Got off the phone with the Guy from the S.E.C

[SgtSpike]

GLBSE he asked about

I'll just leave this here : https://bitcointalk.org/index.php?topic=112402.0

I was just going to post that link... makes a lot more sense now.

I made the comment in that thread that this is not related. Theymos decided in our shareholder meeting on Friday night/Saturday morning to sell his stake. He doesn't want to be a part of the process of GLBSE becoming legitimate.

Alright, fair enough. 

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[Inaba]

However, if Pirate is going to jail that is very bad news indeed

It's really bad news for people who received any kind of payout from pirate during the whole operation. Google clawback. Welcome to the underside of the bus.

Two problems with this... I would love to see how they can clawback BTC (And what is the value of that BTC?)... but more importantly, I would love them to formally acknowledge that BTC is a legitimate currency.

That's the problem with any legal action by any state government.  The minute they enforce any monetary rules on Bitcoin, they legitimize it and that opens up so many doors and cans of worms that they will avoid that at all possible costs.  Right now, it's imaginary nerd money, no different than WoW gold or the like, and that's just fine as far as they are concerned.  If the SEC weighs in and imposes sanctions, well then, it becomes something much more than imaginary nerd money.

[Puppet]

He asked tons of questions about PPT operators,

Best news all day.

[greyhawk]

I bet Goat is reeeeeal afraid now sitting on his boat in the middle of a flooded rice field watching for the Hueys to arrive.

[Fjordbit]

Two problems with this... I would love to see how they can clawback BTC (And what is the value of that BTC?)... but more importantly, I would love them to formally acknowledge that BTC is a legitimate currency.

They don't have to acknowledge bitcoin as a currency, just that it has value. The government only recognizes it's own currency and by all accounts by law in the united states if you have a debt to settle you must allow for it to be settled in federal reserve notes (e.g. even if a farmer owes you a bushel of apples by contract you must allow for him to pay you consideration in dollars. Annoying, no?). So the way the government will do the clawback is, after determining the identities of the pirate payees through various means (including public record of your IP address on your bitcoin transactions and contacting your ISP), they will assign some arbitrary US dollar amount to what you owe and say "you must pay this to the court." If you don't pay it, then they'll garnish your wages.

If you're out of the country, then they'll probably be shit out of luck, but you never know. If they can dox you, they might issue a bench warrant.

[Puppet]

They don't have to acknowledge bitcoin as a currency, just that it has value.

Exactly. It wouldnt be any different than if this was a swindle with foreign currency (which is also not legal tender anywhere), stocks,  gold or cat food. Then again, I dont know how much the SEC has to say about cat food, but possibly they do have some authority when it comes to trading future contracts or whatever.

[MPOE-PR]

OP cannot even right a few paragraphs of text in correct English and with internal consistency. Not much of a source.

However, if Pirate is going to jail that is very bad news indeed

You mean write, right?
Ps. Since we're leaving things here...

[BinaryMage]

GLBSE is based in the UK and is subject to regulation by the  Financial Services Authority (FSA), we are in the process of becoming a registered company that meets all conditions to carry on business.

We have not been contacted by the SEC and are not subject to SEC regulation.

Nefario.

I'm not so sure that is true

Why would it not be?

[Vandroiy]

(...) He did not say the exchange was going to be closed cause he could not disclose that information (...)

Now, elaborating on that bit might be useful. Is some zealot mixing up Mt. Gox in this?

This would be very annoying and counterproductive IMO. Not looking forward to another regulation war, I hope they don't try that.

[ArticMine]

However, if Pirate is going to jail that is very bad news indeed

It's really bad news for people who received any kind of payout from pirate during the whole operation. Google clawback. Welcome to the underside of the bus.

Two problems with this... I would love to see how they can clawback BTC (And what is the value of that BTC?)... but more importantly, I would love them to formally acknowledge that BTC is a legitimate currency.

That's the problem with any legal action by any state government.  The minute they enforce any monetary rules on Bitcoin, they legitimize it and that opens up so many doors and cans of worms that they will avoid that at all possible costs.  Right now, it's imaginary nerd money, no different than WoW gold or the like, and that's just fine as far as they are concerned.  If the SEC weighs in and imposes sanctions, well then, it becomes something much more than imaginary nerd money.

IANAL

It becomes money what is what bitcoin has been since it was first created. In fact all governments will avoid the vast majority of  regulatory problems and cans of worms by simply treating bitcoin the same way they treat foreign currency. The SEC is simply following the lead of the Brazilian regulators and treating bitcoin like what it really is and regulating securities in the United States based on BTC that same way they would regulate securities in the United States based on CAD or EUR or any other non USD currency, as is their mandate under existing law. As for what a BTC transaction was worth in terms of USD in the past this is trivial to establish since one has both a blockchain time stamp and easily established published historical BTC / USD exchange rates.

By the way stealing bitcoins is subject to that same laws for theft that apply any valuable item. For example if one steals bitcoins in a jurisdiction where the punishment for theft is the amputation of one right hand, then the fact that the law in question proceeded the invention of bitcoin by over 1300 years does not negate the applicability of this law, in that particular jurisdiction, to the theft of bitcoins.

[Shadow383]

GLBSE is based in the UK and is subject to regulation by the  Financial Services Authority (FSA), we are in the process of becoming a registered company that meets all conditions to carry on business.

We have not been contacted by the SEC and are not subject to SEC regulation.

Nefario.

I'm not so sure that is true

Why would it not be?

American regulatory agencies aren't exactly famous for respecting their jurisdiction when it comes to shutting down .com sites...

[dust]

No offense to BitcoinINV, but I would prefer that information about bitcoin that will be used IN COURT is not provided by random forum users.

In addition, please do not inadvertently link BFL to pirate's scam.  BFL has not violated an SEC regulations as far as I know.

[repentance]

He doesn't want to be a part of the process of GLBSE becoming legitimate.

I don't think posts implying that GLBSE has not been legitimate in the past are going to be helpful to any investigation of its activity.  The DoJ has a long reach and where your business is based is often less material to their powers than whether you are conducting business with people in the US (see online poker debacle).  A number of countries have laws which make it illegal to offer unregulated securities to people who don't qualify as "sophisticated investors".  You may or may not be in the clear, but don't assume that you are purely on the basis of location.

Get legal advice now.  Even if you're cleared of any wrong-doing, the cost of complying with investigations by financial regulators can be devastating.

[ArticMine]

GLBSE is based in the UK and is subject to regulation by the  Financial Services Authority (FSA), we are in the process of becoming a registered company that meets all conditions to carry on business.

We have not been contacted by the SEC and are not subject to SEC regulation.

Nefario.

I'm not so sure that is true

Why would it not be?

American regulatory agencies aren't exactly famous for respecting their jurisdiction when it comes to shutting down .com sites...

Is there a case where the registrar was based outside the United States and the .com was shut down by the US Government? The best example to the contrary is thepiratebay.org where the PIR registry is based in the United States but the registrar is not. GLBSE.com is not registered by a US based registrar.

[MrTeal]

No offense to BitcoinINV, but I would prefer that information about bitcoin that will be used IN COURT is not provided by random forum users.

In addition, please do not inadvertently link BFL to pirate's scam.  BFL has not violated an SEC regulations as far as I know.

QFT. There are some valid concerns about BFL, but trying to get them shut down or cause them issues for no reason doesn't help anyone.

[zorgberg]

No offense to BitcoinINV, but I would prefer that information about bitcoin that will be used IN COURT is not provided by random forum users.

Who should it be provided by?  Or are you saying that we are supposed to not talk about anything that it is being investigated by the SEC?

[malevolent]

Is there a case where the registrar was based outside the United States and the .com was shut down by the US Government? The best example to the contrary is thepiratebay.org where the PIR registry is based in the United States but the registrar is not. GLBSE.com is not registered by a US based registrar.

I must admit this is sad that the Internet is not decentralized enough to prevent such moves. TLD .com is managed by Verisign which is based in US, therefore it would be prudent to move GLBSE onto a different TLD, with a registrar and the TLD registry based in some liberal place.

[dust]

No offense to BitcoinINV, but I would prefer that information about bitcoin that will be used IN COURT is not provided by random forum users.

Who should it be provided by?  Or are you saying that we are supposed to not talk about anything that it is being investigated by the SEC?

Information should ideally be provided by nefario or PPT operators' lawyers.  If not lawyers, then at least knowledgable and respected forum members.

No offense to BitcoinINV, but I would prefer that information about bitcoin that will be used IN COURT is not provided by random forum users.

In addition, please do not inadvertently link BFL to pirate's scam.  BFL has not violated an SEC regulations as far as I know.

QFT. There are some valid concerns about BFL, but trying to get them shut down or cause them issues for no reason doesn't help anyone.

BitcoinINV runs a GPU farm based GLBSE asset (ironically more at odds with the SEC than BFL is) and would benefit from the government hassling BFL.  In fact, he would only benefit if BFL is not a scam but the government hassles them anyway, as if BFL is a scam an investigation would not change the availability of ASIC devices.

[Puppet]

Getting BFL involved in this is nonsensical and frankly, childish by the OP. Wont go anywhere.

However, it could be worth mentioning bitcoinica to them. Im sure they would be a whole lot more interested in that.

[justusranvier]

I must admit this is sad that the Internet is not decentralized enough to prevent such moves. TLD .com is managed by Verisign which is based in US, therefore it would be prudent to move GLBSE onto a different TLD, with a registrar and the TLD registry based in some liberal place.

It would be prudent for all Bitcoin services which do not require a physical nexus or an interface with the legacy banking system to operate anonymously on Tor like Silk Road does to insulate them from future changes in the law and/or extra-legal regulatory harassment.