Reading Group: Regulating the "blockchain" | Patrick Murck | January 31, 2018

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Reading Group: Regulating the "blockchain"

by Patrick Murck Show/Hide
This is a reading group to discuss the application of law and regulation to cryptocurrency and distributed ledger technology. EDIT PLAYLIST INFORMATION DELETE PLAYLIST

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  1. 1 Show/Hide More What was Bitcoin, what will it be? The techno-economic imaginaries of a new money technology
    What was Bitcoin, what will it be? The techno-economic imaginaries of a new money technology
  2. 2 Show/Hide More Bitcoin's Academic Pedigree
    Bitcoin's Academic Pedigree
  3. 3 Show/Hide More Is Blockchain Different than Bitcoin?
    Richard Gendal Brown, Chief Technology Officer at R3 CEV, discusses different types of blockchain innovation.
  4. 4 Show/Hide More Mastering Bitcoin - Chapter 2
    Mastering Bitcoin is a book for developers, but the first two chapters cover bitcoin at a level that is approachable to non-programmers. Anyone with a basic understanding of technology can read the first two chapters and get a great understanding of bitcoin.
  5. 5 Show/Hide More IRS Virtual Currency Guidance: Virtual Currency Is Treated as Property for U.S. Federal Tax Purposes; General Rules for Property Transactions Apply
    This notice describes how existing general tax principles apply to transactions using virtual currency. The notice provides this guidance in the form of answers to frequently asked questions.
  6. 6 Show/Hide More When (and If) Income is Realized from Bitcoin Chain-Splits
    While income can be realized from a chain-split, it need not be realized at the time of the chain-split, or, possibly, ever, for federal income tax purposes.
  7. 7 Show/Hide More Ethereum Design Rationale - Accounts and not UTXOs
    Ethereum Design Rationale – Accounts and not UTXOs
  8. 8 Show/Hide More The UCC and Bitcoins: Solution to Existing Fatal Flaw
    Would you purchase a house if you had no information on mortgages encumbering it? Of course not; yet, that is analogous to what buyers of bitcoin are doing every day – purchasing without information about liens on their bitcoins. This article identifies (1) the fatal flaw in the current Bitcoin ecosystem created by Uniform Commercial Code (“UCC”) Article 9 (Secured Transactions) and (2) the solution presented by UCC Article 8 (Investment Securities).
  9. 9 Show/Hide More Negotiability, Property, and Identity
    Focus on Section III. “PROPERTY AND IDENTITY
  10. 10 Show/Hide More Does 18 U.S.C. § 1960 create felony liability for bitcoin businesses?
    Attorney Brian Klein explains how relatively recent changes to a federal law make it a felony to run an unlicensed bitcoin business whether you knew you needed a license or not.
  11. 11 Show/Hide More Bitcoin exchange operator tied to hacks gets 5-1/2 years U.S. prison
    Anthony Murgio, 33, of Tampa, pleaded guilty on Jan. 9 to three conspiracy counts, including bank fraud and operating an unlicensed money transmitting business. The sentence was roughly half as long as prosecutors had sought.
  12. 12 Show/Hide More FinCEN Virtual Currency Guidance
    The Financial Crimes Enforcement Network is issuing this interpretive guidance to clarify the applicability of the regulations implementing the Bank Secrecy Act to persons creating, obtaining, distributing, exchanging, accepting, or transmitting virtual currencies.
  13. 13 Show/Hide More Former CEO Of Bitcoin Exchange Company Sentenced
    Former CEO Of Bitcoin Exchange Company Sentenced
  14. 16 Show/Hide More CFTC: Proposed interpretation of "Actual Delivery"
    The Commodity Futures Trading Commission is issuing this proposed interpretation of the term “actual delivery”; as set forth in a certain provision of the Commodity Exchange Act pursuant to the DoddFrank Wall Street Reform and Consumer Protection Act. Specifically, this proposed interpretation is being issued to inform the public of the Commission's views as to the meaning of actual delivery within the specific context of retail commodity transactions in virtual currency. The Commission requests comment on this proposed interpretation and further invites comment on specific questions related to the Commission's treatment of virtual currency transactions.
  15. 17 Show/Hide More CFTC: Consent Order re: Bitfinex
    The Commodity Futures Trading Commission (“Commission”) has reason to believe that from in or about April 2013 to at least February 2016 (the “Relevant Period”), BFXNA Inc. d/b/a Bitfinex (“Bitfinex” or “Respondent”) and, prior to January 2015, Bitfinex's predecessor in interest, iFinex Inc., violated Sections 4(a) and 4d of the Commodity Exchange Act (“Act”), 7 U.S.C. 6(a) and 6d (2012). Therefore, the Commission deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted to determine whether Bitfinex engaged in the violations set forth herein and to determine whether any order should be issued imposing remedial sanctions.
  16. 20 Show/Hide More Let the Chips Fall Where They May: Nevada Court Dismisses CFAA Charges against Casino Players Who Cashed in on Video Poker Software
    In United States v. Kane, authorities arrested two casino players after discovering that they had been exploiting a software bug that allowed them to multiply jackpots on video poker machines. It didn't take hours on end poring over lines of code to discover the bug – defendant John Kane discovered the bug simply by virtue of playing a lot of video poker.
  17. 21 Show/Hide More The Tao of “The DAO” or: How the autonomous corporation is already here
    Over the past couple of weeks a project with no mainstream press has become the second biggest crowdfunding project in history. It’s not crowdfunding a product, an artwork or a new cryptocurrency. It’s crowdfunding — or more accurately, crowd-founding — a corporation called “The DAO.” This is a corporation whose bylaws are written entirely in code.
  18. 22 Show/Hide More TheDAO: Explanation of Terms and Disclaimer
    The terms of The DAO Creation are set forth in the smart contract code existing on the Ethereum blockchain at 0xbb9bc244d798123fde783fcc1c72d3bb8c189413. Nothing in this explanation of terms or in any other document or communication may modify or add any additional obligations or guarantees beyond those set forth in The DAO's code. Any and all explanatory terms or descriptions are merely offered for educational purposes and do not supercede or modify the express terms of The DAO's code set forth on the blockchain; to the extent you believe there to be any conflict or discrepancy between the descriptions offered here and the functionality of The DAO's code at 0xbb9bc244d798123fde783fcc1c72d3bb8c189413, The DAO's code controls and sets forth all terms of The DAO Creation.
  19. 23 Show/Hide More Blockchain Company's Smart Contracts Were Dumb
    What matters more: What the code said or what people thought it said?
  20. 24 Show/Hide More Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934: The DAO
    The Securities and Exchange Commission issued an investigative report today cautioning market participants that offers and sales of digital assets by “virtual” organizations are subject to the requirements of the federal securities laws. Such offers and sales, conducted by organizations using distributed ledger or blockchain technology, have been referred to, among other things, as “Initial Coin Offerings” or “Token Sales.” Whether a particular investment transaction involves the offer or sale of a security – regardless of the terminology or technology used – will depend on the facts and circumstances, including the economic realities of the transaction.
  21. 25 Show/Hide More In the matter of Munchee Inc.: Cease and Desist
    Munchee violated Sections 5(a) and 5© of the Securities Act by offering and selling these securities without having a registration statement filed or in effect with the Commission or qualifying for exemption from registration with the Commission. On the second day of sales of MUN tokens, the company was contacted by Commission staff. The company determined within hours to shut down its offering, did not deliver any tokens to purchasers, and returned to purchasers the proceeds that it had received.
  22. 26 Show/Hide More The SAFT Project: Toward a Compliant Token Sale Framework
    The public token sale, colloquially known as an “Initial Coin Offering” is a powerful new tool for creating decentralized communities, kickstarting network effects, incentivizing participants, providing faster liquidity to investors, and forming capital for creators. In these sales, network creators sell an amount of the network's tokens at a discount to users, investors, or both. Some token sales take place when or after the token network is launched, as a means to disseminate some fraction of the token supply to early users. Other token sales happen long before the token network has genuine functionality; so called direct token pre-sales are sold at greater discounts with the goal of financing the development of the network and its launch. Purchasers in these direct presales tend to expect profit predominantly from the seller's efforts to create functionality in the token. As such, these sellers may unintentionally be selling securities, and may have failed to comply with several U.S. laws. We propose a path toward a new, compliant framework called the Simple Agreement for Future Tokens, or “SAFT”;. Together with the publication of this paper, we launch the SAFT Project – a forum for discussion and development of the SAFT framework.
  23. 27 Show/Hide More NOT SO FAST—RISKS RELATED TO THE USE OF A “SAFT” FOR TOKEN SALES
    On October 2, 2017, Cooley LLP and Protocol Labs released a whitepaper entitled “The SAFT Project: Toward a Compliant Token Sale Framework”, purporting to develop “a new, compliant framework”; for engaging in the sale of blockchain-based tokens. The Whitepaper acknowledged that the framework has limitations, and invited a conversation within the blockchain and legal community. In that spirit, the below report analyzes the framework proposed in the Whitepaper and highlights a number of risks related to the use of a Simple Agreement for Future Tokens (a “SAFT”) for token sales. As explained below, while the framework proposed in the Whitepaper is arguably attractive in its simplicity, it may create more problems than it solves for sellers that follow its prescriptions.
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February 08, 2018

smart contract distributed ledger cryptocurrency blockchain bitcoin

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Patrick Murck

Fellow

Berkman Klein Center for Internet & Society

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