[CRYPTOSTOCKS] Labcoin Official Thread - Self-Moderated

[Sou]

Putting the Blockchain at risk? Please elaborate.

essentially every bitcoin client will become part of a distributed unregulated security exchange, which might be considered illegal by regulators just about anywhere.  Now whether or not such interpretation would stand up in court, I have no idea, but Id rather not see them get the chance to try it.

I forget who said it, but they likened a fight against Bitcoin to a fight against Algebra. Good luck with that. Colored Coins are the future.

[Puppet]

every computer program could be considered algebra, that doesnt magically make it elude legislation.

[Sou]

every computer program could be considered algebra, that doesnt magically make it elude legislation.

Every computer program is not Bitcoin - that's why Bitcoin is special. That's why Bitcoin is Bitcoin.

[Puppet]

Gee, good point. Did Pirate hire you yet to chair his legal defense team?

[Sou]

Gee, good point. Did Pirate hire you yet to chair his legal defense team?

ad hominem?

[radiumsoup]

Gee, good point. Did Pirate hire you yet to chair his legal defense team?

ad hominem?

That wasn't an ad hominem. That wasn't even any sort of argument at all, making categorization of the logical form irrelevant. It was just a sarcastic quip.

"Your assertion that 'Bitcoin is special because not every computer program is Bitcoin' is flawed because you're nearsighted and your body odor is offensive enough that simply posting on this board leaves readers half a world away in tears" would be an example of an ad hominem.

[Luckybit]

Puppet... till now no one feared the chinese government because of selling shares. btcgarden only closed because of the risks involved with chinese crowdfunding, as far as i know. And friedcat always checked out such potential legal risks to Asicminer. I mean it would be pretty stupid to risk all his income. So if you now start to generally question the legality then why not start at bitcoins? Its still a gray area and governments would have any right to forbid bitcoins. That happened with many regional currencies before often too.

So far i trust friedcat more than your legal advice in a anyway legal gray area.

Of course once colored coins get used, that may change, if these colored coins represent securities, that has the potential to threaten bitcoin

Agreed, if they use the blockchain to represent colored coins/securities, it will give them ammo to go after the entire Bitcoin protocol. Or if Ken creates an alt coin, then the exchange it's hosted on would be targeted.

These solutions are a step ahead right now, but only one step.

How would they go after an idea? Ban the source code? Also at that point no ban will stop it.

If Colored Coin or Mastercoin works then nothing stops either of them except if the protocol fails. Hundreds of trillions of dollars. The derivatives market is 180 trillion in the US alone. The US economy is only 10-12 trillion.

What this means is that Colored Coin and Master Coin are more valuable as a protocol than the entire US economy. Who is going to ban that during a recession?

Also if those protocols do happen then each coin Bitcoin will be worth around a million dollars potentially and it wont take very long to reach that. It might take 5-6 years and the block reward halving built into the protocol will push it up to a around a million dollars a coin.

This is all speculation assuming the protocols do work and most people are unsure if Colored Coin or Mastercoin can work. If you fear regulation and don't take risks you wont have any rewards.

The governments of the world will react how they react to innovation.

[Luckybit]

every computer program could be considered algebra, that doesnt magically make it elude legislation.

Every computer program is not Bitcoin - that's why Bitcoin is special. That's why Bitcoin is Bitcoin.

There are illegal numbers so you are correct, governments are stupid enough to attempt to regulate math. But just like with regulating file sharing it will fail and for the same reasons. Unlike sharing files we are talking about sharing money now. Nothing will stop people from sharing money. Even in an all out war people are still sharing money.

Bitcoin allows people to share money over the Internet while Colored Coin and Mastercoin built on top of Bitcoin allows for Bitcoin to take over the entire global economy and replace virtually every function.

I think Bitcoin may end up being money 2.0 and there is no way any government can stop that. People have killed and died over money and governments pay their troops with money. So how exactly are you going to stop money with laws? You can stop money by offering more money or better money than Bitcoin.

I don't think the US government or any government wants to do that though. They will just build on top of Mastercoin and Colored Coin for their own purposes when the time comes.

Putting the Blockchain at risk? Please elaborate.

essentially every bitcoin client will become part of a distributed unregulated security exchange, which might be considered illegal by regulators just about anywhere.  Now whether or not such interpretation would stand up in court, I have no idea, but Id rather not see them get the chance to try it.

If the king were to outlaw bread do you think it would stop peasants from eating bread during a famine?
The laws will be rendered unenforceable due to the particular condition of the economy.

When there is no viable alternative for people, it wont matter what the law says. Ultimately the law enforcement are supposed to protect and serve the community. The laws if they don't protect the community probably aren't going to be followed by many people. People still gamble for example even if you make that illegal, and copyright infringement is illegal but probably everyone you know does that.

Consider that the government of the US does decide to crack down on Bitcoin? The people who break the law and ignore the regulations would become millionaires. Those millionaires would be the people smart enough to leave America and live where there aren't any regulations on Bitcoin being enforced.

So if the US is stupid enough to crack down then people will start leaving the US and working overseas instead. Then they'd start businesses over there and pay taxes to some other country. That other country will use the tax money to spy on US interests. It would be smart if the US actually kept it's tax base in the US by either not enforcing certain regulation or changing the law.

[Ytterbium]

Get a clue. *ALL* those bitcoin denominated securities are illegal. Even asicminer. This has been argued and proven ad nauseam in the relevant stock exchange threads. You dont need any kind of investigation to establish that, the fact they were selling unregistered securities to unsophisticated investors makes it a violation of security regulation in just about any civilized country on this planet, regardless of where labcoin is headquartered (if anywhere) and regardless of where the exchange operates from.

You are correct but bitcoin as a digital product is NOT illegal yet..  Deception and to per-mediate a scam is illegal no matter what the goods are.  I've already looked into this.  

Duh. No one said bitcoin is illegal. But the fact securities are traded for bitcoin instead of dollar, euro's, gold or oil is irrelevant.  The fist thing the SFC will look at is not how labcoin (ab)used the funds, but how they raised them. And they clearly did it in breach of laws all over the world.

BTW. "per-mediating a scam". ROFL.

As far as I can tell, it's not illegal for an HK company to issue shares to people outside of HK.  Also 796.com seems to be operating perfectly legally in HK.

You run around posting "This is all illegal!!!1111" based only on US law, as if it applies everywhere in the world, which it doesn't.

[Ytterbium]

Oh man, how often does one have to explain this? US law applies to the US market. A chinese selling stock in a Lebanese company through an unlicensed exchange based in Malta and hosted in Belize *is* breaking US security laws if those stocks are readily available to US investors. Why do you think BSTCT closed its doors? Why do you think BF doesnt want US investors?

Nope.  US government has no authority over activities that take place outside of US borders. BTCT was run from the US, and therefore the person running it had to abide by US law. As far as bitfunder is concerned they're just being cautious, and he may want to do business in the US in the future.

If you look at the actual HK law that's been posted, it's clear that it doesn't apply to companies so long as they do something as simple as post a checkmark for people to click to indicate they are not HK residents.

You want me to dig up the same laws for EU countries? Japan? Russia?

Yes. If you want to prove your point, that's what you have to do. 

[Puppet]

Nope.  US government has no authority over activities that take place outside of US borders.

too fucking tired of correcting this a gazillion times. Some people are just too dumb or too stubborn.

so long as they do something as simple as post a checkmark for people to click to indicate they are not HK residents.

"A simple check box on a website for a person to indicate that he or she is, or is not, a Hong Kong resident would not by itself be a sufficient precaution."

I guess in your case its too stupid. F for reading comprehension.

[Ytterbium]

Nope.  US government has no authority over activities that take place outside of US borders.

too fucking tired of correcting this a gazillion times. Some people are just too dumb or too stubborn.

so long as they do something as simple as post a checkmark for people to click to indicate they are not HK residents.

"A simple check box on a website for a person to indicate that he or she is, or is not, a Hong Kong resident would not by itself be a sufficient precaution."

I guess in your case its too stupid. F for reading comprehension.

Sorry, meant to say a checkbox + other precautions.  But that said, the the thing you quoted has to do with solicitation for hedge fund investment not for issuing securites. 

The Internet is a growing medium in the marketing of funds in Hong Kong. However, its use as a distribution channel for funds in Hong Kong is still relatively low. This chapter describes the rules applicable to the use of the Internet in marketing and distributing hedge funds in Hong Kong.There are different considerations for funds authorized by the Securities and Futures Commission (SFC) and for unauthorized funds.


Use of the Internet for authorised hedge funds

Overview of regulatory regime
The primary regulatory guidance in Hong Kong in relation to promoting investment funds is the SFC’s CIS Internet Guidance Note, the Guidance Note for Persons Advertising or Offering Collective Investment Schemes on the Internet, which the SFC re-issued in April 2003.

You do understand the difference between a hedge fund and a security right? If so why are you quoting a page about marketing hedge funds in HK as if it had something to do with issuing virtual securities? It seems like you're the one with zero reading comprehension here.

You still haven't quoted a single law from a single country other the then the US that makes bitcoin stocks illegal in any way.  US law specifies that it's against the law to offer unregistered securities for "value", such as bitcoin.

So far you've never offered a single shred of evidence for your assertion that it's illegal to sell bitcoin securities "everywhere" - and the quoted article has nothing to do with issuing securities, it's about marketing hedge funds.

[Puppet]

Sorry, meant to say a checkbox + other precautions.

ROFL.

But that said, the the thing you quoted has to do with solicitation for hedge fund investment not for issuing securites.  

Bravo, you have started to read. Good for you. Yes, the article is about hedge funds. Now can you also read the paragraph in its entirety?

When are you subject to SFC regulation?
As a general principle, the SFC has stated that it will not seek to regulate the provision of financial services that are conducted from outside Hong Kong and over the Internet, unless such activities are targeted at people residing in Hong Kong or are detrimental to the interests of the investing public in Hong Kong or to the market integrity of Hong Kong.


This is a general principle, explaining what "targeting people residing in hong kong" over the internet means. its not limited to hedge funds in any way and the idea that targeting HK investors for hedge funds would be different from future contracts or other securities is just ridiculous. Moreover, I did link to the original laws earlier, but hey, with your reading comprehension skills I thought the above article might be easier to digest. I guess not.

Now carry on trolling.


edit:
http://en-rules.sfc.hk/net_file_store/new_rulebooks/h/k/HKSFC3527_3568_VER11.pdf

2.1 This Guidance Note clarifies the Commission's regulatory approach
associated with the conduct of the following activities over the Internet:
2.1.1 securities dealing, commodity futures trading, leveraged foreign
exchange trading, and related advisory businesses;


7.4.4 Reasonable precautions are taken to
guard against the acceptance of purchases
from or provision of services to people
residing in Hong Kong.
Precautions may include the checking of
telephone numbers and mailing addresses
(including e-mail addresses) of potential
clients; the use of firewall, password,
blocking or other limiting device to restrict
access to the information and services
provided; or not providing the means for
applying for the services. Precautions that
simply require a person to identify whether
he is a Hong Kong resident would not alone
be regarded as sufficient to guard against
such activities taking place in Hong Kong.

You've been saying the same BS for months now and you've been proven wrong at every turn. Dont you ever get tired of being wrong or are you that stupid that you dont realize it?

[MikeyVeez]

Oh man, how often does one have to explain this? US law applies to the US market. A chinese selling stock in a Lebanese company through an unlicensed exchange based in Malta and hosted in Belize *is* breaking US security laws if those stocks are readily available to US investors. Why do you think BSTCT closed its doors? Why do you think BF doesnt want US investors?

Nope.  US government has no authority over activities that take place outside of US borders. BTCT was run from the US, and therefore the person running it had to abide by US law. As far as bitfunder is concerned they're just being cautious, and he may want to do business in the US in the future.

If you look at the actual HK law that's been posted, it's clear that it doesn't apply to companies so long as they do something as simple as post a checkmark for people to click to indicate they are not HK residents.

You want me to dig up the same laws for EU countries? Japan? Russia?

Yes. If you want to prove your point, that's what you have to do.  

First off we all know everyone has US envy and loves to pretend the US has no authority world wide. Why dont you ask all the extradited foreigners in US jails, about foreign authority.

Or even better US agents come to your country kidnap you and charge you. Its been done before and the US courts deemed it to be legal. You think piss poor 3rd world country or any other country for that matter is going to do anything about it? Besides a little bit of talk.

Secondly, Labcoin has accepted US sharesholders funds, so it falls under US laws. 9 out of 10 of these companies all do business with US customers therefore US law is pretty much world wide.

[Ytterbium]

When are you subject to SFC regulation?
As a general principle, the SFC has stated that it will not seek to regulate the provision of financial services that are conducted from outside Hong Kong and over the Internet, unless such activities are targeted at people residing in Hong Kong or are detrimental to the interests of the investing public in Hong Kong or to the market integrity of Hong Kong.


This is a general principle, explaining what "targeting people residing in hong kong" over the internet means. its not limited to hedge funds in any way and the idea that targeting HK investors for hedge funds would be different from future contracts or other securities is just ridiculous. Moreover, I did link to the original laws earlier, but hey, with your reading comprehension skills I thought the above article might be easier to digest. I guess not.

Now carry on trolling.

Why are you quoting a totally unrelated article from some random website that isn't about bitcoin stocks at all as if it has anything to do with whether or not bitcoin stocks are illegal in Hong Kong.

Clearly financial services in Hong Kong have to follow Hong Kong law.  However, doesn't violate HK law then there wouldn't be any problem. The SFC, presumably, isn't going to target people who follow HK regulations.

Now, again. You've provided no proof, zero, that bitcoin "virtual" stocks would even qualify as "Financial Services" under HK law, and what regulations would apply to those services.

The key question is whether or not a virtual bitcoin share qualifies as a "security", or share under HK law.  The key question is whether or not the virtual shares represent "interests, rights or property", and clearly from the btct.co terms of service they did not.

Now, on the other hand if Sam was a con artist then presumably he may have broken some other law in HK, like fraud. Same with Pirateat40 in the US.  But that has no baring on the legality of stocks that are not fraudulent.

[Ytterbium]

Secondly, Labcoin has accepted US sharesholders funds, so it falls under US laws. 9 out of 10 of these companies all do business with US customers therefore US law is pretty much world wide.

I'm not talking about Labcoin specifically, rather Puppet said that all bitcoin securities were illegal everywhere, which would include 796.com and their ASICMiner shares in Hong Kong.  Do you think 796 is illegal?

If Sam committed fraud, obviously that would be illegal.

[MikeyVeez]

Secondly, Labcoin has accepted US sharesholders funds, so it falls under US laws. 9 out of 10 of these companies all do business with US customers therefore US law is pretty much world wide.

I'm not talking about labcoin specifically, rather Puppet said that all bitcoin securities were illegal everywhere, which would include 796.com and their ASICMiner shares in Hong Kong.  Do you think 796 is illegal?

Yes if it accepts US customers. I'm sure developed countries have laws about unregistered securities. Even if they didn't,  the fact is 9 out of 10 of these companies have US customers therefore they blanket thenselves under US laws making it basically world wide.

[Ytterbium]

Sorry, meant to say a checkbox + other precautions.

ROFL.

But that said, the the thing you quoted has to do with solicitation for hedge fund investment not for issuing securites.  

Bravo, you have started to read. Good for you. Yes, the article is about hedge funds. Now can you also read the paragraph in its entirety?

When are you subject to SFC regulation?
As a general principle, the SFC has stated that it will not seek to regulate the provision of financial services that are conducted from outside Hong Kong and over the Internet, unless such activities are targeted at people residing in Hong Kong or are detrimental to the interests of the investing public in Hong Kong or to the market integrity of Hong Kong.


This is a general principle, explaining what "targeting people residing in hong kong" over the internet means. its not limited to hedge funds in any way and the idea that targeting HK investors for hedge funds would be different from future contracts or other securities is just ridiculous. Moreover, I did link to the original laws earlier, but hey, with your reading comprehension skills I thought the above article might be easier to digest. I guess not.

Now carry on trolling.


edit:
http://en-rules.sfc.hk/net_file_store/new_rulebooks/h/k/HKSFC3527_3568_VER11.pdf

2.1 This Guidance Note clarifies the Commission's regulatory approach
associated with the conduct of the following activities over the Internet:
2.1.1 securities dealing, commodity futures trading, leveraged foreign
exchange trading, and related advisory businesses;


7.4.4 Reasonable precautions are taken to
guard against the acceptance of purchases
from or provision of services to people
residing in Hong Kong.
Precautions may include the checking of
telephone numbers and mailing addresses
(including e-mail addresses) of potential
clients; the use of firewall, password,
blocking or other limiting device to restrict
access to the information and services
provided; or not providing the means for
applying for the services. Precautions that
simply require a person to identify whether
he is a Hong Kong resident would not alone
be regarded as sufficient to guard against
such activities taking place in Hong Kong.

You've been saying the same BS for months now and you've been proven wrong at every turn. Dont you ever get tired of being wrong or are you that stupid that you dont realize it?

Okay you eddited your comment to include that. But obviously you decided to excise some parts, such as:

The Commission does not intend to impede
the legitimate use of the Internet. People
residing in Hong Kong are free to seek out
and to take advantage of financial services
and products made available over the
Internet. However, the provision of such
services and products, when targeted at
people residing in Hong Kong, may fall
within the Commission's purview and hence
trigger regulatory concern. In determining
whether or not an activity conducted over
the Internet is targeted at people residing in
Hong Kong and hence attracts regulatory
concern, the Commission will consider the
nature of the business activities as a whole
and have regard to a number of factors,
including (without limitation) the following:

And again. All it says is that that if not done, the financial services would may fall
within the their purview and trigger regulatory concern, in which case they might be required to register or something like that.

7.1 The issue of advertisements or
documents which contain an invitation to the
public to acquire, dis
pose of, subscribe for
or underwrite securities or to take part in
investment arrangements is prohibited
unless such advertisements or documents are
approved by the Commission or are the
subject of exemption under the relevant
Ordinance.

Do you or do you not understand the difference between "triggering regulatory concern" and "being illegal"?   You're clearly deliberately misrepresenting what's said in the PDF.  It doesn't say anything about a failure to ban HK users making the services illegal.

You also haven't shown anything whatsoever that shows bitcoin based virtual securities qualify as securities under HK law.  There is a case to be made in the US that they are, because the wording makes it apply to anything traded "for value". But HK law does not include that language. The main criteria is whether or not the items under discussion are "interests, rights or property".

None of the rules you posted would even apply if bitcoin stocks didn't qualify as "securities", and again, you've never posted anything that indicates that bitcoin virtual shares, or whatever legally qualify as "securities"

[Puppet]

Why are you quoting a totally unrelated article from some random website that isn't about bitcoin stocks at all as if it has anything to do with whether or not bitcoin stocks are illegal in Hong Kong.

You moron. Straight from the SFC website

2.1 This Guidance Note clarifies the Commission's regulatory approach
associated with the conduct of the following activities over the Internet:
2.1.1 securities dealing, commodity futures trading, leveraged foreign
exchange trading, and related advisory businesses;

Are you really saying company shares are not securities, just because the company business is somehow related to bitcoin asics instead of cell phone asics, oil, gas or Chinese pastry? Or are you saying that because we trade these securities for bitcoins instead of dollar or CNY that they are not securities?

The key question is whether or not a virtual bitcoin share qualifies as a "security", or share under HK law.  The key question is whether or not the virtual shares represent "interests, rights or property", and clearly from the btct.co terms of service they did not.

You may think the key question is whether or not the earth is flat or round, but everyone else is long past that point. If you want me to dig up the legal defintion of securities for whatever your favorite country, you will have to start paying me. But anyone that had any doubt that a bitcoin denominated investment contract is legally a security in the US should start reading up on Pirate's court case.

Bitcoin investments "meet the definition of investment contract, and as such, are securities,” the judge added.

http://rt.com/usa/bitcoin-sec-shavers-texas-231/

[Ytterbium]

Bitcoin investments "meet the definition of investment contract, and as such, are securities,” the judge added.

http://rt.com/usa/bitcoin-sec-shavers-texas-231/

Are you mentally retarded? Why are you posting about a court case in the US.

For the n'th time.  You haven't given any evidence that bitcoin virtual stocks, as traded on btct.co, or 796.com for that matter, qualify as securities under Hong Kong law.