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

I think you’re missing the point here. The technologies used and listed
within the DID spec registries are irrelevant to whether a method can be
listed. Whether a token is a security or not is irrelevant to the scope of
the registry, the DID WG, or the W3C and it’s logo.

Just because a law exists doesn’t mean it applies. To point out the
absurdity of your claims, it’s illegal to throw snowballs at trees in
Tennessee and the working group does not endorse doing so. But is that
relevant to the working groups scope? Absolutely not. A more relevant
example is that in China, manufacturers have to be granted a license to
import or export products that utilize cryptography.

The did:ccp method utilizes cryptography but that doesn’t mean it should be
removed from the registry. Neither of these examples invalidate that the
law exists and that a member of the working group could violate such law,
but because it’s irrelevant to the purview of the scope of the working
group we don’t need to mention that in any document of the DID working
group.

Put simply, because your concerns are not relevant to the scope of this
working group I do not believe we need to take any further action. To
clarify my position more explicitly, I’d be against any proposal suggesting
that it this is relevant to the working group and would oppose any
proposal that
uses these laws as justification to remove a method from the registry and
intend to object if necessary.

-Kyle


On Thu, 22 Jun 2023 at 9:18 PM Melvin Carvalho <melvincarvalho@gmail.com>
wrote:

>
>
> čt 22. 6. 2023 v 10:30 odesílatel Kyle Den Hartog <kyle@pryvit.tech>
> napsal:
>
>> I’ve already put forth a proposal that I believe better addresses the
>> concern and has been approved by 5 and soon to be 6 members of the working
>> group and has approvals from the chair. If that does not adequately address
>> the concerns to resolve this issue please state so within the PR[1].
>>
>> [1]: https://github.com/w3c/did-spec-registries/pull/519
>>
>
> Thank you for raising this, and for the pointer.  The listing of unlawful
> and unregistered securities as DID methods, particularly under the W3C
> logo, could potentially raise concerns. If we can reach consensus on the
> need to abide by U.S. securities laws, then there could be a two-step
> process.
>
> The next step could be to list only compliant chains (or something else).
> Some guidance is offered here:
>
>
> https://www.sec.gov/corpfin/framework-investment-contract-analysis-digital-assets
>
>
>>
>> -Kyle
>>
>> On Thu, 22 Jun 2023 at 7:56 PM Melvin Carvalho <melvincarvalho@gmail.com>
>> wrote:
>>
>>>
>>>
>>> st 21. 6. 2023 v 18:59 odesílatel Chaals Nevile <
>>> charles.nevile@consensys.net> napsal:
>>>
>>>> > Chaals, I'd appreciate a clear response to this straightforward
>>>> question:
>>>>
>>>> I'm unconvinced that the question is as straightforward as you make
>>>> out, and note that once again you seem to aim to make a rhetorical point.
>>>> Nevertheless, I have tried to provide a clear answer to the question, below.
>>>>
>>>> > Do you agree that our groups should adhere to US securities laws?
>>>>
>>>> I don't believe I have *ever* expressed the opinion that anyone should
>>>> not do so.
>>>>
>>>> W3C groups should obey US securities laws.
>>>>
>>>> I remind you that some of my work explicitly aims to make it clearer,
>>>> for people involved in "DeFi", what that actually means, to help people do
>>>> so.
>>>>
>>>> I note that at least for the most part W3C groups have no business
>>>> doing things that are even governed by US securities laws - investing or
>>>> trading in, promoting or denigrating, securities, seem like generally
>>>> inappropriate activities for W3C groups. (Scenarios exist in which it seems
>>>> a reasonable proposal for a group to create and offer in the US something
>>>> that seems to be a security. In any such case it would self-evidently be
>>>> very important to follow the relevant laws. In concrete situations I am
>>>> aware of, the complexity of doing so has been one reason that the proposals
>>>> haven't been implemented.)
>>>>
>>>> I believe W3C groups should not be promoting *any* specific products
>>>> except the products of W3C itself - various technical documents, lists,
>>>> specifications, registries, tests and testing frameworks and the like - as
>>>> that would be a failure to respect the obligation W3C places on itself to
>>>> be vendor-neutral not just with respect to our members but overall.
>>>>
>>>> > If yes, we can move forward. However, if your answer is otherwise,
>>>> kindly state it explicitly as it seems, to my knowledge, you're the only
>>>> member expressing such a viewpoint.
>>>>
>>>> What viewpoint am I expressing, alone among members of this group to
>>>> your knowledge?
>>>>
>>>> - That an allegation is not a legal determination?
>>>> - That some questions about whether something is legal are unanswerable
>>>> today?
>>>> - That we work as a global organisation?
>>>> - That US securities law does not have "universal jurisdiction"?
>>>> - That people in China should follow Chinese securities law?
>>>> - That believing "we should obey the law" doesn't mean that we should
>>>> simply accept any argument that invokes a supposed legal principle?
>>>> - That noting the existence of something is different from promoting it?
>>>>
>>>
>>> Thank you Chaals for the clarification
>>>
>>> From your statement here:  "W3C groups should obey US securities laws."
>>>
>>> If we have consensus on this item, then it can be applied to the W3C DID
>>> registry, in a two-step approach.
>>>
>>>
>>>>
>>>> cheers
>>>>
>>>>
>>>> On Tuesday, June 20, 2023 10:05:20 (+02:00), Melvin Carvalho wrote:
>>>>
>>>>
>>>>
>>>> ne 18. 6. 2023 v 23:33 odesílatel Chaals Nevile <
>>>> charles.nevile@consensys.net> napsal:
>>>>
>>>>>
>>>>>
>>>>> On Saturday, June 17, 2023 12:13:25 (+02:00), Melvin Carvalho wrote:
>>>>>
>>>>>
>>>>>
>>>>> čt 15. 6. 2023 v 17:06 odesílatel Kyle Den Hartog <kyle@pryvit.tech>
>>>>> napsal:
>>>>>
>>>>>> ...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...
>>>>>>
>>>>>
>>>>> While it's true that regulations vary widely across different
>>>>> jurisdictions, this discussion is fundamentally about aligning our work
>>>>> with legal frameworks, particularly those which carry significant penalties
>>>>> for non-compliance, such as US securities law.
>>>>>
>>>>>
>>>>> While as far as I can tell the US is pretty happy about killing people
>>>>> as a legal sanction, I believe they only have it for certain classes of
>>>>> crime that do not include financial crimes. Whereas China does seem to
>>>>> apply the death penalty in such cases. I don't know about you, but that
>>>>> strikes me as a significant penalty and indeed significantly more so than a
>>>>> fine and lengthy term in prison.
>>>>>
>>>>
>>>> Chaals, I'd appreciate a clear response to this straightforward
>>>> question:
>>>>
>>>> Do you agree that our groups should adhere to US securities laws?
>>>>
>>>> If yes, we can move forward. However, if your answer is otherwise,
>>>> kindly state it explicitly as it seems, to my knowledge, you're the only
>>>> member expressing such a viewpoint.
>>>>
>>>>
>>>>>
>>>>> Notably, it's not about proposing that W3C adheres to every regulation
>>>>> in every jurisdiction. That may indeed lead to an impractical "slippery
>>>>> slope" situation, as you've outlined.
>>>>>
>>>>> Promoting potentially illegal activities under the W3C banner is
>>>>> concerning for a couple of reasons.
>>>>>
>>>>> Yes. But promoting adherence to one country's law that doesn't cover
>>>>> somewhere in the order of 80-90% of Web users, while explicitly ignoring
>>>>> that of other countries seems to me a terrible idea, and I plead with the
>>>>> working group not to follow such a path.
>>>>>
>>>>> Firstly, it could be seen as an endorsement or promotion of these
>>>>> activities,
>>>>>
>>>>> This seems a stretch. Apart from the fact that you can add something
>>>>> to a registry, where is the endorsement?
>>>>>
>>>>> Can you please explain a particular case where it seems like the group
>>>>> is (or may, by following its current approach) endorsing something that has
>>>>> been *formally alleged* to be illegal by a body such as the SEC? I mean,
>>>>> not an assertion by some smart person, but something that is clearly at
>>>>> least *very* likely to end up in court - because this gives us some sense
>>>>> that it's worth following up to see how reality turns out. By the same
>>>>> token, I am not asking you to demonstrate that something *is* illegal
>>>>> (although by assuming the right jurisdiction this probably becomes trivial
>>>>> for anything involving trading in a cryptocurrency), just that there's a
>>>>> serious allegation that's likely to be tested.
>>>>>
>>>>> I don't see any endorsement of tokens that might be securities, let
>>>>> alone any endorsement of people who are selling them in a way that is
>>>>> illegal. Remember, there are legal ways to sell securities in the US. Being
>>>>> a security is not an inherent problem, that's why there is "securities law".
>>>>>
>>>>> It's hard (and I believe irresponsible) to endorse a decision whose
>>>>> goal is to avoid something that one doesn't believe is a risk.
>>>>>
>>>>> which could lead to an increase in network effects and, subsequently,
>>>>> an increase in token prices.This could be problematic as it can be
>>>>> interpreted as a violation of securities laws if these tokens are deemed
>>>>> unregistered securities.
>>>>>
>>>>> Perhaps that could happen. There are a lot of conditions being stacked
>>>>> up in this hypothetical. I am afraid that as I look at them, they seem to
>>>>> add up to "in a particular set of circumstances, it is possible to imagine
>>>>> an idiosyncratic interpretation of our actions that suggests we are
>>>>> responsible for promoting a security".
>>>>>
>>>>> This approach also seems to me to very obviously fail the "reasonable
>>>>> person" test that would be applied at law in a number of countries, such as
>>>>> the US. Likewise, it seems to ignore reality. (Those are pretty similar
>>>>> claims in practice).
>>>>>
>>>>> This is why I think it is important to demonstrate the practical
>>>>> issue, as requested above.
>>>>>
>>>>> Secondly, doing so could risk damaging the reputation of the W3C and
>>>>> undermining the transparency and trust that are critical to its operations.
>>>>>
>>>>> Sure. However, as explained above with regard to the necessary chain
>>>>> of what seem to be incredibly unlikely interpretations and events, I think
>>>>> the risk is risibly small. This is particularly so when I compare it to
>>>>> things that damage our reputation like not being a suitable place to do the
>>>>> work we aim to take on.
>>>>>
>>>>> It seems to me that accepting the argument of reputational risk you
>>>>> have repeated as a reason not to accept blockchain-based methods for DIDs
>>>>> would damage our reputation as an organisation capable of holding
>>>>> complicated technical discussions and making systems that are suitable for
>>>>> use around the world more than rejecting the argument and running the risk
>>>>> you are describing.
>>>>>
>>>>> cheers
>>>>>
>>>>> Chaals
>>>>>
>>>>>
>>>>>> [1]:
>>>>>>
>>>>>> https://asia.nikkei.com/Spotlight/Cryptocurrencies/Chinese-crypto-activity-slows-but-not-dead-despite-ban
>>>>>>
>>>>>> 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/
>>>>>>>
>>>>>>> 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
>>>>>>>
>>>>>>
>>>> --
>>>> Charles 'Chaals' Nevile
>>>> Lead Standards Architect, ConsenSys Inc
>>>>
>>>>