Quote from: ilic on June 10, 2018, 02:50:16 AM

"Dr Craig Nakamoto-Wright" Tweeted some crap about DASH being a security or whatever-the-hell he tweeted about?

You are confused and unclear about what @ProfFauxtus actually said in his tweets, so I will clarify and explain the situation.

Craig didn't say Dash is a security, he said "shares" of Dash masternodes are (dangerous, unregistered, and illegal) securities.

Let's break it down so that you may understand more easily. There are six (6) different concepts to examine independently and within the context of the Dash project in general.

1. DASH. Dash is a crypto-coin in the context of the Dash protocol, but has been intentionally burdened with additional properties, which in financial/regulatory contexts make it what CNW correctly identified as "sub-units" of Masternodes and shadowy entities known as THE DASH FOUNDATION and THE DARKCOIN FOUNDATION INC. DBA EVAN DUFFIELD.

2. Masternodes. You put 1000 Dash (~$300,000 USD) into a cryptographic bond proving to the network they are locked up. That gets you interest payments and the right to one (1) vote on where to invest the Dash Treasury each month. Masternodes are obviously a financial product of some kind, and were for years marketed as such (without the legally required risk, etc. disclosures) to unsophisticated non-qualified retail investors.

3. Masternode shares. If you cannot afford Dash's extravagantly prohibitive cost to run a full node but still wish to enjoy the high interest rates for Masternode investment, you will be offered (by a few entities closely affiliated with Dash Core) so-called "shares" in Masternodes. These are not really "shares" in any company or any actual Thing, which is among the reasons why Craig Wright took to twitter to call fraud on Dash's menagerie of multifarious fraud.

3. MNOs (Masternode owners). MNOs control monthly allocation of the substantial Dash Treasury and are tasked with investing it wisely, following up on previous investments, and building out Dash's distributed governance structures. Crucially (for legal purposes), even if MNOs don't vote or otherwise contribute/participate they still enjoy the exact same mathematical probability of getting Masternode payments as MNOs who do vote and otherwise participate. This is the "expectation of profit as the result of the efforts of others" the SEC's Howey Test is looking for. It is unknown what if any repercussions MNOs would incur should they vote for a proposal that entails illegal activity, such as funding doxxing/harassment of Dash critics or even assassination of Dash's political opponents. Crypto-lawyer Jason Siebert stated on his Youtube podcast that MNOs are also subject to subpeona for breaking KYC/AML/anti-terrorism laws.

4. Dash Treasury. Just as a corporation may (in certain very precisely defined circumstances and under very strictly legally-controlled conditions) print up more shares to raise capital at the expense of diluting existing holders, so does Dash print up over 6000 new coins every month. These 6000+ coins are mostly sold for cash to fund the DAO's various investments, but this dilution and resultant sell pressure is accepted by MNOs because the indirect return on the DAO's investment of Treasury funds is presumed to be greater than the direct cost of the dilution/selling. In terms of regulatory attack surface, the Dash Treasury is functionally equivalent to any other sloppy/careless investment fund and any other broke/greedy company holding an ongoing monthly stock issuance. Unlike traditionally centralized organizations however, 100% of regulatory and other forms of liability pass directly onto DAO members (IE MNOs) because there is no traditional fictitious legal entity to absorb and thereby limit liability.

5. DCG (Dash Core Group). Dash Core is the direct beneficiary of the bulk of monthly investments made by the Dash Treasury, as directed by the MNOs who bother to vote. In terms of the Howey Test, DCG represents the most salient example of a third party making promotional and development efforts on behalf of MNOs' and Masternode "share" holders' profits.

6. The DAO (Decentralized Autonomous Organization). This is the sum collective of items 1-5. It's a lame attempt to appropriate cyberpunk fiction and even more lame attempt to evade legal accountability by supposedly having nobody actually be responsible or liable for anything. The fiction of the DAO's ostensible decentralization is obviously a convenient yet implausible lie, given Dash HQ is located in Phoenix and the DCG located there is voraciously consuming >50% of the Dash Treasury (while at the same time, suddenly imposing arbitrary limits on other projects so they cannot compete for the dwindling funds remaining).