Re: Unlawful Unregistered Securities, DID and VC

I see the issue from the perspective of tech farming humans for profit.
Public blockchains as a decentralized non-commercial technology are
analogous to ethanol. Humans can make and use ethanol in a decentralized,
non-commercial, non-proprietary way for preservation, sanitation, and
social benefit - as peers. Standards for purity and labeling promote safe
and effective peer-to-peer use.

The problems with alcohol arise when it's commercialized for profit. In the
hands of the powerful, it's used to manipulate humans for profit in
countless ways. Society responds by trying to regulate the technology
(taxes, age restrictions, adulteration to methanol) and sometimes the
peer-to-peer, non-commercial uses of the tech are adversely impacted as
well.

Public blockchain technology and decentralized digital identity tech are
potentially quite useful in the peer-to-peer, non-commercial context.
Problems arise when the tech is used by powerful interests that profit from
human manipulation in the form of investment scams, ransom, surveillance,
dynamic pricing, forced association, etc...

Like it or not, SDOs like W3C do play a role in the abuse of technology.
With DIDs and VCs, the workgroups they host seem well designed to serve
institutional customers. At the leadership levels, academic influences,
like MIT, have disengaged.

When it comes to public blockchains, I remain hopeful that the peer-to-peer
decentralized uses will contribute to a fairer society. For example, where
remittances across borders is more cost-effective or digital cash reduces
surveillance. Combined with identity, I can hope that public blockchains
will support non-commercial contextual reputation domains to replace
today's platform oligopolies.

My experience with W3C in the DID / VC context has been disappointing
because the workgroups are almost exclusively focused on serving for-profit
commercial arms merchants and their human farming customers.



On Wed, Jun 14, 2023 at 12:26 PM Alex Tweeddale <alex@cheqd.io> wrote:

> +1 to Christopher's point - the UK is going the other way and as is the EU
> with the MiCA regulation
> <https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52020PC0593>,
> which looks at regulating different asset providers rather than making them
> "illegal". It also provides a lot more clarity on what constitutes a
> "utility" token.
>
> I think the larger problem within the DID Registry is that many of the
> methods are:
>
>    1. Not spec compliant;
>    2. Not built into any SDKs / libraries and cannot be used in practice.
>
> If we wanted to start looking at removing methods, we should look at
> Markus Sabadello's latest work with the DID linter on the Universal
> Resolver <https://dev.uniresolver.io/>. Here, it shows only 12 methods
> are fully spec-compliant, and only 8 methods have a functional DID
> registrar <https://uniregistrar.io/>.
>
> I'd suggest only having methods in the registry that have a working DID
> Resolver and DID Registrar, regardless of whether they're blockchain based
> or not.
>
> On Wed, 14 Jun 2023 at 16:56, Christopher Allen <
> ChristopherA@lifewithalacrity.com> wrote:
>
>>
>>
>> On Tue, Jun 13, 2023 at 5:19 PM Melvin Carvalho <melvincarvalho@gmail.com>
>> wrote:
>>
>>> For a more comprehensive understanding, I recommend reading the original
>>> SEC guidance, which you can find at this non paywalled link:
>>>
>>> https://www.sec.gov/litigation/complaints/2023/comp-pr2023-102.pdf
>>>
>>> This document provides thorough case studies, including insights from
>>> blog posts, Twitter posts, and transcripts. For an illustrative and
>>> relevant example, you might find the Filecoin / Protocol Labs case study
>>> particularly informative, which is covered in parts 163-189.
>>>
>>
>> I'm very uncomfortable with this discussion by our community (ccg) and
>> standards (did). We are not qualified.
>>
>> I read through the Filecoin/IPFS portion of this doc, and it is very
>> biased and is based on unsettled law. They did not mention the utility use
>> of the tokens, which in some jurisdictions (Wyoming and a few other states)
>> should be considered a factor.
>>
>> The key point is that these topics are unsettled. There are many
>> congressmen and senators that are very unhappy with how the SEC is handling
>> these matters and are working on bipartisan bills. There are also cases
>> before judges where they appear to be critical of the SEC approach even
>> before making judgment. Other parts of the Federal Government are also
>> critical of the SEC here.
>>
>> Though I'm not a big fan of Filecoin for other reasons, they went to a
>> lot of effort to do the best practices of the time and avoided many bad
>> practices that were common. I, too, want us to avoid scams and bad
>> practices, but I don't know where the line is.
>>
>> So to say that we need to remove, for instance, Filecoin-related DID
>> methods because they are included in an SEC document feels to me to be very
>> premature. I suspect that this may not be settled law in the US for a few
>> years. In addition, this will likely only be US — it feels like the UK is
>> going the other way. This is the WORLD-wide-web consortium. What if a token
>> used in a blockchain becomes illegal in the US, but is legal in the UK?
>> What to do then?
>>
>> -- Christopher Allen
>>
>