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Author Topic: Coinbase's Securities Law Framework applied to every ICO  (Read 1003 times)
iamnotback
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February 28, 2017, 11:06:15 PM
 #1

This thread should be about scoring every ICO and project based on Coinbase's Securities Law Framework (c.f. page 24).

I will update this list in this OP based on feedback in the thread.

Happy ICO shredding! Here we go...

A total score of 100+ on every one of the 3 major categories means "Very likely" for a token to be an investment security subject to SEC regulation.

The Common Enterprise items are determining whether the token holder has the ability to effect his own destiny without depending on actions of some group that received the Investment of Money.

The Expectation of Profits are if the token holders are expecting to receive collectivized profits from the ongoing operation of the enterprise or system. However the Howey test also refers to expectation of gains, so that would also include investment gains. So IMO the expectation of profits is tied into whether the token holders' potential investment gains depend on some group that received the Investment of Money. If so, then I am going to give at least 100 points for that category.

Note if your project and token is truly decentralized, you will receive a 0 scoring on every category. So please don't tell me this regulation is interring with our ability to have decentralized systems. The law exists for a very good reason. The authorities are standing back and allowing us to reap what we sow, before they are forced to regulate eventually if we don't build truly decentralized systems.

Crowdsales that sell some product that will be produced by the funding raise (was Kickstarter's original model) are not investments with an expectation of profit. The only expectation is to receive the goods purchased. Selling tokens can be considered a s/w product, if there is no expectation of profit and/or investment gain dependency on the group that received the money invested. Regulatory-compliant crowd equity sites already exist on the Internet for companies that want to raise equity funding.

Bitcoin

PointsItem
0Investment of Money: Crowdsale
0Common Enterprise: Pre-deployment
0Common Enterprise: Fully operational protocol, not just a mockup
0Common Enterprise: Live network is operational
0Common Enterprise: egalitarian returns without ongoing effort
0Common Enterprise: variable returns based on ongoing effort
0Expection of Profit: Ownership or equity interest in a legal entity
0Expection of Profit: Entitlement to a share of profits/gains of the enterprise
0Expection of Profit: No function of token
0Expection of Profit: Pre-deployment
0Expection of Profit: Fully operational protocol, not just a mockup
0Expection of Profit: Voting on budgets
0Expection of Profit: Voting on governance
0Expection of Profit: Marketed as an ICO, not as network access token

TotalsItem
0Investment of Money
0Common Enterprise
0Expection of Profit



Dash

PointsItem
100Investment of Money: Crowdsale (invest money in masternodes in an enterprise run allegedly by "Evan Inc.")
0Common Enterprise: Pre-deployment
0Common Enterprise: Fully operational protocol, not just a mockup
0Common Enterprise: Live network is operational
25Common Enterprise: egalitarian returns without ongoing effort (masternode ROI)
0Common Enterprise: variable returns based on ongoing effort
0Expection of Profit: Ownership or equity interest in a legal entity
100Expection of Profit: Entitlement to a share of profits/gains of the enterprise (masternode ROI)
0Expection of Profit: No function of token
0Expection of Profit: Pre-deployment
0Expection of Profit: Fully operational protocol, not just a mockup
0Expection of Profit: Voting on budgets (there is, but obfuscates that allegedly "Evan Inc." has controlling interest)
0Expection of Profit: Voting on governance (there is, but obfuscates that allegedly "Evan Inc." has controlling interest)
0Expection of Profit: Marketed as an ICO, not as network access token

TotalsItem
100Investment of Money
25Common Enterprise
100Expection of Profit



Ethereum

PointsItem
100Investment of Money: Crowdsale
70Common Enterprise: Pre-deployment
60Common Enterprise: Fully operational protocol, not just a mockup
50Common Enterprise: Live network is operational
0Common Enterprise: egalitarian returns without ongoing effort
0Common Enterprise: variable returns based on ongoing effort
0Expection of Profit: Ownership or equity interest in a legal entity
100Expection of Profit: Entitlement to a share of profits/gains of the enterprise
0Expection of Profit: No function of token
20Expection of Profit: Pre-deployment
10Expection of Profit: Fully operational protocol, not just a mockup
0Expection of Profit: Voting on budgets
0Expection of Profit: Voting on governance
50Expection of Profit: Marketed as an ICO, not as network access token

TotalsItem
100Investment of Money
180Common Enterprise
180Expection of Profit



Monero

PointsItem
0Investment of Money: Crowdsale
0Common Enterprise: Pre-deployment
0Common Enterprise: Fully operational protocol, not just a mockup
0Common Enterprise: Live network is operational
0Common Enterprise: egalitarian returns without ongoing effort
0Common Enterprise: variable returns based on ongoing effort
0Expection of Profit: Ownership or equity interest in a legal entity
0Expection of Profit: Entitlement to a share of profits/gains of the enterprise
0Expection of Profit: No function of token
0Expection of Profit: Pre-deployment
0Expection of Profit: Fully operational protocol, not just a mockup
0Expection of Profit: Voting on budgets
0Expection of Profit: Voting on governance
0Expection of Profit: Marketed as an ICO, not as network access token

TotalsItem
0Investment of Money
0Common Enterprise
0Expection of Profit



Steem

PointsItem
0Investment of Money: Crowdsale
0Common Enterprise: Pre-deployment
0Common Enterprise: Fully operational protocol, not just a mockup
0Common Enterprise: Live network is operational
0Common Enterprise: egalitarian returns without ongoing effort
-20Common Enterprise: variable returns based on ongoing effort
0Expection of Profit: Ownership or equity interest in a legal entity
0Expection of Profit: Entitlement to a share of profits/gains of the enterprise
0Expection of Profit: No function of token
0Expection of Profit: Pre-deployment
0Expection of Profit: Fully operational protocol, not just a mockup
0Expection of Profit: Voting on budgets (yet but controlled by a few whales due to the sneaky mine)
0Expection of Profit: Voting on governance (yet but controlled by a few whales due to the sneaky mine)
0Expection of Profit: Marketed as an ICO, not as network access token

TotalsItem
0Investment of Money
-20Common Enterprise
0Expection of Profit



WeTrust

PointsItem
100Investment of Money: Crowdsale
70Common Enterprise: Pre-deployment
60Common Enterprise: Fully operational protocol, not just a mockup
50Common Enterprise: Live network is operational
0Common Enterprise: egalitarian returns without ongoing effort
-20Common Enterprise: variable returns based on ongoing effort
0Expection of Profit: Ownership or equity interest in a legal entity
100Expection of Profit: Entitlement to a share of profits/gains of the enterprise
0Expection of Profit: No function of token
20Expection of Profit: Pre-deployment
10Expection of Profit: Fully operational protocol, not just a mockup
0Expection of Profit: Voting on budgets
0Expection of Profit: Voting on governance
50Expection of Profit: Marketed as an ICO, not as network access token

TotalsItem
100Investment of Money
160Common Enterprise
180Expection of Profit
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iamnotback
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March 01, 2017, 12:15:17 AM
 #2

Added Bitcoin, Dash, Ethereum, Monero, and Steem to the OP.
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March 01, 2017, 02:37:43 AM
 #3

what is coinbase about ico security
coinbase can open service iso selling, same with yobit, bitrex, c-cex and more, or what is about coinbase ico service equal title youre thread
iam visit youre link in title pdf only about framework


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●  Whitepaper
●  ANN Thread
●  Reddit
●  Telegram
●  Twitter
●  Facebook

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March 01, 2017, 12:09:52 PM
 #4

This thread should be about scoring every ICO and project based on Coinbase's Securities Law Framework (c.f. page 24).

Seeing the table you referenced then I think Zcash would be highly likely to face SEC regulation, however, Zclassic would not right?


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March 01, 2017, 01:06:09 PM
 #5

ok.

ETC.
WAVES.
LSK.
ARDOR.
BTS.
STRAT.
ZEC.
FCT.

.SPECTRE.                ▄▄███▄▄
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    │
 
▬▬     WHITEPAPER    ▬▬
FACEBOOK     TELEGRAM
TWITTER     SLACK     MEDIUM
.
PRE-SALE.
PUBLIC SALE.
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March 01, 2017, 01:06:46 PM
 #6

and any assets on those platforms.

.SPECTRE.                ▄▄███▄▄
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███ ███     │
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    │
 
▬▬     WHITEPAPER    ▬▬
FACEBOOK     TELEGRAM
TWITTER     SLACK     MEDIUM
.
PRE-SALE.
PUBLIC SALE.
iamnotback
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March 01, 2017, 07:53:37 PM
 #7

I am reviewing my logic on the scoring of Steem in the OP compared to Dash.

In Dash there is investment money in a masternode to receive a return that is the same for every other masternode (deposited in the same period). The is a common enterprise that depends on the core team for its promotion and future development that drives the expectation of profit. It is presented as DAC (decentralized autonomous corporation) because there is voting and thus claimed to be decentralized governance. But it is alleged that "Evan Inc." controls a majority of the masternodes and thus controls the enterprise. So this is what allegedly makes Dash likely to be subject to SEC regulation (and thus likely in an illegal circumstance currently unless it will be grandfathered).

Steem has delegates and witnesses which are elected which receive a return, but it is not based on the investment of money. Although the whales do in effect control the governance and the sneaky mine did enable a high concentration of the money supply, the sneaky mine was announced in advance (although not very conspicuously). So it was only sneaky because most of us were not paying careful attention to the ANN threads. In Dash's case, it has been shown convincingly that Evan's group deliberately exacerbated the instamine (in his favor) in a non-transparent (at the time) way.

Although one can argue that Steem is an ongoing common enterprise that investors based their expectation of gains, and I might think this is subject to being an investment security per SEC regulations and the Howey test, it doesn't seem to fit Coinbase's scoring items well.

So I am saying that Steem is also perhaps culpable, but Dash is more clearly so. And even Dash is not as unarguably culpable as most (if not all) of the ICOs.
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March 01, 2017, 08:15:53 PM
 #8

About Monero versus Dash:

Your other report topic for example lambasted Dash and gave Monero an almost perfect score.

Are you referring to Coinbase's Securities Law Framework scoring system?

Well in that system Monero is decentralized and not culpable.

You love to forget about King Risto's shenanigans.
If he had not poured money it into it non stop running the coin Monero would not be here today.

That doesn't make it a security. Why don't you go learn about the Howey test and stop talking about irrelevant matters.

What ever Risto did was his own decision. There was no Common Enterprise which received an Investment of Money from the token.

There was some stupid MEW group for a while, but it didn't receive any money from Monero's protocol, unlike the masternode scam of Dash.

Please your technological ignorance is unbearable.

I didn't like what Risto did but that didn't make it liable under the Howey test. Please have more accurate discernment skills.
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May 27, 2017, 12:44:10 AM
 #9

iamnotback:

How would you score NEM?

Based on their description here:

https://forum.nem.io/t/not-claiming-nemstake-why-it-is-no-longer-possible-and-the-history-of-the-process/2859

it would seem that there was an "Investment of Money" and "Expectation of Profit" but I don't know about "Common Enterprise".
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May 27, 2017, 02:34:13 AM
 #10

So how would the DAPPS being built on Ethereum be rated? For instance, I have my eye on Bancor currently. It lets you exchange coins, buy into funds (multiple coins), or make your own currency (think reward points or what not). It has its own token and that appears to be the only way to get an investment return that I can see (like most cryptocurrencies).
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