Quote from: 2342q6tegw on August 09, 2018, 05:56:19 AM

Quote from: plauthor on August 08, 2018, 01:16:59 PM

Quote from: 2342q6tegw on August 08, 2018, 11:11:28 AM

Quote from: plauthor on August 07, 2018, 03:39:11 PM

Quote from: 2342q6tegw on July 31, 2018, 03:10:04 PM

Quote from: OgNasty on July 17, 2018, 11:16:53 PM

Quote from: plauthor on July 17, 2018, 09:41:48 PM

Issuing cryptobonds is a new way of raising funds for your project.

You may want to review what happened to the last person who tried this: https://www.sec.gov/litigation/complaints/2018/comp-pr2018-23.pdf

unregistered bitcoin-denominated securities exchange, though a cryptobond denominated in your own coin sounds just like a SAFT, so not really new.

If registered, whats your FCS number? What is the name of the officer in charge of your MiFid compliance? How are you preventing US citizens from joining?

Please have a look at the relevant legal framework in the links stated above, so that we talk on the same terms / jurisdiction and discuss relevant questions.

I'm talking about UK framework too. Yes the earlier poster, was cosnidering from a USA standpoint, so there is a diffrence there. That was a typo, it is a FCA number (as UK competent MIfid Authority) or MifId exemption I'm looking to find.

Quote from: stephen_fortune on August 01, 2018, 01:58:07 PM

And considering legal issues with regional law, as the other posters so kindly brought to our attention, how could this be realistically determined to be a bond?

IANL, but believe it is to do with a specific legal meaning of the word bond in the UK context. The issuing jurisdiction might require usage of that term over say promissory note. Of course equally it could be if the word just mean spromise, you can say I'm just making a promise(although that might be a bond like an IOU)

Quote from: stephen_fortune on August 01, 2018, 01:58:07 PM

How are disputes settled? Who is the arbiter that determines where the money goes in case of missing payments as well?

If it is issued in accordance with UK law, then the British version of the SEC. The SEC is unlikely to get involved in British offerings to non US citizens/residents.

Quote from: plauthor on August 07, 2018, 04:04:21 PM

Quote from: stephen_fortune on August 01, 2018, 01:58:07 PM

How are disputes settled? Who is the arbiter that determines where the money goes in case of missing payments as well?

Quote from: plauthor on August 07, 2018, 04:04:21 PM

Quote from: stephen_fortune on August 01, 2018, 01:58:07 PM

How are disputes settled? Who is the arbiter that determines where the money goes in case of missing payments as well?

And considering legal issues with regional law, as the other posters so kindly brought to our attention, how could this be realistically determined to be a bond? Is it registered out in the Indian Ocean territories or something? Or could it also be that "bond" is just a nice term that makes people feel more secure, and there is no legal backing behind the security?

It's hard to know with these things with all of the legal issues and stuff.

There is an excellent resource to give you a definition of a bond and its lifetime process, stated in a previous post. It is easy to look up online as well. Just please make sure you are researching English bonds/notes, so that we speak on the same terms.

As it is an obligation to return borrowed funds, it is enforceable under English law in any court that recognises it, on the other hand, cryptocurrencies are unregulated in the UK so cryptobonds issuance is not a regulated activity. It does involve a significant amount of legal matters though and there is legal risk involved in the sense that cryptobonds may be banned at any time (meaning an abrupt end) or declared regulated activities, which would simply mean they would fall within the FCA regulatory perimeter. Therefore we do not expect such a proliferation of fraudulent issues as with ICOs.

Untrue

Cryptocurrency derivatives are, however, capable of being financial instruments under the Markets in Financial Instruments Directive II (MIFID II), although we do not consider cryptocurrencies to be currencies or commodities for regulatory purposes under MiFID II.
So, bonds can be derivatives as can ICOs plus there is securities law too, if issued in accordance with UK law;

Whom is in charge of the MIFID?
What FCA number or what MIFID exemption?
Who is the KYC/AML officer?
What is your FACTA compliance procedure?
How about your GDPR comptroller?

There are numerous bond types but I am not in the position to offer couching on basic terminology, so I would again refer to these excellent resources:
http://wildy.com/isbn/9781912363100/clp-legal-practice-guides-banking-and-capital-markets-2018-paperback-a4-college-of-law-publishing
http://wildy.com/isbn/9780414031364/the-law-and-regulation-of-finance-2nd-ed-hardback-sweet-maxwell-ltd
http://wildy.com/isbn/9780414027640/the-law-of-finance-2nd-ed-paperback-sweet-maxwell-ltd

The FCA names which financial derivatives ARE regulated and which are CAPABLE OF BEING regulated activities. At the end of the day it is the courts that have the final say on that. We contend that cryptobonds are not regulated activities and are prepared to argue that position before court.

We would preferably recommend a syndicate distribution of the issue in question rather than a retail bond.

The FCA list is non exhaustive, there's still a requirement to list a prospectus or the number of the exemption your using in your offering, even if it is an unregulated exempt offering, that has to be declared too. Your legal counsel will be in a portion to answer my basic questions (in fact quite possibly required and compielled to do so)

Quote from: stephen_fortune on August 08, 2018, 03:37:47 PM

Quote from: 2342q6tegw on August 08, 2018, 11:11:28 AM

Untrue

Cryptocurrency derivatives are, however, capable of being financial instruments under the Markets in Financial Instruments Directive II (MIFID II), although we do not consider cryptocurrencies to be currencies or commodities for regulatory purposes under MiFID II.
So, bonds can be derivatives as can ICOs plus there is securities law too, if issued in accordance with UK law;

Whom is in charge of the MIFID?
What FCA number or what MIFID exemption?
Who is the KYC/AML officer?
What is your FACTA compliance procedure?
How about your GDPR comptroller?

This is what I meant. And to what extent is the government actually going to get involved in these issues if Bitcoin is still in the legal grey zone? I personally like the idea of a bond because it's guaranteed, but I'm having a hard time imagining who will enforce these laws if push comes to shove. Are they actually going to give it court time? Do they really want to sit and argue over (what they may claim to be) bits and bytes that are perceived value?

At this stage in Bitcoin's development I am a bit hesitant to believe that a truly guaranteed bond could be created.

Actually the idea of a truly guaranteed Bitcoin bond doesnt seem thag far out of grey. Eu countries routinely issue security bonds in other currinces. If the jurisdiction considers Bitcoin to simply be another currency, then a properly regulated MiFid and prospectus compliant conventional bond denominated in bitcoin seems functionally the same as an EU company issuing a dollar bond. Of course there is no crypto issuing,trading is in terms of the white legal framework of bond issuing. Bond payments would be in btc and the sale price would be in btc though.

Assuming crypto/tokens were regulated under English law, the questions asked above would be perfectly legitimate. However, English law does not regulate them. Cryptobonds are "capable of being" regulated, that does not mean they are though. In any case we would recommend anyone considering joining our syndicate or appointing us as the lead manager for their issue to do their own legal research and/or seek legal advice.

We would calculate the total cost of the issue as follows:

Issue amount £2M in crypto: 5%

£100M: 0.37%

The cost would decrease from 5% to 0.37% in a linear manner with increasing issue amount. For issues below £2M there would be a fixed total cost of £100k, for issues over £100M the cost would be further discounted on an individual basis. We would accept fiat and/or crypto.

The calculation would be based on pricing of fiat bond issues as a starting point which we will adhere to wherever possible. In addition, there may be third party costs such as exchange listing fees or rating fees, for instance; these will need to be clarified if/when such services become available and you decide to use them.

The issue costs would be deducted from the funds raised; a mandate deposit 5% of the total estimated issue cost will apply if you instruct us to lead-manage the issue. This may be spread over instalments.

Fiat Eurobond issues usually take about six weeks. Your issue might require more time as this is a novel way of raising funds but I will be happy to prepare a mandate letter at your nearest convenience.