7 ms·

You're right, but some people seem to think cryptocurrency is magically exempt from securities laws because they really want them to be.

rolltiide 7y ago
> magically exempt from securities laws because they really want them to be. Well when the law gets changed that's exactly why and how it gets changed Last year, Wyoming has recategorized crypto assets into their own asset classes that is exempts them from state level securities law and others. Because it was obvious to the legislature and governor there that debating commodities, currency or securities status was ignorant. This year, Montana representatives have also reached the same conclusion. This year, Colorado's representatives have also reached the same conclusion. US Congress has a bill in committee mirroring these. It isn't a priority for the House as you might imagine. Holistic US re-imagining of these assets isn't relevant until the Federal legislature reaches consensus. A week ago Liechtenstein's legislature unanimously reached the same conclusion, which inherits limited consensus amongst all European Union/EEA/EFTA member states. So yes, people seem to think cryptocurrency is magically exempt from securities laws except the securities regulators that do not mirror the will of the people and are being steered by their legislatures, as designed. Courts lack latitude to lean any other way as well, until the legislature changes the law, which is happening.
- elchupanebre 7y ago
  SEC applies Howey Test to determine if a given security is an investment contract (security) and as such must be registered if offered to public. The test is quite simple: * It's an investment of money * There is an expectation of profits from the investment * The investment is in a common enterprise * Any profit comes from the efforts of the one offering the investment or a third party Cryptocurrency trading in general could be either but ICOs are clearly in the security category. I would be curious to see Wyoming etc. try to overturn Supreme Court's decision on SEC vs. Howey. If they are successful it will be the end of SEC and the public markets in the US as we know them. Re: Liechtenstein. They don't have a stock exchange so they don't have anything to lose.
  - rolltiide 7y ago
    Nobody is trying to overturn the Howey and more important subsequent Federal court decisions. The law in Congress will tell the SEC to stop wasting time on this and give a default status for digital asset issuers to exist in that isnt securities. Exactly as a handful of states have done.
  - rolltiide 7y ago
    Digital asset exchanges and issuers already exist in Liechtenstein. Kindly learn more about that. Things that are actually securities in liechtenstein are passportable to other European countries that do have stock exchanges. I think that was a very reductive and inaccurate comment on a multifaceted topic
    - elchupanebre 7y ago
      I said: "These is no stock exchange in Liechtenstein. They have nothing to lose." Your response: "Digital asset exchanges and issuers already exist in Liechtenstein." Why do you conflate the two? Is it intentional or due to lack of understanding? L. is trying to make money on ICOs because it does not have anything to lose with regular financial markets. > I think that was a very reductive and inaccurate comment on a multifaceted topic And I think that was an attempt to intentionally complicate a simple topic. Crypto can be used as an investment in a form of an ICOs and that should be registered. It can also be used as a currency instrument for (mostly illegal) transactions. When used as such it does not need to be registered.
      - rolltiide 7y ago
        I guess its not clear: Liechtenstein doesn't need a stock exchange because securities - stocks in particular - issued in Liechtenstein are already tradable in countries that do have stock exchanges. People sometimes do this because some their own country might have a withholding tax on capital or other uncompetitive nuances. You’re right in that they don't have one and have little to lose by creating digital securities and digital assets clarity. Liechtenstein’s law isn't only about cashing in on ICOs. It covers digital securities as well, which Europe’s other securities exchanges are not equipped to handle. There is only upside for them to provide a clear framework for digital securities and digital assets, making it easier for an issuer to choose and regulatory clarity for all participants We speaking the same language yet?
- cortesoft 7y ago
  I wasn't saying all crypto assets are necessarily securities.... just that these Telegram ones are.
anovikov 7y ago
I find it weird to even try to bring the ICO (which are the engine of fraud and should be anonymous, or otherwise you get to jail anyway) into legitimate space. Someone apparently lost their sense of limits. It's really difficult to comment on someone trying to make a fully legally compliant ICO and get surprised that it's difficult. Cryptocurrencies exist to move money out of China by circumventing their currency controls (pay miners in RMB locally, get crypto, send it to Hong Kong, exchange into USD). ICOs are a byproduct of that process and exist merely for scam. Again, i am not against scam. Scam is fine as long as you aren't getting caught - nearly everything in software in scam directly or indirectly. It's just trying to do scam in the open and getting surprising it's hard is what crosses my mental limits of acceptable chutzpah.
- rolltiide 7y ago
  Scams and circumventing capital controls are two uses cases. People want to use ICOs like they use Kickstarter: to fund a consumptive purchase. Digital assets have the capability of being consumptive. There isnt an obvious way to tell them apart, especially when there is a limited supply and exchange of money. People want there to be an easy way to distinguish business models and assets. So thats where experimenting with different legal theories helps.
- elchupanebre 7y ago
  Why downvotes? He is exactly right about crypto (>50% of volume?) being used to move money out of China.
  - anovikov 7y ago
    Yes, i agree that they were not invented for that purpose. I think most likely they were invented to make covertly funding U.S. spies abroad, without any paper trail, completely circumventing banking system, easier. It's just what they are mainly used now.
- Lucadg 7y ago
  Legal ICOs are STOs and not surprisingly they have a hard time getting off the ground.
spurdoman77 7y ago
There are cryptocurrencies like Bitcoin who dont clearly have any issuer. On the other hand crypto tokens like telegrams ton has a clear issue. The latter is clearly a security, for the first you first have to find the issuer which cant be found. Also I would classify ethereum as a security, because they created a token offering initially. After it was launched it was mined, but I understand majority was sold in the initial coin offering.
- akrymski 7y ago
  Satoshi is the issuer. Just because you can’t find the person who started a pyramid scheme doesn’t mean he doesn’t exist.
  - pm7 7y ago
    Just because he created software doesn't mean he issues BTC. Bitcoin by design doesn't grant him any control like that. Pyramid scheme? Do you even know what does it mean? If Bitcoin is pyramid scheme, so are many others things like stocks, currencies etc.
    - pergadad 7y ago
      Stock - you open part of a company Currency - a state-backed value in which government salaries and bills are paid and in which you pay your taxes BTC - a somewhat decentralised ledger where most coins are held by a very low number of people and where some of the early folks made massive amounts of money. Not backed out exchangeable by/for anything, with value purely coming from someone else being there to buy it. Great for dissidents, tax evaders and anything illegal - but not really any other case for its existence except among those with a radical distrust in government.
      - pm7 7y ago
        Stock - in theory yes, but look at how massively overpriced they are now. For example, do you think 123B capitalization of Netflix is appropriate to value of company itself? If there was no expectation of stock value going up indefinitely, would it really sell for current stock price? Currency - you said "state-backed" - backed by what? Forcing it's use by demanding taxes and paying salaries/bills is not "backed". BTC: "most coins are held by a very low number of people" - can you prove it? Consider that keys to many old account are probably lost. "Not backed out exchangeable by/for anything" - neither are most/all currencies. Even commodities like gold sell by much higher price that is "backed" by usage of these in industry. "value purely coming from someone else being there to buy it" - there is some value in being able to transmit/store value "Great for dissidents, tax evaders and anything illegal" - I would actually say cryptocurrencies are awful for these applications: there are little places where you can pay with them and many will require verifications (and will report significant transfers). Bitcoin blockchain is public allowing tracking of transaction. On the other hand, cash? Accepted anywhere, non-trackable and people are already experienced in money laundering. "but not really any other case for its existence except among those with a radical distrust in government" - distrust in government seems to be just healthy at the moment (for example, see civil forfeiture and Snowden).

rolltiide 7y ago

> magically exempt from securities laws because they really want them to be. Well when the law gets changed that's exactly why and how it gets changed Last year, Wyoming has recategorized crypto assets into their own asset classes that is exempts them from state level securities law and others. Because it was obvious to the legislature and governor there that debating commodities, currency or securities status was ignorant. This year, Montana representatives have also reached the same conclusion. This year, Colorado's representatives have also reached the same conclusion. US Congress has a bill in committee mirroring these. It isn't a priority for the House as you might imagine. Holistic US re-imagining of these assets isn't relevant until the Federal legislature reaches consensus. A week ago Liechtenstein's legislature unanimously reached the same conclusion, which inherits limited consensus amongst all European Union/EEA/EFTA member states. So yes, people seem to think cryptocurrency is magically exempt from securities laws except the securities regulators that do not mirror the will of the people and are being steered by their legislatures, as designed. Courts lack latitude to lean any other way as well, until the legislature changes the law, which is happening.

elchupanebre 7y ago
SEC applies Howey Test to determine if a given security is an investment contract (security) and as such must be registered if offered to public. The test is quite simple: * It's an investment of money * There is an expectation of profits from the investment * The investment is in a common enterprise * Any profit comes from the efforts of the one offering the investment or a third party Cryptocurrency trading in general could be either but ICOs are clearly in the security category. I would be curious to see Wyoming etc. try to overturn Supreme Court's decision on SEC vs. Howey. If they are successful it will be the end of SEC and the public markets in the US as we know them. Re: Liechtenstein. They don't have a stock exchange so they don't have anything to lose.
- rolltiide 7y ago
  Nobody is trying to overturn the Howey and more important subsequent Federal court decisions. The law in Congress will tell the SEC to stop wasting time on this and give a default status for digital asset issuers to exist in that isnt securities. Exactly as a handful of states have done.
- rolltiide 7y ago
  Digital asset exchanges and issuers already exist in Liechtenstein. Kindly learn more about that. Things that are actually securities in liechtenstein are passportable to other European countries that do have stock exchanges. I think that was a very reductive and inaccurate comment on a multifaceted topic
  - elchupanebre 7y ago
    I said: "These is no stock exchange in Liechtenstein. They have nothing to lose." Your response: "Digital asset exchanges and issuers already exist in Liechtenstein." Why do you conflate the two? Is it intentional or due to lack of understanding? L. is trying to make money on ICOs because it does not have anything to lose with regular financial markets. > I think that was a very reductive and inaccurate comment on a multifaceted topic And I think that was an attempt to intentionally complicate a simple topic. Crypto can be used as an investment in a form of an ICOs and that should be registered. It can also be used as a currency instrument for (mostly illegal) transactions. When used as such it does not need to be registered.
    - rolltiide 7y ago
      I guess its not clear: Liechtenstein doesn't need a stock exchange because securities - stocks in particular - issued in Liechtenstein are already tradable in countries that do have stock exchanges. People sometimes do this because some their own country might have a withholding tax on capital or other uncompetitive nuances. You’re right in that they don't have one and have little to lose by creating digital securities and digital assets clarity. Liechtenstein’s law isn't only about cashing in on ICOs. It covers digital securities as well, which Europe’s other securities exchanges are not equipped to handle. There is only upside for them to provide a clear framework for digital securities and digital assets, making it easier for an issuer to choose and regulatory clarity for all participants We speaking the same language yet?
cortesoft 7y ago
I wasn't saying all crypto assets are necessarily securities.... just that these Telegram ones are.

anovikov 7y ago

I find it weird to even try to bring the ICO (which are the engine of fraud and should be anonymous, or otherwise you get to jail anyway) into legitimate space. Someone apparently lost their sense of limits. It's really difficult to comment on someone trying to make a fully legally compliant ICO and get surprised that it's difficult. Cryptocurrencies exist to move money out of China by circumventing their currency controls (pay miners in RMB locally, get crypto, send it to Hong Kong, exchange into USD). ICOs are a byproduct of that process and exist merely for scam. Again, i am not against scam. Scam is fine as long as you aren't getting caught - nearly everything in software in scam directly or indirectly. It's just trying to do scam in the open and getting surprising it's hard is what crosses my mental limits of acceptable chutzpah.

rolltiide 7y ago
Scams and circumventing capital controls are two uses cases. People want to use ICOs like they use Kickstarter: to fund a consumptive purchase. Digital assets have the capability of being consumptive. There isnt an obvious way to tell them apart, especially when there is a limited supply and exchange of money. People want there to be an easy way to distinguish business models and assets. So thats where experimenting with different legal theories helps.
elchupanebre 7y ago
Why downvotes? He is exactly right about crypto (>50% of volume?) being used to move money out of China.
- anovikov 7y ago
  Yes, i agree that they were not invented for that purpose. I think most likely they were invented to make covertly funding U.S. spies abroad, without any paper trail, completely circumventing banking system, easier. It's just what they are mainly used now.
Lucadg 7y ago
Legal ICOs are STOs and not surprisingly they have a hard time getting off the ground.

spurdoman77 7y ago

There are cryptocurrencies like Bitcoin who dont clearly have any issuer. On the other hand crypto tokens like telegrams ton has a clear issue. The latter is clearly a security, for the first you first have to find the issuer which cant be found. Also I would classify ethereum as a security, because they created a token offering initially. After it was launched it was mined, but I understand majority was sold in the initial coin offering.

akrymski 7y ago
Satoshi is the issuer. Just because you can’t find the person who started a pyramid scheme doesn’t mean he doesn’t exist.
- pm7 7y ago
  Just because he created software doesn't mean he issues BTC. Bitcoin by design doesn't grant him any control like that. Pyramid scheme? Do you even know what does it mean? If Bitcoin is pyramid scheme, so are many others things like stocks, currencies etc.
  - pergadad 7y ago
    Stock - you open part of a company Currency - a state-backed value in which government salaries and bills are paid and in which you pay your taxes BTC - a somewhat decentralised ledger where most coins are held by a very low number of people and where some of the early folks made massive amounts of money. Not backed out exchangeable by/for anything, with value purely coming from someone else being there to buy it. Great for dissidents, tax evaders and anything illegal - but not really any other case for its existence except among those with a radical distrust in government.
    - pm7 7y ago
      Stock - in theory yes, but look at how massively overpriced they are now. For example, do you think 123B capitalization of Netflix is appropriate to value of company itself? If there was no expectation of stock value going up indefinitely, would it really sell for current stock price? Currency - you said "state-backed" - backed by what? Forcing it's use by demanding taxes and paying salaries/bills is not "backed". BTC: "most coins are held by a very low number of people" - can you prove it? Consider that keys to many old account are probably lost. "Not backed out exchangeable by/for anything" - neither are most/all currencies. Even commodities like gold sell by much higher price that is "backed" by usage of these in industry. "value purely coming from someone else being there to buy it" - there is some value in being able to transmit/store value "Great for dissidents, tax evaders and anything illegal" - I would actually say cryptocurrencies are awful for these applications: there are little places where you can pay with them and many will require verifications (and will report significant transfers). Bitcoin blockchain is public allowing tracking of transaction. On the other hand, cash? Accepted anywhere, non-trackable and people are already experienced in money laundering. "but not really any other case for its existence except among those with a radical distrust in government" - distrust in government seems to be just healthy at the moment (for example, see civil forfeiture and Snowden).