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Patrick Murck

Fellow

Berkman Klein Center for Internet & Society

Patrick Murck's Workshop

25 Links, 2 Texts, 1 Playlist Total

  • NOT SO FAST—RISKS RELATED TO THE USE OF A “SAFT” FOR TOKEN SALES

    04/06/2018 added by Patrick Murck

    (more)

    <p>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.</p> (less)

  • The SAFT Project: Toward a Compliant Token Sale Framework

    04/06/2018 added by Patrick Murck

    (more)

    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. (less)

  • In the matter of Munchee Inc.: Cease and Desist

    03/28/2018 added by Patrick Murck

    (more)

    Munchee violated Sections 5(a) and 5(c) 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. (less)

  • Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934: The DAO

    03/28/2018 added by Patrick Murck

    (more)

    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. (less)

  • The Tao of “The DAO” or: How the autonomous corporation is already here

    03/24/2018 added by Patrick Murck

    (more)

    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. (less)

  • Blockchain Company's Smart Contracts Were Dumb

    03/23/2018 added by Patrick Murck

    (more)

    What matters more: What the code said or what people thought it said? (less)

  • TheDAO: Explanation of Terms and Disclaimer

    03/23/2018 added by Patrick Murck

    (more)

    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. (less)

  • Let the Chips Fall Where They May: Nevada Court Dismisses CFAA Charges against Casino Players Who Cashed in on Video Poker Software

    03/23/2018 added by Patrick Murck

    (more)

    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. (less)

  • CFTC: Proposed interpretation of "Actual Delivery"

    03/18/2018 added by Patrick Murck

    (more)

    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. (less)

  • CFTC: Petition for Rulemaking concerning the requirements of "Actual Delivery"

    03/18/2018 added by Patrick Murck

    (more)

    As part of such rulemaking, the Commission is requested to promulgate the elements that are necessary to satisfy the requirements of "actual delivery" under CEA 2(c)(2)(D)(iiXIID as applied to leveraged or financed retail cryptocurrency transactions. 'We believe this is warranted because the Commission has not articulated these elements with respect to the newly developing cryptocurrency and blockchain marketplaces, which may have unique attributes that would suggest a different approach relative to the more traditional markets under the Commission's jurisdiction. Absent a definitive Commission statement identifying the essential elements, market participants must attempt to discern what is lawful and what is problematic through assessments of enforcement orders, which are focused on a single entity at a time and may or may not be instructive. (less)