Except you haven't answered this. You'd just denied that this is a problem every time or claimed you've already answered it.

If you operate an exchange within the US without complying with know your customer regulations then YES. You will be shut down for money laundering.

The currency pairing is irrelevant. If you are exchanging currency you have to have a money services business license in every state you operate in.

Please explain how he's immune to SEC regulation and Know your Customer regulation (money laundering regulations) while directly selling a virtual currency as an investment.

Dacoinminister's "Mastercoin" proposal is taking Bitcoin in exchange for what he calls an "investment" without any regulatory compliance. Here's precedent for that being illegal: http://www.pcworld.com/article/2045083/sec-charges-texas-man-with-running-bitcoin-ponzi-scheme.html

Dacoinminister's "Mastercoin" proposal is taking Bitcoins in exchange for a centrally issued virtual currency. Here's precedent for that being illegal: http://www.paritynews.com/2013/05/26/libertyreservecom-shuttered-founder-arrested-in-spain/

Please refute these points rather than assuming it's legal without any reasoning.

I have no standing to sue him since I would never ever send him money. In the US court system you can't sue anyone unless you have been personally effected. I'm posting in the scam accusations thread because I believe it's a scam and should be added to this list.

He's only "stupid" if he is really the guy who he says he is living in the US. It would actually be far "smarter" for a scmamer to use someone else's LinkedIn and say its his (this is what I believe he's done unless he's really just lost his mind).

The real question is why are you so upset about this random person's scheme being proposed for addition to this list?

Applicable laws are those that can be applied to his project. He's not complying with them. How is that so hard to understand?

If he didn't want US laws to apply to him he shouldn't have claimed to live inside the US. He could have released his "protocol" in an open source way without crowning himself the only one allowed to make "mastercoins" and claiming direct control of his "exodus address". Yet he didn't. The reason he has to follow US law is because he insisted upon making his project closed source and taking all the money directly while claiming to live in the US.


Mastercoin should be added to the scam list because it's impossible for it to work yet he's asking for money now. His economics are fatally flawed (half baked is probably a better description). He violates US laws that are definitely applicable to his project if he is who he says he is yet ignores this criticism. Therefore it will never work and any money you send him is utterly lost.

applicable is the operative word

Namely:
He's selling an investment without complying with SEC regulations (this wouldn't be illegal except for the fact he's claiming to be a US citizen)
He's selling a virtual currency directly to buyers without any kind of know your customer regulation(Look at the liberty reserve shutdown if you don't think this is illegal. That guy was even from Spain not the US but they still got him.)

Bitcoin doesn't have a centralized operator and so nobody can be charged with running it. There's no company that maintains the source code since its open source. If you had to buy Bitcoin directly from Satoshi Nakamoto, and he lived in lets say Kansas, the whole thing would be shut down and declared illegal right away. That's basically what "Mastercoin" is.

He hasn't even tried to comply with the law and ignores this criticism.

Hey Bytemaster. It's cool you're posting in this thread because I remember your BitShares idea was very similar to this. At least you weren't so greedy that you asked for money directly. You definitely have a point about how he fails again and again to reply in a meaningful way to criticism (or he deletes the post).

Please add "Mastercoin" to the list.

-This project violates all applicable US laws
-The creator claims to be based in the US but has not provided proof of his identity yet
-He's asking for money now even though all he's got is a hastily thrown together whitepaper
-The money is sent directly into his BTC account in exchange for nothing but a promise of "mastercoins" when he gets around to making them

See: https://bitcointalk.org/index.php?topic=265666.0

You posted a video of someone at a conference. You also posted a LinkedIn profile. That doesn't prove that your forum identity is in any way linked to that real identity.

As far as the applicability of the laws, the first link I posted the guy collected only Bitcoin just as in your proposal.

The creator of Liberty Reserve got taken down by the US govt and you will too. Decentralization and open source are the only thing keeping Bitcoin from being shutdown. Since your project has neither it will be shut down if it ever ends up existing in the first place.

(PS: Again, you can't profit from maintaining an artificial peg so the economics of your system make it a failure before it's even begun. Taking people's Bitcoins and promising them Mastercoin is certainly just as illegal as what the guy from Texas did in the first link. So whether you deliver or not you're still violating multiple US laws.)

You assume that your escrow is going to profit by maintaining a peg. Basic supply and demand make the maintenance of an arbitrary peg always a money losing proposition. People are only ever going to buy from the fund when they can make money. They're also only going to sell to the fund when they can make money. Eventually any "escrow" you set up will run out of cash as the public treats it like a big money giveaway. How do you counter this?

Read the links I posted. The first one the guy collected Bitcoins (not USD) yet that didn't stop the SEC from charging him with offering unlicensed investment instruments. The second link someone created a virtual currency (Liberty Reserve) and sold it directly to people.

The only reason Bitcoin hasn't been shut down is because it's open source, decentralized, with no official creator. That makes it impossible to shut down. Since your project has none of these properties you're a ripe target for the feds. You cannot deny that you're proposing to sell a currency directly to consumers (it's irrelevant whether it's in BTC or USD for legal purposes). Even if you succeed what you're doing is fundamentally illegal in the US. The creator of Liberty Reserve was in Spain but that didn't stop the US govt from getting him and shutting his currency down.

Got any answer for those two points? Or are you just going to self moderate my posts away instead of defend your project using words again?


It would certainly help establish your identity even if it wouldn't directly establish this project's legitimacy (since the whole thing basically boils down to "give me money now and you can have some coins that don't exist yet when I get around to making them").

He's right though Bitcoin is valuable because it has useful and desirable properties. "Mastercoin" lacks those and has as its only real feature an escrow system that will steadily lose money and collapse over time (since maintaining an artificial peg is impossible to profit from). Therefore it will never have value.

What he's doing is almost certainly illegal.
He is selling an investment instrument without complying with any of the regulations. See this article: http://www.pcworld.com/article/2045083/sec-charges-texas-man-with-running-bitcoin-ponzi-scheme.html

Even if you disagree with that assessment he's proposing at minimum to sell a virtual currency directly to consumers without doing any know your customer regulation compliance. See: http://www.paritynews.com/2013/05/26/libertyreservecom-shuttered-founder-arrested-in-spain/

He claims to be based within the US yet follows none of the applicable laws. Even if he doesn't run with the money and actually releases some source code he's going to get a nasty visit from the law eventually.

If he's really released his true identity, I think he's screwed. He still hasn't proved he is who he says he is. Maybe he could take a picture holding a sign saying "Mastercoin is totally not a scam guys"?

Definitely stay away from this one and don't give him any money. Since even if he succeeded at his project he'd be violating the law I think it's far more likely he'll run with the money instead.

What you're doing is almost certainly illegal.
You're selling an investment instrument without complying with any of the regulations. Maybe read this? http://www.pcworld.com/article/2045083/sec-charges-texas-man-with-running-bitcoin-ponzi-scheme.html

Even if you disagree with that assessment you're at minimum selling a virtual currency directly to consumers without doing any know your customer regulation compliance. See http://www.paritynews.com/2013/05/26/libertyreservecom-shuttered-founder-arrested-in-spain/

Even if you don't run with the money and actually release some source code you're going to get a nasty visit from the law eventually.

If this really is your identity, I think you're screwed. You still haven't proved you are who you say you are though. Maybe take a picture of yourself holding a sign saying "Mastercoin is totally not a scam guys"?

"hero status" is only determined by number of posts. He's got quite a few one line posts. Accounts are bought and sold all the time for pretty cheap.

Abstract Coin is just another imaginary coin like the one he created under the name "dacoinminister". "Mastercoin" is BS because it doesn't really even exist since there's no source code. He's asking for money now and giving nothing in return, not even a promise. He actually said he wants 1 million dollars in Bitcoins before he works on this project full time. He is either totally delusional or hoping people will not read beyond his sock-pupeteered and self moderated thread.

He controls this address. All funds go directly to him. That's seriously the only way to "make" mastercoin.

Don't take it from me, read his proposal. That's seriously what he says. His reasoning? Because he deserves it. And he's said he wants 1 million dollars in Bitcoins before he actually quits his job to make the program. Who could fall for this scam?

He's going to delete this post soon because he has deleted 30+ posts from this whole thread already.

You don't pay sockpuppets, you run them yourself, as you well know.

You're posting here to subscribe to people verbally eviscerating your project without refuting them? You don't even have any defense for yourself and want to let these statements (such as how you're nothing but a dirty conman) stand then?

You're now speaking as if you know the personal motivations of the creator. That's because you are the "project"'s creator (dacoinminister) posting under your sockpuppet AdamstgBit. This is the first time you haven't said something positive about your stupid mastercoin project in a response. You're trying to save your sockpuppets now, I understand. Glad we got you to give up your stupid fucking scam (I hope).

Totally agree with this assessment except you give him too much credit. He doesn't even have a program released so there are no "Mastercoins" even if you pay him. You get nothing but him saying "thanks!". He started posting that crap last night and I couldn't let it go uncontested. I spent the better part of the night reposting in his thread to make sure there was at least one dissenting voice. I've posted a thread about this issue as well (so he couldn't self moderate it away) and he came in there with his sock puppets saying he "disapproves of spiral_mind". I think he disapproves of anyone who points out the flaws with his "project". I'm sure he thought this was the most clever scam ever developed. However it's pretty transparently nothing more than this guy trying to trick idiots into hedging a "few coins they can afford to lose" into his wallet.

He's got 1300+ bitcoins in his stupid Exodus address bullshit now. I sincerely hope that's just him shuffling around ill gotten gains in an attempt to create the appearance of others buying in rather than real people losing so much money.