[SecondMarket] Bitcoin Investment Trust™ (Non-Official thread)

[canuck]

This is a pretty big deal. You don't have to be a $1M net worth individual if you self-incorporate.

The federal securities laws define the term accredited investor in Rule 501 of Regulation D as:

1. a bank, insurance company, registered investment company, business development company, or small business investment company;

The use of proper traditional exchanges sets the stage for short selling and derivatives, which will be a big part of Bitcoin's coming-of-age.

(Although SecondMarket isn't exactly a "proper traditional exchange", it's a hell of a lot closer than we're used to)

I believe in the USA that an SBIC is an investment firm that invests in small businesses.  This would be different from just any incorporated company.

[Dabs]

Maybe I should form my own "Dabs Bitcoin Thing" ... and make it as vague as possible about what it does.

[Vycid]

This is a pretty big deal. You don't have to be a $1M net worth individual if you self-incorporate.

The federal securities laws define the term accredited investor in Rule 501 of Regulation D as:

1. a bank, insurance company, registered investment company, business development company, or small business investment company;

The use of proper traditional exchanges sets the stage for short selling and derivatives, which will be a big part of Bitcoin's coming-of-age.

(Although SecondMarket isn't exactly a "proper traditional exchange", it's a hell of a lot closer than we're used to)

I believe in the USA that an SBIC is an investment firm that invests in small businesses.  This would be different from just any incorporated company.

You are right. That's pretty ambiguous  

It seems that a self-incorporated company for the purpose of acting as an accredited investment agent would be a "registered investment company", which means complying with a bunch of SEC regulations and all the corresponding pains in the butt.

[statdude]

"Accredited investor" is usually a self-certification. 

http://www.sec.gov/answers/accred.htm

Uh huh.

You must be over 18 to view the material on this site. Are you over 18?

Residents of the US are not permitted to access our gambling services. Are you a resident of the US?

Only accredited investors, as defined by the SEC, are permitted to invest in the Bitcoin Investment Trust. Are you an accredited investor?

Erm...it's slightly more tricky than that.  A good amount of documentation is required to prove that you are an accredited investor.  Second market requires the same sort of accreditation proof that retail stock brokerages require if you claim to be an accredited investor.

This is not simply a tick box that any 12 year old can deftly ignore.

This isn't suggested by the signup form. You self-certify all the information you enter into boxes. There are no mechanics to allow the uploading of any documentation in the accredited investor portion of the signup sheet, though maybe they do this later for every individual (I didn't get past the page asking for information for a background check - I wouldn't know). They indicate they do a background check, but don't indicate what they're looking for.

I can confirm you're right - it's a self-certification, persay.

I find that incredibly difficult to believe.  Second Market operates in the United States as a brokerage that accepts accredited investors.  I've witnessed that rigamarole before and if you provide fake documentation to assert your status as an accredited investor, that's potential jail time.

I'd like to hear from someone who has had to go through the process.  If such a person went through the signup process without receiving even a phone call to go over their documentation, Second Market could be in a lot of trouble.

But then, it was the SEC that had all of their employees busted for sitting about watching porno during business hours so...

As hard as it is for you to believe, that's what I'm saying. I know people directly that have gone though SecondMarket's process.

[jedunnigan]

"Accredited investor" is usually a self-certification. 

http://www.sec.gov/answers/accred.htm

Uh huh.

You must be over 18 to view the material on this site. Are you over 18?

Residents of the US are not permitted to access our gambling services. Are you a resident of the US?

Only accredited investors, as defined by the SEC, are permitted to invest in the Bitcoin Investment Trust. Are you an accredited investor?

Erm...it's slightly more tricky than that.  A good amount of documentation is required to prove that you are an accredited investor.  Second market requires the same sort of accreditation proof that retail stock brokerages require if you claim to be an accredited investor.

This is not simply a tick box that any 12 year old can deftly ignore.

This isn't suggested by the signup form. You self-certify all the information you enter into boxes. There are no mechanics to allow the uploading of any documentation in the accredited investor portion of the signup sheet, though maybe they do this later for every individual (I didn't get past the page asking for information for a background check - I wouldn't know). They indicate they do a background check, but don't indicate what they're looking for.

I can confirm you're right - it's a self-certification, persay.

I find that incredibly difficult to believe.  Second Market operates in the United States as a brokerage that accepts accredited investors.  I've witnessed that rigamarole before and if you provide fake documentation to assert your status as an accredited investor, that's potential jail time.

I'd like to hear from someone who has had to go through the process.  If such a person went through the signup process without receiving even a phone call to go over their documentation, Second Market could be in a lot of trouble.

But then, it was the SEC that had all of their employees busted for sitting about watching porno during business hours so...

As hard as it is for you to believe, that's what I'm saying. I know people directly that have gone though SecondMarket's process.

I hope for their own sake they change their methods. You imagine with this Bitcoin fund the spotlight is on them, the SEC will come knocking at some point.