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Sporticus

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  1. Why don't you try reading and figuring it out for yourself, you doorknob.
  2. https://www.thinkadvisor.com/2020/06/26/sec-charges-lobbyist-jack-abramoff-crypto-firm-and-ceo-with-fraud/ Yeah, Abramoff's scheme is in many ways just like Ripple's scam, except that old Abe had just gotten out of the clinker for some other racketeering matter. Oh yeah and Abe had not even built a token with the $2 MM + he had filched investors out of, at least Ripple has a crap coin to promote, which is illegal per se. There is a way to do this, but not as these scammers like Katz, Garlinghouse, Larson, the Telegram Bros, and Abramoff have done. The SEC and DOJ already had their eye on those other losers. The Riptards have bought their way out of jail using our jack. We relied on old Brad and Joel and the other yahoos at Ripple when they kept on saying it was not a security and that they were "regulated." then Coinbase slipped up and quashed the listing rumor in early 2018 and it all began to rip, Ripple and tumble. Now we have this garbage pile of steaming funny money where it was three years ago at .17 and Bitcoin and the crypto market have left it far behind. The problem with the scammers like Abramoff and the ones at Ripple have had is they were substituting their conflicted judgment that their operations were legal instead of waiting for for a court of law or an agency determination. Every time a Ripple employee has made a statement about the legality of their insect token, or expended their lying breath defending Ripple's tarnished integrity, they are fleecing another retail customer and breaking the law by supporting false premises “The defendants ( you could substitute the language from the indictment, RIPPLE LABS) also “deceived investors by, among other things, making false and misleading statements in press releases, social media posts," This brings me around to a fundamental question which I keep posing and while everyone of you Riptard shills will respond to every other minutiae unrelated to any legal issues, I never get a clear answer on who is running or propping up this propaganda machine? Who the hell is funding XRP Chat and all the crap the Ripple agents and employees have been putting up here touting the legality of this crap coin and conflating Ripple Labs successes with those of XRP? All the "lockup" pump and hype that HODOR and the rest of the peanut gallery have spewed is actionable in the same manner as in dear old dumb and crooked Abe's case. HODOR was smart in getting out of the lime light if one considers what he was doing was essentially to promote fraudulently, an unregistered security. He made all kinds of speculations and conjectures which got old Abe in crap-loads of deep doo doo. (“Many of these false and misleading statements were also disseminated through paid articles that Abramoff arranged and helped write, which purported to be written by independent authors rather than disclosing that they were paid promotions of NAC,” the SEC alleged.) Why hasn't Ripple been brought to task by the DOJ? The fact is the DOJ is horrifically corrupt right now and the fat jowled AG (BARR who should be disBARRed and put behind BARRs) and the fat assed and fat faced, orange jowled POTUS, will sell our US government to the highest bidder. Rip-off has lots of corruption money it has duped out of us to throw at the RICO ring which has become the US DOJ and POTUS at their highest levels. COVIDIOT thinks he is the sovereign and gifts all of his sycophants and supplicants with passes . Especially those who grease his filthy palm like the Riptard RICO ring. I do not recall how much Hype that Ripple shoveled out about its being on some task force or the other, that they were working with governments, and it was repeated over and over again. It still is. ('...and other promotional materials regarding the status of the technology and governmental agencies’ interest in using AML BitCoin in their payment systems,” according to the SEC.") But we never hear from the SEC in the case of Ripple, neither good or bad. Because the SEC expresses itself with a civil suit, a DOJ indictment, or a no action letter. If Ripple were in any way a law abiding company it would have removed doubt about its security status by getting a no action letter. There have been two given out. Turnkey Jet and Pocketful of Quarters. This is how it is done and for Ripple not to have gotten one years ago is simply inexcusable and flies in the face of their claims to being law abiding. Until they get an SEC no action letter they remain an unregistered and illegal security. https://www.google.com/search?q=tnurnkey+jet+no+action+letter&rlz=1C1EJFC_enUS806US806&oq=&sourceid=chrome&ie=UTF-8 https://www.sec.gov/corpfin/pocketful-quarters-inc-072519-2a1 The reason Ripple does not get a no action position is because there is no way it will pass the SEC tests. That SEC FinHUB test is here below. There is simply no way that you can get the garbage ecosystem cobbled together by Ripple to pass this. They will not be able to retrofit it either. The only way Ripple can succeed is by buying their way through and using smoke and mirrors to navigate their great many criminal and civil violations. The first mover advantage is no advantage in tech. Otherwise we would still be flying in planes that Orville and Wilbur Wright built. Ten years is an eternity in tech. The fact is Ripple copied a failed model, Bitcoin and never did anything to dis-intermediate. The validator nodes do not do sufficient decentralization to effect a non-securities interpretation. Ripple still controls billions on billions of tokens. There are many other reasons the model is a failure, and it is not worth my time to do the complete analysis. BUT THE TEST IS RIGHT HERE>>>>>>> >>>>>>>https://www.sec.gov/corpfin/framework-investment-contract-analysis-digital-assets IF YOU CAN READ LAW, YOU MIGHT GET THIS. RIPPLE HAS NOT A SNOW BALL'S CHANCE IN HELL OF HOLDING IT TOGETHER THROUGH THE FIN HUB TEST. Ripple has been looking for some grandfather clause approach and is relying on the statute of repose in the Zakinov case. https://www.lexisnexis.com/community/case-opinion/b/case/posts/zakinov-v-ripple-labs-inc That "STRATEGY" is a technicality which does nothing to obviate that XRP is a security controlled and promoted by Ripple. The trial court has yet to rule on these issues and it will be strung out and in the meantime the risk of loss will be shoved over to the XRP hodlers the longer it takes and the greater uncertainty causes it to bleed in value like it has done since Jan 2018. If Ripple tries to do an IPO, it will need to make full disclosure and answer all these questions about the liabilities presented by its illegal securities sales. Here is more from the indictment in Abramoff that stands for the proposition that disclosures are required when a company promotes a token. and other promotional materials regarding the status of the technology and governmental agencies’ interest in using AML BitCoin in their payment systems,” according to the SEC. “Many of these false and misleading statements were also disseminated through paid articles that Abramoff arranged and helped write, which purported to be written by independent authors rather than disclosing that they were paid promotions of NAC,” the SEC alleged.“ I am mad at myself because I let these Rip-tard hooligans rip me off and I should have sold in January 2018. Instead I held on and believed them. Over the past two years, while this dumpster fire burned down to nothing I have educated myself on how I could have been so stupid. The securities law requires an issuer like Ripple to make disclosures to overcome "informational asymmetry". Ripple had a duty to tell us all the things I am telling you now, even if the matter had not been addressed in the details it has subsequently by the SEC in its shifting policy and in other court cases like Telegram, EOS, BTCE, and Abramoff. The SEC Acts and the SCOTUS case law in Howey and the many no action positions were available to Ripple and they have denied steadfastly that they are a security, even though that is an outrageous lie and fraudulent claim given the exceptionally clear circumstances. The Riptard crew has been all over the board in claiming they are in some way exempt from securities registration and they have continued their networked backed PONZI ICO using the proceeds from the sale of unregistered securities XRP to build, defend in the courts and media and to promote their platform by selling XRP. I know most all of you COVFEFE and ZERP cultists have filled yourself with this XRP Chat garbage propaganda and you think that you are legal experts and you want to challenge and contort matters to suit your ignorance, but unless you have a US law degree, have passed the bar of a state. have been admitted to the federal bar, and have practiced before the SEC on these issues, you are best served to keep your ignorant drivel to yourself. I once relied on you XRP Chatters for information to my great detriment. That was my bad and it cost me a lot of money. The tech has nothing to do with any excuse for giving value to the ecosystem, except it is a negative and that it is configured in such a way that it is hopelessly illegal. But there is very little that comes out of this collective crap pile in XRP Chat that passes for real knowledge. It is just a gang of COVIDIOTS at a Trump ralley drinking the Chlorox. This echo chamber with its basic logical and legal fallacies and foolishness is best described by the Dunning-Kruger effect. In the field of psychology, the Dunning–Kruger effect is a cognitive bias in which people with low ability at a task overestimate their ability. It is related to the cognitive bias of illusory superiority and comes from the inability of people to recognize their lack of ability. Without the self-awareness of metacognition, people cannot objectively evaluate their competence or incompetence. So that's it. I wasted my time on most of you and some of you can read and determine for yourself. These are primary sources cited here and unless you have a modicum of legal skill or training, you will misinterpret in favor of your rude and unschooled bias. If you have enough grey matter and savvy you might get through it, but I am not really confident. Getting most of you rubes to get this this is about like trying to get a pig to sing soprano and wear lipstick. I will not argue with any of you. Unless you are qualified to make a rational argument by virtue of a law license and securities or corporate practice.
  3. Yeah, Abramoff's scheme is in many ways just like Ripple's scam, except that old Abe had just gotten out of the clinker for some other racketeering matter. Oh yeah and Abe had not even built a token with the $2 MM + he had filched investors out of, at least Ripple has a crap coin to promote, which is illegal per se. There is a way to do this, but not as these scammers like Katz, Garlinghouse, Larson, the Telegram Bros, and Abramoff have done. The SEC and DOJ already had their eye on those losers. We relied on old Brad and Joel and the other yahoos at Ripple when they kept on saying it was not a security and that they were "regulated." then Coinbase slipped up and quashed the listing rumor in early 201 and it all began to rip, Ripple and tumble. . The problem with that the scammers Abramoff and the ones at Ripple have had is they were substituting their conflicted judgment that their operations were legal instead of waiting for for a court of law or an agency determination. Every time a Ripple employee makes a statement about the legality of their insect token, and defending Ripple's tarnished integrity, they are fleecing another retail customer and breaking the law in my opinion. “The defendants (RIPPLE LABS) also “deceived investors by, among other things, making false and misleading statements in press releases, social media posts," This brings me around to a fundamental question which I keep posing and while everyone of you Riptard shills will respond to every other minutiae unrelated to any legal issues, I never get a clear answer. Who the hell is funding XRP Chat and all the crap the Ripple agents and employees have been putting up here touting the legality of this crap coin and conflating Ripple Labs successes with those of XRP? All the "lockup" pump and hype that HODOR and the rest of the peanut gallery have spewed is actionable in the same manner as in dear old dumb and crooked Abe's case. HODOR was smart in getting out of the lime light if one considers what he was doing was essentially to promote fraudulently an unregistered security. He made all kinds of speculations and conjectures which got old Abe in crap-loads of deep doo doo. (“Many of these false and misleading statements were also disseminated through paid articles that Abramoff arranged and helped write, which purported to be written by independent authors rather than disclosing that they were paid promotions of NAC,” the SEC alleged.) Why hasn't Ripple been brought to task by the DOJ? The fact is the DOJ is horrifically corrupt right now and the fat jowled AG (BARR who should be disbarred and put behind Barrs) and the fat assed and fat orange jowled POTUS will sell our US government to the highest bidder. Rip-off has lots of corruption money it has duped out of us to throw at the RICO ring which has become the US DOJ and POTUS at their highest levels. COVIDIOT thinks he is the sovereign and gifts all of his sycophants and supplicants with passes . Especially those who grease his filthy palm. I do not recall how much Hype that Ripple shoveled out about their being on some task force or the other, that they were working with governments, and it was repeated over and over again. It still is. ('...and other promotional materials regarding the status of the technology and governmental agencies’ interest in using AML BitCoin in their payment systems,” according to the SEC.") But we never hear from the SEC in the case of Ripple, neither good or bad. . Because the SEC will only give you a civil suit, a DOJ indictment or a no action letter. If Ripple were in any way a law abiding company it would have removed doubt about its security status by getting a no action letter. There have been two given out. Turnkey Jet and Pocketful of Quarters. This is how it is done and for Ripple not to have gotten one years ago is simply inexcusable and flies in the face of their claims to being law abiding. https://www.google.com/search?q=turnkey+jet+no+action+letter&rlz=1C1EJFC_enUS806US806&oq=&sourceid=chrome&ie=UTF-8 https://www.sec.gov/corpfin/pocketful-quarters-inc-072519-2a1 The reason Ripple does not get a no action position is because there is no way it will pass the tests. That SEC FiNHUB test is here below. There is simply no way that you can get the garbage ecosystem cobbled together by Ripple to pass this. They will not be able to retrofit it either. The only way Ripple can succeed is by buying their way through and using smoke and mirrors to navigate their great many criminal and civil violations. The first mover advantage is no advantage in tech. Ohterwise we would still be flying in planes that Orville and Wilbur Wright built. Ten years is an eternity in tech. The fact is Ripple copied a failed model, Bitcoin and never did anything to dis-intermediate. The validator nodes do not do sufficient decentralization to effect a non-securities interpretation. Ripple still controls billions on billions of tokens. There are many other reasons the model is a failure, and it is not worth my time to do the complete analysis. BUT THE TEST IS RIGHT HERE>>>>>>> >>>>>>>https://www.sec.gov/corpfin/framework-investment-contract-analysis-digital-assets IF YOU CAN READ LAW, YOU MIGHT GET THIS. RIPPLE HAS NOT A SNOW BALLS CHANCE IN HELL OF HOLDING IT TOGETHER THROUGH THE FIN HUB TEST. Ripple has been looking for some grandfather approach and is relying on the statute of repose in the Zakinov case. https://www.lexisnexis.com/community/case-opinion/b/case/posts/zakinov-v-ripple-labs-inc That "STRATEGY" is a technicality which does nothing to obviate that XRP is a security controlled and promoted by Ripple. The trial court has yet to rule on these issues and it will be strung out and in the meantime the risk of loss will be shoved over to the XRP hodlers the longer it takes and the greater uncertainty causes it to bleed in value like it has done since Jan 2018. and other promotional materials regarding the status of the technology and governmental agencies’ interest in using AML BitCoin in their payment systems,” according to the SEC. “Many of these false and misleading statements were also disseminated through paid articles that Abramoff arranged and helped write, which purported to be written by independent authors rather than disclosing that they were paid promotions of NAC,” the SEC alleged.“ I am mad at myself because I let these hooligans rip me off and I should have sold in January 2018. Instead I held on and believed them. Over the past two years, I have educated myself. The securities law issue involves "informational asymmetry". Ripple had a duty to tell us all the things I am telling you now, even if the matter had not been addressed in the details it has subsequently by the SEC and in other court cases like Telegram, EOS and Abramoff. The SEC Acts and the SCOTUS case law in Howey and the many no action positions were available to Ripple and they have denied steadfastly that they are in some way exempt and have continued their networked backed PONZI using the proceeds from the sale of unregistered securities XRP to build and promote their platform. I know most all of you COVFEFE and ZERP cultists have filled yourself with this XRP Chat garbage propaganda and you think that you are legal experts and you want to challenge and contort matters to suit your ignorance, but unless you have a US law degree and have passed the bar and have practiced before the SEC on these issues, you are best served to keep your ignorant drivel to yourself. I once relied on you idiots for information to my great detriment. That was my bad and it cost me a lot of money. But there is very little that comes out of this collective crap pile in XRP Chat that passes for real knowledge. It is just a gang of COVIDIOTS at a Trump ralley drinking the Chlorox. These are basic logical fallacies and foolishness which is best described by the Dunning-Kruger effect. In the field of psychology, the Dunning–Kruger effect is a cognitive bias in which people with low ability at a task overestimate their ability. It is related to the cognitive bias of illusory superiority and comes from the inability of people to recognize their lack of ability. Without the self-awareness of metacognition, people cannot objectively evaluate their competence or incompetence. So that's it. I wasted my time on most of you and some of you can read and determine for yourself. These are primary sources cited here and unless you have a modicum of sill you will misinterpret in favor of your rude and unschooled bias. If you have enough grey matter and savvy you might get through it, but I am not really confident. Getting most of you rubes to get this this is about like trying to get a pig to sing soprano.
  4. You are that simple aren't you?
  5. Ripple XRP has been used for crime like all the other garbage and illegal cryptos. It is really time to dump this entire racketeering and terrorism model for something with actual societal utility. There is no way Ripple and XRP can comply with the present model. They will need an escrow or to be able to reverse transactions which is the chief reason cited by Nakamoto in his insipidly simpleton legal analysis found in his whitepaper. Bitcoin WP . Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model. Completely non-reversible transactions are not really possible, since financial institutions cannot avoid mediating disputes. The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions, and there is a broader cost in the loss of ability to make non-reversible payments for nonreversible services. With the possibility of reversal, the need for trust spreads. Merchants must be wary of their customers, hassling them for more information than they would otherwise need. A certain percentage of fraud is accepted as unavoidable. These costs and payment uncertainties can be avoided in person by using physical currency, but no mechanism exists to make payments over a communications channel without a trusted party. What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party. Transactions that are computationally impractical to reverse would protect sellers from fraud, and routine escrow mechanisms could easily be implemented to protect buyers. In this paper, we propose a solution to the double-spending problem using a peer-to-peer distributed timestamp server to generate computational proof of the chronological order of transactions. The system is secure as long as honest nodes collectively control more CPU power than any cooperating group of attacker nodes.
  6. So in the meantime they have been breaking the law for the past seven years and the very nature of their crummy tech does not allow them to properly deal with the Travel Rule. Garbage tech and garbage security scam run by a bunch of losers and Trump suck ups. Covfefe company.Go home to Wilma, Fred.
  7. EXACTLY! Yeah, Ripple paid the FinCEN fine for what amounts to a reckless driving no contest and they paid the fine with our money invested in Ripple/XRP. Ripple has been using investments into XRP to promote and to build their PONZI platform. To claim that paying a FinCEN fine as exoneration to continue with their Ponzi scheme, is like claiming paying the reckless driving ticket is license to steal cars and drive drunk. That is the kind of excuse Bernie Madoff and Ripple and all you Chlorox drinkers used to make off with all other people's money. Ponzi scams and schemers all of them. The really screwy thing is that Ripple still does not adhere to the travel rule. A Bank Secrecy Act (BSA) rule [31 CFR 103.33(g)]—often called the “Travel” rule—requires all financial institutions to pass on certain information to the next financial institution, in certain funds transmittals involving more than one financial institution. But the Covidiots on this site, do not concern themselves with such technicalities.
  8. This is what should be happening to those on this web site and at Ripple who have pumped this useless trash XRP. https://www.justice.gov/usao-ndca/pr/lobbyist-jack-abramoff-and-ceo-rowland-marcus-andrade-charged-fraud-connection-5
  9. I was referring to ZERPBOX, which is just a rip off of the OG Troll Box of BTCE. If NickB is on here he is demonstrating some very ignorant regard for the securities laws in the United States pertaining to control and promotion. The real question is who the F pays for this web site? Do you know Einstein? Who pays for this Ripple propaganda machine? This is not free to run such a web site. Who pays for it? I knew that BTCE paid for the Troll Box. But who pays for this trap?
  10. You are another one of those sheep. OK Hint: Nick B.
  11. There is no intellectual honesty, candor or spontaneity here. The original troll box of BTCE was the place you could say anything and in consequence, you could learn things. This is the only dedicated service like this touting a crypto of which I am aware and of course it has been funded by Ripple. When the securities issues were raised in law suits, all the Ripple commentators ceased coming in here. Of course Ripple controls the admins in this crappy propaganda machine. It is really a continuation of a security scam and heavily censored. .
  12. The company I work for has gone about conforming to best practices in a highly regulated area involving event, payment and tracking by successively obtaining clearances from the concerned state and federal regulatory agencies. After three years of working with lawyers and regulators in several agencies, we submitted a bid just this last week. Our approach begins with use case, law and then you apply the tech. In determining the law, you allow the agency to pick apart your design and as a function of law practice with close tech consultation, adjust the protocol to their input. recognize that there are very oftentimes multiple jurisdictions and there are layers of concerned agencies which should be included as stakeholders Not until you have the regulatory approach down solid, do you finally apply the tech. (There is a well-known book on what not to do in kicking off these startups. " Lean Startup.") You do best by combining subject matter experts, specialized lawyers, data architects and coders. You need either a very good idea to attract these skill sets or a very deep pocket to pay for the expertise. The mistake of proceeding with the tech design first does not seem to always work. In fact more and more it has demonstrated a shortsightedness that leads to insolvent disaster. Witness Libra which is foundering even with the Swiss Finma. "Moving fast and breaking things" the mantra of the first innovators has not been successful with the current more tech savvy and tech hostile regulatory environment. This lawless and reactionary approach is a good way to go broke yourself in the best scenario and if you look at the legal challenges faced by Telegram and Ripple, it is really stupid and unfair to investors.
  13. Ripple will live or die by the safe harbor provision that is being litigated in the US Dist Ct.ND CA case and the fact of public distribution is unclear. There is really no difference between Telegram and Ripple, except Ripple got a head start.
  14. The dude was rude to me and payback time. He claims to understand US securities laws and he criticizes those who actually do. He is misleading and fraudulent. The fact is completely uninformed idiots hold forth in this chat. Read the substance of what the Court opined and a registered broke dealer wrote, which I quoted. That is the message. I am simply the messenger. Crypto as we know it, is a PONZI scheme and the 3000 crap coins are violations under United States laws. They are all financial crimes used to sell unlawful securities and violate banking secrecy and money laundering laws.
  15. BEND OVER ALL XRP HODLERS! Below is the Order for those who know how to read law, (that excludes the semi-literate and one brain cell capacity Tiny Account). We will see how Ripple overcomes the next layer of issues pertaining to the securities characterization of XRP. The court's ruling is in red. . Plaintiff Adequately Alleged the Federal Securities Claim Against Defendants Title 15 U.S.C § 77l(a)(1) provides the following in relevant part: “Any person who— (1) offers or sells a security in violation of section 77e of this title, or . . . shall be liable, subject to subsection (b), to the person purchasing such security from him . . .” 15 U.S.C § 77l(a)(1). Title 15 U.S.C § 77e(a)(1) provides the following: “Unless a registration statement is in effect as to a security, it shall be unlawful for any person, directly or indirectly— . . . (1) to make use of any means or instruments of transportation or communication in interstate commerce or of the mails to sell Ripple lost on the main issues: that XRP is not a security and the three year statute of repose issue as to when their security was first offered to the general public, which was Ripple's strongest line of defense. https://www.courtlistener.com/recap/gov.uscourts.cand.334410/gov.uscourts.cand.334410.85.0.pdf B. Analysis 1. Plaintiff’s Claims under the Federal Securities Laws Are Not Barred by the Statute of Repose Here, whether Title 15 U.S.C § 77(m)’s three-year statute of repose bars plaintiff’s federal securities law claims depends upon two distinct issues: (1) the controlling rule for measuring when the statute of repose commences for purpose of Title 15 U.S.C § 77l(a)(1); and (2) when the alleged (or judicially noticeable) sales of XRP first qualified as a “bona fide” public offering within the meaning of Title 15 U.S.C. § 77l(a)(1). b. The First Offered Rule Does Not Bars Plaintiff’s Federal Securities Claims Having decided the controlling rule for determining when the statute of repose commences, the next issue is its application. Based on the allegations and judicially noticeable facts, the court concludes that defendants did not make their first bona fide public offering of XRP before August 5, 2016 (three years prior to plaintiff’s filing of his federal securities claims in this action on August 5, 2019) It really does not mean much though because Ripple simply follows slavishly Bit Coin and has no genuine use case or value impacting its crypto market share, save speculation. This article below is written by a professional who understands the securities problems of cryptos like Ripple. https://www.coindesk.com/securities-law-helped-build-modern-capitalism-crypto-should-embrace-it THE FOLLOWING IS WRITTEN BY: Bruce Fenton is CEO of Chainstone Labs, which owns Atlantic Financial, the Satoshi Roundtable and Watchdog Capital, an SEC registered broker-dealer. In 1602, the Dutch East India Company launched a new structure of ownership called the joint stock company. For the first time, investors could own and trade small pieces of businesses called shares. This invention changed the world. Securities are one of the most crucial components to the operation of our global economy. Many types of securities have become heavily regulated over the last century. This isn’t a discussion in favor of the regulations (many are overly burdensome and outdated) but it does point to the importance of securities as a structure. The logistics of operating and fundraising for public companies is hard work. Fundraising is a process with lots of friction, compliance requirements and paperwork. The ongoing operation of a public company can have complex management issues. For large companies, this is typically handled by trusted third parties like DTCC, which provides clearing and depository services. If we can make this easier, it could have a massive positive impact. Distributed ledgers allow us to replace trusted third parties and have a blockchain manage the ledger. This makes securities move more easily and quickly. The invention of distributed ledgers, bitcoin (BTC) and blockchains is not the same as the invention of the joint stock company and Dutch East India Co. It’s not a new economic model; it’s a new technology and tool that improves how ledgers work. The invention is more similar to the printing press, the computer or the internet. It’s a big deal, but it’s not an invention that changes existing laws of economics. Just as bitcoin doesn’t change the properties of money but finds a way to improve on money, tokens don’t change the fundamentals of investing; they improve on the existing inventions. Think of it as an evolution from paper stock certificates to something better than paper but where the fundamentals of the underlying legal structure stay the same. Just because we invented a better form of paper doesn’t mean we should scrap the most productive and proven legal instrument in history for an unproven model of widgets with no terms. Instead of reinventing the bicycle, let’s improve on a proven model and update the Dutch East India Co. model for a new century. In 2016, when I saw some of the first of the new wave of initial coin offerings (ICO), I had two simultaneous reactions: 1. Wow, this is amazing. 2. Wow, this is in violation of securities regulations. I’ve been registered in the securities business in some form for 28 years now. Since I was 19 and done billions of dollars in transactions. So I knew it was possible to comply with the regulations. Rather than trying to avoid being a security, I figured the right choice for most companies would be to simply embrace being a security and focus on complying with regulations. This is a key difference from how many looked at it in the early days and how some still do. This isn’t because I think the regulations are great, but because I know they are unavoidable. The first time I heard of the Securities and Exchange Commission was at about age seven when my stockbroker Mom came home and told us that the SEC, Federal Bureau of Investigation and police had arrested someone in her firm who broke the rules. I thought this was fascinating. Only 12 years later I had my first job in a brokerage where the seriousness of federal laws was emphasized in our training. These rules have been around for 87 years and are not going anywhere. THIS IS THE EQUIVALENT OF A MARIJUANA ACTIVIST OPENING AN UNLICENSED DISPENSARY IN TIMES SQUARE. Forget trying to ignore the laws or hoping they go away or thinking “this tech makes it different.” Advocacy also matters little relative to old laws affecting trillions of dollars. Some in crypto think they can just build to violate these laws; it doesn’t work that way. This is the equivalent of a marijuana activist opening an unlicensed dispensary in Times Square. Some may support the ideology, but it would be an ineffective activist action. In the first ICO wave, many focused on trying to prove “utility” so they wouldn’t be classified as a security. Today we still see similar efforts from some exchanges. For example, Coinbase’s Crypto Ratings Council makes a case for why certain instruments are not securities, instead of doing the harder work to become licensed to deal in legal securities. Many DeFi projects, and efforts such as Hester Peirce’s "Safe Harbor" proposal, continue down the same road. The goal is to avoid being a security. I think this is a mistake. The Securities Act of 1933 defines a security very broadly: any note, stock, treasury stock, security future, security-based swap, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a “security,” or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing.
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