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SEC and FinCEN attacking counterparty & other crowdsales

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shawn_j

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http://cointelegraph.com/news/112811/us-regulators-one-two-punch-sec-probes-crowdsales-fincen-takes-aim-at-exchanges

Just saw this on reddit. Counterparty was mentioned so i thought i'd post it here as well as the counterparty forums. So, any thoughts on this? It's not a surprise that they would go after completely unregulated assets that look like securities. The crypto community now has a bit of legal help to respond to this.. So does this mean we're all going to jail for buying some storj coins???? Lol

Posted on October 28, 2014 at 2:12 PM

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• Cryptonaut

  

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  So does this mean we're all going to jail for buying some storj coins?

  lol no, worst case is that the guys behind storj (and these other projects) probably are going to face some legal trouble, possibly some big fines. I extremely doubt that they would try and track down and prosecute any customers or individual investors. Its just another step in the U.S pushing out tech businesses to other countries

  fortunately we have not done any crowdsales etc. with LTBcoin, so we are in the clear at least :p

  Posted on October 28, 2014 at 2:18 PM
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• Theogoodman

  

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  In theory all convertable virtual currency falls under regulation according to the FinCEN letter. Crowdsale or No Crowdsale.

  Posted on October 28, 2014 at 2:52 PM
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• shawn_j

  

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  @theogoodman In theory all convertable virtual currency falls under regulation according to the FinCEN letter. Crowdsale or No Crowdsale.

  What implications does that have for us?

  Posted on October 28, 2014 at 3:45 PM
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• jsea

  

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  I doubt they're "attacking" lol don't get it twisted "probing" is probably the better word.

  Coinfire, who I think might have broke the story about 100's of letters being sent, maybe somebody can confirm if it was Coinfire or not but for some reason their site was shutdown on the same day.

  We discussed this yesterday on LTB the topics are here

  http://letstalkbitcoin.com/forum/post/fincen-issues-two-administrative-rulings-regarding-virtual-currency

  http://letstalkbitcoin.com/forum/post/regarding-bitcoin-and-taxes-in-light-of-recent-sec-irs-investigation

  Posted on October 28, 2014 at 6:49 PM
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• shawn_j

  

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  @jsea

  I doubt they're "attacking" lol don't get it twisted "probing" is probably the better word.

  Coinfire, who I think might have broke the story about 100's of letters being sent, maybe somebody can confirm if it was Coinfire or not ? who coincidentally, for some reason had their site shutdown on the same day.

  We discussed this yesterday on LTB the topics are here

  http://letstalkbitcoin.com/forum/post/fincen-issues-two-administrative-rulings-regarding-virtual-currency

  http://letstalkbitcoin.com/forum/post/regarding-bitcoin-and-taxes-in-light-of-recent-sec-irs-investigation

  ok, thanks, just read it.

  I think it's a clear sign of stiff regulation brewing for exchanges and payment processors and possibly those that use the services. I don't think it should have an effect on incentive reward tokens except when perhaps they are being used for asset trading, stocks or speculative investment schemes or perhaps when exchanged for fiat via a payment processor.

  Like being traded on an exchange, if the tokens are "convertable" then it should fall under regulation. The company that issues them might need a money transmitter license, in the USA. If this means convertable to USD or convertable to BTC is a bit unclear but it seems that even converting to BTC is enough.

  we can create an asset for 5 xcp. does that put us at any risk as the creator? also, the counterparty exchange is decentralized. how do they target an "owner" like they could with a company?

  Posted on October 28, 2014 at 7:14 PM
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• Cryptonaut

  

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  @shawnj we can create an asset for 5 xcp. does that put us at any risk as the creator? also, the counterparty exchange is decentralized. how do they target an "owner" like they could with a company?

  They cant, unless they can link your identity to a specific address

  Posted on October 28, 2014 at 7:22 PM
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• jsea

  

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  @cryptonaut

  So does this mean we're all going to jail for buying some storj coins?

  lol no, worst case is that the guys behind storj (and these other projects) probably are going to face some legal trouble, possibly some big fines. I extremely doubt that they would try and track down and prosecute any customers or individual investors. Its just another step in the U.S pushing out tech businesses to other countries

  fortunately we have not done any crowdsales etc. with LTBcoin, so we are in the clear at least :p

  Why do you think that's the worst case it looks like Theogoodman;s theory is quite probably "all convertable virtual currency falls under regulation"

  Whereas I would word differently. I kinda agree and have said before that pretty much any scheme that could be construed as falling under financial sector regulation might find itself under the microscope of a regulatory body or industry watchdog. Particularly, in my opinion, speculative investment schemes and others such Financially manged type funds etc.. Cryptonaut Speculate.XCP is one example http://letstalkbitcoin.com/forum/post/speculatexcp-weekly-payouts

  I wouldn't dismiss it as FUD regulations are about protection, it's serious business when people in black sun glasses are involved and could have wider far reaching implications. Might surprise a few people.

  Posted on October 28, 2014 at 7:27 PM
  Last Edited: October 28, 2014 at 7:29 PM
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• shawn_j

  

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  They cant, unless they can link your identity to a specific address

  many people do have public bitcoin/CP/etc addresses in their signature, so I'm sure more than a few identities will be paired. personally I don't trust my security knowledge to know that I'm anonymous or that I could avoid leaving any blockchain-based evidence of my transactions. but then again I highly doubt that I'm on anyone's radar. I'm thinking more in a general sense, that anybody could face fines or worse just for creating an asset. this seems to fall in line with bitlicense in that it treats any asset as monetary in nature, even those that are used for fun, entertainment, data (like documents), or even just for testing purposes.

  Posted on October 28, 2014 at 7:35 PM
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• jsea

  

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  @shawnj

  They cant, unless they can link your identity to a specific address

  many people do have public bitcoin/CP/etc addresses in their signature, so I'm sure more than a few identities will be paired. personally I don't trust my security knowledge to know that I'm anonymous or that I could avoid leaving any blockchain-based evidence of my transactions. but then again I highly doubt that I'm on anyone's radar. I'm thinking more in a general sense, that anybody could face fines or worse just for creating an asset. this seems to fall in line with bitlicense in that it treats any asset as monetary in nature, even those that are used for fun, entertainment, data (like documents), or even just for testing purposes.

  You're correct, full anonymity is difficult and raises question, disclosure is about building trust, partial anonymity isn't so questionable, If you've seen Tropical Thunder you know what I'm talking about when I say there's a storm brewing.

  Posted on October 28, 2014 at 7:48 PM
  Last Edited: October 28, 2014 at 7:52 PM
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• shawn_j

  

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  @jsea

  You're correct, full anonymity is difficult and raises question, disclosure is about building trust, partial anonymity isn't so questionable, If you've seen Tropical Thunder you'll know what I'm talking about when I say there's a storm brewing.

  if maidsafe delivers on its promises, then would a 100% maidsafe environment remove all evidence trails & identity pairings? even if it can, I wouldn't want to feel like a criminal because I had to create a small, inconsequential asset for some benign reason.. and I wouldn't want any high-profile projects, like Pat Byrn's medici, to come under any fire either.

  Posted on October 28, 2014 at 7:55 PM
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