RT @EdanYago: Arguing with people on twitter has made me realise that no token can be a security - only the way tokens are sold or traded can be security. It's the agreement about the tokens, not the token themselves that are a security.
Good article. Thanks for sharing. It needs to be forwarded to our legislature at all levels. You may send to 1k+ legislators, but it only takes a few to change their thoughts. Once there is someone fighting for people holding crypto at least we'll begin to have a voice.
Excellent articles explaining the reality of regulators failing to understand this is not their world.
Decentralization is a new paradigm on which existing control instances have... No control. I don't say that we don't need regulation. ICO scams is something that needs regulation. But the existing tools are not fit for purpose and have no legal basis to be enforced. I am also wondering if any of the existing tool really works, refering to financial scandals, fraud and money laudering recently with Danske Bank. Apparently not.
I don't think so.
Firstly an exchange is a public forum for the completion of buy / sell orders. Automating those orders through the use of smart contracts doesn't change that. (p.s. etherdelta.com is clearly set up as an exchange)
Secondly the 'address' is a legal entity. As outlined in the white paper, the obfuscation of ownership is purely for privacy. It is not meant to bypass ownership laws. That ownership can be convoluted through mining pools / commercial mining / trusts / etc. but all of these entities have binding agreements that establish ownership of any assets they acquire.
Thirdly lack of regulation does not mean you can ignore legal obligations. A binding agreement is innocent until proven guilty. It is legal until proven illegal. Bitcoin may use maths to outline and fulfil it's binding agreement, but it is nowhere near the legally grey area that the article above makes it out to be.
You are falling into the trap the article talks about.
And no, an bitcoin address is not a 'legal entity'. It is merely the public key (or the cryptographic hash thereof) of a public key private key pair. That is all that it is.
Whatever entity that knows the corrisponding private key can make and sign new transactions, 'moving' the 'ownership' of some satoshi units around. And that entity could be a computer program running on, say, Raspberry PI, that has its own solar charged powerbank and prepaid SIM 4G cellular modem. All that inside a weatherproof enclosure installed, out of the way without anyone knowing or caring, on an antenna pole ontop of anonymous apartment building. Is that thing a 'legal entity'? No. Does the Bitcoin protocol and network care? No. Does the 4G telecomms provider care so long as the sim is topped up regularly? No.
> Thirdly lack of regulation does not mean you can ignore legal obligations.
Lack of regulation IS lack of legal obligations, otherwise there would not be a lack of regulation.
> A binding agreement
A binding agreement between whoom? That is precisely the question.
>You are falling into the trap the article talks about.
There is no trap. The article uses a lot of semantic bologna in an attempt to try and paint crypto as some magical unicorn that defies conventional understanding, but then fails to account that the concept of "property" and "ownership" are inherently infinitely flexible pragmatically and philosophically.
It would be like saying libel laws aren't real because there is no ownership of words or quotes, so we can't determine or prove someone said anything or that it's generating blah blah blah - but in reality we realize that when you say something, you both have ownership of that statement (and can challenge people who misquote you) and are liable for damages that may cause (libel, slander, etc). And most importantly, I can exchange this for material goods in many ways.
Taking this guys article to it's logical conclusion he's like, literally saying if someone were to take your phone, steal your private key, and steal your bitcoins, we could never really determine ownership or blame this party, because there isn't like, anything that exists, at all - ignoring that the possession and ability to utilize this non existent thing has some sort of market value that people are willing to exchange goods or services for.
The device you described was installed by a legal entity and is therefore the legal obligation of that legal entity. It does not just spontaneously appear on top of an anonymous apartment building.
>Lack of regulation IS lack of legal obligations, otherwise there would not be a lack of regulation.
Think of regulators as like referees in basketball. You can play basketball without a referee, but if you assault a member of the other team you still broke the law. You can't turn round to the arresting officer and claim that it was only part of the game.
The same thing goes with other laws such as fraud. Lots of industries are regulated to prevent fraud, but if an industry has no regulator that doesn't make fraud legal.
> A binding agreement between whoom? That is precisely the question.
A binding agreement between all participants. The participants are the legal entities. A wild lion is not controlled by anyone, but setting one loose on your neighbourhood would make you responsible as you participated in putting it there.
> Think of regulators as like referees in basketball.
Yeah and regulations are the rules they follow. However they are, if I may extend your metaphor, trying to referee a game that is not basketball and without any of the players actually asking them to.
So, that the regulation, that is the rules they follow does not exist for the game being played does not mean that they can try to shoe horn in another ruleset without the players asking them to.
That's exactly right: "properly constructed crypto systems do not involve “persons” or “entities” and do not represent a form of property. For this reason, they do not have any analogue in the traditional financial world, nor can they fall under financial regulation."
I don't get why it's entrenched in the SEC in the first place.