Re: [EXT] Re: Potential list of securities in the US [was: Unlawful Unregistered Securities, DID and VC]

so 17. 6. 2023 v 12:22 odesílatel Kyle Den Hartog <kyle@pryvit.tech> napsal:

> I’d assume the explicit ban of trading cryptocurrencies by China would
> hold up to scrutiny then given they’re the exact same outcomes. What’s the
> difference between US law and Chinese law?
>
> Similarly, in the past an initiative of the European Commission [1] stated
> there exists a lot of uncertainty around usage of persistent blockchain
> identifiers and the very clearly defined GDPR regulations which has
> resulted in many fines. What’s different around the US securities laws and
> GDPR?
>

> These issues were both known about when the working group formed the
> requirements of the did method registries and the mandate laid upon editors
> by the WG clearly stated to not arbitrarily restrict methods.
>
> It seems pretty clear that if we are to apply the rules of one
> jurisdiction then it should be applied to all. Against the will of the
> working group. However, when China (previous email of this thread) and the
> EU have produced similar laws and legal guidance you didn’t bring this
> issue up. However this isn’t the first time you’ve been concerned with the
> usage of the W3C and a particular did method [2]. Could it be that you’re
> relying upon a selection bias of legal rationale here to selectively
> discredit did methods you don’t like so they get removed from the
> registries and the US securities law issue is just the latest example of
> this? Furthermore, even if we did remove the entries in question from the
> registries this doesn’t invalidate the compliance of the methods
> themselves. They can still claim compliance with W3C’s did core
> specification even if we completely remove the registry because the did
> core specification placed no legal requirements to be a compliant method.
> The working group recognized this would be an a highly subjective
> requirement which W3C lacks expertise in which is why you’ve received so
> much pushback from so many different people on this topic. As a next step
> to resolve this discussion I propose that the working group’s decision
> should stand as is and any further discussion should take place in a
> chartered working group with the authority to modify the registries
> requirements since the CCG doesn’t have authority to change the
> requirements of this registry.
>

GDPR is a distinct matter but noteworthy nonetheless. It's indeed
referenced within the DID Core text, and various related issues have been
discussed, as seen in the provided link:

https://github.com/search?q=repo%3Aw3c%2Fdid-core+gdpr&type=issues


>
> [1]:
>
> https://www.eublockchainforum.eu/sites/default/files/reports/20181016_report_gdpr.pdf?width=1024&height=800&iframe=true
>
> [2]:
> https://lists.w3.org/Archives/Public/public-credentials/2023May/0040.html
>
> -Kyle
>
> On Sat, 17 Jun 2023 at 8:18 PM Melvin Carvalho <melvincarvalho@gmail.com>
> wrote:
>
>>
>>
>> so 17. 6. 2023 v 1:46 odesílatel Wayne Chang <wayne@spruceid.com> napsal:
>>
>>> > Perhaps we could agree collectively to confine our work to projects
>>> that are unequivocally within legal boundaries.
>>>
>>> If this is the direction you recommend, then I would like to see
>>> follow-through on the logic and further proposals to remove from the scope
>>> of the W3C technologies that support an open internet, such as HTML, CSS,
>>> or ActivityPub, as these technologies may see use in regimes that where the
>>> rule of law heavily incorporates centralized censorship, and these tools
>>> can facilitate the opposite, which would have legal uncertainty. In fact,
>>> you may also want to consider descoping groups like the Privacy Interest
>>> Group from the W3C as well, due to the potential illegality of its topics
>>> in jurisdictions that implement lawful mass surveillance. Otherwise, you
>>> might need to propose what list of countries and jurisdictions you’d like
>>> to exclude from the consideration of a global standards organization to
>>> keep a coherent argument.
>>>
>>
>> This comparison doesn't hold up to scrutiny. This is because the
>> potential legal issues associated with DID methods, particularly in
>> relation to US securities law, are fundamentally different from the
>> potential misuse of technologies like HTML or CSS in oppressive regimes.
>>
>> US securities law is very specific and its potential violations, such as
>> selling unregistered securities (which some blockchain tokens could be
>> classified as), can have concrete legal and financial ramifications. The
>> laws around securities are designed to protect investors from fraudulent
>> activities and to ensure fair and efficient markets. This includes legal
>> requirements for transparency and providing accurate information to
>> potential investors. These are clear-cut issues with clearly defined legal
>> boundaries.
>>
>>
>>>
>>> Best,
>>> - Wayne
>>>
>>> On Fri, Jun 16, 2023 at 07:45 Melvin Carvalho <melvincarvalho@gmail.com>
>>> wrote:
>>>
>>>>
>>>>
>>>> čt 15. 6. 2023 v 19:42 odesílatel Drummond Reed <
>>>> Drummond.Reed@gendigital.com> napsal:
>>>>
>>>>> Phillip captured wonderfully why I have been uncomfortable from the
>>>>> start of this thread: “DIDs work with chains, not tokens.” The fact that
>>>>> the DID registry includes a DID method that works with a particular chain
>>>>> has nothing directly to do with any token involved with that chain.
>>>>>
>>>>>
>>>>>
>>>>> I get the potential perception issue, but when it comes to the
>>>>> reality, there is no connection, and we will only confuse the market by
>>>>> inferring that there is.
>>>>>
>>>>
>>>> I appreciate the perspective that the relation between DIDs and
>>>> blockchains does not directly involve tokens. However, it's important to
>>>> recognize the inseparable relationship between a token and its respective
>>>> chain, as the latter records the state while the token triggers state
>>>> changes. They inherently function in unison.
>>>>
>>>> The implications under U.S. securities law are clear: if an entity
>>>> offers a token for public sale with the expectation of its value
>>>> increasing, it constitutes the sale of a security and legal
>>>> responsibilities follow. Furthermore, promoting such a token also carries
>>>> legal obligations. Noncompliance can result in severe penalties and
>>>> reputational harm.
>>>>
>>>> Many developers express concern that DID is not a single specification,
>>>> but rather over 100 different specifications, as per the method registry.
>>>> When we feature these blockchains under the W3C logo, it could potentially
>>>> cast a shadow on our work that is otherwise compliant with the law.  It is
>>>> uncomfortable to be adjacent to this at the W3C, especially as groups tend
>>>> to work on interoperable ideas.
>>>> I welcome Chaals comment: "W3C should strive not to engage in illegal
>>>> activity".  However, I would suggest that "striving" might not sufficiently
>>>> express the gravity of this matter. Perhaps we could agree collectively to
>>>> confine our work to projects that are unequivocally within legal
>>>> boundaries.  That still leaves plenty of scope.  More legal ambiguous items
>>>> could be registered outside the w3c.
>>>>
>>>>
>>>>>
>>>>>
>>>>> =Drummond
>>>>>
>>>>>
>>>>>
>>>>> *From: *Phillip Shoemaker <phillip@identity.org>
>>>>> *Date: *Thursday, June 15, 2023 at 9:37 AM
>>>>> *To: *Kyle Den Hartog <kyle@pryvit.tech>
>>>>> *Cc: *Melvin Carvalho <melvincarvalho@gmail.com>, W3C Credentials
>>>>> Community Group <public-credentials@w3.org>, W3C DID Working Group <
>>>>> public-did-wg@w3.org>
>>>>> *Subject: *[EXT] Re: Potential list of securities in the US [was:
>>>>> Unlawful Unregistered Securities, DID and VC]
>>>>>
>>>>> I don’t understand this witch hunt about securities and
>>>>> cryptocurrencies that this group seems to be focused on. A few important
>>>>> datapoints that have already been expressed by others, including
>>>>> Christopher Allen:
>>>>>
>>>>>
>>>>>
>>>>> 1. This is one government that has an issue with these tokens. And
>>>>> while it is the government that rules me and my company, we are working on
>>>>> a technology that has global impact.
>>>>>
>>>>>
>>>>>
>>>>> 2. This is about tokens, not chains. So saying that while Binance has
>>>>> an issue with the SEC, and their token might be considered a security by
>>>>> the SEC, this doesn’t mean that the chain that takes these tokens is in
>>>>> violation or in any way suspected of doing bad things. A chain is not a
>>>>> token.
>>>>>
>>>>>
>>>>>
>>>>> 3. DIDs work with chains, not tokens. So until we understand that a
>>>>> chain is “bad”, we should not entertain this conversation.
>>>>>
>>>>>
>>>>>
>>>>>
>>>>>
>>>>> - - -
>>>>> Phillip Shoemaker
>>>>> Executive Director, Identity
>>>>> E: phillip@identity.org
>>>>> M: 1.408.835.8444
>>>>>
>>>>>
>>>>>
>>>>>
>>>>>
>>>>>
>>>>>
>>>>> On Jun 15, 2023, at 8:06 AM, Kyle Den Hartog <kyle@pryvit.tech> wrote:
>>>>>
>>>>>
>>>>>
>>>>> Why is this just being brought up now? China explicitly banned all
>>>>> cryptocurrencies in September 2021 [1]. If we’re going to impose
>>>>> restrictions for a single jurisdiction we should for all therefore every
>>>>> did method that relies upon a cryptocurrency should be removed under this
>>>>> logic. Do you agree that’s a fair extension of your logic? Or should we be
>>>>> more subjectively selective, against the consensus of the DID WG which
>>>>> explicitly stated the registries were not to be used in this way? Won’t
>>>>> this just lead to a select few number of did methods being allowed based
>>>>> upon a non-unanimous definition of legality? Within the US this is still
>>>>> being interpreted by the judicial system about whether these even are
>>>>> securities.  Globally, there’s a patchwork of legal interpretations. I’ve
>>>>> pointed to China’s laws as one example but what about the regulations that
>>>>> suggest an immutable identifier is actually illegal under GDPR’s framework.
>>>>> Wouldn’t that mean all did methods, blockchain keys, and nostr identifiers
>>>>> are illegal and therefore should be unreferencable at W3C? Or are we not
>>>>> wanting to slip this far down the slippery slope we’re creating with this
>>>>> interpretation?
>>>>>
>>>>>
>>>>>
>>>>> [1]:
>>>>>
>>>>>
>>>>> https://asia.nikkei.com/Spotlight/Cryptocurrencies/Chinese-crypto-activity-slows-but-not-dead-despite-ban
>>>>> <https://www.google.com/url?q=https://asia.nikkei.com/Spotlight/Cryptocurrencies/Chinese-crypto-activity-slows-but-not-dead-despite-ban&source=gmail-imap&ust=1687446422000000&usg=AOvVaw2jmE9pjfnIT5XdpbJqxFFZ>
>>>>>
>>>>>
>>>>>
>>>>> On Fri, 16 Jun 2023 at 2:17 AM Melvin Carvalho <
>>>>> melvincarvalho@gmail.com> wrote:
>>>>>
>>>>> I was looking for a potential list of securities, that may be used
>>>>> improve the did method registry, and closest I came to was this article,
>>>>> there may be better:
>>>>>
>>>>>
>>>>>
>>>>>
>>>>> https://beincrypto.com/full-list-cryptos-securities-sec-lawsuit-binance-coinbase/
>>>>> <https://www.google.com/url?q=https://beincrypto.com/full-list-cryptos-securities-sec-lawsuit-binance-coinbase/&source=gmail-imap&ust=1687446422000000&usg=AOvVaw3w57XnaieOgUJnVX71pbr8>
>>>>>
>>>>>
>>>>>
>>>>> criteria: an investment of money, in a common enterprise, with an
>>>>> expectation of profit derived predominantly from the efforts of others
>>>>>
>>>>>
>>>>>
>>>>> List:
>>>>>
>>>>>
>>>>>
>>>>> Cosmos (ATOM)
>>>>> Binance Coin (BNB)
>>>>> Binance USD (BUSD)
>>>>> COTI (COTI)
>>>>>
>>>>> Chiliz (CHZ)
>>>>> Near (NEAR)
>>>>> Flow (FLOW)
>>>>> Internet Computer (ICP)
>>>>> Voyager Token (VGX)
>>>>> Dash (DASH)
>>>>> Nexo (NEXO)
>>>>>
>>>>> Solana (SOL)
>>>>> Cardano (ADA)
>>>>> Polygon (MATIC)
>>>>> Filecoin (FIL)
>>>>> The Sandbox (SAND)
>>>>> Decentraland (MANA)
>>>>> Algorand (ALGO)
>>>>> Axie Infinity (AXS)
>>>>>
>>>>>
>>>>>
>>>>> Prominent cryptocurrencies previously declared securities by the SEC
>>>>> include:
>>>>>
>>>>> Ripple (XRP)
>>>>> Telegram’s Gram (TON)
>>>>> LBRY Credits (LBC)
>>>>> OmiseGo (OMG)
>>>>> DASH (DASH)
>>>>> Algorand (ALGO)
>>>>> Naga (NGC)
>>>>> Monolith (TKN)
>>>>> IHT Real Estate (IHT)
>>>>> Power Ledger (POWR)
>>>>> Kromatica (KROM)
>>>>> DFX Finance (DFX)
>>>>> Amp (AMP)
>>>>> Rally (RLY)
>>>>> Rari Governance Token (RGT)
>>>>> DerivaDAO (DDX)
>>>>> XYO Network (XYO)
>>>>> Liechtenstein Cryptoasset Exchange (LCX)
>>>>> Kin (KIN)
>>>>> Salt Lending (SALT)
>>>>> Beaxy Token (BXY)
>>>>> DragonChain (DRGN)
>>>>> Tron (TRX)
>>>>> BitTorrent (BTT)
>>>>> Terra USD (UST)
>>>>> Luna (LUNA)
>>>>> Mirror Protocol (MIR)
>>>>> Mango (MNGO)
>>>>> Ducat (DUCAT)
>>>>> Locke (LOCKE)
>>>>> EthereumMax (EMAX)
>>>>> Hydro (HYDRO)
>>>>> BitConnect (BCC)
>>>>> Meta 1 Coin (META1)
>>>>> Filecoin (FIL)
>>>>> Binance Coin (BNB)
>>>>> Binance USD (BUSD)
>>>>> Solana (SOL)
>>>>> Cardano (ADA)
>>>>> Polygon (MATIC)
>>>>> Cosmos (ATOM)
>>>>> The Sandbox (SAND)
>>>>> Decentraland (MANA)
>>>>> Axie Infinity (AXS)
>>>>> COTI (COTI)
>>>>> Paragon (PRG)
>>>>> AirToken (AIR)
>>>>> Chiliz (CHZ)
>>>>> Flow (FLOW)
>>>>> Internet Computer (ICP)
>>>>> Near (NEAR)
>>>>> Voyager Token (VGX)
>>>>> Nexo (NEXO)
>>>>> Mirrored Apple Inc. (mAAPL)
>>>>> Mirrored Amazon.com, Inc. (mAMZN)
>>>>> Mirrored Alibaba Group Holding Limited (mBABA)
>>>>> Mirrored Alphabet Inc. (mGOOGL)
>>>>> Mirrored Microsoft Corporation (mMSFT)
>>>>> Mirrored Netflix, Inc. (mNFLX)
>>>>> Mirrored Tesla, Inc. (mTSLA)
>>>>> Mirrored Twitter Inc. (mTWTR)
>>>>> Mirrored iShares Gold Trust (mIAU)
>>>>> Mirrored Invesco QQQ Trust (mQQQ)
>>>>> Mirrored iShares Silver Trust (mSLV)
>>>>> Mirrored United States Oil Fund, LP (mUSO),
>>>>> Mirrored ProShares VIX Short-Term Futures ETF (mVIXY)
>>>>>
>>>>>
>>>>>
>>>>> These instruments should not be promoted under the w3c banner, imho
>>>>>
>>>>>
>>>>>
>>>>