The altcoin topic everyone wants to sweep under the rug

[spartacusrex]

Good thread.

Whereas, it has helped me greatly to decide how to launch a coin wherein it will be legal every where.

I have read most of the threads on this topic.. (There's a lot to digest)

Is this the conclusion :

1) You can launch a coin that uses POW mining to distribute the coins.

2) Private ICO's, but only to investors that the SEC recognises as institutional.

3) By PUBLIC air-drop - say if you gave them away to every bitcointalk user, for free.

4) Register with FinCEN.. jump through all their hoops.

5) Use a Bank to do it.

And -basically- any coin that has so far done any ICO is a valid target. No one has done it right.

..

Is this where we are at ? I'll be honest. The US of A sucks balls at the moment.

[TPTB_need_war]

Actually you're wrong. That's the daily volume you've quoted there ($10m+).

Insiders buying from themselves to pump up daily volume is a well known tactic of shrilling shit coins. Welcome to the party. Seems you need to catch up on your education of how market manipulation works when the insiders control a large percentage of the float.

Again 96% of all ETH volume is done on two exchanges. I don't see those exchanges sharing their KYC data on who is trading with whom. So it is impossible for anyone to refute this.

Nope. That's just your personal opinion, not fact set in stone, which you will also find impossible to prove. Others have a different opinion of the ETH daily volume.

Where is your proof?

I've never seen a case where humans didn't take money that was sitting in front of their faces to take. The insiders always do this, unless they are worried about being caught and prosecuted. But since ETH was an illegal unregistered investment security launched from Switzerland to attempt to side step SEC (and I presume EU) regulations[1], we don't have to doubt whether they feel constrained by any regulators.

[1] But they marketed it to US investors so they are still in violation of SEC law.

[TPTB_need_war]

stoat hope you've hid your IP address well, because jail time awaits you:

15 U.S. Code § 78i - Manipulation of security prices

(a) Transactions relating to purchase or sale of securityIt shall be unlawful for any person, directly or indirectly, by the use of the mails or any means or instrumentality of interstate commerce, or of any facility of any national securities exchange, or for any member of a national securities exchange—
(1) For the purpose of creating a false or misleading appearance of active trading in any security other than a government security, or a false or misleading appearance with respect to the market for any such security, (A) to effect any transaction in such security which involves no change in the beneficial ownership thereof, or (B) to enter an order or orders for the purchase of such security with the knowledge that an order or orders of substantially the same size, at substantially the same time, and at substantially the same price, for the sale of any such security, has been or will be entered by or for the same or different parties, or (C) to enter any order or orders for the sale of any such security with the knowledge that an order or orders of substantially the same size, at substantially the same time, and at substantially the same price, for the purchase of such security, has been or will be entered by or for the same or different parties.
(2) To effect, alone or with 1 or more other persons, a series of transactions in any security registered on a national securities exchange, any security not so registered, or in connection with any security-based swap or security-based swap agreement with respect to such security creating actual or apparent active trading in such security, or raising or depressing the price of such security, for the purpose of inducing the purchase or sale of such security by others.
(3) If a dealer, broker, security-based swap dealer, major security-based swap participant, or other person selling or offering for sale or purchasing or offering to purchase the security, a security-based swap, or a security-based swap agreement with respect to such security, to induce the purchase or sale of any security registered on a national securities exchange, any security not so registered, any security-based swap, or any security-based swap agreement with respect to such security by the circulation or dissemination in the ordinary course of business of information to the effect that the price of any such security will or is likely to rise or fall because of market operations of any 1 or more persons conducted for the purpose of raising or depressing the price of such security.
(4) If a dealer, broker, security-based swap dealer, major security-based swap participant, or other person selling or offering for sale or purchasing or offering to purchase the security, a security-based swap, or security-based swap agreement with respect to such security, to make, regarding any security registered on a national securities exchange, any security not so registered, any security-based swap, or any security-based swap agreement with respect to such security, for the purpose of inducing the purchase or sale of such security, such security-based swap, or such security-based swap agreement any statement which was at the time and in the light of the circumstances under which it was made, false or misleading with respect to any material fact, and which that person knew or had reasonable ground to believe was so false or misleading.
(5) For a consideration, received directly or indirectly from a broker, dealer, security-based swap dealer, major security-based swap participant, or other person selling or offering for sale or purchasing or offering to purchase the security, a security-based swap, or security-based swap agreement with respect to such security, to induce the purchase of any security registered on a national securities exchange, any security not so registered, any security-based swap, or any security-based swap agreement with respect to such security by the circulation or dissemination of information to the effect that the price of any such security will or is likely to rise or fall because of the market operations of any 1 or more persons conducted for the purpose of raising or depressing the price of such security.
(6) To effect either alone or with one or more other persons any series of transactions for the purchase and/or sale of any security other than a government security for the purpose of pegging, fixing, or stabilizing the price of such security in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.

Securities Regulation Code

CHAPTER VII

Prohibitions on Fraud, Manipulation and Insider Trading

 

SEC. 24. Manipulation of Security Prices; Devices and Practices.

24.1     It shall be unlawful for any person acting for himself or through a dealer or broker, directly or indirectly:

a)         To create a false or misleading appearance of active trading in any listed security traded in an Exchange or any other trading market (hereafter referred to purposes of this Chapter as “Exchange”):

(i)        By effecting any transaction in such security which involves no change in the beneficial ownership thereof;

(ii)        By entering an order or orders for the purchase or sale of such security with the knowledge that a simultaneous order or orders of substantially the same size, time and price, for the sale or purchase of any such security, has or will be entered by or for the same or different parties; or

(iii)       By performing similar act where there is no change in beneficial ownership.

b)         To effect, alone or with others, a series of transactions in securities that:

(i)         Raises their price to induce the purchase of a security, whether of the same or a different class of the same issuer or of a controlling, controlled, or commonly controlled company by others;

(ii)        Depresses their price to induce the sale of a security, whether of the same or a different class, of the same issuer or of a controlling, controlled, or commonly controlled company by others; or

(iii)       Creates active trading to induce such a purchase or sale through manipulative devices such as marking the close, painting the tape, squeezing the float, hype and dump, boiler room operations and such other similar devices.

c)        To circulate or disseminate information that the price of any security listed in an Exchange will or is likely to rise or fall because of manipulative market operations of any one or more persons conducted for the purpose of raising or depressing the price of the security for the purpose of inducing the purchase or sale of such security.

d)        To make false or misleading statement with respect to any material fact, which he knew or had reasonable ground to believe was so false or misleading, for the purpose of inducing the purchase or sale of any security listed or traded in an Exchange.

e)         To effect, either alone or others, any series of transactions for the purchase and/or sale of any security traded in an Exchange for the purpose of pegging, fixing or stabilizing the price of such security, unless otherwise allowed by this Code or by rules of the Commission.

24.2.    No person shall use or employ, in connection with the purchase or sale of any security any manipulative or deceptive device or contrivance. Neither shall any short sale be effected nor any stop-loss order be executed in connection with the purchase or sale of any security except in accordance with such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.�

24.3.   The foregoing provisions notwithstanding, the Commission, having due regard to the public interest and the protection of investors, may, by rules and regulations, allow certain acts or transactions that may otherwise be prohibited under this Section.

[TPTB_need_war]

Lol, according to TPDB, every person on this forum should be locked up.

No. As I've pointed out in the past, the securities regulations appear to be lenient against those who were merely buy and selling illegal unregistered and/or manipulated securities. Those who are promoting are dangerously close to the line. Those who are actively manipulating are flirting with the law. Note IANAL.

[ArticMine]

It comes down to the question of whether a crypto currency is a security. For decentralized virtual currency (FinCEN definition) I argue the answer is  no, since by its very nature a security requires an issuer (the person who is required by law to register or cause registration to occur). For centralized virtual currencies this is where it gets interesting. In this case there is an issuer; however that does not mean there is a security. Take Ethereum for example. In this case there is a very good case that unregistered securities were issued in the IPO / ICO. The more interesting question is was the security the Ether itself or the promise to deliver the Ether at a future date before it was created?  I say the latter.

When it come to fitting certain members of this forum for an orange jumpsuit in the United States, my bet is on FinCEN over the SEC. FinCEN needs to prove in court is that the virtual currency is centralized , the SEC in addition to proving in court the virtual currency is centralized also has to prove in court that it is a security.,

Edit: I believe it is only a matter of time before FinCEN makes a move on Ethereum.

[CryptocurrencyNetwork]

I agree that some Cryptos tokens will attract unwanted attention regarding this matter.

[TPTB_need_war]

4.   the largest music monetization company is MUSE

What the fuck is that?

Okay this is Peertracks and apparently the Bitshares asset is MUSE.

Peertracks runs on the Bitshares block chain, which means it can't scale[...]

The Peertracks Note features is interesting. It might turn audiences in P&D targets though, so I am not sure it is desirable. It is also not clear if these are illegal unregistered securities under SEC law in the USA. I do know that in the case of airplane VIP memberships the Supreme Court ruled they were not subject to the Howey test. I will need to study that more.

[...]I just don't think the masses are going to be tuned into Notes as something they are interested in. You are basically trying to turn the serious music fans into speculators. A rule of Marketing 101 is don't assume you can change an Apple into an Orange. You must target a real existing need, not a fantasy. Yeah speculators here will think Notes are cool, but the actual music fans I think will perceive it to be a negative feature and an insult to love of music. You basically corrupt the musicians teaching then to do P&D instead of produce great music. Sigh.

Definitely the Peertracks Notes will be illegal unregistered investment securities if fans from the USA are allowed to buy them. Follows quoted is an excerpt from my prior research. The key point is that since Notes are transferable and they are mainly purchased with an expectation of gain from reselling them, then they are an expectation of profits significantly due to the efforts of the artist and his fans, i.e. effectively a common enterprise. This is why both Kickstarter and Indiegogo havestrict Terms of Use that prevent any 'perks' which are "any form of 'security' (as such term is defined in the Securities Act of 1933)" or "any form of financial incentive or participation in any profit sharing"

C. Expectation of profits "significantly" due to efforts of others.

When tokens are created and issued (whether it be an ICO or tokens created+assigned during mining), if they are acquired primarily for investment and not primarily for use (in what ever ways a token can be used other than for holding for appreciation of value), then there is an expectation of profits due to appreciation of value.

The fact that no investor is in control of the decentralized collective "common enterprise" qualifies for the "due to efforts of others" clause of this criteria of the Howey test:

https://scholar.google.com/scholar_case?case=4524095741732962732&hl=en&as_sdt=6,33&as_vis=1&kqfp=10330650611816444522&kql=132&kqpfp=14710406364156655404#kq

investment contracts may be found where the investor has duties that are nominal and insignificant or where the investor lacks any real control over the operation of the enterprise

So the only way a crypto-token can potentially avoid qualifying for this criteria is for there to be no expectation of profits, either because the tokens are never obtained for investment or always the primarily consideration is the use value and not the appreciation of value. As documented in my prior post and here in another example, if the primary consideration is the use value, then there is no expectation of value appreciation:

http://law.justia.com/cases/oregon/court-of-appeals/1975/535-p-2d-109-2.html

Jet Set is a nonprofit corporation, organized under the laws of Washington in 1970 for the purpose of owning and operating an airplane in order to provide vacation travel for its members. The club scheduled flights to fixed destinations. Members were permitted to reserve space on any flight on a first-come, first-served basis; however, scheduled flights were often canceled if there were insufficient reservations. Members, in addition to membership fees, paid approximately one-half the cost of commercial airline fares for their flights. Flights were limited to particular dates and destinations. Membership also included participation in certain social activities sponsored by the club, including parties, ground accommodation packages and social activities at some destinations. Memberships in Jet Set were transferable.

After Jet Set was incorporated in 1970 "select memberships" were sold for a price of $1,000. The proceeds from the sale of these memberships were placed in escrow until Jet Set secured the use of an airplane. Approximately $70,000 was raised from the sale of these memberships, which were lifetime and nontransferable in nature, and entitled the holder to fly on any Jet Set flight for $20. These memberships were also subject to monthly dues.

I find it useful to quote the Indiegogo Terms of Use as follows:

Prohibited Campaigns

Campaign Owners are not permitted to create a Campaign to raise funds for illegal activities, to cause harm to people or property, or to scam others. If the Campaign is claiming to do the impossible or it's just plain phony, don't post it. Users must comply with all applicable laws and regulations in connection with their Campaigns, including offering Perks and using Contributions. Campaign Owners shall not make any false or misleading statements in connection with their Campaigns.

Prohibited Perks

Campaign Owners are not permitted to offer or provide any of the following as a Perk:

• any form of "security" (as such term is defined in the Securities Act of 1933);
• any form of financial incentive or participation in any profit sharing;
• any alcoholic consumer products (vouchers or memberships offering physical delivery of alcoholic consumer products are permitted);
• any controlled substance or drug paraphernalia;
• any weapons, ammunition and related accessories;
• any form of lottery or gambling;
• any form of air transportation; or
• any items promoting hate, discrimination, personal injury, death, damage, or destruction to property; or any items (a) prohibited by applicable law to possess or distribute, (b) that would violate applicable law if distributed, or (c) that would result in infringement or violation of another person's rights if distributed.

[TPTB_need_war]

I feel good to be invested in the best decentralized data storage, and hope they will continue to consider how to leverage reputation systems to prevent cheating & attacks.  If you find an obviously superior method, feel free to let us know. 

Of course you do, because you have vested interest because you bought 1/1000th of the illegal unregistered securities (pre-sold for a lie that is vaporware) and now are pumping these lies on unwary n00bs. I am recording all of this for the future SEC investigations and jail time for those who deserve to go to jail.

[TPTB_need_war]

SEC sent out a warning in January 2016. Hope the pumpers are preparing for their jail time:

There is a reason why the SEC issued a warning about Crypto coins calling them scams.. 90% are !
I was doing research early this year when i stumbled onto their press release by accident (same day it was posted)
I then posted it in the Bitcoin section where everyone said it was good news AHAHHAHAHHA
It even mentioned an unnamed forum which was totally obvious they meant Bitcointalk.
Read it yourselves.. https://www.sec.gov/investor/alerts/ia_virtualcurrencies.pdf (Issued Jan 4th 2016)

[TPTB_need_war]

Well the offer me to buy some software during Crowdsale, I liked the idea DAG and bought some.

What have I done wrong 

Did you verify that Iota adhered to all laws and regulations for selling investment securities in every jurisdiction where they offered the "tokens" for sale to investors?

Specifically did they register these tokens with the SEC in the USA? If not, did they restrict non-qualified USA investors from obtaining the coins?

I hope you aware it is against the policy of crowdfunding sites such as Kickstarter and Indiegogo to offer any shares or redeemable tokens to contributors.

[iotatoken]

Well the offer me to buy some software during Crowdsale, I liked the idea DAG and bought some.

What have I done wrong 

Did you verify that Iota adhered to all laws and regulations for selling investment securities in every jurisdiction where they offered the "tokens" for sale to investors?

Specifically did they register these tokens with the SEC in the USA? If not, did they restrict non-qualified USA investors from obtaining the coins?

I hope you aware it is against the policy of crowdfunding sites such as Kickstarter and Indiegogo to offer any shares or redeemable tokens to contributors.

Why would we ever register with SEC to sell software? I know you want to pretend you're a lawyer, but c'mon, this is pretty basic. When I talked with our lawyers about this there was absolutely no constraints on selling software to the US.

[TPTB_need_war]

Well the offer me to buy some software during Crowdsale, I liked the idea DAG and bought some.

What have I done wrong 

Did you verify that Iota adhered to all laws and regulations for selling investment securities in every jurisdiction where they offered the "tokens" for sale to investors?

Specifically did they register these tokens with the SEC in the USA? If not, did they restrict non-qualified USA investors from obtaining the coins?

I hope you aware it is against the policy of crowdfunding sites such as Kickstarter and Indiegogo to offer any shares or redeemable tokens to contributors.

Why would we ever register with SEC to sell software? I know you want to pretend you're a lawyer, but c'mon, this is pretty basic. When I talked with our lawyers about this there was absolutely no constraints on selling software to the US.

Afaik, you sold a token which can be resold by investors. The Supreme Court has said about the Howey test, that it would look past all attempts to obfuscate a security.

Software is not an investment, rather it is purchased for a use case. The Howey test looks at what the expectations were of those purchasing.

Your lawyers are ignorant apparently.

[iotatoken]

Well the offer me to buy some software during Crowdsale, I liked the idea DAG and bought some.

What have I done wrong 

Did you verify that Iota adhered to all laws and regulations for selling investment securities in every jurisdiction where they offered the "tokens" for sale to investors?

Specifically did they register these tokens with the SEC in the USA? If not, did they restrict non-qualified USA investors from obtaining the coins?

I hope you aware it is against the policy of crowdfunding sites such as Kickstarter and Indiegogo to offer any shares or redeemable tokens to contributors.

Why would we ever register with SEC to sell software? I know you want to pretend you're a lawyer, but c'mon, this is pretty basic. When I talked with our lawyers about this there was absolutely no constraints on selling software to the US.

Afaik, you sold a token which can be resold by investors. The Supreme Court has said about the Howey test, that it would look past all attempts to obfuscate a security.

Software is not an investment, rather it is purchased for a use case. The Howey test looks at what the expectations were of those purchasing.

Your lawyers are ignorant apparently.

Haha, we have never tried to 'obfuscate' anything. We made it crystal clear that we do not care about speculators, we do not promise any appreciation in value of the tokens, we sold the tokens as software (which it is), and we SPECIFIED that it was not an investment, security or asset.

Are you willing to legally go on record with this as a claim? If not please get a new life, not a single atom in the universe cares that you exist. In fact I would say that you are bringer us closer to the heat death of the universe by expelling so much energy on useless things.

[TPTB_need_war]

Well the offer me to buy some software during Crowdsale, I liked the idea DAG and bought some.

What have I done wrong  

Did you verify that Iota adhered to all laws and regulations for selling investment securities in every jurisdiction where they offered the "tokens" for sale to investors?

Specifically did they register these tokens with the SEC in the USA? If not, did they restrict non-qualified USA investors from obtaining the coins?

I hope you aware it is against the policy of crowdfunding sites such as Kickstarter and Indiegogo to offer any shares or redeemable tokens to contributors.

Why would we ever register with SEC to sell software? I know you want to pretend you're a lawyer, but c'mon, this is pretty basic. When I talked with our lawyers about this there was absolutely no constraints on selling software to the US.

Afaik, you sold a token which can be resold by investors. The Supreme Court has said about the Howey test, that it would look past all attempts to obfuscate a security.

Software is not an investment, rather it is purchased for a use case. The Howey test looks at what the expectations were of those purchasing.

Your lawyers are ignorant apparently.

Haha, we have never tried to 'obfuscate' anything. We made it crystal clear that we do not care about speculators, we do not promise any appreciation in value of the tokens, we sold the tokens as software (which it is), and we SPECIFIED that it was not an investment, security or asset.

The Howey test doesn't concern itself with what you claim you claimed. It looks at the expectations that investors have. It is clear from all the pumping of Iota that investors are expecting and even promoting gains on these tokens. Thus they are securities. And you did create them and sell them.

Any way, feel free to ignore me. You'll learn the hard way. Bring some Vaseline with you to jail to make it easier on yourself.

[iotatoken]

Hahahahaha no. Ugh how did you not get aborted? Good luck kid.

[Come-from-Beyond]

Afaik, you sold a token which can be resold by investors. The Supreme Court has said about the Howey test, that it would look past all attempts to obfuscate a security.

Software is not an investment, rather it is purchased for a use case. The Howey test looks at what the expectations were of those purchasing.

Your lawyers are ignorant apparently.

Could you comment on http://curia.europa.eu/jcms/upload/docs/application/pdf/2012-07/cp120094en.pdf, please?

[TPTB_need_war]

Afaik, you sold a token which can be resold by investors. The Supreme Court has said about the Howey test, that it would look past all attempts to obfuscate a security.

Software is not an investment, rather it is purchased for a use case. The Howey test looks at what the expectations were of those purchasing.

Your lawyers are ignorant apparently.

Could you comment on http://curia.europa.eu/jcms/upload/docs/application/pdf/2012-07/cp120094en.pdf, please?

Software is not a fungible money. Software is not purchased for expectations of gains.

Your logic is that buying a bicycle is not an investment security even though it can be resold. Then nothing is an investment security by your test. Rather the Howey test looks at the relevant economic facts and ignores any such attempt at obfuscation.

Are attorneys in Europe really this dumb   

[Come-from-Beyond]

Software is not a fungible money. Software is not purchased for expectations of gains.

Your logic is that buying a bicycle is not an investment security even though it can be resold. Then nothing is an investment security by your test. Rather the Howey test looks at the relevant economic facts and ignores any such attempt at obfuscation.

Are attorneys in Europe really this dumb   

I just needed your comment. I didn't expect that you would change your position nor anyone expected that.

[iotatoken]

The most hilarious part about these trolls is that they argue from a retroactive point of view. Laws are never retroactive. According to TPTB's "expert lawyer opinion" pokemon cards were really a security because they appreciated in value due to demand after they were sold as a card game. Genius.

[Come-from-Beyond]

The most hilarious part about these trolls is that they argue from a retroactive point of view. Laws are never retroactive. According to TPTB's "expert lawyer opinion" pokemon cards were really a security because they appreciated in value due to demand after they were sold as a card game. Genius.

Well, he is not an expert and has the right to be wrong. Of course, noone seriously believes that TPTB is better than Ethereum lawyers but if one conforms to TPTB's rules then the one conforms to all possible jurisdictions. So TPTB's opinion is useful to some degree.