GLBSE - TOS Discussion Thread.

[glbse]

This thread is intended to serve as a dialogue between the GLBSE and its users with respect to what those users would like to see in our TOS. Before taking the step of requiring all users to positively acknowledge their acceptance of our terms, we have decided to continue operating with the current terms we have, while working towards a more complete, and hopefully more permanent, document.

To that end please try and keep this thread on topic.

This discussion will be spearheaded by ColdHardMetal who, as most of you probably don't know, is the Secretary and Accountant of the investors group behind the GLBSE.

1. The Global Bitcoin Stock Exchange (GLBSE), BitcoinGlobal, its employees and owners, hereafter referred to as "the Exchange", assume no responsibility or liability for any actions by any government, government body, or government agency, against any person, individual, group, organisation, or company, hereafter referred to as "the Users", as a result of using, trading, listing, or issuing assets on this exchange.

2. The Exchange assumes no responsibility or liability for any fraud committed on this exchange, but will do its best to prevent its occurrence.

3. The Exchange assumes no responsibility for the terms of assets that are traded or listed on the Exchange, or for the actions of any of the Users issuing assets that are traded or listed on the Exchange.

4. It is not the Exchange's responsibility to ensure that those trading, listing, or issuing assets on the Exchange are operating according to any kind of rules, regulations, laws, or standards those trading, listing, or issuing assets on the Exchange are subject to in any jurisdiction, beyond these terms of service.

5. The Users of the Exchange take full responsibility for their own actions, and any consequences resulting from those actions. It is the Users' own responsibility to determine the risks involved in depositing funds with the Exchange, creating assets, executing trades, or any other activity or action related to the use of the Exchange, or any of its current services.

6. The Exchange is currently beta release software, and as such the Exchange assumes no responsibility or liability for any losses that may be incurred if the Exchange is taken offline to deal with any problems that may arise. The Exchange makes no guarantees as to the correct functioning of its services until it is removed from beta release, although the Exchange will do its best to ensure it is functioning correctly. The Users use the Exchange at their own risk.

7. The Exchange will make its best effort to ensure that all data on the Exchange is properly backed up in the event of a system failure, or any other event. However the Exchange makes no guarantees. The Exchange is a best effort service and will remain so until it moves beyond the beta stage of development.

8. The Exchange may at its discretion ask asset creators to provide proof of identity, address, phone number, or any other information as deemed appropriate. Said information will be held securely offline and not shared with any third party.

9. The Exchange reserves the right to suspend trading of any asset, or suspend access to an asset creator's account, for failure of an asset creator to provide requested information, or in the event of suspected fraud.

10. By using the Exchange, and any of its current services, the Users agree to these terms of service.

11. These terms of service are subject to change without notice.

April 8th, 2012

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[ColdHardMetal]

I've chosen to participate in this discussion using my personal account in the hopes that we can have a bit more of an informal dialogue than if it were to take place with the official GLBSE account.

To begin I'll provide some back story to our TOS in their current state. When we initially launched the command line, and then the web client, we were operating without any TOS. We really had no idea if the platform would take off at all. The time and effort required to produce a decent document like this is non-trivial, and was deemed unnecessary. At this point in time the vision of the GLBSE was one free of the onerous burden of paperwork that accompanies the issues of assets like these in the real world. Maybe you could say it was intended to be more in the spirit of BTC itself, in its potential liberation of us all from the shackles of the current financial system. This didn't really prove sustainable as a vision due to the amount of scamming activity we encountered when there were no rules in place.

Once the number of people using the system began to increase we decided we needed to at least have something in place to protect ourselves from potential liability. A basic "If the SEC comes a knockin' don't point them at us" type of document. Users accept the regulatory risk they are running in whatever jurisdiction they are in, and that's not our problem. Nor should it be. We provide the ability to do something. What you choose to do with that ability is outside of our responsibility.

That version persisted until the beginning of March. Around that time there was sentiment in the community that more had to be done to verify the validity/reality/whatever of assets and their issuers. As I've mentioned elsewhere we really hoped that kind of service would be developed by a third party. I guess in a sense it was, by a guy who himself turned out to be a scammer.  sigh.jpg

Regardless, despite our real lack of desire to do so (and I'm not kidding, you have no idea how little we want to have to do with that aspect of this market), it was determined that we needed to make some efforts in that direction. We know it sucks for us to try. We know that the credibility of the exchange provider's claims about the solidity of the assets on its exchange is crap. But crap is maybe better than nothing, maybe? I don't know. Sentiment was that we needed to do something, so we did. Anyway, the result of that was amending the terms to give us the ability to seek identifying information from asset creators.

Fast forward to last week, and events unfold that make it abundantly clear that many people haven't read our terms, or even know we had terms. Fair enough as they hadn't been publicized, and maybe expecting all users to read all the links on a website before they give it their money is expecting too much. That's not generally how I choose to run my finances, but hey, everyone's different.

Because of this, I took our existing terms and formalized them a bit, and we made an announcement of their existence sooner than we would have liked, but felt it needed to happen asap given how unaware most users were. They are not perfect, but again, something is better than nothing, yes?

So that brings us to today. Our TOS as it stands is quoted in the post above.

What do you think isn't there that should be. What is that shouldn't? Not everything I've seen people mention is something I would consider appropriate for a document of this nature, so don't expect that just because you throw it out there that its going in. But feel free to say whatever and we can discuss it as a community.

I do want to solicit the opinions of this community as there are a lot of bright people here, and I personally feel this kind of collaborative effort is a lot of what the BTC community is about.

Thanks for taking the time for reading if you've made it this far. Have at it.

[kronosvl]

I don't like the 11th point. You have emails of the users. use them for notice with a few days/weeks in advance of a new TOS becoming effective

[ribuck]

I don't like the 11th point. You have emails of the users. use them for notice with a few days/weeks in advance of a new TOS becoming effective

Agreed. Apart from that it's OK. I think GLBSE is more vulnerable, and needs more protection, than its users.

[Nefario]

I don't like the 11th point. You have emails of the users. use them for notice with a few days/weeks in advance of a new TOS becoming effective

Agreed. Apart from that it's OK. I think GLBSE is more vulnerable, and needs more protection, than its users.

ribuck: GLBSE need more protection? Could you expand on this?

Regarding emailing notice up an update of the TOS, that's reasonable, it's actually only since we've launched GLBSE 2.0 that we collected users details.

Nefario.

[ColdHardMetal]

I don't like the 11th point. You have emails of the users. use them for notice with a few days/weeks in advance of a new TOS becoming effective

Agreed. Apart from that it's OK. I think GLBSE is more vulnerable, and needs more protection, than its users.

ribuck: GLBSE need more protection? Could you expand on this?

Regarding emailing notice up an update of the TOS, that's reasonable, it's actually only since we've launched GLBSE 2.0 that we collected users details.

Nefario.

I'd add that it's not our intention to alter them and not tell you. We have the function so we'd use it. That's really just a standard term in the event we do need to change something. It's as boilerplate as the title. I'd almost bet money the pamphlet that came with your toaster probably says that.

[ribuck]

ribuck: GLBSE need more protection? Could you expand on this?

If I could give a good answer, I'd be in a position to start a good competitor to GLBSE

I mean that, sooner or later, an unprincipled GLBSE user who loses money will try to sue GLBSE. So GLBSE needs a set of T&C which is as protective as possible.

Furthermore, it benefits EVERY user of GLBSE for the T&Cs to be strongly protective of GLBSE, because otherwise GLBSE will get shut down.

This is an interesting situation, because it's often perceived as beneficial for T&Cs to be as favorable to the user as possible. However, when the business is ethical, and the regulatory environment is not, it's better for the T&Cs to favor the business.

[PawShaker]

Point 8. Obviously you live in some jurisdiction and, unless it is Sealand, you can receive court subpoena. It is not fair to make promisses that you will not be able to keep.

May be you should put a clause that TOS are subject to jurisdiction of Sealand?

[Nefario]

Point 8. Obviously you live in some jurisdiction and, unless it is Sealand, you can receive court subpoena. It is not fair to make promisses that you will not be able to keep.

May be you should put a clause that TOS are subject to jurisdiction of Sealand?

I assume you mean the sharing of identities of those asset issuers who have verified their identity, with governments that request.

i.e. if say the UK or US government knocks on my door with a warrant and a bunch of MIB do we give them the information?

Currently as it stands there is nothing we could do to stop this, you can see yourself that in the US people go to prison if they don't give passwords, and the same is in the UK (except in the UK, it's legal, in the U.S. it's not fully established), and I don't think we're currently getting paid enough to warrant spending time in prison for this

With regards to point 8 of our TOS, this is something we need to look at, but will suffice for the moment.

If we did want to offer protection against such an action it's certainly possible to do so. We could encrypt the information using multiple keys, giving those keys to GLBSE members spread around the world. So even if they did ask me to decrypt I would be unable to comply. I think this would be something we would probably have to charge for, it sounds like a lot of work.

Also  yes, they COULD sue me but I'm not a wealthy person... I've got a nice suit they could have but thats about it :p

[ColdHardMetal]

Problem is as you grow you are going to become a bigger and bigger target. It is still unclear to me that if what you are doing follows all the laws in all the countries of the world that people send BTC from. I'm not a legal expert but I have talked to lawyers about this issue and they were concerned.

I don't think anyone is operating under the illusion that this is within the securities regulatory framework in any jurisdiction.

Breaking free of that is kind of the point.

[HorseRider]

Point 8. Obviously you live in some jurisdiction and, unless it is Sealand, you can receive court subpoena. It is not fair to make promisses that you will not be able to keep.

May be you should put a clause that TOS are subject to jurisdiction of Sealand?

I assume you mean the sharing of identities of those asset issuers who have verified their identity, with governments that request.

i.e. if say the UK or US government knocks on my door with a warrant and a bunch of MIB do we give them the information?

Currently as it stands there is nothing we could do to stop this, you can see yourself that in the US people go to prison if they don't give passwords, and the same is in the UK (except in the UK, it's legal, in the U.S. it's not fully established), and I don't think we're currently getting paid enough to warrant spending time in prison for this

With regards to point 8 of our TOS, this is something we need to look at, but will suffice for the moment.

If we did want to offer protection against such an action it's certainly possible to do so. We could encrypt the information using multiple keys, giving those keys to GLBSE members spread around the world. So even if they did ask me to decrypt I would be unable to comply. I think this would be something we would probably have to charge for, it sounds like a lot of work.

Also  yes, they COULD sue me but I'm not a wealthy person... I've got a nice suit they could have but thats about it :p

Your willingness to work with the governments around the world is why I would not give you my ID. Too much risk if they pass a law tomorrow I do not know about...

Problem is as you grow you are going to become a bigger and bigger target. It is still unclear to me that if what you are doing follows all the laws in all the countries of the world that people send BTC from. I'm not a legal expert but I have talked to lawyers about this issue and they were concerned.

It is also good to know that if something does go wrong somewhere you have a good suit to make up for the loss.

I think the best resolution is to liquidate all the asset Goat issued on GLBSE, at least the uncompleted IPO. let's see what will happen to this serial fund raiser.

Now Goat may find the best excuse for default: "GLBSE frozen my fund and caused my profitable/big/great/secret business a failure. I loss everything? everyone should blame GLBSE but not me! "

What? you say Goat should follow the tradition build by Zhou Tong and Tradehill,  to eat the loss himself. but no, Goat is an alpha male. He will not follow the tradition according to your demand. He acts in the way he wants. Which means, GLBSE freeze his fund, he default the bonds.

[vampire]

I think the best resolution is to liquidate all the asset Goat issued on GLBSE, at least the uncompleted IPO. let's see what will happen to this serial fund raiser.

Now Goat may find the best excuse for default: "GLBSE frozen my fund and caused my profitable/big/great/secret business a failure. I loss everything? everyone should blame GLBSE but not me! "

What? you say Goat should follow the tradition build by Zhou Tong and Tradehill,  to eat the loss himself. but no, Goat is an alpha male. He will not follow the tradition according to your demand. He acts in the way he wants. Which means, GLBSE freeze his fund, he default the bonds.

Or GLBSE should eat the loss, since Goat is a customer. Also it would be responsibility of GLBSE to provide all the relevant data to Goat and shareholders.

Not like we have a clue what is GLBSE. Is that a registered company anywhere? Under which country's laws does it operate?

[Nefario]

Guys try to stay on topic, if you want to discuss something unrelated please start another thread.

[rjk]

Or GLBSE should eat the loss, since Goat is an unreasonable customer.

FTFY

[Stephen Gornick]

8. The Exchange may at its discretion ask asset creators to provide proof of identity, address, phone number, or any other information as deemed appropriate. Said information will be held securely offline and not shared with any third party.

Even if ordered by a court?

From which jurisdiction does GLBSE operate?

[Nefario]

8. The Exchange may at its discretion ask asset creators to provide proof of identity, address, phone number, or any other information as deemed appropriate. Said information will be held securely offline and not shared with any third party.

Even if ordered by a court?

From which jurisdiction does GLBSE operate?

Look up

if say the UK or US government knocks on my door with a warrant and a bunch of MIB do we give them the information?

Currently as it stands there is nothing we could do to stop this, you can see yourself that in the US people go to prison if they don't give passwords, and the same is in the UK (except in the UK, it's legal, in the U.S. it's not fully established), and I don't think we're currently getting paid enough to warrant spending time in prison for this Tongue

[Stephen Gornick]

From which jurisdiction does GLBSE operate?

Look up

That says you would comply with government authority from the U.S. and UK.  I don't see mention though (other than the Sealand snark) regarding from where GLBSE operates.

[Nefario]

From which jurisdiction does GLBSE operate?

Look up

That says you would comply with government authority from the U.S. and UK.  I don't see mention though (other than the Sealand snark) regarding from where GLBSE operates.
[/quote]

Poor Sealand is no more, was destroyed in a fire.

GLBSE isn't a registered company, the server it runs on is based in the US(the .com domain is claimed by the US), I'm based in the UK, it's shareholders are mostly anonymous and based all over the world.

[mila]

would it be feasible to just go out of beta into gamma and only be available as a hidden service
that way good luck finding the server and there goes the problem with registering any legal entity what so ever.
if considering running it as a hidden service and tor might be an issue, proxies could do the hard job for lazy people.

I mean look how it started, open source play money exchange for kind of shares in more open source thingies and we're not hurting anybody nor building another enron. this is a way of keeping score and like in a good novel, any similarities with real person is coincidence. the operators might get unpleasant mail one day and TOS are needed to keep their asses safe keeping our assets safe.

[Stephen Gornick]

the server it runs on is based in the US