3 ms·

how does the law work when you did something before it was illegal? or why it's not the case here?

by gcb0 7y ago

ses1984 7y ago
https://en.m.wikipedia.org/wiki/Ex_post_facto_law https://en.m.wikipedia.org/wiki/Ex_post_facto_law
dmoy 7y ago
Depends on the country. The phrase you're looking for is "ex post facto". Doesn't fly in the US. That said, if I'm reading this article correctly, all that happened was that the SEC issued guidance on the legality (that is, not legal) of various forms of ICO. That doesn't mean ICOs were legal before, just that the SEC hadn't issued guidance about it. If your argument in court is "well nobody told me specifically that my exact actions were illegal, because your honor, I stabbed that guy while hopping on one foot on a Tuesday while it was raining", then the court tends to take a dim view of it. I don't know the case, but if Kik's argument was "well we sold a security before anyone told us specifically that this thing is actually a security", it might pan out in a similar fashion.
- nkrisc 7y ago
  Generally, you can say that if you don't know what you're doing is in fact legal, you should get some legal advice. Of course, this isn't practical in every situation. Sometimes you just have to take a chance if the stakes are low. However if what you're doing looks an awful lot like selling securities, but you don't actually know if it counts or not, I hope you'd get some advice on that matter. I'm curious if they did.
idlewords 7y ago
The SEC is a regulatory agency, not a lawmaking body. It can decide that something novel like an ICO breaks existing rules.
wmf 7y ago
The Securities Act of 1933, the Securities Exchange Act of 1934, and the 1946 Howey test predate cryptocurrencies.
captaincrowbar 7y ago
The SEC isn't a lawmaking body; its job is to decide whether somebody is breaking the law as it stands. So there is no question of "before it was illegal" or ex post facto law here: the question is whether cryptocurrencies (or some subset of them that meet specific criteria) are breaking existing law. If the SEC takes this case (or any of several similar ones) to court and wins, that doesn't mean the cryptocurrencies involved have suddenly become illegal: it means they were illegal all along, it just took law enforcement a while to catch them.
Lazare 7y ago
In general, if you did it before it was illegal, then you're fine! But note that is almost certainly 100% irrelevant here, because the SEC is arguing (very plausibly) that at least some forms of ICOs were always clearly illegal, or at any rate have been clearly illegal since at least 1946. The argument that you launched your ICO before <insert event>, so you should get a pass is unlikely to fly with anyone. Either it violates the laws or it didn't, and since the relevant laws haven't changed in decades, if it violated them, you're in trouble. (Also note that the financial industry is rife with people promoting scams and arguing they don't quite violate the law because of some technicality. This never works.)

how does the law work when you did something before it was illegal? or why it's not the case here?

by gcb0 7y ago

how does the law work when you did something before it was illegal? or why it's not the case here?

ses1984 7y ago

https://en.m.wikipedia.org/wiki/Ex_post_facto_law https://en.m.wikipedia.org/wiki/Ex_post_facto_law

dmoy 7y ago

Depends on the country. The phrase you're looking for is "ex post facto". Doesn't fly in the US. That said, if I'm reading this article correctly, all that happened was that the SEC issued guidance on the legality (that is, not legal) of various forms of ICO. That doesn't mean ICOs were legal before, just that the SEC hadn't issued guidance about it. If your argument in court is "well nobody told me specifically that my exact actions were illegal, because your honor, I stabbed that guy while hopping on one foot on a Tuesday while it was raining", then the court tends to take a dim view of it. I don't know the case, but if Kik's argument was "well we sold a security before anyone told us specifically that this thing is actually a security", it might pan out in a similar fashion.

nkrisc 7y ago
Generally, you can say that if you don't know what you're doing is in fact legal, you should get some legal advice. Of course, this isn't practical in every situation. Sometimes you just have to take a chance if the stakes are low. However if what you're doing looks an awful lot like selling securities, but you don't actually know if it counts or not, I hope you'd get some advice on that matter. I'm curious if they did.

idlewords 7y ago

The SEC is a regulatory agency, not a lawmaking body. It can decide that something novel like an ICO breaks existing rules.

wmf 7y ago

The Securities Act of 1933, the Securities Exchange Act of 1934, and the 1946 Howey test predate cryptocurrencies.

captaincrowbar 7y ago

The SEC isn't a lawmaking body; its job is to decide whether somebody is breaking the law as it stands. So there is no question of "before it was illegal" or ex post facto law here: the question is whether cryptocurrencies (or some subset of them that meet specific criteria) are breaking existing law. If the SEC takes this case (or any of several similar ones) to court and wins, that doesn't mean the cryptocurrencies involved have suddenly become illegal: it means they were illegal all along, it just took law enforcement a while to catch them.

Lazare 7y ago

In general, if you did it before it was illegal, then you're fine! But note that is almost certainly 100% irrelevant here, because the SEC is arguing (very plausibly) that at least some forms of ICOs were always clearly illegal, or at any rate have been clearly illegal since at least 1946. The argument that you launched your ICO before <insert event>, so you should get a pass is unlikely to fly with anyone. Either it violates the laws or it didn't, and since the relevant laws haven't changed in decades, if it violated them, you're in trouble. (Also note that the financial industry is rife with people promoting scams and arguing they don't quite violate the law because of some technicality. This never works.)