It depends on the entity.

For legal constructs (partnerships, corporations, LLCs) it is one which is incorporated in the United States (specifically in one of the States).
For individuals it is US residents (regardless of their citizenship) and US citizens living abroad*
For business entities owned by a single person (sole propreitorships) it depends on the owner's citizenship and residence.

For unincorporated businesses it gets a little more complex because they have no legal basis.  Simply put many of the "companies" listed on Bitcoin exchanges don't exist under the law.  Likely the SEC would use similar rules as those used to identify foreign private issuers:
http://www.sec.gov/divisions/corpfin/internatl/foreign-private-issuers-overview.shtml

The US or foreign status of the entity would depend on material facts (ownership, location of assets, citizenship of directors/officers, listing on US exchanges, etc)



* (Yes I get the unfair treatment relative to other nations but it is what it is)

Please understand that US securities law is very complex:
http://www.sec.gov/divisions/corpfin/internatl/foreign-private-issuers-overview.shtml

simply being a foreign entity alone is insufficient to be excluded from US regulations.

Being a foreign entity owned exclusively by foreigners (non-US residents or citizens), which holds no assets in the US and has never had a trade occur in the United States, has no US directors/officers, and isn't listed on any US exchange would be put the entity totally outside US regulatory system.

For entities not meeting that criteria a lot depends on the details of the company, its owners, its assets, its structure, and its offering.  You are going to need good legal counsel to know if/when/where you cross the line.  The recommendation for seeking counsel is a good idea.  Given that no "Bitcoin stock exchange" has an provision to limit/exclude US residents/citizens any listed asset is at least within the US regulatory regime.  An exemption may apply but it is asininely stupid to say "I am not a US company therefore I am exempt".

No that is a transaction and you can't (without some really bad hacks) include a message in a transaction at least not in any standardized easy to decode method.

Transactions are not messages.  Messages are not transactions.



Signed messages are never part of a transaction and never added to the blockchain.

The client has the ability to sign any arbitrary text.  Once again this has absolutely nothing to do with transactions.

Wow what a dirty bag Vlad is.  Extorting people though lies and FUD to steal coins. 

No.  This kind of thing annoys me because it creates a defacto run around the prohibition on ex post facto laws.  FINCen guidance is that the regulations ALWAYS applied to Bitcoin even before the creation of Bitcoin it applied to any theoretical virtual currency. The guidance was merely clarification of existing law/regulation.

Nope the mere offering of unlicensed security is a crime.

Really?  With the exchange account in his name?  To withdraw $150K would require full KYC and docs.
To seize assets you require a warrant and that would require proving at least to a judge that there is sufficient cause.

Now if he had kept it all as BTC and sent them to a variety of encrypted and brainwallets that would be a lot harder.  Then again at least according to the press release Pirate was an idiot. I mean he lost the lion's share of what he stole.

That assumes basic knowledge of how crypto-currencies work.  Something vlad lacks completely. I understand why you would be confused as most people would assume that a person launching a coin would have at least the most basic understanding of how it works.

They won't.  Reading between the lines, Pirate lost most (90%+) of the stolen funds day trading.  He siphoned off ~150K BTC of victims funds (~700K BTC deposited, ~550K BTC paid back as withdrawals & interest).  At the time 150K BTC was worth >$1M yet he had trading losses and withdrew less than $150K from the exchange account.  So most of what was stolen is either a)imaginary interest which is never coming back or b) money Pirate lost playing day trader.  

Of the remaining $150K I would imagine he has probably wasted a good chunk of that. Say there is $50K left, remember this was a BTC based scam and the price of BTC has risen 10x to 15x since then.  Today $50K/$100 ea = 500 BTC.   500 BTC out of ~150,000 BTC stolen isn't much of a recovery. 

TL/DR Pirate stole siphoned off ~150,000 BTC and best case scenario the feds might be able to recover 500 BTC (0.3%).  The feds may simply seek in reim forfeiture as the entire operation violated federal law and victims will never see a dime.  Not saying it is fair but honestly we are talking a 99% to 100% loss for investors.

Well per the press release he deposited 150,000 BTC on an exchange and then lost about half in day trading and then transfered ~$150K worth (USD) into a checking account.    If necessary getting the records of the exchange to obtain his deposit addresses wouldn't be very difficult. 

Investors BTC --->  Ponzi ---> His Exchange Account ----> USD in his checking account.

Your an idiot.  Look at the DATE.  2 of the "3" have dates PRIOR to your launch. 


No just like last time Mark is going to point out that unless you went back in time it isn't possible for coins which launched prior to yours to have stolen "your" (luckycoin's) idea.

What would be hard about a conviction.  ponzi schemes are completely illegal.  Did he promise investors a return?  Did he pay investors from the deposits of newer investors? That is really all that is needed. Some financial crime can be very tough to prove but something is either a ponzi or not.  

The uncliensed security issue is even easier to prove.  He didn't register with SEC.  They simply needs to find one or more persons willing to testify that Pirate offered them an investment.  Note the word offered.  Proof that funds exchanged hands or securities were sold isn't even a requirement.

BTW though the SEC can't file criminal charges that would be the job of the Justice Dept.  Of course the SEC can hand over everything they have to them.  If Justice Dept doesn't move it probably has more to do with the small scale then any inability to secure a conviction. 

It depends.  Was funds from the scam used to make house payments.   If so then more than one district attorney has gone the "procedes of a criminal enterprise angle".  More common to deprive drug dealers of physical assets (that they could use for bail) but who knows.

As others have pointed out the only proof is a signed message(s) and the signed message should be distinct enough that it can't be reused.

Having someone send you a token amount of coins is very weak security.  Someone could simply be acting as a middle man.  He tells a person who really does have 1000 BTC to send him a bitcent as "proof" and then supplies your address.  You see an incoming "proof" transaction which isn't proof of anything at all.

I updated the post to include a variety of metrics but none come anywhere close to the gold:silver ratio.  Lets go with 10x for mining production, the Silver Gold ratio right now is ~65:1 not 10:1.  

Actually in the last 40 years it has NEVER been as low as 10:1.





However sentiment is affected by estimates.  Yet despite there being really no dispute that by any metric gold is no more than 20x as rare as silver (total historical production  - 20:1, annual production - 10:1, total above ground metal: 5:1, total bullion: 0.5:1) its price has consistently 40x to 80x that of Silver for decades.  

The idea that the cryptocurrency supply is more accurate isn't exactly true.  Generation is very accurate but what matters is AVAILABLE currency and losess are unknown.  How many Bitcoins are still in circulation?  Still the point was that supply alone doesn't determine price.  If it did then the silver:gold ratio would be much lower (no matter what metric one thinks is the most important).

The amount of available silver bullion (30,000 T) is roughly half that of gold bullion (60,000 T).  Is the price of silver double that of Gold?

Based on these metrics why is the price of Silver 1/65th  of Gold?

Total gold      166,000 T
Gold bullion       60,000 T
Gold Production          2,800 T /annually

Total Silver           777,000 T
Silver Bullion         30,000 T
Silver Production         30,000 T / annually   

Total Silver        4.7x Gold
Silver Bullion       0.5x Gold
Silver Production    10.7x Gold

Gold Price      ~$1300
Silver Price:      ~$20
Gold/Silver Ratio:   65:1

Well you can't "just print it" there is a cost involved and to be able to make smart decisions you need to make realistic assumptions about that cost.  How many BTCs would you mine todya if it costs you 1.1 BTC to mine one?


We know it isn't (or at least most isn't) because difficulty would be much higher.  BFL alone has 200TH/s + of pre-orders.  The exact amount is unknown because not everyone discloses but one can get a good ballpark idea.  If BFL was mining with 200TH/s+ difficulty right now would be at least doubled.

You owe me a new monitor.

The future exchange rate is irrelevent from the standpoint of "should I buy new hardware" because you always have the choice of simply buying Bitcoins instead.

Some made up numbers to illustrate the point.

Say you could buy a "x brand" ASIC today it would cost 100 BTC.  However due to rising difficulty it will only produce 90 BTC over the next two years before it is obsolete.  Now lets also say the current exchange rate is $100 and two years from now it is $500.  You likely are thinking "but wait I paid 100 * $100 = $10,000 and will get 90 * 500 = $45,000 so I come out head".  While true in dollar terms you don't know the exchange rate *will* rise to $500, it could instead drop to $50.  Your gain isn't from mining but merely speculation.  To speculate on future exchange rates one could generate a larger gain with lower risk by simply buying and holding BTC instead of buying hardware. Buying 100 BTC will be worth 100 BTC in two years.  This is better than paying 100 BTC for hardware that will produce 90 BTC into two years. 

Difficulty will rise until the projected profits are too little to justify new hardware.  The problem is there is a massive amount of pre-ordered hardware where people like you (but months ago) figured they only had to buy some hardware and they will be rich overnight.  Difficulty hasn't risen YET because the hardware isn't deployed but it will (no matter what) the hardware is already paid for.

So yes difficulty will eventually slow down and may even go down slightly but that equilibrium point is at least 10x if not 20x (or more) higher than where it is now.  So at a minimum your "plan" should consider the possibility that difficulty will at least double every 90 days for the next year.  Honestly that is probably a little optimistic.  Considering difficulty will stay flat though the chance of that is 0% and even doing a "plan" based on that is just foolish.  It is a good way to lose money guaranteed.


If you think Bitcoin is "pretend money" well that is just stupid. If I have 1,000 BTC I don't HAVE to spend it on mining hardware. I could echange it for USD and buy a sports car.