The altcoin topic everyone wants to sweep under the rug

[Fontas.]

To put this topic to bed once and for all, the head of the SEC, Ms. Kara Stein came out today and spoke positively of "blockchain technology".  
  
http://www.coindesk.com/sec-commissioner-kara-stein-blockchain-technology/

Now just Chuck Rosenberg left to speak positively about Bitcoin so that we can free Ross.

[TPTB_need_war]

from the article:

A wide variety of federal agencies have taken an interest in cryptocurrency companies over the last year, with many preparing for administrative actions and even criminal charges in early 2016. These agencies have been seen cooperating on several levels. One agent with the Securities and Exchange Commission told Coin Fire that they were,

Looking at the worst offenders in cryptocurrency and would be closing in further on our unofficial “top ten” list of which Cryptsy and Project Investors will find itself to be in the Top 5.

[americanpegasus]

Looking at the worst offenders in cryptocurrency and would be closing in further on our unofficial “top ten” list of which Cryptsy and Project Investors will find itself to be in the Top 5.

 
  
Yes, project 'investors' and companies that outright scam their customers and fail to protect them.  
  
The SEC is very upset at shit this GAW and Paycon: http://www.coindesk.com/sec-files-suit-against-brother-of-gaw-miners-ceo-amid-investigation/  
  
I don't think they are going to take the time to go after programmers and moderators of communities of new currencies that clearly state the risk involved.  If I have ever made misleading statements (that weren't outright jokes) about any of the projects I am involved with, please refer me to them.  
  
The original bitcoin was treading on strange & unexplored ground, just like new altcoin currencies are treading on strange and unexplored ground.  That being said, so far US Government agencies have taken a suprisingly fair and refreshing stance on online currencies: as long as you are not hyping outright ponzis, selling shares in something that is clearly stated as a security, trying to deliberately scam money from people, or selling illegal things online they don't seem to mind.  
  
Both the FBI and the SEC should be commended for this - I can just as easily imagine a world where the hammer came down on every instance of "digital money" starting in 2011 and forced the whole movement underground for decades (where it would have still inevitably won, just on a longer time scale).  

[Spoetnik]

To put this topic to bed once and for all, the head of the SEC, Ms. Kara Stein came out today and spoke positively of "blockchain technology".   
 
http://www.coindesk.com/sec-commissioner-kara-stein-blockchain-technology/

Nothing and absolutely nothing in her statements absolves culpability under the USA Securities law and Howey test.

You seem to completely misunderstand (and conflate) that statements about the potential of technology speak to nothing about legal implications of the rollout of technologies to investors.

Again I have warned you all that virtually all of the altcoins are ILLEGAL unregistered investment securities and by trading in them, you speculators are potentially setting yourselves up to be culpable, especially those of you who have prominent roles in the community and make statements about speculation.

Proceed at your own peril. And do consult your attorney, because IANAL.

This sounds like a healthy dose of common sense even of your a kid or noob etc.
Be careful out there guys.. all kinds of things could happen any time.

And NO TPTB_need_war since you asked i am NOT a girl LOL
I wish they got it made.. i'd find me a rich man  

[TPTB_need_war]

Nothing special. Same as Ether :

Ether is a product, NOT a security or investment offering. Ether is simply a token useful for paying transaction fees or building or purchasing decentralized application services on the Ethereum platform; it does not give you voting rights over anything, and we make no guarantees of its future value.

https://blog.ethereum.org/2014/07/22/launching-the-ether-sale/

Ownership of ETH carries no rights express or implied. Purchases of ETH are non-refundable. Purchasers should have no expectation of influence over governance of the platform.

http://3amdeveloper.com/terms-and-conditions-of-the-ethereum-genesis-sale/

Perhaps Iota folks may have started to morph the presentation of their endeavors to prospective "investors", because of this thread I did on the legality of selling unregistered shares to investors:

https://bitcointalk.org/index.php?topic=1218399.0

In any case, I do not take sides on this issue. I am not making any accusations of bad intentions nor intentional fraud.

If they have already raised money in the form of shares (and I have no position about whether that claim is true or not because I don't know), I will just note that per my thread above, it is seems impossible for them to now claim they are not offering an investment and have it stand up as a valid argument in a court of law w.r.t. to (at least USA) securities law.

Not at all. This is standard software sale, same way Ethereum, Augur, Gems, Voxelus etc. does it. You need to understand that this guy is a troll, he was banned for stalking, false accusations and death threats on nxtforum the day before.

Seems all of you need to read my linked thread more carefully. Saying that "it is not an investment" doesn't make it so. The legal criteria are covered in great detail in my linked thread.

Again this doesn't mean I am accusing anyone of fraud or bad intentions. I am not taking sides on that concern. Rather I am just pointing out that every single cryptocurrency that is marketed to speculators, is an investment, regardless of any disclaimers issued. Study the law. Delusion won't help you in a court-of-law (even if it is not a kangaroo court).

I'm not catching you on any word, I'm looking at the dictionary definition and silly claims that people who quite obviously "put (money) to use, by purchase or expenditure, in something offering potential profitable returns, as interest, income, or appreciation in value" are not investors. That's nonsensical.

I live in a country with high inflation. People buy a lot of USD to save their money. Are they investors?

W.r.t. to securities law (as I covered in my thread above), a government issued currency is not an unregistered security. But a private issued cryptocurrency always is, unless it was issued primarily to non-speculators (non-investors) for use as a currency token and not as an investment (e.g. a game currency given away from free and primary to participants of the game not to investors and speculators in the potential rise in value of the tokens).

You can't escape the intent of the securities law, which is to protect speculators and investors from "get rich quick" scams.

For example, americanpegasus argued that Aeon is not an unregistered investment security because it is issued by proof-of-work and no party received the proceeds. Yet if there is a community of speculators centered around the core developer (smooth) who are obviously by their forum posts involved for investment and thus this group is looked upon by investors as responsible for the future potential value, then this is an unregistered invesment security as defined by the Howey test. If rather Aeon was primarily distributed for free to n00bs who don't have a clue about investment and the primary use of the tokens is to spend them, then one could argue it is not an unregistered investment security under the Howey test.

Some people believe the USA securities law is not the model that applies globally, but I personally wouldn't risk that. The EU seems to be codifying the similar intent of the law. The globalization of the USA style hegemony is well underway.

[iotatoken]

Please stop lying and misrepresenting. If we're going to continue this discussion I am going to demand your full name so I can have my lawyer contact you incase you choose to continue spreading lies and slander. Back up your own words now or stop lying.

[TPTB_need_war]

I don't want to get in a fight with you. I have nothing against your project. My only concern is that all of us are getting into trouble with the law w.r.t. to unregistered investment securities. I am concerned for you guys too as well as for investors and all of us. You may be getting really poor legal advice (lawyers can make more money getting you into more trouble).

Could you please have your lawyers come debate me in my thread about what constitutes an unregistered investment security. I want to pick their brains and see who is correct. They can debate me anonymously, so they have no legal culpability.

Rather than just appeal to authority, have them come in my thread and prove their superior knowledge. All of us would surely love to see more input from real lawyers. For some reason, they are afraid to post at this forum (even anonymously).

[TPTB_need_war]

And all this just for a zero chance to charge 50'000 USD penalty?

In the sister thread of my securities law thread, someone who claimed to be often consulting with securities law attorneys pointed out that Erik Voorhees escaped severe criminal proceedings only because he refunded all the money to the investors before the SEC could finalize their actions.

So it was much more costly than some $50,000 fine. The level of financial culpability apparently depends on the level of losses and investmentparticipation you are creating. The culpability for jail time is not so limited, especially if someone willfully violates securities law. Again no specific allegations of your case (IANAL). Erik got lucky. Maybe because his scheme was not so willfully snubbing the regulators. Yet you have CfB here acting like his Romanian cohort Mircea Popescu, who I (as AnonyMint) warned the USG will eventually "burn his finger tips up to his armpits".

Hey Putin is part of the same globalist club and this current charade is only temporary and then we will all fall into the NWO together. That is when they will burn your ass over there in Belarus.

Don't forget it was Larry Summers who was over there in Russia after the fall of the USSR to organize the distribution of the nationalized assets to the selected oligarchs who are loyal to the globalist club. Do a Youtube search on Anthony Sutton. Also "Princess of the Orient".

Don't forget who funded the Bolshevik revolution. The globalists are running the show.

[TPTB_need_war]

Moving the discussion that was in my coin's thread over to this more appropriate legal discussion thread. Let's continue this discussion here. Some of the following posts may be deleted from my coin's thread.

...
Please notify me of any corrections I need to make and I will edit the table.

Some notes:

1) ShadowCash is proof of stake.
2) Monero does support mass TXs and has a market based solution in place to allow the main chain blocksize to grow to accommodate them. This is done without the need for a secondary level that is subject to government regulation. It is by the way a classic case of take care of the long term and the short term will take care of itself.
3) The proof of stake vulnerability in Dash is actually much higher than in regular proof of stake coins because of the 1000 Dash requirement for masternodes.
4) Lumping "IPO or mineable by speculators" into one makes no sense from a US or global regulatory point of view.

I will elaborate on 4. The critical US government agency for crypto currency regulation is FinCEN and not the SEC. The SEC has already argued before the courts that Bitcoin is money. This was critical in the Trendon Shavers / pirateat40 case since Trendon Shavers argued that he was not issuing securities with out SEC registration because Bitcoin was not money.. Furthermore internationally we see crypto currency regulation moving on the direction of treating crypto currency as money. The European Union being a good example.  It is for this reason that FinCEN has issued clear guidance close to three years ago, https://www.fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html, while the SEC has not.  There are three further FinCEN rulings that are also very significant.
https://www.fincen.gov/news_room/rp/rulings/pdf/FIN-2014-R001.pdf
https://www.fincen.gov/news_room/rp/rulings/html/FIN-2014-R011.html
https://www.fincen.gov/news_room/rp/rulings/html/FIN-2014-R011.html

The first question and this is critical is whether the crypto currency is classified as a centralized virtual currency or a de-centralized virtual currency. The definition of de-centralized virtual currency is as follows from FIN-2013-G001

c. De-Centralized Virtual Currencies

A final type of convertible virtual currency activity involves a de-centralized convertible virtual currency (1) that has no central repository and no single administrator, and (2) that persons may obtain by their own computing or manufacturing effort.

Mining of POW coins has been clarified in FIN-2014-R001.

Now for my thoughts, First I am not a lawyer.
A POW coin with no premine, such as Bitcoin or Monero is a de-centralized virtual currency. Developers and miners are not MSBs. This is the ideal case. This requires that development of the coin be funded solely by donation of time, money or both. Any attempt to use the emission to fund development will require one or more of the players to register as an MSB.
Dash will likely require an army of lawyers to figure out. As far as I see it, miners are likely MSBs (since they are required to turn over a part of the mined coins to the masternodes) masternodes are also likely MSBs (since they are required to turn over a portion of their coins to development) and the holders of the spork keys are also likely MSBs (since they have in effect been given central administrator responsibilities). Anyone involved with Dash in the above capacities, especially those in the US, would be wise to get professional legal advice and get a ruling from FinCEN on their particular situation.
Delegated structures have also a high regulatory risk.
Issuers of crypto - currencies (such as those behind Ripple, Ethereum etc.) are MSBs

I do not know what issuance model is being proposed by the OP.

Dash will likely require an army of lawyers to figure out. As far as I see it, miners are likely MSBs (since they are required to turn over a part of the mined coins to the masternodes) masternodes are also likely MSBs (since they are required to turn over a portion of their coins to development) and the holders of the spork keys are also likely MSBs (since they have in effect been given central administrator responsibilities). Anyone involved with Dash in the above capacities, especially those in the US, would be wise to get professional legal advice and get a ruling from FinCEN on their particular situation.

Money Services Businesses transmit money between legal entities.

Blockchain addresses are not legal entities. Nor are they owned by legal entities. Nor do they have any relation to persons living or dead. So all this talk about legal implications is just bogus nonsense.

...
Money Services Businesses transmit money between legal entities.

Blockchain addresses are not legal entities. Nor are they owned by legal entities. Nor do they have any relation to persons living or dead. So all this talk about legal implications is just bogus nonsense.

The holders of the private keys of Blockchain addresses are legal entities. By the way this level of denial when it comes to the FinCEN guidance is not just limited to Dash. It is in fact common among most alt-coins. Here is some interesting reading with respect to Ripple. https://www.fincen.gov/news_room/nr/html/20150505.html

The holders of the private keys of Blockchain addresses are legal entities.

There are no "holders" of blockchain private keys in any legal sense. A private key can by known by anyone and multiple people at once for that matter.

You do not have a legal contract between yourself and the blockchain, so therefore no legally defined ownership.

To regulate pure blockchain transactions you'd have to find a way to tie a legal entity (person or corporation) to a blockchain address and that can only be done by contract - the way a fiat account is made synonymous with people. Satoshi broke that link. That is the whole point of crypto.

If you registered with an ETF and invested using such a statutory financial instrument then that would be different. You'd have a contract with the ETF which could be regulated. But then you wouldn't be holding private keys, you'd just be holding paper.

...

There are no "holders" of blockchain private keys in any legal sense. A private key can by known by anyone and multiple people at once for that matter.

You do not have a legal contract between yourself and the blockchain, so therefore no legally defined ownership.

To regulate pure blockchain transactions you'd have to find a way to tie a legal entity (person or corporation) to a blockchain address and that can only be done by contract - the way a fiat account is made synonymous with people. Satoshi broke that link. That is the whole point of crypto.

If you registered with an ETF and invested using such a statutory financial instrument then that would be different. You'd have a contract with the ETF which could be regulated. But then you wouldn't be holding private keys, you'd just be holding paper.

So nobody owns a certain amount of Dash? What a bizarre concept. Please get legal advice and / or get a FinCEN ruling if you are concerned about the legal ramifications of your Dash activities in the US and / or elsewhere. I am not debating pointless "legal" arguments further.

So nobody owns a certain amount of Dash?

They "own" it in a practical sense, but not contractually.

It's a bit like saying that anyone who happens to be in possession of your house keys "owns" your house. You know fine well they don't and there's nothing "bizarre" about it.

...

They "own" it in a practical sense, but not contractually.

It's a bit like saying that anyone who happens to be in possession of your house keys "owns" your house. You know fine well they don't and there's nothing "bizarre" about it.

http://legal-dictionary.thefreedictionary.com/possession
Edit: http://legal-dictionary.thefreedictionary.com/ownership

http://legal-dictionary.thefreedictionary.com/possession
Edit: http://legal-dictionary.thefreedictionary.com/ownership

You mean constructive possession ?

Ok, I can see that applying in crypto to some extent, but jeez - good luck to anyone trying to prove that a particular person has constructive possession of a certain private key. The problem is (and this again is the whole point of crypto-anonymity) everyone is a theoretical constructive possessor. Having said that, I accept your point that it's legally ambiguous at least. But I don't think I'll be loosing any sleep over a couple of strings of numbers and letters.

Guys I am going to copy + paste the legal divigations to the thread on that topic I made. Let's move the discussion over there (and I will also enter the discussion), not in my coin's thread. Please wait for a link after I complete the work.

Please don't reply further on that topic here in this thread. It is really too much of a diversion from my coin's thread. And it is going back and forth.

[TPTB_need_war]

ArticMine is correct that anyone that transferring money or money equivalents that is not for their own personal use is a MSB in terms of the FinCEN guidance. Period.

Any obfuscations Dash or BitShares try to claim won't help them escape culpability.

However I don't agree with ArticMine's claim that only the FinCEN has jurisdiction. FinCEN's jurisdiction is w.r.t. to money transmission, and the SEC has an orthogonal jurisdiction w.r.t. the Howey test for illegal unregistered investment securities (which was covered in detail upthread).

[ArticMine]

ArticMine is correct that anyone that transferring money or money equivalents that is not for their own personal use is a MSB in terms of the FinCEN guidance. Period.

Any obfuscations Dash or BitShares try to claim won't help them escape culpability.

However I don't agree with ArticMine's claim that only the FinCEN has jurisdiction. FinCEN's jurisdiction is w.r.t. to money transmission, and the SEC has an orthogonal jurisdiction w.r.t. the Howey test for illegal unregistered investment securities (which was covered in detail upthread).

In order to pass the Howey test an necessary but not sufficient condition is the presence of a centralized administrator as per the FinCEN guidance. In short the virtual currency must be centralized and not de-centralized. This centralized administrator is needed to to provide the "depending solely on the efforts of a promoter or third party." part of the Howey test. There are already examples in decentralized virtual currencies where "depending solely on the efforts of a promoter or third party." part of the Howey test has failed. Bitcoin: the XT vs Core debate. Monero: Replacing the initial developer with the current team. Dashcoin (not to be confused with Dash): The developer "sold" the coin and the community simply ignored the sale and continued as if nothing had happened.  

Giving away coins for free and keeping a portion of the pre-mine to fund development is exactly what Ripple did and FinCEN came down hard. This does make the issuer an MSB. https://www.fincen.gov/news_room/nr/html/20150505.html

[TPTB_need_war]

ArticMine is correct that anyone that transferring money or money equivalents that is not for their own personal use is a MSB in terms of the FinCEN guidance. Period.

Any obfuscations Dash or BitShares try to claim won't help them escape culpability.

However I don't agree with ArticMine's claim that only the FinCEN has jurisdiction. FinCEN's jurisdiction is w.r.t. to money transmission, and the SEC has an orthogonal jurisdiction w.r.t. the Howey test for illegal unregistered investment securities (which was covered in detail upthread).

In order to pass the Howey test an necessary but not sufficient condition is the presence of a centralized administrator as per the FinCEN guidance. In short the virtual currency must be centralized and not de-centralized. This centralized administrator is needed to to provide the "depending solely on the efforts of a promoter or third party." part of the Howey test. There are already examples in decentralized virtual currencies where "depending solely on the efforts of a promoter or third party." part of the Howey test has failed. Bitcoin: the XT vs Core debate. Monero: Replacing the initial developer with the current team. Dashcoin (not to be confused with Dash): The developer "sold" the coin and the community simply ignored the sale and continued as if nothing had happened.

FinCEN guidance doesn't not apply to the Howey test. FinCEN is not tasked with protecting unsophisticated investors from fraud. FinCEN's job is to fight money laundering.

The Howey test is more nuanced than that, and if a group is promoting a coin for investment purposes they may be culpable under the Howey test. I covered this in detail upthread.

All cryptocoins that being primarily distributed to speculators with no significant users of the currency, are at risk IMHO. That includes Monero and Aeon.

Giving away coins for free and keeping a portion of the pre-mine to fund development is exactly what Ripple did and FinCEN came down hard. This does make the issuer an MSB. https://www.fincen.gov/news_room/nr/html/20150505.html

FinCEN came down on Ripple for being an exchanger and a centralized administrator that was processing money transfers for third parties without registering as an MSB and applying AML/KYC controls. The sales of XRP for fiat that are violations are because Ripple was also exchanging and also able to remove supply from the market.

The Guidance also defines an administrator of virtual currency as a person or entity “engaged as a business in issuing (putting into circulation) a virtual currency, and who has the authority to redeem (to withdraw from circulation) such virtual currency.”

I don't see any mention of Ripple being in violation because of sales of coins it gained during the time of distribution whether it be premine or otherwise. The mention of the premine was just a statement of facts, not a statement of a violation. It is the fact that Ripple was acting as an exchanger and centralized administrator that tainted any sales of XRP they made.

Disclaimer: I am not a lawyer and am merely offering my opinion for argumentative purposes. Readers, consult your own attorney.

[smooth]

FinCEN guidance doesn't not apply to the Howey test. FinCEN is not tasked with protecting unsophisticated investors from fraud. FinCEN's job is to fight money laundering.

Somewhat true but remember "money laundering" is expansive and includes transmission of money that is the proceeds of fraud or to facilitate fraud. As such Fincen's scope reaches anti-fraud and consumer protection, often in cooperation with other agencies.

[TPTB_need_war]

FinCEN guidance doesn't not apply to the Howey test. FinCEN is not tasked with protecting unsophisticated investors from fraud. FinCEN's job is to fight money laundering.

Somewhat true but remember "money laundering" is expansive and includes transmission of money that is the proceeds of fraud or to facilitate fraud. As such Fincen's scope reaches anti-fraud and consumer protection, often in cooperation with other agencies.

Good point. In connection with fraudulent transfer of money, FinCEN would have jurisdiction also. So in one example if a premine was fraudulent or connected with other fraudulent activity, then selling it for real money, would also be within FinCEN's jurisdiction perhaps.

I find that usually FinCEN is taking action when MSB registration and controls are not being done where they should have been. Thus I still think the SEC is the more likely regulatory body for fraudulent investment schemes.

[ArticMine]

ArticMine is correct that anyone that transferring money or money equivalents that is not for their own personal use is a MSB in terms of the FinCEN guidance. Period.

Any obfuscations Dash or BitShares try to claim won't help them escape culpability.

However I don't agree with ArticMine's claim that only the FinCEN has jurisdiction. FinCEN's jurisdiction is w.r.t. to money transmission, and the SEC has an orthogonal jurisdiction w.r.t. the Howey test for illegal unregistered investment securities (which was covered in detail upthread).

In order to pass the Howey test an necessary but not sufficient condition is the presence of a centralized administrator as per the FinCEN guidance. In short the virtual currency must be centralized and not de-centralized. This centralized administrator is needed to to provide the "depending solely on the efforts of a promoter or third party." part of the Howey test. There are already examples in decentralized virtual currencies where "depending solely on the efforts of a promoter or third party." part of the Howey test has failed. Bitcoin: the XT vs Core debate. Monero: Replacing the initial developer with the current team. Dashcoin (not to be confused with Dash): The developer "sold" the coin and the community simply ignored the sale and continued as if nothing had happened.

FinCEN guidance doesn't not apply to the Howey test. FinCEN is not tasked with protecting unsophisticated investors from fraud. FinCEN's job is to fight money laundering.

The Howey test is more nuanced than that, and if a group is promoting a coin for investment purposes they may be culpable under the Howey test. I covered this in detail upthread.

All cryptocoins that being primarily distributed to speculators with no significant users of the currency, are at risk IMHO. That includes Monero and Aeon.

Giving away coins for free and keeping a portion of the pre-mine to fund development is exactly what Ripple did and FinCEN came down hard. This does make the issuer an MSB. https://www.fincen.gov/news_room/nr/html/20150505.html

FinCEN came down on Ripple for being an exchanger and a centralized administrator that was processing money transfers for third parties without registering as an MSB and applying AML/KYC controls. The sales of XRP for fiat that are violations are because Ripple was also exchanging and also able to remove supply from the market.

The Guidance also defines an administrator of virtual currency as a person or entity “engaged as a business in issuing (putting into circulation) a virtual currency, and who has the authority to redeem (to withdraw from circulation) such virtual currency.”

I don't see any mention of Ripple being in violation because of sales of coins it gained during the time of distribution whether it be premine or otherwise. The mention of the premine was just a statement of facts, not a statement of a violation. It is the fact that Ripple was acting as an exchanger and centralized administrator that tainted any sales of XRP they made.

Disclaimer: I am not a lawyer and am merely offering my opinion for argumentative purposes. Readers, consult your own attorney.

In the statement of facts https://www.fincen.gov/news_room/nr/pdf/Ripple_Facts.pdf which is linked form the FinCEN page I quoted the following quote is very relevant. Bold my emphasis.

ATTACHMENT A:  STATEMENT OF FACTS AND VIOLATIONS
I.
INTRODUCTION AND BACKGROUND
1.
Ripple Labs Inc. (“Ripple Labs”) is a corporation registered in Delaware and headquartered in San Francisco, California.  NewCoin,
Inc. and OpenCoin, Inc. (“OpenCoin”) are the predecessors of Ripple Labs.
2.
Ripple Labs facilitated transfers of virtual currency and provided virtual currency exchange transaction services.
3.
The currency of the Ripple network, known as “XRP,” was pre-mined.  In other words, unlike some other virtual currencies, XRP was fully generated prior to its
distribution.  As of 2015, XRP is the second-largest cryptocurrency by market capitalization, after Bitcoin.  
4.
XRP Fund II, LLC, a wholly-owned subsidiary of Ripple Labs, was incorporated in South Carolina on July 1, 2013.  On July 2, 2014, XRP Fund II changed its name to
XRP II, LLC.  During a portion of the relevant timeframe, the entity was named XRP Fund II, LLC, but it will be referred to as XRP II throughout this document.

It does not say transfer for compensation. There are other violations involving exchange service etc mentioned in the document. The question is why is pre-mined even relevant here? The answer is the the guidance that I quoted above and which Ripple ignored. From the same statement of facts.

7.
Specifically, the Guidance defines an exchanger as a person or entity “engaged as a business in the exchange of virtual currency for real currency, funds, or other virtual currency.”  The Guidance also defines an administrator of virtual currency as a person or entity “engaged as a business in issuing (putting into circulation) a virtual currency, and who has the authority to redeem (to withdraw from circulation) such virtual currency.”  

Edit: I would not touch a pre-mine without legal advice.

[ArticMine]

FinCEN guidance doesn't not apply to the Howey test. FinCEN is not tasked with protecting unsophisticated investors from fraud. FinCEN's job is to fight money laundering.

Somewhat true but remember "money laundering" is expansive and includes transmission of money that is the proceeds of fraud or to facilitate fraud. As such Fincen's scope reaches anti-fraud and consumer protection, often in cooperation with other agencies.

Yes. My point is that because of the broadness of the FinCEN mandate if a virtual currency meets the very narrow FinCEN requirement of de-centralized virtual currency then it also fails the Howey test but not the other way around. I fail to see how a crypto - currency can be both a de-centralized virtual currency under the FinCEN requirements and at the same time pass the Howey test making the currency itself a security.

Edit 1: FinCEN goes way further than simply dealing with fraudulent money transfers or money laundering.

[TPTB_need_war]

...
My mind is blown! Do these monerotards have any clue about user friendliness! Compile binaries from source (my gf wouldn't have any clue what binaries and source are)! Are you fucking kidding. That is ridiculous beyond ridiculous.

... but just think about this for a moment. One can compile the Monero binaries from source for various platforms, and post links to the compiled binaries here on BCT thereby demonstrating how Monero fails the Howey test.

As per how I interpret what I have researched about it (details are upthread), the Howey test refers to the economic facts not to the quality of execution of marketing.

The economic test is whether the securities are being marketed to investors and whether those investors base their decision to invest based on the efforts of some person or group's expected future efforts to deliver the return on investment.

IMO, every altcoin that is being promoted and distributed to investors seems to meet the Howey test. The development of the altcoin and its future value is not chaotic, but rather entrusted to some lead devs and some community leaders/promoters.

In the case of Bitcoin, its ecosystem is so widely distributed that one could argue that there is no single group that is being relied on that could even promote it to investors.

Just because Monero doesn't offer compiled binaries, IMO that doesn't sufficiently constitute a widely distributed ecosystem. Afaics, Monero is predominantly driven by a core group of devs and some community leaders/promoters.

That doesn't mean the SEC is necessarily going to crack down on Monero. I tend to think there are much lower hanging fruit, such as Dash and other much more scammy altcoins. And even those may never be large enough to attract the attention of the SEC.

One can argue that altcoins are just software and investors are acting on their own volition. But all the heavy pumping of Monero on these forums is going to work against that line of argument.

Edit: also I do think that it would be more dubious case for the SEC to go after a coin that is developed open source and which the developers and promoters receive no direct remuneration from the coin (unlike Dash and BitShares). I do see a qualitative distinction.

[TPTB_need_war]

My point is that because of the broadness of the FinCEN mandate if a virtual currency meets the very narrow FinCEN requirement of de-centralized virtual currency then it also fails the Howey test but not the other way around. I fail to see how a crypto - currency can be both a de-centralized virtual currency under the FinCEN requirements and at the same time pass the Howey test making the currency itself a security.

So your point is that because FinCEN has defined how a decentralized crypto currency can be "money", then "money" can't also be an investment security.

This is failure of logic because FinCEN's guidance is not exclusionary. Saying that decentralized crypto currency has an attribute which is that it shall be considered "money" from the perspective of FinCEN's jurisdiction and mandate over money transfers, is not saying that decentralized currency is only "money" in every other case of jurisdiction and mandate. If you can find any where that FinCEN wrote that decentralized currency is ONLY money and nothing else, then please do. There is a big difference between qualifying as a money equivalent for the purposes of FinCEN's jurisdiction and being declared to be ONLY money in every possible case. Otherwise this exhibits that you don't understand well legalese.

The Howey test will look at the economic facts and no obfuscations will color the inspection of the facts.

Edit: Also even that which is money to users in the FinCEN guidance doesn't preclude those tokens having investment attributes to issuers and speculators. FinCEN even makes a distinction between different types of entities involved with crypto currency, such as miners, issuers, etc..

[l8nit3]

seems pretty serious, although I'm not sure I fully understand it. My (basic) understanding is that cryptocoins and their exchanges need to meet certain regulations according to US law.... and that most, if not all, have not met said requirements??

Is this possibly what XPY and 'he who must not be named' were trying to touch on when claiming to be registering with the S.E.C?

[TPTB_need_war]

I don't see any mention of Ripple being in violation because of sales of coins it gained during the time of distribution whether it be premine or otherwise. The mention of the premine was just a statement of facts, not a statement of a violation. It is the fact that Ripple was acting as an exchanger and centralized administrator that tainted any sales of XRP they made.

In the statement of facts [...] which is linked form the FinCEN page I quoted the following quote is very relevant.

I already pointed out that I didn't agree with your theory about the word pre-mine in the Preamble. It was not in the list of violations.

Edit: I would not touch a pre-mine without legal advice.

Perhaps readers shouldn't be touching any altcoin without legal advice, except do note that the investors who are not promoters nor issuers apparently have much lower culpability as discussed in detail far upthread.

I will not get in another long discussion repeating everything that was already discussed upthread. I am limiting how much time per day I can be on the computer, so I must allocate wisely.

I do appreciate your participation. Thanks.