Bitcoin Law Review – SEC on ICO, Tether, Salt, Binance, Bitmain



everyone welcome to another edition of Bitcoin law review this show that we have not been able to bring you in a long time I will continue to say this is one of my favorite shows because my bad on that one mostly because I like to learn myself a lot of the other shows I'm the one do I'm the one educating but on this show I get to learn from the experts and this is absolutely great which is why I really like this show all right so for today we're gonna start off with our four guests they've all been on the show before hopefully a few more will jump on so uh bill what's up in your world out in California it's been about two months since we've done this yeah it's hello everybody welcome back it's this is one of my favorite extracurricular activities Bill Restless an attorney he arrests his law firm in San Diego some of the recent things that have been going on in my coin based class action for unpaid Bitcoin a few weeks ago the judge in San Francisco allowed the case to proceed in this case is on behalf of everybody who was sent Bitcoin through email on coinbase and who didn't collect the Bitcoin what we found out was there's millions of dollars worth of Bitcoin that was sent it was never claimed and base is keeping it so that's that's the most interesting thing in the past week that's me I and choice sorry guys I was however like sound issues on my own IIIi can't hear you at the moment but uh man you are Sasha take over introduce yourselves while I get my stuff so go ahead Manny oh I got shot yeah I heard that hey everybody I'm a man yellow cancer I'm an attorney in New York I bought practice I focus on blockchain I've been in a really aggressive business expansion mode so happy that uh you know taking on new clients things are going well exciting opportunities with that being said you know soon as things started to take off you know the market obviously is it a bear bears decline so you know we'll see how things kind of turn around but you know everything's good on my end I mean really interested in kind of how a lot of the move that we had in the market and with regard to regulation we had a couple of bills that I know we haven't met in a while and spoken in a while but there are a couple of bills drop by Republican congressman from Minnesota named emer which were very Pro crypto regulation there were three separate bills now with the change of the House of Representatives to Democrat and a leadership particularly in a Financial Services Committee it's most probably will be Maxine Waters interested to see kind of what happens what you know what our efforts legislatively but you know it only time will tell but are really happy to join you guys again all right hi tone thanks for having me on things with me have been going along pretty pretty well lately I'm focusing a lot of a lot of my work lately has been on compliance reviews so performing the FinCEN review or applying for these I either state you know the state money transmission licenses doing the New York license application at the moment so that's where I've been spending most of my time and then on the weekends attending some excellent trading courses offer to have block spaces well the good thing about crypto is you can trade at night thanks for coming out to eat some states with us as well oh yeah you the biggest cake I've ever seen anyone consume you said Jimmy it's bigger ones I'm working my way up to GP all right let's go go ahead and kick the show off hopefully like I said a few more will join us as we come as usual I have to promote the conference that I am organizing it's gonna be in Las Vegas January 24 to 26 I know you're coming Sasha and you're gonna play in the poker tournament as well right yeah you gotta start studying David silver is supposed to come and play I know unfortunately bill you can't make it Manny what do you think you gotta make it out to Vegas 24 to 26 are you muted Manny I hope I can make it yeah should be fun tonight cool yeah I don't know if I'm punching you guys calm I mean we can always panel I haven't yet you end up together yet and of course the corn every dinner and the poker game let me know if you want to play in a poker game got room for some celebrities all right enough of that let's jump right into it we got so many topics we got so many topics that we're supposed to cover a month ago I kept them all on the agenda I'm so happy I'm gonna close the tab well we're gonna begin with the SEC so I'm gonna I'll play the following clip hopefully the sound comes through good and this was the SEC chairman speaking about the icos what's the message here and what about the people currently owned icos are there what's the value of their eye cos if they're dealing with I'm not registered security at this point well Bob let's um let's separate securities probably Mellon securities I think we've been clear that we don't believe Bitcoin is a security but many of the IC knows that you see we talk about they are securities and if you're gonna offer to sell securities you have to do so in compliance with our laws I think we've been clear about that the recent actions further emphasize that our securities laws do apply to the ICO space if people are going to raise money using initial coin offerings they either have to do so in a private placement well they have to register with the SEC we register the SEC you kind of drive financial statements the disclosure bill along the lines that we would expect so or all I see essentially in non-compliance I know there could be some narrow windows where they might not necessarily be so but you seem to be saying they're all in non-compliance right now that seems to be the message we had no IC o—- is registered with the Securities and Exchange Commission for the extended IC o—- is being conducted offshore or pursuant to a private placement exemption fine to the extent that you have conducts from other Gosling and I feel it's not one let me just move on the Bitcoin ETF we've been waiting for a long time I see well the ETF discussion we'll have to wait for our financial show so speaking of the SEC so this video was published on November 26 a few days before that on November 16 the SEC released an official statement I'm sure all of you guys have read it multiple times and it talked about three specific things offers and sales of digital asset securities which is what I want to cover on this show today I want to save the conversation about investment vehicles investing in digital asset securities by justices like pooling money together when investing on behalf of others we can save the discussion for another day and unfortunately and I really want to talk about this the trading of those digital assets and again that's going to be a discussion for another day so let's just stick to the the IC old stuff I'm just going to go through the headlines and I'll let you guys comment on whatever you see fit I this is what happens when we don't do a show in two months so the SEC had two settlements or they find two companies it was two big ones who was arefox this was also as a headline from November 19th again we're covering all the stuff in November so arefox and Paragon so these were the two that the SEC had found to be totally non-compliant and they already went after them in Colorado the see the Securities Commission in Colorado filed 20 cases against fraudulent icos now I did a control-f here on salt and I didn't see it here because salt just happens to be out of Colorado because salt ended up in a lot of hot water I want to talk some specifics about this but before we talk specifics about salt and perhaps the finance token let's let's talk about the general terms what's going on what's the latest bill let's start with you you know so these two enforcement actions were really interesting and I think the if you have honed that press release the SEC put out that you would just referring to your scroll down a little bit to the end of the first section there's one section in there that I think is the most interesting right so I think I think we've got a it says something about a path to compliance because we have an audio podcast as well here recent enforcement actions involving arefox Paragon crypto asset management token lot and ether Delta discuss further below illustrate the importance of complying with these requirements broadly speaking the issues raised in these actions fall into three categories initial offers and sales of digital asset securities including those issued Nestle coin offerings number two investment vehicles and auto but that's basically what this thing is about oh yeah that was a great summary but it's the next sentence at the bottom right that where it says these two yeah you just had it highlighted yeah okay they're sort o leary okay sorry yeah what's reading the introduction last paragraph this these two matters demonstrate that there is a path to compliance with the federal securities laws going forward even where issuers have conducted an illegal unregistered offering of digital asset securities you know what this makes me really pissed I didn't do a tone vase I co read that sentence what's essentially what they did is they said look for these two particular icos they had to offer rescission to the investors which rescission is a legal term which means you unwind the transaction and it makes it as though it never occurred so the issuers had to provide notice to everybody who invested and said hey do you want to keep your tokens or do you want to get your initial contributed funds back that was the rescission component then they had to register with the SEC when it's a public offering and you register a public offering with the SEC usually you file something called a form s-1 form s-1 has well frankly a ton of crap on it about the the offering the issuers the the use of proceeds financial statements whether people were involved in any kind of criminal misconduct lawsuits I mean there's there's all I could keep going there's a whole host so the SEC DLitt said look you have to disclose this information to the people and you have to do it in the context of the rescission offer because this is going to help people decide whether they want to rescind or not and then the SEC finally said that they have to file regular reports with the SEC which i think is a little bit I don't know it might be a square peg in around to you know if you're if you're depending on the type of ICO token that you're talking about quarterly or annual courts might not be very helpful but but that's the big for me that's the big takeaway from these SEC orders is that they're trying to find a way for ICO tokens and ICO projects not to be left in legal limbo but a way to sanitize after the fact these projects and I think that that's probably a good thing we don't want legal purgatory many anything to add on that ya know III agree with those comments I mean it I think what I got out of these are you know these enforcement actions there was really nothing surprising to me it seems like the enforcement actions that come out of the SEC for the most part seem to be relatively straightforward like easier kind of cases for them to prove where you know there was an offering they could rely upon you know how we demonstrate that was an offering and it was no registration right or exemption therefrom so I don't see these you know and I absolutely comments that were mentioned I don't see these enforcement actions as really enlightening in any way what I want to mention was I was at consensus in New York in November and there was a fireside with chair chair SEC chair Clayton and he actually what I thought was interesting it was a very candid conversation he was interviewed by Glenn Hutchins and it was probably one of the most open conversations that I've seen him have it pretty much said look you know when he looks at an IC o—- more or less he's looking at it as it's a registered some type of registered offering or exempt from registration and then what he does is he determines characteristics that would not make it a registered offering or exempt from registration meaning that his perspective is this is some type of securities offering all right and then consider where do you go from there so I just thought that was an interesting perspective that kind of going back to comments he made earlier in a year that um at the time would deem somewhat controversial that you know he hasn't seen an IC oh that was security he kind of reiterated that to me in a way by kind of saying that his lens about what I SEOs or any your offerings you said that he hasn't seen an IC o—- that wasn't a security there was no security sorry yeah that wasn't a security but so his comments consensus were along those lines that he used things from the perspective of an offering being a security which I thought was interesting in terms of trying to understand the regulator's perspective and the framework and the mindset of a regulator and then how would something not be security um in terms of securities offering well you know it has to deviate from what would make it us security so this ambiguity still exists to a large extent but at the same time I thought it was telling that he portrayed his point of view and how he views things I thought that was telling from my perspective all right I got a few more specific questions for you guys but our sacha general thoughts on the current securities law applied to IC oh yeah sure thanks tone um I thought this was interesting when it came out and I thought more companies would well I wasn't sure I guess what would happen but it you know it seemed like a direct message from the SEC to anyone that did an unregistered securities offering thinking they were doing an IC o—- and that the securities laws didn't apply to them would have a clear path of what to do but it's not a very desirable path for any company that's in that boat and it was interesting watching the tweets of the Panera GaN CEO as she was saying like you know she was so proud of her company for getting to this outcome and it was just it was ridiculous watching these string of tweets saying how proud she was that you know they got they got fine 250 grand and have to give back all their money and have to register which is not a cheap process as bill you know alluded to with that long form that they have to fill out and they you know they have to publicly like this should be an embarrassment to them not something to be very proud of but anyway the it's your it everyone's right that it does give some clarity of what company can do it's just no one no one would if it's financially incentivized that unless you're under extreme pressure from the SEC that this is not something you're probably gonna want to do for your IC o—- and a lot of them probably don't still have the money left to refund people so that would be interesting to see I've seen a few reports that show certain wallets showing what what money is left from IC o—- projects but you know to do these filings with the SEC they have to disclose the extensive financial information and the bad actors checks and I don't think it's very practical for for these companies to follow these steps but you alluded to it right so what happens when you know 80% of all these icos don't have the money to refund our initial investments ah now what we'll see what happens I'm sure that you know it's gonna come down to that and though I think they'll just what can you do you can't get rocket or you can't get what is it water out of a rock or blood out of a rock like if the money's gone on verbalist expenses I don't know does Bill or Manny do you know how they're gonna handle that like do they put loans like attach things to people's real estate and then if they sell it 10 years later they have to pay back the sec and then the sec will give it to investors or how will they handle that well there is personal liability I mean we've seen we've seen enforcement actions that have SEC penalties that go beyond what was recoup so they're you know if if a project blows it all on hookers and blow I guess you could say they should be concerned about potential liability for that and you know it's it is a difficult proposition because sometimes you can't put the toothpaste back in the tube but it is what it is yeah I mean you know it's an interesting question right I mean it doesn't necessarily get you out of jail free because you say oops they don't have the money I can't return it there are mechanisms to collect and to you know enforce collection in terms of obligations owed I mean somebody somebody you know benefited from the proceeds of the ico and it's easily traceable yes so let's talk about some of that personal liability I'm gonna move on so we've heard unofficially people say well we think aetherium was a security but now it's not are they gonna have to return the five million dollars back to initial investors and how do you prove you were an official investor in etherium because it was those damn Jade I think was JSON files I got some people like that God and they lost their passwords too and the metallic wouldn't give him a new password even though he emailed some people like that's a whole giant mess like I would love to see it I wanna I want this to apply evenly across the board aetherium was an ICO are they does anybody here think they're gonna be they're gonna have to give people the option to return investor money now I know what the initial price of aetherium was twenty cents a token so I really want the SEC to wait until aetherium is below twenty cents a token which is where it's going and then forced this action upon aetherium what do you guys think of that one I think you I think you hit the nail on the head it's the the offer of rescission there's a lot of mechanics about how all this works that I think you know we're all left scratching our heads I but I think that all we can do is go from the SCC's guide that's right if they say they don't they're not going to pursue an enforcement action if you do a B and C then I think that it moves founders to do a B and C if they can and if not then they you know it's it's like laying it's like what if you've got a mob hit over your head now how are you gonna sleep at night right if if these types of remedial measures can be accomplished they probably should be accomplished yeah I think what's interesting you know you're raising great points about about aetherium but notice you know in all of the speeches and the hyndman speech in particular where they bring up you know transmogrification that you know you could have a security token or offering that turns into you at a utility they preface it by saying you know bitcoin is not a security and absent the offering of aetherium Ethier IAM Asthana security so they're kind of punting on that whole premise of how a theorem came to the market and i think you know this confusion about now you know something that came out clearly as a security offering could transform into utility I think makes matters even more confusing with that being said I think it could be a way for the Commission and the regulators to justify not moving forward in bringing an action against this area it's my position it's a very unique position and I think I'm only hearing it apply to ëthere IAM and everything i hear about aetherium like I said is not speaking about how a theorem came to the market but aetherium today so it's kind of like they're punting on on a whole offering and how we doing came to the market but they punted it off to the CFTC but did you see the CFTC recently put out a request for comments and if all those comments come back that it is actually centralized and not not a network that is comparable to Bitcoin and the things that make Bitcoin not a security I wonder what will happen there but I think if the areum has enough promoters that they're going to get a lot of people writing positive stuff about it so I can't wait to see what all those comments come out like III really don't have the time to put her all in but hey a lot of people watching we have 800 people watching this show this is definitely our new record and hey you guys know I have three aetherium crypto scam episodes you guys have heard everything I have to say about aetherium so please let the CFTC know that it's insane we and and and the other thing I'm we're gonna move on to the next topic but it's not just that part and you're right everyone seems to like everyone it seems to want to forget and brush it under the rug the fact that aetherium was an ICO and even if they say well it's no longer other than you know that initial coin offering but somebody did that initial coin offering so at some point it was completely centralized so I still think that those people that did the initial coin offering are responsible for launching and on compliance security and Jason Siebert and I talked about this at length on the very first crypto scam episode of etherium like almost two years ago now and it's amazing how no one is still discussing it other than you know me basically all right but let's move on I wanna talk about one specific case and that's the salt case so on salt came under fire the CC my way all of these articles are in the video description guys so assault got a subpoena from the SEC about their fifty million dollar token sale that took place at the end of November now you guys are feel free to put your comments on the whole salt issue now salt as a as a totally useless token you don't need to create your own currency in order to give out loans I mean this is totally ridiculous this has not decentralized the totally centralized project now the interesting thing here is is that but the eric worre he's was quasi involved with the salt company and as the article points out he might have been in violation of his 2014 settlement with the sec over the whole Satoshi dice situation and here's the SE C's press release from 2014 away eric worre cheese was a fine for issue for I guess miss filing paperwork on securities when he sold Satoshi dice you can guys could go ahead and read that over and coin desk also talked about this story as well and I said all of these links are in the video descriptions have you guys like looked into this the whole salt and Eric warranty situation and what's going on there and how bad is it if he is found to have violated a prior SEC settlement that he had so I think just I found a macro-level this sort of fits into everything else we've been talking about this isn't a surprise that this is another ICO that the SEC thinks was a security one of the interesting things about it that you pointed out with his prior settlement is that if you were going to do an offering with a if you were someone that the SEC considers to be quote unquote a bad actor and you had been involved in a certain enumerated list of criminal activities you know one would be something that was dealt with dishonesty embezzlement fraud another one is is an SEC enforcement order there's a list of other ones I don't have off the top of my head but if if you qualify for one of these types of prior conduct that makes you a bad actor you're not allowed to be an executive a board member a major shareholder for a company that doesn't offering so this I think compounds the problems i don't you know i don't like to comment on anyone's an individual you know i don't i don't want to paint mr. Vorhees in any particular light but the issue compounds the the reasons why registration is important so either he wouldn't have been prohibited from being a part of the project or if it was a certain time in the past and i think the date is for 2013 or I think another section security sec says ten years you'd have to disclose the shit out of it basically you have to go into all the details of what the the bad actor conduct really happened to be so it's an interesting twist and and I think this is this is just one of the additional reasons why you know raising any kind of a fundraiser is a trap for the unwary and if you're raising funds from third parties to and you and keeping that either for yourself or using that in some sort of an enterprise with an expectation of profits you need to you need to have some you need to have legal counsel basically to make sure stuff like this doesn't happen ya know you made a good point like had they registered with the SEC the SEC probably could have told them hey or authorities can be involved they would have day he would have been prohibited from being involved absolutely oh man I'm just seeing how bad they nailed them Jesus what he's agreed to settle the SEC charges by paying full disgorgement of the 15.8 ah oh wait that sounds well that was million oh it's not that bad he only fifteen thousand I thought it was fifteen million all right fifteen thousand stole thoughts but at least not fifteen million in profit plus thirty five thousand dollar penalty for a total of fifty thousand dollars I mean was that really his profit only 15,000 on Satoshi dice that seems kind of small but I thought it was a lot more than that but I think he gave a lot like he raised something like five thousand bitcoins and then returned four thousand five hundred of them to the people that that had initially contributed so there was something like that happened I don't think he was a necessarily bad actor during that well that explains it why he only had 15 grand profit again alright well we're not here to talk about any specific person any general comments on this before we move on Manny or Sasha well just quickly the the articles about him that came out they had to redact parts of it because they were calling him the CEO but it says he was on the board but then he stepped down from the board so who knows if you scroll to the bottom and they say never she was never the CEO I could have told ya he was like you he was like half consultant and a board member I mean he wasn't like directly he wasn't that he didn't have a CE position there but he was involved was it did he get out before the I co I guess would be the question and if they thought that their I co wasn't in security when they were doing it then that you know they should have they should have taken the steps to to obtain a counsel that would say that it was a security and that he couldn't be on it but at the time they were doing it it was before a lot of these like the Dow notice had come out and money had come out but a lot of a lot of companies I think still thought that there was such thing as a utility token and it wasn't till later in the year that the attitude really shifted away from that and then even the Groton thing that he's listed on the date that they listed it was in the summer of 2018 and then they filed it in January but that article is saying oh he was still involved in the company in January but if you look at the date that they wrote they initially did it was August 2nd 2018 yeah God said hey Brian Klein I probably is like the busiest man in blockade these days is there anyone he's not a defense attorney for about Erik Voorhees who says something like I'm really proud to represent him he's a visionary he's abided by his SEC settlements the wall street story was unfair man I climb was on the first panel I ever moderated Brian Klein was on nob panel so that was back to like 2014 or something like that these cases I mean you know they just week of didn't you know the need for competent counsel and kind of doing diligence right I mean you know to have someone who who's you know bard affiliated with with a project in anyway you know it's extremely troublesome and if you know some type a minimal analysis was done don't came up with that determination said you know the the the you know the the potential enforcement action on ICO is what it is but the fact that someone involved the voice was involved which it looks like he was you know boy at his bar I mean not that makes it that much more troublesome yeah I was really hoping we would get David silver for this because he was like the first guy quoted in a song like the old thing like here is that Bloomberg article of with the SEC going after icos and here he is that there is a there's global crackdown timings silver government wasn't going to be intimidated by a bunch of libertarians and anarchists in the next year or two we'll see more than just enforcement actions yeah well we'll get so we're back on the show or he will definitely be in Vegas to definitely come out yeah I thought like thought he was a libertarian not wholly kidding no silver he has your all right so let's move on I this is a story that hit the headlines so a judge why is this thing and so on to load so a judge had ruled that a specific case I co is not a security said that the SEC was not able to justify it being a security I don't really pay for subscriptions to lost off maybe I should since I'm doing a law show now but again I'm sure you guys had seen it now before I have you comment now Marco Centauri was one of the first to comment very proud of this micro Santori he was the initiator of saft da where's that stand for the secure simple agreements for future tokens simple agree on future tokens thank you so much and that's right that's what it was and on so so he says a federal court in California just ruled against the SEC and then ICO case explaining that the plaintiff will now have to prove foreign ICO to be a security if you care about whether i ce o–'s create securities read on so so he's obviously in favor of this our own drew Pincus who has not been on the show in a while unfortunately had something slightly different to say many are excited to see the you know the judge ordered that the block vast instrument is not a security looks good but maybe let's not start planning parades quite yet and these were his thoughts I'm sure you guys read them all even though it was a while ago it was twenty days ago now so any what what happened there what did the judge actually say is this gonna get bumped up to a higher court like how critical is this ruling please educate the general public I will start with how a man II have always thought with you I tend to fall into you know I the opinion of agreeing with drew I think I think it might be too early to have a parade and a celebration because you know we're talking about a preliminary injunction so it's not it's not you know one of these two to kind of generalize that you know it's not something very specific to the sec determining whether an ICO is a security or not you know a specific action requesting the court grant an injunction so I think you know it's too early to kind of celebrate it is interesting though because I know people follow you know when the particularly when a sec is not successful so you know for the you know the people who you know the Nerds who follow that stuff it you know what is very interesting you know what courts rule against yes you see but I'm not sure you know going back to we're mentioning earlier with regard to you know clarity of you know what are the elements or indicia that make I see Oh a security or you know what elements are at issue that make it not a security I'm not sure if we get any of that from this I'm thinking this is more of you know I'm looking at it from the perspective of it's an injunction and I'm not gonna you know we too much into this beyond that all right Sasha let's go over to you Joan yeah this case was interesting of like everything that came off Twitter it when I first looked at it a thinking said something different like that that's you see actually lost the case and that this wasn't determinants of security and then when you read into it it's you know this is just a preliminary injunction and the injunction is a very hard standard to me like the SEC has to show that the person has previously violated the securities laws and that there's a reasonable likelihood that the wrong will continue to be repeated and if you look into the facts here the guy mr. Ringwald he he'd put 170 he's out seventy five thousand of his own capital into the company and one of his staff members put a significant amount in as well and all he has left is forty thousand so the SEC had his forty thousand locked up in a temporary injunction and he was unable to feed his family and that's why I think that's part of why they were so adamant in saying that they don't need to keep this injunction going I don't know if that's the to me that looks like why they just didn't want the guy starving today you know his family and and there's also a big question around what the investment was for so he says they're only ten thousand dollars worth of cryptocurrency was raised in the project even though they listed on their website that two and a half million had been raised they they're saying in factual like response to the SEC now that only ten thousand was raised and it was from thirty two people who were testing their website and that they weren't buying it for the expectation of profits they didn't even risk their capital which is what Marco is talking about here because they they thought they were just using it as a test net so that the the when two pretty great lengths to establish that this isn't necessarily like they have to show whether the SEC doesn't have jurisdiction if this ICO is not a security if these 32 people did not expect profits and did not risk their capital then it wouldn't qualify as an investment contract therefore it's hard to prove I there's so many funny facts in this case though that the the website said they raised two and a half million they said they had SEC and CFTC and the BES is approval the BES is a made up organization called the blocks chain Exchange Commission so you know these people are liars they're big time you know there probably is gonna as the case unfolds it's probably gonna come to light that they're lying about stuff and the SEC is saying that they did raise there's enough transactions blockchain transactions to show they raised more than ten thousand dollars but until that information is actually tested there's not enough here to lock up the guy's forty thousand dollars that he has left that he needs for his living expenses but limits so it's all the guy who had his last forty thousand dollars locked up was he one of the creators of this thing or he was just working know he's the creator so before we go over to Bill you raise another interesting point I forget my friend thought so I want to throw it out there like what happens when you only raise twenty thirty thousand dollars but you start blabbing all over your website and the Twitter that you've raised millions of dollars in order to generate interest in your you know fake company in order to pump those tokens later like where's the liability there because now you can say hey SEC I really only made ten thousand dollars I can give it back to you no harm no foul what happens to the lying in order to you know pump your project like like what kind of liability there is for that in this well well clue no one cares in this space but in general once once it would be determined that this is a security or any similar project was a security which they have to beat this is the first time anyone's fighting back on that sec on this so now they have to you know they have to actually determine that it's a security by going through and making the analysis this initial analysis doesn't really mean anything it just means they can't have the injunction if it's a security than these securities that laws apply and it's you can't make fraudulent misstatement statements to the public and that's certainly something that can be punished for making those statements stinks to high heavens right because like the guy is claiming that all he has is forty thousand left to feed his family yet he somehow has the money to pay for a lawyer to fight the SEC yeah that was one of the things they alleged was he didn't have any money to pay his lawyers and that's part of why they probably didn't issue the injunction so that he can pay them I think that's was my take anyway let me dig the tomahawk case right I mean they didn't sell any tokens right you know that that's an interesting case by comparison right well you know where they didn't sell any so it doesn't really even matter how many tokens are sold or not it's it's it's if you're offering these ico with their Dean securities in terms of you know or you know either registered or an exemption from registration you know that's really the fundamental point so you know I don't even think that matters in terms of how many tokens are sold or not I think you know I agree with Sasha's comments I mean this is it's it's kind of early days to kind of look at this case more than I think you know really should be you know it should be taken somewhat superficially because it's talking about a preliminary injunction and I think what's what's interesting about it is this is the first time that there's been resistance you know the other the other matters that we you know liken to refer to all the time in terms of enforcement actions you know there wasn't much you know disagreement so there was consent from from those individuals and those projects and they you know and they agreed with those enforcement actions and and they were closed out but this is what you know unique time where there's some you know just you about the fundamental question but to look at this more than you know then what we're saying I think is kind of jumping a gun uh bill quick thoughts I know Manny has to go in about ten minutes I want to get him for at least one more topic we can always come back here if there's something really important you want to dive into no I don't actually this is a case I don't care to go into too much detail I thought there was a lot of really good comments but you know let's just look at this as a matter of Civil Procedure in this case it might have been Criminal Procedure so an injunction is is something that happens before trial in a lawsuit and usually you know if if either the SEC wants to put pressure on someone or if I'm in a civil lawsuit let's say and I want to put pressure on someone you can go in and you can say I knew I wanted to assume that I'm gonna win and order the court to freeze all the assets so that none of the proceeds of whatever bad conduct can be dissipated right but what you but if you're gonna make that move you have to essentially prove your case at the beginning of your case and not the end of your case and it's usually before you get discovery it's before you get a lot of different things so it's a very high bar and it just it compresses a did an entire lawsuit from you know year maybe two years into two weeks and it's something that as everybody said this isn't this isn't additional information but it's you know it's hard to do judge I will say this judge curio in I believe he's in the Southern District of New York is a very well-respected judge all over the countries so his opinions will probably be in this case as it goes forward will probably be taken with some I don't want to say grand saw what's the opposite of that with some respect all right very good Robin gravity gravity with some gravity that's right nice alright so I guess our last topic in security law before we move on and maybe we'll save it for next time because I know I'm missing Jason and some of the other guys that are dealing with securities we're gonna be coming back to finance quite a bit so Larry Cermak he's a lawyer right yes so Larry Cermak wrote an article III think he's a he likes finance a little too much it makes me question how much of the finance tolkien he actually has and he wrote he has no coins he had it he published something recently Singh has like everyone had the block had to show how much coins they have so many III know but like I don't believe anybody in this space like how do you know who hasn't hasn't doesn't have any so he wrote this huge piece of out by Nance and then he had this gigantic tweet storm about by Nance praising them again to high heavens except everyone seems to ignore his piece number three by Nance raised 15 million in an IC o—- in July 2017 and within six months had become the largest cryptocurrencies exchange in the world hmm I wonder why when you print your own money and you sell it up money for fifteen million dollars you have a huge edge on all of your competition of other exchanges that decided not to print or sell on compliant securities it's been the largest crypto exchange by volume I probably maybe I don't know I don't trust any of the volume of these Chinese companies now of course they're not actually in China a China banned all I SEOs so they weren't gonna do it out of China I believe they've already moved like two times and I think they're in Malta now I I think there was somewhere else before that so he mentions that and if he goes on about how great they are and all this other stuff but what about this like you can someone like tell me what that was clearly a bunch of US citizens bought this stuff they're all trading on it they're all praising it and they're like you need the finance token we get cheaper fees with the finance token no that just means they're ripping off the people the I'm buying into their printed money like that I'm sorry like it might be only one that finds this ridiculous or any one I guess Manny's got to go soon Manny let's start with you here I think he put in a telegram Chad he can't comment on this one Oh Manny can't comment on this one sorry I didn't see the telegram shot the other one okay Sasha you go well I should just cause I have some finance tokens and I don't know if fifteen million doesn't seem like that big of an IC o—- compared to some of the other IC ODEs we saw out there so I kind of leaned towards they use their money to build something that seems to work hasn't been hacked have some integrity for the coins they're listing like that chart that Larry put in the Twitter thing produced by Dyer shows the you know the losses on Finance coins on average compared to the rest of the market or lower and that could be because they only list 158 that they have a pretty stringent process on but but I and you know for the jurisdiction hoppin definitely will make it hard for the FCC to you know to go after them on something like like their unregistered security sale like I do think that's probably wanted what it would boil down to if it did have to come to the test but but then there's also a and our next story kind of gets into the tether thing but now finance is doing so by Nance holds a lot of tether and there's a lot of risk that tether is not worth what they say it's worth and Finance is now creating a basket of stable coins and maybe they're doing that you know to get rid of their own bags of tether so that would be kind of anyway it'll just be I'm just sitting on the sidelines watching this like Bill like very quick thoughts because I want to get Manny's views on the tether story hopefully everyone's able to comment on our yeah I don't I don't really have a lot of knowledge of this one tone I will say this though you know if and I haven't used by Nance personally I tend to like my exchanges to be in a country that I am in simply for the reason that if anything goes wrong I can try to hold them accountable so you know that's my personal preference but you know I I think that generally we we need to be very suspect of exchanges in their economics and how they work generally and this isn't specific to finance you've heard me say this over and over again you know unless it's very clearly disclosed this how the exchange is making their money and whether they have for example their own proprietary BOTS or they're taking the other side of a trade to their investors participating on their exchange there's a tremendous amount of room for I guess you could call it skimming and and everyone needs to be very careful about that to the extent they want to capture the economic opportunity of their trades if you don't then you know use whatever exchange you want to use yeah and I don't want to talk about the story in the upcoming episodes because everyone is in the chat is like saying that the SEC it's none of the SE C's business what by Nance is doing they're not an SEC jurisdiction during a European Union country Americans citizens are speculating on their token I don't understand how people in the live chat think that the SEC has absolutely no jurisdiction here talk about what the SEC is jurisdiction is right there's an issue of how far outside the United States the US securities laws can go and so there is a test called the extraterritoriality test which means that the US has jurisdiction if title passes to a security in the US or if irrevocable liability forest security was taken within the US and that could be you know for example you saw in the tezo's case this was really the first one where we had a court decision relating to this issue the judge said well for example you might you had a us-based IP address that contributions went through that was in the US transactions get recorded on a big Bitcoin eutherian blockchain in the US so arguably title passes in the US so there's there's different ways that courts and regulators are determining you know how you can attach US jurisdiction to these things but generally speaking you could have a court case with some against some person or entity outside the US but what are you really going to do unless they step foot in US soil you can get Interpol on them it's it's really so it's it's like how Comey is bringing indictments against the russians in new york city like this is very different right i mean a brig going if he washed it in Russia or if you launched it in China I would absolutely agree with the common Thurs right that yes the US SEC has no jurisdiction in Russia or China they can't go in there but come on but the SEC equivalent out of Europe aren't talking to the SEC right now about how to manage this stuff they're gonna be on the same page maybe I can't speak to that yes all right let's all let's move on to the last topic hopefully we have Manny for a few more minutes and this is the ripple situation so US officials are probing Heather's role in bitcoins market manipulation so I'm not gonna get into the details of the article but basically it looks like the US government is going after Heather and BitFenix accusing them of the price manipulation now I personally think this is ridiculous this is the kind of stuff they should have done two years ago not like I need a firm after the drop I personally don't blame ripple for the for the rise and I don't blame ripple for the fall yeah I didn't want ripple to exist to begin with and this is the kind of stuff that needs to be done ahead of time in my you know financial opinion but what guys think from a legal perspective about the whole rupal bit FedEx and tether being blamed for price manipulation manual start with you since you have to go sure yeah I think this is really interesting I mean right we all know about tether and yet you know the issues around tether and you know what was going on in terms of you know was it truly back while USD how is that maintained and all that right so you know the there's just questions that unfortunately still remain I think to me how what I read into this is this is going to in my opinion have an effect upon the SEC approval or not approving the the Bitcoin ETFs alright because the the argument at what the sec is that bitcoin is subject to manipulation and surveil the Bitcoin marketplace the way we surveil other marketplaces to stave off prevent manipulation and I think you know even though this kind of seems kind of somewhat far-fetched and out there potentially um it just drives into that fundamental point and you know in that video that you showed when you started off the show with chair Clayton you know later on that video he talked about the Bitcoin eats yet in the fact that the SEC is still uncomfortable wrapping their arms around the fact that an exchange could effectively surveil for Bitcoin preventing manipulation so I think this just drives that point even further and I think hurts the prospects of the Bitcoin ETF um you know being approved all right hey stop screen share for a second let's say hi to Adela haired a lie oh yeah after I'm you I'm good I'm gonna drop guys Happy Holidays everybody see it I cannot mutual Adela you're unmuted oh shit I just miss Manny I didn't even get time to make fun of him for his like microphone that's good no it's a geek on me for my new haircut laughter oh I love it this is this is basically what I call the like I am NOT going to pretend anymore here Silas reality of it no I wasn't pretending hey here's the thing here's the here's the truth right so the truth is I thought I had a terrible shaped head for a shaved head and it turns out the complete opposite I really uh I mean well why didn't all of you guys complain about my hair like for the last couple of years I would have done this earlier you know a signature move man all right all right let's move on with the show adela you've been watching we'll get your let's finish up this story and then maybe I'll grab your comments on our earlier stories it depends on bill and Sasha how much time they have you guys both know I can do this all day but on oh wow look who else is coming in oh boy no unfortunately one way better looking oh you get Isaiah here today there you go oh my god this beard you know no hair you know oh my god I know rest this has more hair than me my wife like about this big since I was in high school guys hey how we doing on time Sasha bill do you guys have any commitments what do you guys have I'm ready to go one more hour at most you guys have commitments so that I know how to manage this I think another half hour is good for me all right Kamio I have guests and my mom is here trying to make a rum cake in the kitchen it's pretty serious all right so so Adela so let's go to you Dan hey you've been listening to us up to this point anything you want to say on any of the stories the floor is yours yeah because you know we have a lot of things to cover but oh no no I want you I want you to comment on anything that we've said prior up to this point so why dance is fine anything yes just just floors yours go okay so I was thinking about finance because I was wondering I looked on the up in San MSP registers like portal and I I don't see that they're registered in us as men of speech which is a little you know do you guys know what they're registered or not you know I don't have all of the information whether they're well you know what they register Dax because for example the you can use different search things in the search fields so they could have a different DBA that they used to register I don't know does anybody you know I talk about finance the company or are you talking about what classified dirt coconuts I'm gonna just watch the whole thing unfold exit those but it was wondering first they were registered MSB in the u.s. they're not and they're allowing to Bitcoin a day to move without requiring kyc but they're saying that they are complying with like to report suspicious transactions and stuff without registering so I have no idea how that really works but you know talk about how libertarian I am but it just seems like if you're I mean what is what is what is the risk you know what do you / up for example how risky do you think it is for them to continue you know operating practically in the West because from I don't know what it's what is it a dollar ninety-nine two dollars and ninety-nine a month you can you know get a VPN and use their services anyways right like you risk they call themselves a largest exchange in the world and I wonder what they're using to base that on if it's volume or what I don't know it's probably volume I want to throw one more at you I'm Adela so you're talking about the money services license with what registering with Vincent on you know withdrawing value from the exchange what about the whole you know tether competitor no true USD which is supposed to have actual US dollars American money backing this stable coin how is that any different than actually moving US dollars like if anything I would think that would need a money services license you know does anybody else well someone did an interesting thing about how to arbitrage the price difference of Bitcoin today from coinbase to crack in know from queen bees to bid treks to finance to crack in in to tether and then get your money out where if you did that you would make like a guaranteed six dollars and not have to go through like a YC to get your money out wait so you're actually getting paid to get your money out without kyc I love it exist it was on Twitter today so it had like this great flow about how you can arbitrage because I want to say like there was a difference of my like 100 or 110 dollars the price of Bitcoin on coin base and Finance and then apparently tether was up a little bit today also so I'm with you duh but I'll tell you this I don't think there are anything to do with the US because I can't sue them and if I could sue them I would you'll find that you'll find a way David I believe in you me too but I mean I my problem with what he talks about and blanking on the CEOs name when they left Japan to go to Malta you know everyone that leaves Japan to go to Malta they're not gonna stay in the US and obviously people know how I feel about certain other exchanges so anyone if you can't meet the regulatory structure in Japan you're never going to meet the regulatory structure in the US so now I don't think he's coming here and I think he's staying out and I think what sorceress said was dead-on accurate they're not exactly complying with kyc at the moment I mean it's not hard you know we're certainly doing it a little bit coins right I wouldn't call it hard I would call it yes you know to register and to get the state by state licensure so I'm just wondering for the you know largest exchanger in the world why they wouldn't just bother well again like my biggest problem with with them like again look I I hate can't I see as much as the next guy right like I understand that if you don't do kyc you aren't caught you breaking the law like I wish you didn't have to do kyc my problem my libertarian problem with this like my problem is everything I hate the whole kyc laws but my problem is they created money out of thin air they created a token that I know is useless from my knowledge of the blockchain so my problem is they cheat it so to me like if I was a competitor of theirs I would say hey if they're gonna be allowed to create money out of thin air with an IC o—- token why am I not allowed to do the same I want to break the security law as well I want to create my own 15 billion million dollars also so I can pay better and developer so I think why don't you do it I mean you're gonna have you're gonna have a conference you know coming up soon why don't we launch this you know like breaking the law going no no because it's like to me this is like it I mean they do cheating and and I think the reason why other exchanges don't stand up and say something and try to like go after them for it is because something like coinbase for example they want to trade their scam coin and just profit off of people trading the scam coin instead of actually saying hey how come we have to go out and raise funding and these guys can print their own money anyway do you see that bee sings article today about a feather and Noble Bank and how he saw the and how he saw the money behind tether might actually be there um no I haven't seen it but now that we're back on tether any thoughts I mean bill haven't heard from you in a little while and then we'll go back to our David and Adela your thoughts on the whole tether a criminal probe thing which i think is like coming two years too late you should have regulated this stuff to begin with and then we wouldn't have this you know question if the money is or isn't there we have no idea so I you know I've been following this theory and I don't want to call it a conspiracy theory because I don't know anything about it to be candid the mechanics about how tether was supposedly used to pump the price of Bitcoin we saw this as a narrative a lot in the second half of last I didn't believe it I well I don't exactly understand the mechanics of it I mean I know that perhaps you know you used it I don't know I and I get financial scams it's kind of my business to understand those so I don't get it however I will say this to the extent that there is something there that is being used to manipulate the market this looks very similar to me like the foreign exchange antitrust cases and the gold manipulation and the silver manipulation cases that we've seen with Justice Department enforcement actions and then you get large antitrust class actions that come out so I I can say that myself and some other very top antitrust attorneys in the US are taking a look to see whether something drops from this from the DOJ and if it does it's going to be a very big antitrust class-action most likely but if if there's something there if there isn't then there then who knows I actually I've been throwing up good comma then we'll go to David I get a David or Sasha so to me all of the gold and silver manipulation stuff that I've seen it's all been like skimming in front of other people's trades like it wasn't like printing money out of thin air to depress the price or to raise the price it's always been like hey I know that the price of gold is you know $840 but I'm gonna tell the world that it's eight hundred forty dollars and eight cents because now I'm cheating and I can make eight cents just a day and I can do this every day with large amounts like it wasn't like pumping the price and definitely it was just skimming little tiny bit all right David get on a call unless you want to say something else to that effect bill will go to Sasha and Adella yeah I'm just gonna leave it broad at this point because I don't really know I like I said I'd never really understood the details or the mechanics behind the theory well for a second I'd you say bill called himself he what are the other ant the top antitrust lawyers bill do this you guys start saying that you're the top antitrust law No thank you no I wasn't referring to myself I was referring to some others but thank you take that away someday when I have more gray hairs perhaps what was the highlight sasha was the best thing someone said so far on the show oh I think that you just pointed it out bill calling himself the best and she trusts yeah my take on tether though I did a podcast with this CPA Kara Haas a few weeks ago and she's been following the price move like the yeah the price fluctuations but also the tether wallet and she's very skeptical of the whole situation and and she's it's just she tweets about it every day now is really interest when she sees all the other movement going on there on their wallets on a block Explorer but she was saying what they had they so they were supposed to have an attestation but they just got some consulting firm to perform their audit and they saw that they had the money in the bank that one day but that doesn't mean that it's there every day and it's certainly not a full audit but apparently they've been trying to get companies to do an audit for them and everyone's declining to do it so I think it's kind of interesting that the you know the CFTC is probing into it because that will probably get to the bottom of it and and actually in the podcast I did with Cara she was kind of talking negatively about you know go tether or the risk of it and a lot of a surprise it was one of my most viewed podcasts and everyone had very differing opinions like the older people in Bitcoin had a lot of respect for BitFenix and after they got hacked they created Ted you know they created they did something to try and replace people's money and it was thought to be kind of the crypto way to do it and then now all these banks are coming in you know making their own stable coins and competing against them and anyway it opened the door to a lot it opened my mind to a lot of drama you know there's that bit the next Twitter account and anyway I've been following it pretty closely on Twitter since then but but it just kind of singing back with the popcorn watching it I Bala any thoughts no you okay David when I had anything to the Thunder story or add a line jump I think that you know if we're looking at an article I think when this article came out I got quoted and coined us yeah I started doing my PR for me towing now this is why I come on the show so people think on me when they'll call himself one of the top dogs and you know no I did right here ma'am I'm gonna ride your stairs no I I read it earlier yeah but my whole point being is I think on one of the other ones I got quoted because I have a whistleblower case that I am the actual whistleblower tie to the whole BitFenix and tether firm so I am literally part of the probe that the government is investigating where I'm desperately trying to work with the SEC with the CFTC I've had I've given over data to them data dumps from professors then this is going to take a while but they are there they're looking I know people want them to jump in and actually do something but it's gonna take a while for them to do it and do it right but it's getting done I mean they're gonna be a lot of Main Street investors to get wiped out but it's unfortunately a part of the process I guess now I got like what happened last time if tether blows up that's good for Bitcoin right because people wouldn't need a safety net and not safety net it's gonna be Bitcoin yeah I see yeah III don't wanna you know I mean look at this I have to look at you everywhere man like what is this but we scroll down to the first line two days before Thanksgiving really having 30 people and three fried turkeys I am down 12 pounds since this article I'm no longer allowed to eat food I haven't had like booze everyone's been making fun of me for being fat when the first sentence in a fortune article is heavyset so 12 pounds since November 21st so it's been a month I'm down 12 pounds in a month with no dieting nice good job I'm gonna send you on my food god I actually ended up losing like 15 pounds myself without a shirt on and you know I saw it I thought it fit too so I have two things to say right don't you are you important things to say number one if we could just go back to that picture of David for a second it looks like a glamour shot can we just agree that if he goes missing we can I use this picture to find it that's one and another really sort of interesting one is Tien ABC is anybody doing that this year yeah well she'll lose there that's not fair another question tone do you have psoriasis look at the ad rias's wait what is psoriasis is this time for me to say goodbye now always always like blue steel looks like wait have you seen Adela have you seen the fake cover we made no oh my god the fake cover is even better you thought over to me okay we're going got two more topics I want to try and get your thoughts um so this is interesting US Treasury Department sanctions Bitcoin addresses what do you guys think of this now again our own drew Henkes who I can't get back on the show says I tweeted about this as well open questions from today's edition of Bitcoin addresses to the OFAC SDN list I'm assuming that's the like the banned list do miners nodes and exchanges in the u.s. have to block transactions from these addresses does this suggest or require code changes so obviously you can't force code changes on mr. Hodel a very frequent Twitter troll that actually like one of the few says drew I think the only answer to that question is outlawing Bitcoin in the US I drew this agrees so what do you guys think of this and I like what they try to do why did they do it I I didn't read the details I just know that the US government ain't gonna get their way on this one that's not how Bitcoin works who was the star not sure I think bill you have to go soon let's start with you you Munich I had on mute no this is actually just one of the most fascinating things topically for today and I don't have a whole lot of commentary on it other than you know I think that what we're going to see is that governments will try to capture Bitcoin and make it subject to whatever laws and whatever powers they are hoping to to utilize and so I think this was really a fascinating way to attempt to do that so you know we've talked on the show before that I think regulators really one of the ways that they can try to control Bitcoin specifically is by regulating the on ramps and off ramps and how you converted into digital currency excuse me fiat currency you know that doesn't seem to be very useful at this point I suspect as you said you can't this is not going to change the code of Bitcoin so this one would probably failed and the more attempts to regulate and control Bitcoin fail I think the stronger it gets so that's my two cents to regulate and control Bitcoin fail I think stronger I guess so that's my that was come from David's computer I muted him a David turn off to our podcast ah adalah any job you're back I'm a new David again wait wait I'm good I'm good you're good now okay go ahead no try it again right blue back anymore ah no you're okay now okay I know you know this is just a step of what's happening anyone who thinks this isn't where we're moving is insane this is just the government taking another small piece of freedom away from people who love freedom rights also don't get it right this time all right I wouldn't exactly call this small we do have to separate it here right like the fact that they can tell exchanges what to do is one thing but I mean drew specifically talked about nodes and minors now that's a different story altogether so uh adela thoughts on this you know I think you're probably the biggest of birth Arian in this group yeah just give me just give me a second I'm just doing one more one thing okay Sasha we'll go to you sure I think I think they can enforce this at the exchange level so or you know ATMs that have a compliance program set up if someone can scant use blocks scanners to find this address and block transactions for them or if they receive a transaction from these addresses they can hold onto the coins and notify the authorities by in terms of stopping people from mining that coin at a you know overall level because a trance-like trick I think what initially when this happened a ton of people spammed those addresses so Bitcoin was going to stop you know mining because those addresses had had a transaction after oh fak put out the notice then you know we wouldn't be we wouldn't still have Bitcoin going today it's it would be I think the only way to enforce this is that the that's the exchange level and also you can't really control if you were if you hi were you know Tony we're selling mean your bicycle and you know just out of one-off transaction and I had those I had an address that was blocked by OFAC you and I sent it to you you wouldn't have no way to know that that that I was you know blocked at an individual level so I think I I wouldn't but I think they're gonna try and go after the wallets because the wallet might not yeah that's what I'm saying – they can the wallets can stop those those transactions from happening or the exchanges you know can see it ahead of time and stop it but otherwise is pretty hard and and it's so silly to in a sense because how hard is it to create a new Bitcoin address and never use that address again I don't maybe there's a lot of Bitcoin in it and that's what they're trying to prevent is from those Bitcoin being moved but ya know I I got you on that one alright so let me see here hold on without daxing myself and everyone else hey here's that picture of our own David silver and we'll cancel that I like this better what's wrong with this I don't say oh that was great I didn't think well I always thought you were bald this is like seriously man I'm not thinking on that fat I'm like an extra ten pounds in these picture like professional photographers do wonders I'm a little pissed you take away my second chin that's the problem when you don't have when you know the S you know I've been around professional photographers too which is why if anyone ever sees my like tinder picture and they'll never know that it's me because it was not a professional photographer so I have nothing to worry about hey we should talk about blockchain terminal it's my favorite store legal story of the last two weeks wait I don't know what this is I don't know about this I I'm Ben and I've been a little busy lately traveling the world what is this I will say something about the recent Iran thing say something about what the recent Iran thing go ahead gobbling it up the floor yeah go ahead are we just talking about a run oh yeah well do they yeah actually I wanted someone to explain why door Betty the address I know it's in the article so but but I didn't really read the details what was there like some Iranian people tied to terrorism or something I received a little bit of Bitcoin well this is really interesting to me because you know in October this year FinCEN released an advisory that stated that since 2013 Iran's use of virtual currency include or included at least 3.8 million dollars worth of Bitcoin denominated transactions per year which I mean doesn't really seem like a lot right but that advisory came right after the whole sort of like Trump blowout right so it had me sort of questioning be I don't want to see legitimacy because obviously I don't know what's going on you know behind the curtains yeah but it just seemed that it came right after the whole Trump thing and uh they're saying that while the use of virtual currency in Iran is comparatively small virtual currencies and emerging payment system that may provide potential avenues for individuals and entities to evade sanctions so that did come out from the US Treasury I'm really wondering how much of this is actual risk and information based and not more policy based they're asking exchanging vast exchanges and peer-to-peer actually registered exchanges and peer to peer exchanges to really just sort of look very carefully at payments or activity that has originated from Iran and of course you know to look at the SDN list which if if any does anybody know what that is I'm just going to say it's the UM specially designated Nationals and blocked persons list that's one st & Demons stop it what is wrong with david say I'm really gonna code I got memed then I'm so in love with myself today you guys don't know how much it is if I Han pounds no one's gonna love me as much as me you know yeah you know you you're you you're moving up the range so far the B being hated again bye-bye gloating so much right I'm using them keep going Adela like you know serious stuff again so so exchanges were asked to monitor transactions that originated from Iran and of course I mean how you know how how realistic is an enforcement of that sort of thing again you know always ask myself when these things come out you know how much of that is actual risk-based direction versus you know just knee-jerk policy cuz you know 3.8 million dollars a year in Bitcoin denomination doesn't really sound like that much like what kind of broke-ass ratchet terrorism you know thing are you funding with that yeah and we don't even know if that's how much was the total like it could have been like for example you look at a wallet sometimes and you're like a hundred Bitcoin went through this wallet you know like holy shit they have a hundred Bitcoin in reality the final balance is like three right because it was Bitcoin in and out in and out you're like sending it to each other basically so a lot of these statistics are so flawed absolutely Joanna net that actually brings up a very important question which is you know how much of this information because there's no citation to this you know since they cited in this they stayed in the advisory that since 2013 Iran's use of virtual currency includes at least a 3.8 million dollars worth of Bitcoin denominated boo transactions per year but where's a citation like where where did you get back from did you get that from you know Quinn dance like where'd you get that from you know yeah and not to mention more and more people are starting to use mixers we're gonna have all we get like Bitcoin is on the verge of having privacy Manero can only dream of and uh I mean all of this is kind of pointless at this point what kind of methodology I know at this point that the Treasury does have a designated crypto sort of you know expert team right but what kind of methodology are they using to do this is you know Shane Alice is helping them on the side like what's going on wait they're gonna have to provide that info all right any other thoughts on this Sascha Damon got on you I just think that you know it's funny you were saying mixers it's not like mixers or a new thing mixers have been around forever so I mean no no they're getting much better and a lot more user-friendly they're not the same mixers that have been around forever yeah but I'm just saying that it's they're getting better but it's like everything else I you know it's gonna be a foot race about who gets out in front of this faster regularly they're stopping people from being able to make chains shielded transaction chains worse chains that claim to be shielded transaction chains so you know the regulators always have to adopt to the technology so I do think it's going to be there's always gonna be so many claims to create the better shielded transaction to help people do the things they want to do without being caught online Sascha your thoughts yeah I guess it'll just be interesting to watch it play out I wonder how many more addresses we'll have on that list this time next year oh yeah there's probably going to be a lot more hey David if you want to send me the link to your other story I'll pull it up by daven I sent you the link to the BCE terminal you did where'd you send machi a terminal oh I got it so for those who don't know about blockchain terminal they raised 31 million dollars and about two weeks ago a week ago it turns out that the guy who's running the ICO was really someone else actually going in a second link this was the essentially the wrong one first that was the article that made me laugh talking about this one so the guy who ran blockchain terminal ICO was a guy named Sean McDonald it turns out that his real name is Boaz matter who ran an 800 million dollar Ponzi scheme in Canada we went to jail for four years and then was barred by the Canadian Securities Exchange when he got caught now he was like it's really interesting I assume you guys all know Rand nooner yes oh yeah I shot like six times well he's tied into this really so this article written by the block frank Chaparro wrote the article gets published I think it's their biggest P their bit their biggest article to date readership wise exposes that Sean McDonald is really boaz manner to show where the fraudster Boas manner is he goes on a show called the cryptic row without a lawyer and admits to the whole thing since I been on that show as well he comes back and says yeah that's me crypto crow admits in his before either says I am AP marketer of blockchain terminal blockchain terminal claims to have gone through the 30 million dollars raised already and have no money has no money left and it turns out when they start investigating for the lawsuit that Sean McDonald is really doesn't exist his name is Boaz Manor and he's a former for us their criminal ran gets thrown into this because ran is was an advisor for the company claims to have put three hundred and fifty thousand of his own dollars in through a saft now there's some debate about whether he bundles some other money that's part of this article which was the second link because everyone's threatening defamation lawsuits but blockchain terminal has threatened to sue the writers because they say it's unfair to say the truth about Sean McDonald but they shouldn't be to expose Sean McDonald as Boas manner a fraudster and then it was immaterial that he was using a fake name and was barred by the Securities and Exchange Commission and spent time in jail for 800 million dollar fraud Wow do you write this is the this is insane so um how else is round tied into this like good was he talking about this coin on his show on CNBC because that can get really interesting it's really interesting ran ran so ran writes a response to this so the one of the guys at the block does a tweet storm Larry Cermak yeah the guy who seems to be unreasonably in love with Vine ants who I think as a visit for the company that I personally hate but yes I don't know what I have too many links hopefully the Twitter the tweet the tweet said you had up and I first came on the show yeah so he think was a tweet storm saying you know as bad as bow as matter as Rams even worse you know brand claims so Raylan his web page claims to have a disclosure he discloses every project he's invested in well it turns out that he doesn't this after he finds out that Sean McDonald is boaz matter he takes the blockchain terminal off of his page of disclosures and doesn't disclose I knows the guys front stir so there's a lot tied to that when you start doing a different when you're a promoter when you're someone like ran you know I think if the articles right and that ran raised 1.2 million and sold like 900,000 as a bundler to other people the rams got some problems yes so that's odd that's gonna be an issue I yeah hey thank you for I just got a pair of images I'm gonna pull those up I guess I should have just done this the easy way I'm gonna attempt not to Doc's anyone especially myself by taking this thrown it over here and let's see what we got thank you for sending these over since the Farrell some kind of a private conversation that went public I don't think we should put them on and I just sent it it's amazing he says somewhere in here I'm in Africa they kill people who kill people I go to jail for like I read these I read these these were on Twitter I read it but I didn't know the contacts right and people are octone you gotta look into it and I'm like what's the point it's another ICO they're all the same like I didn't really care but what's the context behind it line like do we know who's the manners manner oh this is the conversation with Sean McDonald yeah this is him in the CEO when they're fighting about people knowing that he's a fraud and ran demanding his money back oh so this is no but I thought right I thought they were being academic using ran of fraud well they are because they're saying Rand knew about this and didn't tell people you can't promote something and sell things then learn about if the fraud and not tell other people if you find it there front you're their financial advisor we're broiler oh yeah but but so so so who is RAM talking to in this conversation Sean McDonald but Troy McDonald's the scammer so the truck McDonald is but Sean McDonald is nope the bhojas guy right yes right he's the scammer so the scammer is accusing ran of being a bigger scammer yes that tweets or that texts storm the scammer is telling rant he's the bigger scammer saying you knew this was going on you knew this was going on and you did nothing to stop it that's amazing this is crypto perfected this is I did this might be more interesting than the whole big connecting door unfortunately not as big a scale yes but there's really some people to pay money if she sent you all them I think the next batch of text has the one where he talks about people going to jail well the people don't go to jail in Africa oh no I read that part yeah I think that's on the next slide Sasha probably sent you yeah I know that's okay oh yeah these are public I've seen them out of the Republic they they they got published I actually have a whole tweet storm to this day it's my most liked retweeted tweet I've ever done on your channel unlike my Twitter I like D like a whole crying it was the first time I ever did multiple tweets and one tweet I'm trying to become more Twitter or savvy you know learn how to use Twitter and see I'm trying to become more Instagram savvy CIO to Instagram can we talk about why drew has like 7,000 followers is that too that's too little I'm assuming right no I I never used Twitter but drew come on that guy really uses it all day every day yeah he's the academic community loves drill know he drew I don't like that guy you know I always thought there was something very sketchy about him so just saying so yeah this is the hole so this is it yeah that's it all right hey guys check this out we'll add these articles to the video description we should follow the story maybe we should written in your future oh wow okay that was a tweet storm from you oh yeah ever did more than one so are you it's also I you you you're not so enough for anything right you just washing yeah I'm just watching this one I am I'm happy if someone actually bought stuff from ran but I mean this is just an IC o—- gone bust at this point but it's got like weird things the lawyer for BC Terminal who filed the lawsuit against the block is the woman who signed the Reg D for the ICL I mean the story has crazy things all over it ah wait what was the IC on what the hell was the blockchain terminal if there's like a picture it's supposed to be like a fake Bloomberg terminal for crypto oh great grow up like it's a Bloomberg terminal crypt for crypto you passed it the this thing yeah yeah and they were I see owing you 31 million dollars beautiful alright okay so do we have time for one more story oh we can let it go I was going to talk about the two lawsuits filed against bit main one of them is seems legit the other one just seems hilarious so the legit one is claiming that they like use the equipment and they were selling like you know bad equipment so that's the one lawsuit and then the other lawsuit is the Bitcoin cash our people the other Bitcoin cash people so Craig Wright and Calvin Ayres suing everybody and anybody involved in the other V cash for manipulating the market now I actually think they have a partial claim because Raj Revere moved Bitcoin half straight in order to defend their chain and hey your your your friend Jesse Powell there David is also named in this one well like they did they just threw everybody in here I guess that's what happens when you have money you can just file Oh their Florida company I don't know if you claiming is better than lawsuit this one or the other one well whichever one you want to comment on go for it I just want no your opinion do you like this one do you like the other one I think the I think the other one is more like real I think this one is a little more of a joke I don't I can't believe this is actually being filed I think the III I thought this was like an April Fool's gag when I read it initially but it looks legit well it's not just legit it's the second fanciest law firm in Florida who filed it so the fact that they are paying a ton of money and a Grameen pot put their name on this this isn't going away like I'm dying to see what discovery leads to in this case oh this is gonna be on discovery because they're naming individual names that's that gets serious because I mean back on Wall Street I was working for a company and there's a little company of about 70 people and we JPMorgan sold us they owned us so they sold our company to another company I none of us liked it and everyone pretty much quit and some of these are like PhD Wall Street guys so a lot of them went to a competing company to rebuild the product that we used to do and then that the company that we got sold to and then up suing the company that the people went to work for instead claiming that they stolen intellectual property and that was insane a lot like the oh that was like a five year lawsuit like these people like their the three PhDs like their lives were basically turned upside down like they have to get like all of their information like all their personal devices I mean when you get personally named in one of these big lawsuits its it gets crazy like if this lawsuit goes through like all of the private messages of like Roger Vere and all these other guys they're going to be subject to discovery I doubt they're gonna be able to serve Roger I mean Roger hasn't stepped foot in the u.s. in a while that's surely my jurisdiction there I mean he's in where Hong Kong now yeah we know but we can file this internationally I mean that I that case that I'm talking about with our two companies I can name the companies but it doesn't matter ah people it was international like one of the guys was a British citizen another was a I think a Swiss citizen going through the hague and doing things internationally if Roger doesn't want to participate he's not going to participate what's what's a judgment against Roger in the US gonna do against Roger he's not coming back yeah that's true so what do you think of this why did you read these things over I did I think it's fascinating I mean it's true like I don't think anyone disputes that the story they're telling is exactly how everything played out the question is whether they whether they weren't allowed to do what they did and the course is after interpret I mean what happened but I mean you ready told you agree this is exactly what happened well um I unfortunately have time to read through the details of this or the only thing that I felt was like potentially liable was then I'm taking the hash rate from their Bitcoin pool and pointing that hash rate towards are the the defend Bitcoin ABC well yeah like that's essentially what the lawsuit is then they go to Jesse and how he picked the winner and he gave the title and the BCH to the winners and not everyone else but respectively I don't think there's much disputed facts here I think they did that intentionally they wanted to tell the story accurately because they didn't want to come back again sue by everybody yeah no and I and I think that let's see where this goes like I didn't expect this I thought maybe so I like I didn't know who I thought would be more like a class-action lawsuit on behalf of those renting hash power from Bitcoin calm but this is interesting Calvin Ayres and Craig Wright filed this one well you keep saying that Calvin Aires and Craig Wright did not file this bill oh I could publicly I'm my understanding is they have no ownership or a relationship to that particular company interesting so what is this company because from what I'm hearing in my back channels is that it was them so what is it agrees everyone agrees that it's Craig right and Calvin Ayres don't get me wrong but they technically have nothing to do with this company so what is this company I think it's a – it's a shell company that's a mining company in South Florida interesting but it's not like if you google this and Craig air or a Craig right and you're going to pop up with their names interesting all right I'm gonna have to look into this a little bit more alright what about the other lawsuit any thoughts on this one about the madhai the equipment I see until you put it up I even though it exists ah okay ah bill are you familiar with this one yeah I mean I've read through it you know I I'm I have been a class action lawyer for about 15 years now and you know I the last thing I want is other people to poopoo on my lawsuits so I'm going to avoid doing that in this case the best of the best action lawyer for like 15 minutes and I can tell you I don't like the fact that they have different fonts in their complaint whether it's good come back to it in a future show okay so bill any thoughts on this United American Corp case yeah I mean it's it's I think I'm just gonna go with the word fascinating I you know I don't know that much about it it hasn't been on my radar screen I think that it's it's a case to watch you know when when people come up with new permutations about how you can violate the antitrust laws I think that that is that has wide-ranging effects and I'm very curious to see whether it really sticks or does not stick i I what I would like to see is what a judge because there's definitely gonna be a motion to dismiss here tenants are gonna come in they're gonna say no this theory is not one that you know that can be can create a cause of action of the antitrust laws I'm curious what the what the court thinks about that there's there's additional claims in here you know state law claims you know when you're getting in a case like this case causes of action like unjust enrichment I think you're you're probably grasping at straws if you don't have some specific statute that you can that you can tie your hang your hat on excuse me I'm starting to be a really unarticulated I'm not paying attention anymore I'm trying to multitask and and it's yeah still bill just insulted my entire the complaint writing by saying that you guys if you use unjust enrichment you're stretching unjust enrichment these guy listen more power to you David is a real paragon of an attorney if you can get money with unjust enrichment claims but these guys threw the kitchen sink it's where you see unjust enrichment to violations of the land the different I like securities Antitrust Act yeah yeah thing under the Sun they just wants to buy the motion to dismiss right and as you said you get into discovery and it's gonna be a shit show and and then there's lots of fun things to play with once you find that alright guys hey we do have to wrap the show up David you're coming to Vegas right on confiscate of all January 24 to 26 you are on my calendar you're as committed as I get from being a month out you're on the Calvin awesome alright so we'll see David there I uh would love to get a della back for a second but I haven't I have to do another podcast I have no idea if it's live or it's gonna get pre-recorded today it's like my podcast day but I thank you guys once again please check out the uncomplicated conference happening in the end of Vegas and check out my other videos and the tone bass calm thank you to my guests bill saver buys happy holidays everybody David if you give the details to the conference about every only only only every day on my youtube show but are you coming right Adela awesome are you playing poker was hits with Roger beer but actually it's Adam watch but um in my head it was sort of like I was playing they talked about having to live something with Roger beer no further comment on that but I mean how many women since we live in such a sexist world you know I don't know if it's politically correct to ask like how many women are playing in the poker game yeah oh I'm expecting at least ten so about 10% about about about our average of women in blockchain like 10% I don't like that so and I think we should like you know lobby for legislation or something to you know have at least a 50% woman buy-in you know why your friends ask your friends please bring them you just get the details on the conference oh yeah sure ah so the conference will be January 24th to 26th 24 is a Thursday we will be doing workshops Jimmy song and myself that evening is followed by the carnivore on Friday is more workshops followed by the celebrity poker game hundred people max we already had about I believe about 60 people have bought a ticket IIIi closed off registrations I want to get celebrities in there like David like Adela you guys have to pay up the point one Bitcoin and by an amount and then whatever seats are left I'll open it up again to the general public Saturday is the full day of conference I haven't made the agenda yet but hopefully enough of my lawyers will show up and now my personal lawyers Butler is Rhonda from the tone base YouTube channel will show up and will try to do a law panel as well at the conference so awesome thank you so much for coming Adela and hey guys if you want to come hang out with Adela and lots of other really cool people thank you I'll see you in Vegas awesome see you then thank you guys yeah

29 thoughts on “Bitcoin Law Review – SEC on ICO, Tether, Salt, Binance, Bitmain”

  1. It appears Binance has achieved some success recently. I kind of don`t care, but will keep in mind just in case. What concerns Tether, it`s a hackneyed subject, I wish people just stopped dishing the dirt about it. Obviously the fact that Tether occurred to be fully backed doesn`t let its rivals sleep peacefully.

  2. All this mess around Tether is just beneficial for its competitors and is actually initiated by them. You don`t have to be a damn genius to investigate that. Tether frightens a whole bunch of people because it`s really robust and it would very difficult for them to dethrone it.

  3. So many info about Tether lacking audits, but it`s not rue that it doesn`t conduct audits. It does, maybe not so often, but still. Tether must comply all the rules, there`s no other option.

  4. Thanks for covering this important topic. There are so many speculations about Tether and still any of them doesn`t sound solid. Facts speak for themselves: Tether provided info on bank account and it says that it possesses the necessary amount of US dollars. Maybe stop this slandering?

  5. Thanks for your review! I think Tether absolutely complies with SEC rules otherwise they would have shed some light on it. Now we know that Tether is fully backed by US dollars. I think the upcoming year will be very successful for this stable coin and it will gain even more popularity.

  6. Great info!  Want a full functioning hidden crypto gem today?  Checkout the new community tokenized exchange CoinPulse.io.  The UI is fabulous like Binance's, but has an advanced trailing stop loss feature.  You receive a much greater 70% discount on trades when fees are paid in CPEX, the utility token.  The exchange is bot free to increase profit margins on trades. They have giveaways, referral bonuses, and weekly trading contests on new crypto listings. See their rewards page.  Incredibly, you can buy CPEX today for less than a penny with a low max supply of 100 million.  They just started adding coin listings and for December ERC20 listings are free! They are growing with over 38k Telegram members.  They are soon to be listed on CMC, and when discovered the price of cpex will soar.

  7. "Libertarians" gloating and complaining about how the US government isn't coming down hard enough on people who threaten their religion. Bitcoinu Ackbar!

  8. Here is how it goes.. In the end, F*** the SEC. They mean nothing! KYC should be against the law.. It's invasion and weakening of privacy. I don't want just any company to have access to my personal info and leave an open vulnerability.

  9. Sactioning bitcoin addresses is really dumb. There are so many ways to "clean" BTC these days: coin-join via the Wasabi wallet, trade for Monero (or other altcoin) then back to BTC on a decentralized exchange, etc.

  10. You should really check your facts on Boas Manor, and what he actually did time for, that was unrelated to the 800m "scam", that all investors walked away with a profit.

  11. Love most of your content…but your view on Ethereum is completely delusional. You may not be a fan, but there’s no chance it’s dropping anywhere close to your childish predictions

  12. hands down, this Bitcoin Law Review show is the best content being put out online today. it provides discussion, scrutiny, and critical evaluation of global financial madness, with a measured dose of decency. this will shape our society for a long time to come. if you're paying attention to this, then you're on the right track.

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    Cheers bro!

  14. http://robertkim-scam-korean-american-conman.blogspot.com/2014/11/korean-american-con-man-defrauds.html
    please cover this scammer

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