Moving the discussion that was in my coin's thread over to this more appropriate legal discussion thread. Let's continue this discussion here. Some of the following posts may be deleted from my coin's thread.
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Please notify me of any corrections I need to make and I will edit the table.
Some notes:
1) ShadowCash is proof of stake.
2) Monero does support mass TXs and has a market based solution in place to allow the main chain blocksize to grow to accommodate them. This is done without the need for a secondary level that is subject to government regulation. It is by the way a classic case of take care of the long term and the short term will take care of itself.
3) The proof of stake vulnerability in Dash is actually much higher than in regular proof of stake coins because of the 1000 Dash requirement for masternodes.
4) Lumping "IPO or mineable by speculators" into one makes no sense from a US or global regulatory point of view.
I will elaborate on 4. The critical US government agency for crypto currency regulation is FinCEN and not the SEC. The SEC has already argued before the courts that
Bitcoin is money. This was critical in the Trendon Shavers / pirateat40 case since Trendon Shavers argued that he was not issuing securities with out SEC registration
because Bitcoin was not money.. Furthermore internationally we see crypto currency regulation moving on the direction of treating crypto currency as money. The European Union being a good example. It is for this reason that FinCEN has issued clear guidance close to three years ago,
https://www.fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html, while the SEC has not. There are three further FinCEN rulings that are also very significant.
https://www.fincen.gov/news_room/rp/rulings/pdf/FIN-2014-R001.pdfhttps://www.fincen.gov/news_room/rp/rulings/html/FIN-2014-R011.html https://www.fincen.gov/news_room/rp/rulings/html/FIN-2014-R011.htmlThe first question and this is critical is whether the crypto currency is classified as a centralized virtual currency or a de-centralized virtual currency. The definition of de-centralized virtual currency is as follows from FIN-2013-G001
c. De-Centralized Virtual Currencies
A final type of convertible virtual currency activity involves a de-centralized convertible virtual currency (1) that has no central repository and no single administrator, and (2) that persons may obtain by their own computing or manufacturing effort.
Mining of POW coins has been clarified in FIN-2014-R001.
Now for my thoughts,
First I am not a lawyer. A POW coin with no premine, such as Bitcoin or Monero is a de-centralized virtual currency. Developers and miners are not MSBs. This is the ideal case. This requires that development of the coin be funded solely by donation of time, money or both. Any attempt to use the emission to fund development will require one or more of the players to register as an MSB.
Dash will likely require an army of lawyers to figure out. As far as I see it, miners are likely MSBs (since they are required to turn over a part of the mined coins to the masternodes) masternodes are also likely MSBs (since they are required to turn over a portion of their coins to development) and the holders of the spork keys are also likely MSBs (since they have in effect been given central administrator responsibilities). Anyone involved with Dash in the above capacities, especially those in the US, would be wise to get professional legal advice and get a ruling from FinCEN on their particular situation.
Delegated structures have also a high regulatory risk.
Issuers of crypto - currencies (such as those behind Ripple, Ethereum etc.) are MSBs
I do not know what issuance model is being proposed by the OP.
Dash will likely require an army of lawyers to figure out. As far as I see it, miners are likely MSBs (since they are required to turn over a part of the mined coins to the masternodes) masternodes are also likely MSBs (since they are required to turn over a portion of their coins to development) and the holders of the spork keys are also likely MSBs (since they have in effect been given central administrator responsibilities). Anyone involved with Dash in the above capacities, especially those in the US, would be wise to get professional legal advice and get a ruling from FinCEN on their particular situation.
Money Services Businesses transmit money between legal entities.
Blockchain addresses are not legal entities. Nor are they owned by legal entities. Nor do they have any relation to persons living or dead. So all this talk about legal implications is just bogus nonsense.
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Money Services Businesses transmit money between legal entities.
Blockchain addresses are not legal entities. Nor are they owned by legal entities. Nor do they have any relation to persons living or dead. So all this talk about legal implications is just bogus nonsense.
The holders of the private keys of Blockchain addresses are legal entities. By the way this level of denial when it comes to the FinCEN guidance is not just limited to Dash. It is in fact common among most alt-coins. Here is some interesting reading with respect to Ripple.
https://www.fincen.gov/news_room/nr/html/20150505.htmlThe holders of the private keys of Blockchain addresses are legal entities.
There are no "holders" of blockchain private keys in any legal sense. A private key can by known by anyone and multiple people at once for that matter.
You do not have a legal contract between yourself and the blockchain, so therefore no legally defined ownership.
To regulate pure blockchain transactions you'd have to find a way to tie a legal entity (person or corporation) to a blockchain address and that can only be done by contract - the way a fiat account is made synonymous with people. Satoshi broke that link. That is the whole point of crypto.
If you registered with an ETF and invested using such a statutory financial instrument then that would be different. You'd have a contract with the ETF which could be regulated. But then you wouldn't be holding private keys, you'd just be holding paper.
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There are no "holders" of blockchain private keys in any legal sense. A private key can by known by anyone and multiple people at once for that matter.
You do not have a legal contract between yourself and the blockchain, so therefore no legally defined ownership.
To regulate pure blockchain transactions you'd have to find a way to tie a legal entity (person or corporation) to a blockchain address and that can only be done by contract - the way a fiat account is made synonymous with people. Satoshi broke that link. That is the whole point of crypto.
If you registered with an ETF and invested using such a statutory financial instrument then that would be different. You'd have a contract with the ETF which could be regulated. But then you wouldn't be holding private keys, you'd just be holding paper.
So nobody owns a certain amount of Dash? What a bizarre concept. Please get legal advice and / or get a FinCEN ruling if you are concerned about the legal ramifications of your Dash activities in the US and / or elsewhere. I am not debating pointless "legal" arguments further.
So nobody owns a certain amount of Dash?
They "own" it in a practical sense, but not contractually.
It's a bit like saying that anyone who happens to be in possession of your house keys "owns" your house. You know fine well they don't and there's nothing "bizarre" about it.
You mean
constructive possession ?
Ok, I can see that applying in crypto to some extent, but jeez - good luck to anyone trying to prove that a particular person has constructive possession of a certain private key. The problem is (and this again is the whole point of crypto-anonymity) everyone is a theoretical constructive possessor. Having said that, I accept your point that it's legally ambiguous at least. But I don't think I'll be loosing any sleep over a couple of strings of numbers and letters.
Guys I am going to copy + paste the legal divigations to the thread on that topic I made. Let's move the discussion over there (and I will also enter the discussion), not in my coin's thread. Please wait for a link after I complete the work.
Please don't reply further on that topic here in this thread. It is really too much of a diversion from my coin's thread. And it is going back and forth.