You dont lease a PS3 with the aim of making money.
And I fear just relabeling it wont really help. I came across this, granted, for Arizona, but I suspect it will similar all over:

I. Defining a Security.
 The first step in deciding whether the securities statutes apply is to determine whether the transaction at issue actually involves a “security”. Arizona broadly defines a security as any:

[N]ote, stock, treasury stock, bond, commodity investment contract, commodity option, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, viatical or life settlement investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas or other mineral rights, real property investment contract or, in general, any interest or instrument commonly known as a “security”, or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing.[7]

The definition for each of these securities is either listed in the Act under A.R.S. Section 44-1801 or provided by judicial interpretations and tests.[8] In determining whether a certain instrument is a security, a court will consider the substance rather than the form of the instrument.[9] “Essentially, if the purchaser will be a passive owner―relying on someone else’s efforts or conduct in order to make money on the investment―the instrument is probably a security.”[10]

http://www.mitchell-attorneys.com/legal-articles/securities-registration-and-exemption/

Becoin, you should start another silk road, perhaps one that doesnt require tor. Since payments will be processed with bitcoin and not "money", you wouldnt be selling anything and surely regulations wont apply, right?

For the nth time, bitcoin has nothing to do with it.  Swapping assets on GLBSE,  a transaction that doesnt even involve bitcoins (let alone fiat) would be subject to regulation, because the assets are securities, and therefore subject to regulation.

The point is that it has value. That the value is derived from computer calculations is irrelevant. I dont see an exception for securities based on running compute intensive code.

As for it being a contract; yes its a contract, but the important point is that it is a tradable contract, aka as a security.


You can speculate if robbing a bank is legal, but its not prudent to assume it might be.

Not that I disagree with your post (particularly getting bitcoin foundation involved), but out of curiosity, did whoever claimed "it is simply a contract to run computer calculations, and it's perfectly legal"  have any relevant credentials ? I kinda doubt it.  While Im not a lawyer myself, and things might be different in Canada, SEC regulation is pretty clear that these kinds of mining bonds are securities. That the bond relates to mining bitcoins rather than mining coal is of no importance.

You gotta love this place. Some  irony that a well thought out,  reasonable and informative post like Mike Hearn just wrote is followed by a single line post showing drop dead stupidity, ignorance and even inability to read whats been written already.

Not to be a jerk, but Im waiting for my first payment.