4 ms·

Article I, Section 8: Says nothing about "other currencies," only the value of its own coined money and of foreign coin. I don't see it. To be clear, I'm devil

Article I, Section 8: Says nothing about "other currencies," only the value of its own coined money and of foreign coin. I don't see it. To be clear, I'm devil's advocate arguing that this probably shouldn't be an SEC case, not that he hasn't committed a prosecutable fraud. Securities always represent a legal obligation to something. A stock represents legal ownership of a legally recognized organization. If this guy wasn't making such binding obligations, as I suspect he wasn't, it isn't a securities issue - just fraud. Because applied this broadly, the SEC would therefore regulate as Securities Dealers: Ebay, Baseball Card publishers, and Blizzard's World of Warcraft.

rayiner 13y ago
I think the gap you're trying to carve out for bitcoin between U.S. money and "foreign coin" is a narrow and tenuous one. You've got a good point that, depending on how Shavers's investment was structured, he might not have been issuing anything that could be called a security. But he was billing it as a "bitcoin hedge fund" so if there was some sort of tradable interest in the fund that would in fact be a security.
- julespitt 13y ago
  I'll have to dig in to federal law again, but I'm pretty sure the law does carve it out that way. And it seems legally weird to me that I as an American citizen can mine "foreign coin" in the US. But I see where you're coming from. Actually I think there is a bit of a tradition of the SEC prosecuting people for purporting to sell securities, even if they legally weren't. So I'd say that should be the basis of prosecution as opposed to "Bitcoin = Money." I'm mostly just sore that the SEC hasn't bothered to prosecute MF Global principals, as that was outright, straightforward Securities Fraud.
  - mpyne 13y ago
    Possibly you could simply consider BTC a "non-state" foreign currency?
    - dragonwriter 13y ago
      Or you could just recognize that the Exchange Act is an exercise of Commerce Clause power and not Coinage Clause power, so, while whether bitcoin is "money" within the sense of the definition in the Exchange Act is an issue, it is an issue completely unrelated to whether it is "money" at all in the sense intended by the Coinage Clause, much less whether it is "foreign money" or some other kind.
dragonwriter 13y ago
The court ruling at issue [1] specifically addresses each of the legal elements of "security" and how they apply to the what Shaver is accused of doing. [1] http://www.archive.org/download/gov.uscourts.txed.146063/gov.uscourts.txed.146063.23.0.pdf http://www.archive.org/download/gov.uscourts.txed.146063/gov...
- julespitt 13y ago
  Thanks. Still think this ruling is weird, but it sure is interesting.

rayiner 13y ago

I think the gap you're trying to carve out for bitcoin between U.S. money and "foreign coin" is a narrow and tenuous one. You've got a good point that, depending on how Shavers's investment was structured, he might not have been issuing anything that could be called a security. But he was billing it as a "bitcoin hedge fund" so if there was some sort of tradable interest in the fund that would in fact be a security.

julespitt 13y ago
I'll have to dig in to federal law again, but I'm pretty sure the law does carve it out that way. And it seems legally weird to me that I as an American citizen can mine "foreign coin" in the US. But I see where you're coming from. Actually I think there is a bit of a tradition of the SEC prosecuting people for purporting to sell securities, even if they legally weren't. So I'd say that should be the basis of prosecution as opposed to "Bitcoin = Money." I'm mostly just sore that the SEC hasn't bothered to prosecute MF Global principals, as that was outright, straightforward Securities Fraud.
- mpyne 13y ago
  Possibly you could simply consider BTC a "non-state" foreign currency?
  - dragonwriter 13y ago
    Or you could just recognize that the Exchange Act is an exercise of Commerce Clause power and not Coinage Clause power, so, while whether bitcoin is "money" within the sense of the definition in the Exchange Act is an issue, it is an issue completely unrelated to whether it is "money" at all in the sense intended by the Coinage Clause, much less whether it is "foreign money" or some other kind.

dragonwriter 13y ago

The court ruling at issue [1] specifically addresses each of the legal elements of "security" and how they apply to the what Shaver is accused of doing. [1] http://www.archive.org/download/gov.uscourts.txed.146063/gov.uscourts.txed.146063.23.0.pdf http://www.archive.org/download/gov.uscourts.txed.146063/gov...

julespitt 13y ago
Thanks. Still think this ruling is weird, but it sure is interesting.