The altcoin topic everyone wants to sweep under the rug

[CoinHoarder]

If your only point was that we are unlikely to get expert advice here in these forums

That was my only point. I find your project Ion (that name is better imo) interesting, and I hope you follow through with it.

Cheers

[tokeweed]

Hahaha. Probably reasonable advice. Thanks for the humor and bluntness. Others of us would like to find another answer though, if there is one.

Are you implying you think everyone in crypto is either naive or of a criminal mindset? Or are you implying people are ready to fight their government and are fed up to the point of proactively not caring?

If you do not want to get in trouble, just stay away.  It's as simple as that.

Well everyone in the USA is on average committing 3 felonies a day just by breathing.

Life is about weighing relative risk vs. reward probabilistically.

Also there is the concept of near-term and long-term. Long-term legal risk is much higher than short-term, but at age 50 I care much less about my long-term risk because I might be dead or too old any way. Also there is the concept/option of changing citizenships after some time. Etc..

As for users of crypto, I would track your capital gains when you are holding it in large enough quantities (e.g. over $600 worth in the USA) and also your income. Report everything on taxes as you are obligated to in your jurisdiction.

But this thread was more about how to single out which coin models are at very high risk of being classified as "investment securities".


Edit: also the law exists to protect the "public interest" (although it may be gamed by the powers-that-be, I am referring to the official raison d'être for law), thus doing acts that harm others in unjustified ways, then expect to incur the wrath of the law. Whereas, if you try your best to really help others and be very thorough with disclosure, then risks of unjust legal culpability decline.

Well, then go dabble in crypto then.  Why even worry about it too much.  Everyone in the USA is on average committing 3 felonies a day just by breathing.

[TPTB_need_war]

stan you are conflating issues and glossing over the relevant definition of a "security" in the other thread linked from the OP of this thread. Try to read again my posts more slowly and carefully. I will also make a few more clarifying posts in that other thread.

(not to be condescending, but also no time to repeat myself again)

I have tried to clarify what I think the USA law says a security is:

https://bitcointalk.org/index.php?topic=1218269.msg12795383#msg12795383

Can anyone tell me after that post why Monero is not an unregistered investment security under USA law?

[TanteStefana2]

As for me, I also don't understand what you're asking, nor why you made a second thread because you didn't get enough attention on your first thread.

But what I do want to know, Anonymint, is what your new name stands for?  TPTB_need_war  = what?  I don't get it?  Of course I'm not a genius like you are, so???

[hashtag101]

As for me, I also don't understand what you're asking, nor why you made a second thread because you didn't get enough attention on your first thread.

It is really starting to look like many of the cryptos out there can be classified as securities.

People, like yourself, don't seem to understand. Before, I didn't think they were securities, either. He is bringing up an extremely important point for discussion. He is trying to understand as well. And yes, he made a new thread to hopefully be more successful than the first one.

Do you think if we just stay quiet it will go away?

Its a great point. And what is the response.

What, you think you're a lawyer? Etc.

Fucking ridiculous, lol.

[TanteStefana2]

As for me, I also don't understand what you're asking, nor why you made a second thread because you didn't get enough attention on your first thread.

It is really starting to look like many of the cryptos out there can be classified as securities.

People, like yourself, don't seem to understand. Before, I didn't think they were securities, either. He is bringing up an extremely important point for discussion. He is trying to understand as well. And yes, he made a new thread to hopefully be more successful than the first one.

Do you think if we just stay quiet it will go away?

Its a great point. And what is the response.

What, you think you're a lawyer? Etc.

Fucking ridiculous, lol.

Nope, I'm not a Lawyer, not sure why you'd think that?  I'm still wondering what  TPTB_need_war  means, I really am curious   Actually, I just saw a thread I liked deleted for unknown reasons, and I thought it was odd that this one stays, even so it's only here to bring attention to another thread.

Anyway, I'm not good at acronyms, and can't figure out  TPTB_need_war ?  The last part sounds intriguing and since I don't understand the first part, I can't figure out what needs war?

[generalizethis]

As for me, I also don't understand what you're asking, nor why you made a second thread because you didn't get enough attention on your first thread.

It is really starting to look like many of the cryptos out there can be classified as securities.

People, like yourself, don't seem to understand. Before, I didn't think they were securities, either. He is bringing up an extremely important point for discussion. He is trying to understand as well. And yes, he made a new thread to hopefully be more successful than the first one.

Do you think if we just stay quiet it will go away?

Its a great point. And what is the response.

What, you think you're a lawyer? Etc.

Fucking ridiculous, lol.

Nope, I'm not a Lawyer, not sure why you'd think that?  I'm still wondering what  TPTB_need_war  means, I really am curious   Actually, I just saw a thread I liked deleted for unknown reasons, and I thought it was odd that this one stays, even so it's only here to bring attention to another thread.

Anyway, I'm not good at acronyms, and can't figure out  TPTB_need_war ?  The last part sounds intriguing and since I don't understand the first part, I can't figure out what needs war?

The Powers That Be. Why doesn't your internet have search? Is it broken or something? 

[1aguar]

stan you are conflating issues and glossing over the relevant definition of a "security" in the other thread linked from the OP of this thread. Try to read again my posts more slowly and carefully. I will also make a few more clarifying posts in that other thread.

(not to be condescending, but also no time to repeat myself again)

I have tried to clarify what I think the USA law says a security is:

https://bitcointalk.org/index.php?topic=1218269.msg12795383#msg12795383

Can anyone tell me after that post why Monero is not an unregistered investment security under USA law?

There is no "promise of profits".
There is no "enterprise" because there is no business or company.
Furthermore, there is no investment at all but only exchange between bankers.
A crypto-currency is nothing more than a network of bankers that will accept and use a token.
Did you not see on blockchain.info how it says "be your own bank"?
BANK: the store of money or tokens held by the banker in some gambling or board games.

[TanteStefana2]

I finally googled, 'cause I really was curious.  TPTB = the powers that be

Ah well, I thought it was something else  LOL.

I'm going to suggest, for you tptb, that you think on the intent of the law.  Instead of trying to fit the development teams of crypto, and the vast voluntary force that also help direct the way crypto projects go, into some kind of traditional management team, think also about why there are laws on securities.  Mainly, to enforce the disclosure of financial information, etc... of a company that issues those securities.  In the case of open source cryptos, those are completely known and ... well... open.  There are so many reasons why crypto currencies do not fit the mold of securities, and you seem to choose one, a management team, which in and of itself does not define a security.  You're trying to force a square peg (cryptos) into a round hole (securities) and I don't know why other than to cause consternation.  

I know you are a brilliant man, but honestly, I think you direct your energies in the most unproductive directions.  Your view is so narrow, you can't see the forest for the trees.  I honestly think you need to develop your lateral thinking.  Or for better productivity, team up with someone who has the opposite problem?

[rdnkjdi]

trees.  I honestly think you need to develop your lateral thinking.  Or for better productivity, team up with someone who has the opposite problem

He would need to find someone he respects and views as his equal for that to work.

[Snail2]

Also, I am not in the US and cannot really give an opinion.

I presented details on why I think Europeans and others also are affected. I don't know why Europeans think (if they do so or if not why they are often say it is only a USA problem) they are immune to securities regulation?

Of course we are not, but (apart from a few Eastern European countries) taxing and tax collection seems to be more relaxed over here, in addition until I don't cash out in fiat I don't have to worry. If I convert it to fiat then I have to pay a CGT but that's all.

[TPTB_need_war]

stan you are conflating issues and glossing over the relevant definition of a "security" in the other thread linked from the OP of this thread. Try to read again my posts more slowly and carefully. I will also make a few more clarifying posts in that other thread.

(not to be condescending, but also no time to repeat myself again)

I have tried to clarify what I think the USA law says a security is:

https://bitcointalk.org/index.php?topic=1218269.msg12795383#msg12795383

Can anyone tell me after that post why Monero is not an unregistered investment security under USA law?

There is no "promise of profits".
There is no "enterprise" because there is no business or company.
Furthermore, there is no investment at all but only exchange between bankers.
A crypto-currency is nothing more than a network of bankers that will accept and use a token.
Did you not see on blockchain.info how it says "be your own bank"?
BANK: the store of money or tokens held by the banker in some gambling or board games.

If you review the thread I linked to, which has more details on what the legislation and case law has stated, I think the conclusion is that the determination of whether an implicit "investment contract" has been formed is tied into whether there are those who are selling (and/or offering for sale, including reselling) shares in a "common enterprise" wherein they are "promoting the reasonable expectation of profits/gains" and another condemning characteristic is when those who have those reasonable expectations, are depending on the efforts and/or promotion of those aforementioned promoters or trusted controllers of the common enterprise. So it appears that when the developers of the coin have created a community promotion wherein there is a reasonable expectation of profits backed by the efforts and promotion of those developers who are in control of the common enterprise, then a security (dependency on the developers to deliver gains) has been formed and thus these shares need to be registered and regulated under the law. IANAL, but that is my interpretation.

I have proposed that no security would be created if the developer of a crypto-token protocol and implementing software instead does a crowdsale (and/or just launches with distribution via mining debasement) where it is made very clear in the pronouncements and actions of the developer that the tokens created by this protocol and software are being offered to users of the tokens for using the protocol network, and disclaims prominently and profusely that no one obtaining these tokens should have any expectations of future gains based on any exchange value. The developer should not be targeting his marketing (such as forum activities, naming, etc) to individual public investors and rather to selling his software and protocol to users, for example via a crowdfunding to gain funding to complete or repay loans he incurred to do the programming. He should not make public announcements of the available of tokens to  investors. One way perhaps to make this very clear, is to limit the maximum size that any one person can donate at the crowdfunding to perhaps $500 or what ever would be considered too small to be a reasonable worthwhile investment in the first world. In other words, there are many users of a new technology (even include other developers who can work on ecosystem projects) who have an interest in using the real world product (thus they need some tokens to use it) who have an interest in its success and in interacting with the product, that have nothing to do with a reasonable expectation of profits on those tokens. Whereas if you are constantly trolling in these forums acting as if you want to funnel all the speculators to your coin, then ostensibly you are not targeting usership but rather speculation and thus arguably (and implicitly) promoting a security.

One issue I am still trying to work out is how accepting placements from angel investors would mesh with the crowdfunding direction for funding programming of software and protocols for users?

Apparently there are several types of exceptions to requirements to register securities in the USA, which seem to revolve around accredited and/or sophiscated investors:

http://thismatter.com/money/stocks/exempt-securities.htm

These all appear to place restrictions on when the shares of the angel investors can be sold and also require subsequent registration. Apparently sales to non-USA angel investors is a complete exception to all requirements (but may trigger requirements in the non-USA angel investor's domicile or tax jurisdiction).  What is worrisome is that such may trigger all shares (even those sold to users and not investors) to be classified as security especially if these shares are divisible and fungible (become mixed up) as is the case for crypto-currencies.

Thus it appears one would be best pay their angel investors back in cash (with any agreed interest rate or equation of return), classifying these as loans are investments in the programmer, and not in the final protocol and software which is sold and provided to users, not investors. Angel investors who wanted to convert this cash to shares would have to do so on some open exchange market (and again with disclaimers from the developer in force that no reasonable expectations of gains should be expected and shares should be obtained for use and not for investment and if they choose to ignore that, there is nothing the developer can do to prevent markets from forming). This has been a very important epiphany for me.

[TPTB_need_war]

Also, I am not in the US and cannot really give an opinion.

I presented details on why I think Europeans and others also are affected. I don't know why Europeans think (if they do so or if not why they are often say it is only a USA problem) they are immune to securities regulation?

Of course we are not, but (apart from a few Eastern European countries) taxing and tax collection seems to be more relaxed over here, in addition until I don't cash out in fiat I don't have to worry. If I convert it to fiat then I have to pay a CGT but that's all.

I argue the powers-that-be do hope you are so willfully ignorant of the law, so they can entrap you. I reviewed the EU legislation and they are very busy advancing the securities law and the definitions are sufficiently broad that they could start to interpret securities law very similar to USA courts do in some EU court that gains powers as the EU is federalized (reducing national sovereignty) as this sovereign debt smashup crisis comes crashing down 2016 - 2018. The powers-that-be appear to have planned it out very well to trap you Europeans who boast to yourselves how you don't have to pay taxes on income abroad and yet the powers-that-be are busy formulating a G20 coordination on unified taxing so that no one escapes paying taxes and regulation. The global economic collapse is the way they will get all the nations to accede to this coordination to hunt down all capital.

You are just buying a little time before your demise.

[hashtag101]

As for me, I also don't understand what you're asking, nor why you made a second thread because you didn't get enough attention on your first thread.

It is really starting to look like many of the cryptos out there can be classified as securities.

People, like yourself, don't seem to understand. Before, I didn't think they were securities, either. He is bringing up an extremely important point for discussion. He is trying to understand as well. And yes, he made a new thread to hopefully be more successful than the first one.

Do you think if we just stay quiet it will go away?

Its a great point. And what is the response.

What, you think you're a lawyer? Etc.

Fucking ridiculous, lol.

Nope, I'm not a Lawyer, not sure why you'd think that?  I'm still wondering what  TPTB_need_war  means, I really am curious  Actually, I just saw a thread I liked deleted for unknown reasons, and I thought it was odd that this one stays, even so it's only here to bring attention to another thread.

Anyway, I'm not good at acronyms, and can't figure out  TPTB_need_war ?  The last part sounds intriguing and since I don't understand the first part, I can't figure out what needs war?

Sorry. I should have been more careful with how I wrote that.

I was referring to some of the responses tptb has been getting. Wasn't asking you if you were a lawyer.

At the same time, rereading your original comment, you weren't so innocent. You were being a dick. But better late than never to become more civil and backpedal. Good to hear you don't want your original comment to be taken as a slight anymore. And let it be, don't, just don't keep......thanks.

[hashtag101]

What I am getting from all of this is that the laws are written in a way that they COULD be interpreted as tptb is stating.

If they chose to do so, they would most likely pull it off.

So the exercise here, as I understand it, is for us to discuss ways that the developers could fund the creation of a platform/coin in a way that would make it impossible for it to be characterized as a security.

[1aguar]

stan you are conflating issues and glossing over the relevant definition of a "security" in the other thread linked from the OP of this thread. Try to read again my posts more slowly and carefully. I will also make a few more clarifying posts in that other thread.

(not to be condescending, but also no time to repeat myself again)

I have tried to clarify what I think the USA law says a security is:

https://bitcointalk.org/index.php?topic=1218269.msg12795383#msg12795383

Can anyone tell me after that post why Monero is not an unregistered investment security under USA law?

There is no "promise of profits".
There is no "enterprise" because there is no business or company.
Furthermore, there is no investment at all but only exchange between bankers.
A crypto-currency is nothing more than a network of bankers that will accept and use a token.
Did you not see on blockchain.info how it says "be your own bank"?
BANK: the store of money or tokens held by the banker in some gambling or board games.

If you review the thread I linked to

I did review the thread; nowhere did I see how a cryptocurrency (a network of bankers that will accept and use a token) can be considered a "common enterprise" because a cryptocurrency is essentialy a resource (bank). The promoters do not operate a business; no one can expect anything of them.

Yes, the courts could classify your crypto as a security, but take a look at the TOS page on banx.io regarding BANX shares and you will see that these crypto-shares are really just 'donations to a for-profit company'. As far as other cryptos go, it is quite a stretch to say that they represent interest in a company, business, or enterprise.

[TPTB_need_war]

I did review the thread; nowhere did I see how a cryptocurrency (a network of bankers that will accept and use a token) can be considered a "common enterprise" because a cryptocurrency is essentialy a resource (bank). The promoters do not operate a business; no one can expect anything of them.

Yes, the courts could classify your crypto as a security, but take a look at the TOS page on banx.io regarding BANX shares and you will see that these crypto-shares are really just 'donations to a for-profit company'. As far as other cryptos go, it is quite a stretch to say that they represent interest in a company, business, or enterprise.

I don't think you understand the key essence of the thread.

The Howey decision clarifies the "investment contract" clause of the Securities Act, that promoting a reasonable expectation of gains where the investors have any reason to base their decisions to purchase on those pronouncements has converted what they are promoting into an "investment security", because of the implicit "investment contract" created by those pronouncements and the resultant "reasonable expectations" of investors.

My interpretation is that you are overemphasizing the "common enterprise" because Howey decision and court decisions hence have stated all special cases will still apply to the economic reality that the Securities Act's (stated) purpose is to protect unsophisticated (unaccredited) investors from losses due to faulty disclosure.  Just because the shares are coordinated in a decentralized protocol, doesn't mean the promoters have not created an implied investment contract with the buyers. The "common enterprise" is the mutual participation in the decentralized system of shares. Participation as a user does not in my view cause the shares to be "investment securities", as any game token wouldn't be an investment security if the tokens are not promoted to investors (and especially if there are disclaimers from the "controlling or influential entities" stating no investment gains should be expected at all and that the tokens are intended for users only). Rather it is the promotion of the shares to investors that does. And IMO it is much more likely to be prosecuted when those doing the promoting are "controlling or influential entities" in that "common enterprise", i.e. the developer(s) who can introduce new features and whose reputation drives investor confidence and ditto influential community members or foundation, especially those endorsed by the lead developer(s).

[americanpegasus]

Ok TPTB, your concerns have caused me to do a search of the SEC website to determine my best interpretation of current law and guidance as issued by the SEC themselves.  I'll quote what I think are the most interesting sections of each.  tl;dr: As long as none of the 'insiders', as you call us (mods, devs, public personalities) are directly offering these assets for sale, are calling them "investment opportunities", or claiming they carry no risk I think everyone is in the clear.  I would expect non-'insiders' would be even further in the clear as the SEC has firmly established by precedent that as long as cryptocurrencies don't claim to represent ownership in any venture, they are exempt from classification as securities. 
 
To the details, I found this "concern" letter published: https://www.sec.gov/comments/s7-06-13/s70613-504.pdf 
 

Obviously, clearly, cryptocurrency technology shows us the future of all financial securities and issuers.
The definition of “issuer” today revolves around promises to investors that if they buy securities issued
by the issuer that they will share equitably and materially in the future financial gain (or losses) created
by the issuer. The SEC has declared that cryptocurrency might be deemed a “security” based on facts
and circumstances in each instance, but that if the cryptocurrency is not being offered as a security then
the fact that it may be created, issued and verified technically by a single party does not cause the issuer
of the cryptocurrency to be deemed an “issuer” of securities. One of the practical implications of being
an “issuer” of securities rather than an issuer of cryptocurrency is that anyone who buys directly from
an issuer must “qualify” as a buyer (e.g. an “Accredited” investor, or pursuant to JOBS Act Rules) or
the buyer must legitimately be “friends and family” of the securities issuer. Another key difference is
the requirement for the direct buyers to comply with Rule 144 and/or Rule 145 prior to future resales of
the securities in the public secondary market. Issuers of cryptocurrency can create their own self-hosted
or cloud-hosted public secondary market, whereas “issuers” of “securities” must (currently) rely on the
existing public financial markets created by brokers, exchanges and alternative trading systems (ATS).

 
 
Here's a direct link to Rules 144 and 145 elaboration: http://www.sec.gov/info/smallbus/secg/rules144-145-secg.htm 
 
Second, here's an article directly written by the SEC warning investors of Ponzi schemes conducted with cryptocurrencies.  The smoking gun here is that by the SEC's own language they make clear distinctions in the language they use between cryptocurrencies and the "investments" that can be made with these currencies:  http://www.sec.gov/investor/alerts/ia_virtualcurrencies.pdf 
 

 
We are concerned that the rising use of virtual currencies
in the global marketplace may entice fraudsters to lure
investors into Ponzi and other schemes in which these
currencies are used to facilitate fraudulent, or simply
fabricated, investments or transactions. The fraud may
also involve an unregistered offering or trading platform.
these schemes often promise high returns for getting in
on the ground floor of a growing Internet phenomenon.
Fraudsters may also be attracted to using virtual
currencies to perpetrate their frauds because transactions
in virtual currencies supposedly have greater privacy benefits
and less regulatory oversight than transactions in
conventional currencies. Any investment in securities in
the United states remains subject to the jurisdiction
of the SEC regardless of whether the investment is made
in U.S. dollars or a virtual currency. In particular, individuals
selling investments are typically subject to federal or state licensing requirements

 
 
From what I can tell here, as long as you are a promoting an actual cryptocurrency which acknowledges the risks you face, doesn't claim to represent ownership in anything, and doesn't propose to be its own trading platform you are good.  Especially considering they have already released guidance on this (so if you run a Bitcoin ponzi now you have no excuse; you will face charges) then it would seem they have established legal precedent for people innocently speculating in actual currencies themselves. 
 
I can't find any dangerous language there; everything makes me feel like everyone involved in building and promoting a cryptocurrency is on legally solid ground. 
 
Finally, another link where the SEC has moved to prosecute someone who ran an exchange that sold crypto-stocks (not the raw currencies): http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370543655716 
 
This further draws the line in the sand between what is defined as a security and what is not.  The fact that US based exchanges such as Poloniex and Coinbase have not had to register as securities exchanges is enough to draw conclusions to this fact, and consistent language like we see here just solidifies the case. 
 
I feel confident and comfortable that no rational decision by the SEC can come to the conclusion that the currencies I'm involved with: Monero or Aeon are anywhere near a Security.  For sure no other users are affected and should feel free to speculate as much as they like, but I'm not a lawyer so this is a non-professional opinion.  As I have said, going forward I personally will abide by some self-imposed rules (even though I suspect I would be fine even if I did not).  I will not refer to either of these as an "investment opportunity" or being "without risk" and will publicly disclose that I own significant amounts (if I can ever *acquire* significant amounts of either!  ).  I also will not be offering any cryptocurrency for sale. 
 
I think if the SEC wanted to put their foot down and classify any of these as securities they would have done it already, and their 6-year hesitance will cost them the ability to pursue that route even if they ever tried it. 

[TPTB_need_war]

In my opinion, you have some egregious errors in your analysis, presumably because you are moving too fast trying to digest a few google searches and haven't taken the time to read carefully the other thread in the Bitcoin Discussion forum that is linked from this thread?

Ok TPTB, your concerns have caused me to do a search of the SEC website to determine my best interpretation of current law and guidance as issued by the SEC themselves.

 

In your first quote, that is not the SEC's opinion, but rather a letter to the SEC. You misunderstood the SEC's guidance in second quote you provided.

tl;dr: As long as none of the 'insiders', as you call us (mods, devs, public personalities) are directly offering these assets for sale, are calling them "investment opportunities", or claiming they carry no risk I think everyone is in the clear.

See the SEC vs Howey Supreme Court decision (which I covered in detail in the other thread in the Bitcoin Discussion forum that is linked from this thread); if you create an implicit investment contract where investors have reasonable expectations of future gains secured by your (collectively the insider group's) efforts and promotions, then you have caused the cryptocurrency be a security which is secured by you all. The implication on you if you are not the "issuer" (and the SEC has more leeway as to definition of "issuer" than you are thinking due to your misunderstanding of the SEC guidance you quoted), then you can't sell the restricted coins for 1 year. However, what you are failing to grasp is that Rule 144 only applies to restricted, unregistered securities, i.e. those sold to accredited investors or one of the other exemptions from registration. If any of the unregistered securities (the coins) were sold to non-accredited investors (and did not qualify for any other exemption from registration) and thus are in an illegal state, then afaik purchasing and reselling these implicates you in many forms of fraud, such as wire fraud. Rule 144 applies to restricted securities that were sold only under the allowed exemptions and not securities that were sold without an exemption and thus are entirely illegal. If you perpetuate that crime (even you were not the issuer) especially with your willful promotion and efforts securing the gullible investors' expectations and the investors lose money, you are possibly in for a whole lot of hurt in the future. IANAL, I suggested you consult with an attorney. This is no matter that you can be certain from 15 minutes of googling.

I would expect non-'insiders' would be even further in the clear as the SEC has firmly established by precedent that as long as cryptocurrencies don't claim to represent ownership in any venture, they are exempt from classification as securities.

Afaik, the SEC has not issued any such guidance. You misread what you quoted below. The SEC vs. Howey Supreme Court decision and case law hence specifically disavow any schemes employed to obfuscate the actual implied investment contract.

To the details, I found this "concern" letter published: https://www.sec.gov/comments/s7-06-13/s70613-504.pdf  
  

Obviously, clearly, cryptocurrency technology shows us the future of all financial securities and issuers.
The definition of “issuer” today revolves around promises to investors that if they buy securities issued
by the issuer that they will share equitably and materially in the future financial gain (or losses) created
by the issuer. The SEC has declared that cryptocurrency might be deemed a “security” based on facts
and circumstances in each instance, but that if the cryptocurrency is not being offered as a security then
the fact that it may be created, issued and verified technically by a single party does not cause the issuer
of the cryptocurrency to be deemed an “issuer” of securities. One of the practical implications of being
an “issuer” of securities rather than an issuer of cryptocurrency is that anyone who buys directly from
an issuer must “qualify” as a buyer (e.g. an “Accredited” investor, or pursuant to JOBS Act Rules) or
the buyer must legitimately be “friends and family” of the securities issuer. Another key difference is
the requirement for the direct buyers to comply with Rule 144 and/or Rule 145 prior to future resales of
the securities in the public secondary market. Issuers of cryptocurrency can create their own self-hosted
or cloud-hosted public secondary market, whereas “issuers” of “securities” must (currently) rely on the
existing public financial markets created by brokers, exchanges and alternative trading systems (ATS).

Haha, afaics you totally miss the point. This person is complaining to the SEC and making the argument that cryptocurrency will be used to circumvent securities regulation. He is essentially challenging the SEC that if they don't go after cryptocurrency then the SEC will be irrelevant because instead of complying with Rule 144 and 145 as not admended the way he is requesting, he argues people will just use cryptocurrency to try to circumvent the requirements entirely by arguing the cryptocurrencies are not securities. But all he is doing is inciting the SEC to crack down on cryptocurrency at some point in the future. The SEC is likely using this as an exhibit of their need to crack down in the future.

Also don't be confused by the underlined sentence. It is does not say an issuer is only one who sells coins directly to buyers. If you think it says that then you have serious english comprehension failure and also failure of the context of the SEC vs. Howey Supreme Court decision and subsequent case law.

Here's a direct link to Rules 144 and 145 elaboration: http://www.sec.gov/info/smallbus/secg/rules144-145-secg.htm

And you need to read that document more slowly and carefully.

Second, here's an article directly written by the SEC warning investors of Ponzi schemes conducted with cryptocurrencies.  The smoking gun here is that by the SEC's own language they make clear distinctions in the language they use between cryptocurrencies and the "investments" that can be made with these currencies:  http://www.sec.gov/investor/alerts/ia_virtualcurrencies.pdf  
  

 
We are concerned that the rising use of virtual currencies
in the global marketplace may entice fraudsters to lure
investors into Ponzi and other schemes in which these
currencies are used to facilitate fraudulent, or simply
fabricated, investments or transactions. The fraud may
also involve an unregistered offering or trading platform.
these schemes often promise high returns for getting in
on the ground floor of a growing Internet phenomenon.
Fraudsters may also be attracted to using virtual
currencies to perpetrate their frauds because transactions
in virtual currencies supposedly have greater privacy benefits
and less regulatory oversight than transactions in
conventional currencies. Any investment in securities in
the United states remains subject to the jurisdiction
of the SEC regardless of whether the investment is made
in U.S. dollars or a virtual currency. In particular, individuals
selling investments are typically subject to federal or state licensing requirements

You have serious reading comprehension failure if you don't see that the above says nothing to support your incorrect summary.

From what I can tell here, as long as you are a promoting an actual cryptocurrency which acknowledges the risks you face, doesn't claim to represent ownership in anything, and doesn't propose to be its own trading platform you are good.

And afaics you don't have a clue. And this is the last time I am going to suggest to you that you be get serious and study this properly.

Please I don't have enough free time go through all your sloppy research again if you do it again. Please if you want to rebut, at least properly read both threads and really immerse yourself in the issue properly.

Especially considering they have already released guidance on this (so if you run a Bitcoin ponzi now you have no excuse; you will face charges) then it would seem they have established legal precedent for people innocently speculating in actual currencies themselves.

Oh my. The law doesn't work that way son. Ignorance of the law is not a valid form of criminal defense. The SEC warning against Ponzi does nothing to absolve your culpability under the law for being involved in promoting, offering, and selling illegal, unregistered securities.
  

I can't find any dangerous language there; everything makes me feel like everyone involved in building and promoting a cryptocurrency is on legally solid ground.

And if they listen to you, they are in for potentially a world of future hurt.

Finally, another link where the SEC has moved to prosecute someone who ran an exchange that sold crypto-stocks (not the raw currencies): http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370543655716  
  
This further draws the line in the sand between what is defined as a security and what is not.

No it does not. Going for low hanging fruit doesn't mean they aren't biding their time before they destroy the crypto-currency wildwest. They are probably letting it run for now because the Winklevoss twins haven't cashed out yet and also because the phenomenon is not big enough yet. After the next super bubble and then the global crash of the USA into the economic abyss after 2017.9 is when the witch hunts are likely to come flying from every direction.

The fact that US based exchanges such as Poloniex and Coinbase have not had to register as securities exchanges is enough to draw conclusions to this fact, and consistent language like we see here just solidifies the case.

I don't think Bitcoin is a security, plus Coinbase has backing from the global elite and is thus likely shielded from the SEC. Poloniex is a poignant example because they trade so many different kinds of altcoins. But I think they can argue that they have complied with every legal guideline they've been made aware of and they are not promoting any altcoins (rather than just offering a service for trading that is indifferent as to which coin is better than the other). Those who are both promoting and securing the securities with their efforts, while also reselling ILLEGAL, unregistered securities are potentially much more culpable. Poloniex can get a slap on the wrist later perhaps or just be liable at the corporate level and not personal incrimination of the principles. Whereas, you as an individual and as a promoter...falling directly under the SEC vs. Howey Supreme Court decision...
  

I feel confident and comfortable that no rational decision by the SEC can come to the conclusion that the currencies I'm involved with: Monero or Aeon are anywhere near a Security...
  
I think if the SEC wanted to put their foot down and classify any of these as securities they would have done it already, and their 6-year hesitance will cost them the ability to pursue that route even if they ever tried it.  

You think...are you sure you have thought?

[americanpegasus]

It sounds like all of your arguements (which I still don't agree with) revolve around me selling Aeon or Monero after my efforts.  
  
I haven't sold any to date, only bought, and will simply continue to buy and hold.  It seems impossible, even in the most draconian interpretations of laws that don't even exist (which you seem predisposed to invent and then maliciously apply) that someone who does not sell - only buys - would be liable for any misconduct.  
  
Should the time come that I would actually like to trade some of my Monero for Bitcoin, the currencies would be so widespread that this would be a non issue. (A Winklevoss twin selling some Bitcoin isn't going to get them brought up on any charges).  
  
As well, it's likely that by that point I would simply choose to spend them directly with a merchant (also a succinct way of proving no wrongdoing).  
  
I feel like you are grasping for straws on this topic, and while being a little paranoid is healthy, it makes no sense to worry about complying with laws that don't even exist yet.  If you were right, then there would be no way for anyone to buy or help promote any new cryptocurrency legally, and to date *nothing* they have done has shown they are taking this stance.  If your flawed interpretations were correct, no US citizens could legally contribute to new cryptocurrency.
  
Since that's obviously not going to happen in my case, the issue is a nonstarter for me.  I'm going to be part of the cryptocurrency movement, even if all the laws regarding it aren't finalized yet; please remember that this isn't 2011; this is 2016 and things are much more certain now. 
 
Also, it is a reasonable conclusion that considering the SEC continues to refer to these as currencies, and US based exchanges are being allowed to continue operating as long as they comply with KYC laws, and there is no way to legal way to register your involvement with them despite their obvious legality, no reasonable citizen would be expected to comply with measures which don't exist.  
  
Please realize that an even stronger precedent has already been set with Ethereum, which major players like Goldman Sachs have invested money into even while the "insiders" have cashed out of.  This would be what would put me on edge, but since private citizens can observe this happening loudly and publicly without even so much as a statement against it by the SEC (while they have chosen to rapidly respond to other issues in this space) then again the precedent is set that cryptocurrencies cannot have any 'insiders' who are subject to these provisions.  
  
You can imagine all you like how they *might* have tried to leverage these laws against crypto, but they haven't, leaving individuals with no way to comply with them and still be involved in promoting a cryptocurrency..  
  
But sure, perhaps if Monero takes off then it would be a wise use of $1000 to hire a lawyer to write a letter to SEC inquiring about my situation, just to show I had made an attempt to comply with laws above and beyond what is expected.  It can't hurt, but I maintain that you are grasping at straws here.