Quote from: stellarman on September 03, 2014, 02:00:22 AM

I don't have time to read the entire thread. But one thing strikes me, that I feel I should comment on.

You are talking about an IPO here. The word is right there in the title of the post.

In my opinion (an opinion that is informed by ten years experience as a Security Principal for three different securities broker/dealers) everyone involved (James and everyone who is thinking of investing) needs to understand clearly the definition of the word "security". In this case, the definition we are interested in is the definition that involves investments.

In the United States, the US Supreme Court has ruled (in SEC v. Howey) that a "securities contract" is defined as a contract, transaction, or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or third party.

If you are offering an IPO for SuperNET, you are almost certainly creating a "securities contract".

Let's look at this definition in terms of the issuance of a cryptocurrency. Let's say that the promoters issue a certain number of coins to the company or the development team, and then open up sales to the public. As soon as someone buys those coins from the promoters, with the expectation that the value will go up, you are walking straight into "securities contract" territory. I believe there is very a real possibility that the SEC could (and would) take the position that the developers have offered and sold a security. The regulators would make the case that sale of the coin is a "transaction or scheme" where people are investing money (by buying coins), in a "common enterprise" (the IPO) with the expectation that the value of the coins will go up based on the efforts of the "promoters" (SuperNET and its developers).

All it takes is one dissatisfied purchaser to bring this to the attention of regulators (if they aren't already aware of it). Far from unifying the crypto community, this could easily lead to more scrutiny from the regulators and a black eye for the community. And, frankly, it could even lead to civil or criminal charges.

But wait. What if the developers of the business and coin are incorporated in a jurisdiction outside the United States? Or, what if the business is a Distributed Autonomous Corporation, with no headquarters or jurisdiction anywhere? In either case, if a developer individually, or the "company" as an entity sells to US citizens, it generally needs to comply with US laws. And, I think it is fairly clear that it also doesn't make any difference if the start-up company's coins were purchased in exchange for another cryptocurrency, like Bitcoin, NXT or BBR.

The guys like Ethereum who have done this type of thing successfully have structured their offer very carefully, have given investors lots of disclosures and warnings, and still could be treading on thin ice.

Since Poloniex is a US company, I think they should take a long, hard look at what they are potentially getting themselves into before they start participating in an offering of unregistered securities. I like Poloniex -- and have coins there -- so I hope they have a good attorney.

To any potential investors, I would point out that this (SuperNET IPO) is exactly the type of risky venture that the securities regulations are designed to protect you from.

Please note that I am not taking any position, pro or con, about the technology involved, or about James as a person. I'm just trying to warn about a situation that could be harmful not only to individual investors, but the entire community.

I don't have a lot of time to try to follow this thread, so don't necessarily expect me to reply to the (probably inevitable) crush of angry replies.

warning: the following response is insulting the great nation of USA. please protect the children, women, and anybody else from exposure to such things and do not complain if you are reading some things about USA you are not liking to read.
end of warning

it goes without saying that if your country is not allowing for such things, then please do not invest. There are hundreds of countries and hundreds of sets of laws and in the crypto there is the concept that no one country's laws is to dictate globally. I think maybe USA should learn that it is just one small part of the world and the sooner its fiat hyperinflates, I think the better for the rest of the world. Personally, the laws of a country that makes using crypto or making a coin backed by precious metals the same as having weapons or being a terrorist, well it seems to lack common sense. Its a good thing the "eminent domain" legal theory is allowing for all the levels of government to simply take someones land and give it to the much more deserving real estate developer. I dont know how the rest of the world can be called civilized without its govts protecting their citizens in the same way. Can you imagine a life without shopping malls built on the land stolen from its rightful owners?

Now 99% of the funds raised will be held in escrow and the other 1% will have all of its transactions being documented. I will run the operations side at a 90% profit margin. All of these revenue flows will be left visible on the blockchain (I wont be teleporting it out of sight!) and significant amounts fed back into the coin communities. The 10% for the supertraders are not able to be withdrawn. Common sense protections are in place for the funds. Also, we are not spending a zillion dollars on fancy suit lawyers, bankers, etc. The money not spent is allowing for the book value sale.

Maybe we can change this to being totally donation based. Such donations would happen to get tallied, and and asset issued to each donation in proportion to the donation. Then this asset will be used to determine the amount of counter donations that are sent to an address holding these assets. As some sort of nonprofit coop, I believe it is a totally different animal than selling "air" backed by just tech + future expectations.

I am working for no salary, I am putting my own net worth into this and investors are getting the same ROI as I do. Now the SuperNET is not selling "air", it is backing the funds raised (whatever you call it) with the funds raised and there is no charge for the future revenue streams to the people participating. I will hope you are not quibbling over the 15% bonus that gives the early investors below liquidation value. Is this something USA has to protect people from too? This too is probably illegal in USA for some guy to give away the revenue streams to investors. USA needs to protect the investors from receiving future dividends. What else will USA protect us from? Is the 99% in escrow not enough? Is the 90% profit margin too low? Is my zero salary too high? Is the fact that we have no overhead too risky?

I am saying I dont know how much the future profits will be. There is no price for this portion. It is quite possible that I forget how to code and cant finish any of the nearly finished projects. it is possible that no coin will want to join SuperNET. it is possible that people all stop using crypto. it is possible that blah blah blah. There are risks with everything. does listing out all these risk factors change anything? The Bitcoin community is an intelligent one, call it an international club and they are not seeking the USA's protection. I am making as low risk vehicle as I can think how to do. Can you do any better than me with all your experiences? The only one thing I can guarantee is that I am not made of cheese.

So the fiat empire is wanting to make troubles to the crypto movement. I am making what is arguably the most secure thing in crypto, which also has an upside. To my limited knowledge SuperNET is a unique thing and cannot be compared with any prior crypto. this means general advices are potentially meaningless. Please tell me specifically what are the things about SuperNET that USA must protect people from?

without any specifics, you are like the troll using the FUD. this is fiat FUD. now you are writing as if you are so concerned about the crypto community, then please take the one hour out of your precious billable hours and donate it to the crypto cause to advises us poor simpletons who can barely understand about this danger thing called money. I mean we hardly deserve to be having any of it in the first place, maybe we should just send it all to USA so they can spend it to protect us from super risky things?

James

P.S. To the peoples of USA, please do not get me wrong. The people of USA are really quite fantastic and have such positive ideals and dreams and, well, the govt has just gotten so out of control and using all means at its disposal for sucking the humanity out of you. I am sad by this. Tragic events have been used to multiply the power over your lifes and from what I hear it is much more difficult to even just pay all the bills, unless you are real estate developer or someone else who is playing the proper people the proper monies. The hard working USA person is at a big disadvantage against the very system built on your back. I am hopeful that after some few short years, the inevitable economics of overspending will bring some happy changes, but there is some trouble to get through before the new happy times without the burdensome govt in every area of your lives. I wish you well and will do my best to help with whatever power the SuperNET achieves.