I need some advice on setting up a crypto investment club

[Jet Cash]

I'm not looking for investors or money, I'm just after advice. I'm setting up the Crypto Coin Tree private investment club, and I've installed Drupal 8 on the domain. I posted a few comment in the internal forum at http://cryptocointree.com/clubroom/forum

I seem to be spending a lot of time reading up on the legal implications, and also the creation of the private coin associated with it. The interaction between future members has also required a lot of thought.

Some of the other topics I've considered are - what to do with any advertising revenue. How to value new payments after the fund has appreciated, and a few other things.

Any comments or advice would be appreciated.

[JohnL316]

I will be following this thread.

You need professional advice from those in your jurisdiction.

As a lot of laws have yet to be crafted by lawmakers and
as usual with monetary policy makers at the helm any
policies crafted now will probably be in constant change.

Find people who know how to comply with and monitor
securities laws in your jurisdiction

[Jet Cash]

I know a bit about running small investment clubs in the UK. The real problem is in deciding how to create a coin, and to stop it being considered as a security. I think that one important thing is to ensure that all members are able to influence the value of the coin by contributing to the investnent decisions. I believe that, if this is the case, then the coin will not be considered to be a security. Another factor will be ensuring that the coin is not traded on third party exchanges.

[bitmover]

IAnother factor will be ensuring that the coin is not traded on third party exchanges.

The idea would be to trade it only inside the club?
If it's going to be an erc20 , its not possible to prevent it to be traded in Dex exchanges such as mercatox. Maybe use omni layer?

Some of the other topics I've considered are - what to do with any advertising revenue. How to value new payments after the fund has appreciated, and a few other things.

Advertising revenue will probably be small, it would at first moments, only enough to  cover the costs of running and managing the club and website. Don't you think?

[Jet Cash]

The financial costs of running the club is negligible, and I will pay those. Adding the revenue to the investment pool provides an incentive for members to make public comments which could attract viewers.

The coin needs to be a centralised record of members "shareholding", and it could be exchanged between members, but not outside the club. A member withdrawing funds would result in the associated coins being burnt. Members adding funds would result in coins being created, and the number would be related to the current value of the portfolio.

I'm not sure if there is any software available to handle a blockchain associated with these coins. It would need to include investment purchases and sales, as well as members deposits and withdrawals. Treating investment products as members could turn the blockchain into a form of double entry system, and mean that the financial structure is transparent. At the moment I'm not sure if it is really a blockchain project, and maybe a simple mysql d/b would be sufficient.

[bitmover]

I want to be updated about this investment club Jet Cash, and contribute if possible (probably as an investor or helping the project to getting started).


Maybe you could create a thread about it in bitcointalk where you post the updates?

[jackg]

I’m guessing the coin will be backed physically by other investments/coins which should be stored off the exchange and in a wallet node of itself where possible.

With the club members voting on the coins they want the coin to back.

I’ll put some coin into this too. I think the price of the coin at the time should be considered and not the fiat value also to determine the amount of shares people have.

[Jet Cash]

I've installed Drupal 8 in a directory on the crypto coin tree web site -
http://cryptocointree.com/clubroom/

There is a forum on that, but it's public, and I really need the initial chat to be private, as I need to take advice. JackG is pretty much on the concept, and I wanted to start in a fairly small way - maybe just $50 or so.

I might use the blab chatroom for discussions if JackG agrees. I'll keep this thread going for public discussions of course. Right at the moment, I'm more concerned with the concept, and setting up the environment. I don't want any investments until the market is a bit more favourable, although I' thinking of shorting Bitcoin. That's specualtion rather than investment though.

[aftermkt]

I am an attorney, so I can probably offer some advice. The answer to your questions begins with what exemption from securities laws that you fall under. Do you know the people who will be investing into the partnership? Are they located in the US or abroad? How much are you seeking to raise for the club? How many investors do you envision having in the club?

[Jet Cash]

Thanks for your post.

There will be fewer than 20 real members, although some members may have more than one identity. This is to allow them to discuss different asset classes in public. All identities will be known to the other members.

I am in the UK, and the hosting is in the US. Membership will not be based on nationality.

Initial investment will be fairly small, as it is an experimental venture. Probably not more than $100 per member in the initial stage.

Investors will probably be trusted members of the Bitcoin Talk forum, but this is open to discussion with the initial members.

I think it is important that all investments are made based on collaborative decisions. This is for two reasons, it helps with the education of the members, and I bellieve that the joint decisions change the legal status of the club.

My initial idea was that the purchases would be real asets, but I'm open to discussion about the possibility of purchasing short futures, and these may include gearing ( leverage ).

[Jet Cash]

I'm quite keen to get this club started. I don't need/want the money, but I do want the advice and help.

As I haven't had much of a positive reaction to the idea, I think I'll create a number of fake members, and then I can start the investing and speculation. This will give me a chance to build the site based on some real transactions. I've opened a coinbase account, and I've started to try to earn BAT ( basic attention tokens ). I'm not sure if that will distort the situation if I use those for the club investments.

I want to keep things transparent, and operating multiple accounts may make this difficult. Even worse, it could lead to misunderstandings and accusations of fraudulent activity.

[jackg]

I think every member should get two accounts. (Or one of you want). One for public discussions and one for private discussions on the club. The public ones can be more generic and include less information about individuals, the private ones can contain more information specific to each person.

[Jet Cash]

That is one possibility, but it blows out the chance of a central fund, and the start of its own crypto.

It also rules out the fund buying shares if a member wants to leave or reduce his holding.

[jackg]

It’s merelu a design for the actual project. The shares will be represented by some sort of smart contract/online contract between “the club” and “the members”.

It’s just the number of accounts on the project that is being changed, not the stake.

[Jet Cash]

The stumbling block is the control of the accounts. I believe that the "club" will need to control the wallets, unless it has control, then there is no asset value for the coin. Members may be reluctant to give up control of their "deposits", and I can understand this. The are so many frausds and scams around at the moment.

I do want to move ahead with this, so I will create half a dozen "fake" accounts,and start to use those to build club assets. As my primary motivation is the quest for knowledge and advice, maybe adding a gust book and comments section to the project will achieve this end.

[xiaoxiaox]

I'm not looking for investors or money, I'm just after advice. I'm setting up the Crypto Coin Tree private investment club, and I've installed Drupal 8 on the domain. I posted a few comment in the internal forum at http://cryptocointree.com/clubroom/forum

I seem to be spending a lot of time reading up on the legal implications, and also the creation of the private coin associated with it. The interaction between future members has also required a lot of thought.

Some of the other topics I've considered are - what to do with any advertising revenue. How to value new payments after the fund has appreciated, and a few other things.

Any comments or advice would be appreciated.

It depends from your country's laws. Try contacting a government official or a local lawyer.

[LoyceMobile]

The coin needs to be a centralised record of members "shareholding", and it could be exchanged between members, but not outside the club. A member withdrawing funds would result in the associated coins being burnt. Members adding funds would result in coins being created, and the number would be related to the current value of the portfolio.

I think Byteball offers what you need: a Token in which the creator has to co-sign all transactions.
Summon LoyceV to experiment on this.

[MadZ]

What country are you located in? It is likely not worth the legal hassle to do this if you're in the US.

[Jet Cash]

I'm in the UK, and pretty soon that will be out of the stupid EU regulations.

Knowledge is priceless, so the project is worth it to me, although there doesn't seem to be much interest. I think the small number of participants, and the minimal amount speculated/invested will avoid any conflict with regulatory bodies. In fact I'm probably going to create a number of fake investors, and open up discussions to observers and commentators. That was it will only be my money that is involved. I can also feed Steem and BAT rewards into the portfolio as they are awarded. I think it has already picked up about $5, so that is encouraging, as I haven't really done anything so far.

I slipped up by not riding the recent rise in Bitcoin. I deposited £100 in coinbase, but I misread the dip, and missed the buying chance. I really wanted the discussions to see if I could avoid making mistakes like that.

[bitmover]

I slipped up by not riding the recent rise in Bitcoin. I deposited £100 in coinbase, but I misread the dip, and missed the buying chance. I really wanted the discussions to see if I could avoid making mistakes like that.

I don't think you missed already. BTC is still 4300, which is a 75% fall from the previous ATH.

You will never hit the bottom, forget it. The only way to hit it is if you buy all the way down. Alternatively, the only way to hit the top is to sell on the way up. Personally, even if I hit close to the bottom, I will think "I didn't buy enough. Why did I bought only 100?"

IMO and according to my experience in investing, if you are too worried about the buying price, you will never buy it. Ofc you shouldn't buy any asset in ATH, but that's clearly not the situation now.

There are really nice discussion about trading methods in Wall Observer thread. Like this one by JayJuanGee

What do you do?

Are you going to sell now at 8.000?
Did you bought at 5800 ?

I thought that most peeps here understand my methodology.

In brief, largely I am an incrementalist.  I buy on the way down, and I also dollar cost average buy, and I sell a small amount of the way up.  I sell between about 1% and 1.5% of my bitcoin stash for every 10% that the BTC price goes up, and I use a decent amount of the sales proceeds to buy back, in the event that the BTC price goes down.

I have been engaged in such incrementalism for almost 3 years.  In other words,  before October 2015, I was largely accumulating and dollar cost average buying... I also was establishing my initial BTC stake in 2014, and in a kind of maintenance during 2015, so if I ever sold any BTC for any reason, I would replace such BTC (and a bit more) quite quickly thereafter.

Currently, largely, I do not really change my practice by BIG price moves or make any BIG moves of my own.. so I am constantly selling on the way up and constantly buying as the price goes... I do tend to play around with the increments and the amounts based on how the BTC price is moving, but the amount that I authorize to buy or to sell is based on ongoing similar percentages that I authorize for myself and only tweak in small ways.  Regarding the actual price points of $8,000 and $5,800, yes I was buying all the way down.  Actually, I sold all the way up to $19666 and then I bought all the way back down and was largely prepared to keep buying , even if BTC prices were to go below $1k (which surely seems unlikely, currently).  Largely also I had been selling all the way up through the $6000s until reaching our $8000 of today.. so if the price goes above $8k I will continue to sell, and if the price goes below $7700 or something like that I will resume buying..

This idea is inspired in Rpietila's SSS thread. I really liked it, however I will begin doing that when we reach at least 10k (don't want to sell before).