4 ms·

How is this going to get around CFTC rules on commodity derivatives markets?

by tt293 10y ago

zdkl 10y ago
> incorporated under the laws of Lithuania https://www.deribit.com/docs/terms-of-service-and-privacy-policy/ https://www.deribit.com/docs/terms-of-service-and-privacy-po... > hosted in France https://www.deribit.com/docs/ https://www.deribit.com/docs/ §1.9 Are they even subject to those rules?
- hackerboos 10y ago
  >Are they even subject to those rules? Derivative trading is regulated by https://www.lb.lt https://www.lb.lt
- cloudjacker 10y ago
  Naive enterprisers think they are exempt from US Securities laws using a 50 year old concept of jurisdiction inside their head That's always cute The CFTC is nice, the SEC will come down hard
  - zdkl 10y ago
    Yeah if I fall under a US orgs' jurisdiction as a EU citizen not conducting business with US citizens as far as I can ascertain, please explain where I'm naive? This isn't sarcasm, I can't think of a way the SEC would have any say over the exchange instead of it's potential US clients but would like to hear it
    - cloudjacker 10y ago
      > not conducting business with US citizens as far as I can ascertain If you make a reasonable [and effective] effort to not conduct business with US citizens then they will leave you alone. The mere fact that I can access Deribit undermines their exemption. But I've seen the SEC charge people with thinner rationale. For example, a eastern european guy in an alleged insider trading ring only traded CFDs on a European CFD exchange. The SEC claimed that he would know that the exchange would have to make corresponding trades and hedging trades in US equities and therefore he is culpable. If it makes you feel any better, that particular case hasn't reached a verdict yet and was insider trading, so if you feel comfortable dealing with extradition hearings to establish case law in a foreign country or simply not insider trading on US equities, then you'll be fine.
    - cloudjacker 10y ago
      Also, the SEC doesn't charge people that merely gain access to unregistered and noncompliant exchanges. So the "US clients" would never create liability for themselves. The majority of the SEC's compliance statutes are levied on businesses that offer any product labelled a security. This is a well distinction defined and quite broad and very difficult to play wordgames with. Its just unfortunate that registration is so expensive.
cloudjacker 10y ago
By existing for two weeks
jboggan 10y ago
You're really not. I created Bitfuture two years ago, which did exactly what this site purports to do. Derivabit did the same thing. Writing a platform that does this isn't that hard, getting legal approval is the main hurdle followed by having sufficient money in your market to make it liquid. Derivabit and I both decided to hang it up two years ago when Tera Exchange seemingly made it over the fence and got provisional CFTC approval, but that didn't stop them from being sued and settling [0]. Good luck staying off the radar. I think it's an insurmountable chicken-and-egg problem. If you are going to have enough money to fight your way through the inevitable jurisdictional battles you would have had to start this pre-Mt. Gox to get big enough to survive. On another note - no one actually wants to hedge their Bitcoin. They are buying it as a highly speculative instrument already, even the players with supposedly large transactional demand for it. 0 - http://www.cftc.gov/PressRoom/PressReleases/pr7240-15 http://www.cftc.gov/PressRoom/PressReleases/pr7240-15

How is this going to get around CFTC rules on commodity derivatives markets?

by tt293 10y ago

How is this going to get around CFTC rules on commodity derivatives markets?

zdkl 10y ago

> incorporated under the laws of Lithuania https://www.deribit.com/docs/terms-of-service-and-privacy-policy/ https://www.deribit.com/docs/terms-of-service-and-privacy-po... > hosted in France https://www.deribit.com/docs/ https://www.deribit.com/docs/ §1.9 Are they even subject to those rules?

hackerboos 10y ago
>Are they even subject to those rules? Derivative trading is regulated by https://www.lb.lt https://www.lb.lt
cloudjacker 10y ago
Naive enterprisers think they are exempt from US Securities laws using a 50 year old concept of jurisdiction inside their head That's always cute The CFTC is nice, the SEC will come down hard
- zdkl 10y ago
  Yeah if I fall under a US orgs' jurisdiction as a EU citizen not conducting business with US citizens as far as I can ascertain, please explain where I'm naive? This isn't sarcasm, I can't think of a way the SEC would have any say over the exchange instead of it's potential US clients but would like to hear it
  - cloudjacker 10y ago
    > not conducting business with US citizens as far as I can ascertain If you make a reasonable [and effective] effort to not conduct business with US citizens then they will leave you alone. The mere fact that I can access Deribit undermines their exemption. But I've seen the SEC charge people with thinner rationale. For example, a eastern european guy in an alleged insider trading ring only traded CFDs on a European CFD exchange. The SEC claimed that he would know that the exchange would have to make corresponding trades and hedging trades in US equities and therefore he is culpable. If it makes you feel any better, that particular case hasn't reached a verdict yet and was insider trading, so if you feel comfortable dealing with extradition hearings to establish case law in a foreign country or simply not insider trading on US equities, then you'll be fine.
  - cloudjacker 10y ago
    Also, the SEC doesn't charge people that merely gain access to unregistered and noncompliant exchanges. So the "US clients" would never create liability for themselves. The majority of the SEC's compliance statutes are levied on businesses that offer any product labelled a security. This is a well distinction defined and quite broad and very difficult to play wordgames with. Its just unfortunate that registration is so expensive.

cloudjacker 10y ago

By existing for two weeks

jboggan 10y ago

You're really not. I created Bitfuture two years ago, which did exactly what this site purports to do. Derivabit did the same thing. Writing a platform that does this isn't that hard, getting legal approval is the main hurdle followed by having sufficient money in your market to make it liquid. Derivabit and I both decided to hang it up two years ago when Tera Exchange seemingly made it over the fence and got provisional CFTC approval, but that didn't stop them from being sued and settling [0]. Good luck staying off the radar. I think it's an insurmountable chicken-and-egg problem. If you are going to have enough money to fight your way through the inevitable jurisdictional battles you would have had to start this pre-Mt. Gox to get big enough to survive. On another note - no one actually wants to hedge their Bitcoin. They are buying it as a highly speculative instrument already, even the players with supposedly large transactional demand for it. 0 - http://www.cftc.gov/PressRoom/PressReleases/pr7240-15 http://www.cftc.gov/PressRoom/PressReleases/pr7240-15