[....] ART issue - The Mug #004 included - crowdfunding the project...

[ChrisKoss]

This product seems a little too confusing for my wallet.  It seems like you're trying so hard not to be a security, that the investor has lost all assurances of any benefit from purchasing "tokens".  I suggest looking into a different model where returns aren't BTC, but in goods.

I am interested in purchasing art with Bitcoin.  You should get your artist friend(s) to make some pieces around the theme of Bitcoin (money, cyberpunk, anonymity, electronics, etc).

Still life of some 7970's in a basket of fruit anyone?

Maybe you could hold a monthly/quarterly art auction, where all bids must be made with Tokens?

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[EskimoBob]

This product seems a little too confusing for my wallet.  It seems like you're trying so hard not to be a security, that the investor has lost all assurances of any benefit from purchasing "tokens".  I suggest looking into a different model where returns aren't BTC, but in goods.

I guess all the screaming and yelling of how the SEC/FSA is breaking down imaginary doors of imaginary corporations and is threatening to hang bazaars owners has had it's effects on me too

One option is to say, fuck that hysteria and advertise the dividends, get some pople to sign up and get this project off the ground.
I rather keep it low key and go the other way.
There will be no participation in any profit-sharing agreement so we can end this "this is a security" nonsense for good.
 

I am interested in purchasing art with Bitcoin.  You should get your artist friend(s) to make some pieces around the theme of Bitcoin (money, cyberpunk, anonymity, electronics, etc).

Still life of some 7970's in a basket of fruit anyone?

Maybe you could hold a monthly/quarterly art auction, where all bids must be made with Tokens?

We can and will do all that but first we need to get this project going  - buy or lease the equipment to make the "product".

I know that there is a hand made tea/coffee mug in making. It has a nice bas-relief of a bitcoin logo on it.
This is not a printed/decal crap from China or from your local "gifts" shop.
How it looks? I have no idea at the moment.   I know that you can get your name embossed in to it until the material is still soft. 

What I was thinking is this:
ART-OTC is a open cooperative that buys the equipment.
Coin used for the purchase of this equipment is donated by the purchase of ART-OTC tokens.
Equipment is leased to "Open Art Studio Project ART-OTC"
Open Art Studio Project pays for the equipment to ART-OTC like lease payments.
Coin starts to flow back to ART-OTC tokens holders.

Is that acceptable?

[DannyM]

I've purchased a few, its a nice test of the #assets-otc system, and a nice to encourage and help artisans, and really nice to keep Bob busy so he doesn't troll other threads

Go ahead and throw a coin at this project.

[EskimoBob]

Tonight (after UTC 19.00) I am going send out a small gratuity to those brave, who have show support to this project by purchasing support tokens from assets-otc.com

 

[ChrisKoss]

I know that there is a hand made tea/coffee mug in making. It has a nice bas-relief of a bitcoin logo on it.
This is not a printed/decal crap from China or from your local "gifts" shop.
How it looks? I have no idea at the moment.   I know that you can get your name embossed in to it until the material is still soft. 

Could we get our Bitcoin Address embossed into it, as text or a QR code?  If reasonably priced, I'd bet at least half of the CoinLab office would want to order one.

What I was thinking is this:
ART-OTC is a open cooperative that buys the equipment.
Coin used for the purchase of this equipment is donated by the purchase of ART-OTC tokens.
Equipment is leased to "Open Art Studio Project ART-OTC"
Open Art Studio Project pays for the equipment to ART-OTC like lease payments.
Coin starts to flow back to ART-OTC tokens holders.

Is that acceptable?

Acceptable to who?  The SEC?  Probably not.

*DISCLAIMER* I'm not a lawyer.  Assume everything I say is wrong, get your own legal counsel before doing anything based off this information.

As far as I understand, the SEC classifies pretty much any passive investment as a security. If you put money in, and have a chance to get more than your initial deposit back out, it is a security (by the SEC's definition).

Read this for some examples of things that the SEC says are and are not securities:
http://www.wcl.american.edu/sba/outline_databank/outlines/SecuritiesRegulation_Quinn_Fall2004_Cases.pdf

From that doc:

If you pitch something as an investment,
then you come under the securities laws.

Investment contract TEST:
Whether the scheme involved (1) an
investment of money (2) in a common enterprise (3) with the expectation
of profits (4) to come solely from the efforts of others.

It seems like you could get around SEC regulations by:

- Require investors to somehow contribute non-monetarily as well (not solely on the efforts of others)

- Don't pay dividends, but allow asset holders to either sell shares at their buy price, or redeem them for goods/services (no expectation of profit)

- Don't sell to US investors, locate outside of the US (outside of SEC jurisdiction)

[usagi]

Tonight (after UTC 19.00) I am going send out a small gratuity to those brave, who have show support to this project by purchasing support tokens from assets-otc.com

 

Why are you people so happy buying fake and illegal securities in non existing (fake) entities?
Why even issue this illegal stuff and call yourself a corporation, while you know, you are not representing any legally existing Co.
If your company is registered, and you offer shares to general public - you are breaking the laws in most of the countries that have internet access.

Obviously this opens the ugly door of SEC/FSA/OSC/... etc, who will start cracking down on this sooner or later and make everyone's life really miserable.

（Posted by: EskimoBob.. last week.)

Sounds like EskimoBob started to believe his own delusions that everyone was a scammer and decided to set up his own scam. After all, everyone's doing it, right EskimoBob?

Your friend's art studio you say? And who are these people exactly? Do they even exist? I mean come on. EskimoBob has friends? Ha! Tell me another one.

[Stephen Gornick]

Acceptable to who?  The SEC?  Probably not.

If this investment is not offered to those in the U.S., it doesn't matter if the U.S. Securities and Exchange Commission approves or not.

It seems like you could get around SEC regulations by:
- Require investors to somehow contribute non-monetarily as well (not solely on the efforts of others)
- Don't pay dividends, but allow asset holders to either sell shares at their buy price, or redeem them for goods/services (no expectation of profit)
- Don't sell to US investors, locate outside of the US (outside of SEC jurisdiction)

That's where my suggestion of using a simple revenue contract might be preferable.  The studio needs equipment.  A supporter/investor of the studio project can buy the equipment (or provide the funds to buy the equipment and then becomes the owner of the equipment), and then the equipment located at the studio earns revenue when it is used, or when items constructed using that equipment are sold.

But seriously, these laws are ridiculous for someone trying to raise investment money for an art studio.  The crowdfunding ammendment let the genie out of the bottle and it is only a matter of time before the laws are either ignored en mass or repealed and that some day an art studio operator that wants to tap an online social circle for investment (measuring in thousands of dollars) can do so without concern over breaking securities laws.

[EskimoBob]

I know that there is a hand made tea/coffee mug in making. It has a nice bas-relief of a bitcoin logo on it.
This is not a printed/decal crap from China or from your local "gifts" shop.
How it looks? I have no idea at the moment.  I know that you can get your name embossed in to it until the material is still soft.  

Could we get our Bitcoin Address embossed into it, as text or a QR code?  If reasonably priced, I'd bet at least half of the CoinLab office would want to order one.

Bitcoin Address embossed into it - Yes, this can be done.
QR code - There is a way to do it but I am not sure it can stay readable  so I am not going to promise this.
Every cup will be hand made - not poured to the mold. What do you think is a reasonable price?
100 tokens of ART-OTC? 200? Shipping will be extra.  
If you want your name or Bitcoin Address embossed into it, please send it to me via PM.

[Deprived]

A. WHY AND WHAT IS OFFERED
1. ART-OTC virtual Support Tokens (later: STs) represents your participation in the "Open Art Shop Project ART-OTC" as a supporter by helping us to purchase new equipment for the project
2. Proceeds from the sale of virtual Support Tokens are used to buy equipment, materials, parts and cover other equipment related expenses.
3. Equipment will be insured against the theft or destruction by fire or similar incident.
4. Equipment is used to generate additional income for the project.
5. Most of the equipment is usable for long periods of time (years).
6. Up to 34 000 virtual Support Tokens will be sold at 0.05 BTC per token.
7. Support Tokens do not represent any share (equity) in "Open Art Shop Project" or in its managing entity(s). 
8. Support Tokens are not financial securities nor do they represent any financial security whatsoever.
9. The project does not promise any profits and there will be no profit sharing with holders of virtual ART-OTC Support Tokens.
10. If the purchased equipment is sold at later date, proceeds will be divided up between token owners at that time.
11. ARTS-OTC Support Tokens can (but do not have to) be bought back by the issuer.

So we don't get any share of profits and we don't own any equity?  But we might get back the second-hand value of equipment IF it's sold?

Not quite seeing what the benefits of investing are - seems like we're being asked to donate money to help a "friend" of yours, without even being told where this art studio is so we can actually see the benefits our funding provides.  Is that a fair summary?

[EskimoBob]

A. WHY AND WHAT IS OFFERED
1. ART-OTC virtual Support Tokens (later: STs) represents your participation in the "Open Art Shop Project ART-OTC" as a supporter by helping us to purchase new equipment for the project
2. Proceeds from the sale of virtual Support Tokens are used to buy equipment, materials, parts and cover other equipment related expenses.
3. Equipment will be insured against the theft or destruction by fire or similar incident.
4. Equipment is used to generate additional income for the project.
5. Most of the equipment is usable for long periods of time (years).
6. Up to 34 000 virtual Support Tokens will be sold at 0.05 BTC per token.
7. Support Tokens do not represent any share (equity) in "Open Art Shop Project" or in its managing entity(s). 
8. Support Tokens are not financial securities nor do they represent any financial security whatsoever.
9. The project does not promise any profits and there will be no profit sharing with holders of virtual ART-OTC Support Tokens.
10. If the purchased equipment is sold at later date, proceeds will be divided up between token owners at that time.
11. ARTS-OTC Support Tokens can (but do not have to) be bought back by the issuer.

So we don't get any share of profits and we don't own any equity?  But we might get back the second-hand value of equipment IF it's sold?

Not quite seeing what the benefits of investing are - seems like we're being asked to donate money to help a "friend" of yours, without even being told where this art studio is so we can actually see the benefits our funding provides.  Is that a fair summary?

Yes, current draft read like it reads and is not attractive at all, unless spreading coin makes you feel good and this is all you want. 
This is a 'work in progress' and the goal is to figure out how to structure it so that all participants are happy.  As you can see, we are not there yet.
In last few pages we have attempted to figure out how to share the profit but not share the profit Sounds absurd, I know.
Problem is, that  security definition is directly connected to contract to share the profit.

I am trying to put together a "contract" where ones who donate via purchase of ART-OTC tokens, get back more than they donated.

[Bitcoin Oz]

hmm...that site needs a way to find all the assets that have been issued. Like a charts site or something.

[EskimoBob]

hmm...that site needs a way to find all the assets that have been issued. Like a charts site or something.

Setting up an account it asstets-otc is not complicated but the lack of quoting system is a bit annoying
I posted some quotes here [url http://bitcoin-otc.com/vieworderbook.php?type=&nick=&thing=VIRTUAL+ST%27S+OF+ART-OTC&otherthing=&eitherthing=&notes=]virtual ST's of ART-OTC[/url]

Same time, I do not like to get involved with a system, where one guy has the full control over the tokens, token holders and all the coin in the system (if any).
Sites like GLBSE are convenient but all those risk are there and those risk have materialized multiple times in last year or so.  
At the same time, what happens, if asstets-otc guy gets bored and walks? (tokens, assets etc) holders have the contracts aka proof of the holdings and also the trades. All signed and verifiable by both parties. Problem solved.
I added a high level description of possible trading "interface" to asstets-otc tread. https://bitcointalk.org/index.php?topic=105437.msg1283427#msg1283427
Looks like Goat and pjotr_n have a "chicken to pluck" or "bone to pick" lol so this thread got out of control really fast.  Damn.

[EskimoBob]

This is anew contract (draft) #02
English is obviously not my first language - all grammar corrections are welcome.

Sale of ART-OTC virtual Support Tokens

This is a rewards-based crowdfunding project. Project supporters (aka buyer of ART-OTC virtual Support Tokens - ST’s) are offered, as a reward, the virtual Support Tokens for the are agreeing to pool the coin for the purchase of art studio equipment and leasing it to "Open Art Shop Project ART-OTC".
As a additional perk to ST holders, virtual tokens can be used at later date for discounts on product and services offered by the project in the future.
No equity is offered to ST holders.

A. WHY AND WHAT IS OFFERED
1. ART-OTC virtual Support Tokens (later: STs) represents your participation in the "Open Art Shop Project ART-OTC" as a supporter by helping us to purchase new equipment for the project

1. ART-OTC virtual Support Tokens (later: STs) represents your participation in the open co-op "ART-OTC".
2. Proceeds from the sale of virtual Support Tokens are used to buy (Edit)art studio equipment, materials, parts and cover other equipment related expenses.
3. Equipment will be insured against the theft or destruction by fire or similar incident.
4. Equipment is used to generate additional income for the project.
4. Equipment will be leased only to "Open Art Shop Project ART-OTC"
5. Most of the equipment is usable for long periods of time (years).
6. Up to 34 000 virtual Support Tokens will be sold at 0.05 BTC per token.
7. Support Tokens do not represent any share (equity) in "Open Art Shop Project ART-OTC" or in its managing entity(s). 
8. Support Tokens are not financial securities nor do not represent any financial security whatsoever.
9. The project does not promise any profits and there will be no profit sharing with holders of virtual ART-OTC Support Tokens.
9. Leasing payments form "Open Art Shop Project ART-OTC" are paid to ART-OTC biweekly (every second week).
10. If the purchased equipment is sold at later date, proceeds will be divided up between token owners at that time.
11. ARTS-OTC Support Tokens can (but do not have to) be bought back by the issuer ART-OTC.

(I am going to leave that in because this is also present in crowd-funding contracts)
B . LIMITATIONS TO STs BUYERS

1. If your (STs buyer) annual income or the net worth of is less than USD 100000, your maximum aggregate purchase of STs in 12 month period can not exceed the greater of USD 2000 or 5 percent of your annual income.
2. If your annual income or the net worth of is more than USD 100,000, your maximum aggregate purchase of STs in 12 month period can not exceed 10 percent of your annual income.

C. RISKS

1. By purchasing any number of STs you positively affirm that you understand that you are in risking of losing your coin entire investment -
2. and that you could bear such a loss; and
3. you understand the level of risk generally applicable to participating investments in startups, emerging businesses, and small co-op projects;
4. and you understand the risk of illiquidity
5. If the project fails, ART-OTC Support Tokens issuer or project manager (persons or legal entity(s) can not be held liable.
6. Issuer can not be held liable for any of STs holders actions or for any of the results from STs holders actions.
7. Issuer can not be held liable for STs holders actions like selling, trading, destroying or anything else you (STs holder) plan or can imagine doing with your STs.
8. Issuer reserve the right to make minor changes to this contract.
9. All sales of ART-OTC virtual Support Tokens are considered final after you have transferred your coin to address give to you by the issuer.

D. FORCE MAJEURE

1. Issuer or manager(s) shall not be liable for any failure to perform its obligations where such failure is as a result of Acts of Nature (including fire, flood, earthquake, storm, hurricane or other natural disaster), war, invasion, act of foreign enemies, hostilities (whether war is declared or not), civil war, rebellion, revolution, insurrection, military or usurped power or confiscation, terrorist activities, nationalisation, government sanction, blockage, embargo, labour dispute, strike, lockout or interruption or failure of electricity [or telephone service], and no other Party will have a right to terminate this Agreement under Clause 19 (Termination) in such circumstances."

2. Any Party asserting Force Majeure as an excuse shall have the burden of proving that reasonable steps were taken (under the circumstances) to minimize delay or damages caused by foreseeable events, that all non-excused obligations were substantially fulfilled, and that the other Party was timely notified of the likelihood or actual occurrence which would justify such an assertion, so that other prudent precautions could be contemplated.
[/quote]

[EskimoBob]

asstets-otc is out. This project and the supporters are way too important for me to build my contract-client management on someone as unstable and as erratic like  piotr_n and his hobby "service".  He told me today that asstets-otc is just a hobby and his is not taking it seriously.

I have to look for another way to manage the contract-client relationship.
Cheers!

[EskimoBob]

Could we get our Bitcoin Address embossed into it, as text or a QR code?  If reasonably priced, I'd bet at least half of the CoinLab office would want to order one.

Here is a "work in progress". I can get the numbers or name on it now. If it gets fired to bisque, only glazes can be added.
Where so you want the Bitcoin Address and what it is

[MPOE-PR]

Good luck with this (am I too late?)!

[EskimoBob]

Good luck with this (am I too late?)!

No, you are not

[MPOE-PR]

Good luck with this (am I too late?)!

No, you are not

I just meant gl with the venture in general.

[DannyM]

Good luck with this (am I too late?)!

No, you are not

I just meant gl with the venture in general.

What have you done with the real MPOE-PR?

[EskimoBob]

Impress your girlfriend(s)! Support ART