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

Thanks for the direct link.

Here is the method spec that is registered for Solana.

https://github.com/w3c/did-spec-registries/blob/main/methods/sol.json

https://g.identity.com/sol-did/

Given that DIDs and VCs can be used to trace and certify the transactions,
and actors associated with these allegations,
that such evidence is useful for all parties engaged in any legal process
that is interested in facts.

Melvin, would you be willing to suggest text in the did spec registries
regarding forensic and graph analysis of the underlying verifiable data
registries?

Perhaps this text belongs in one of these other working group notes:

- https://www.w3.org/TR/did-spec-registries/
- https://www.w3.org/TR/did-imp-guide/
- https://www.w3.org/TR/did-use-cases/

Or maybe even in the next version of the core specification:

https://www.w3.org/TR/did-core/

I don't believe that W3C should remove entries from any TRs that
might otherwise help law enforcement.

Would you prefer that cryptographic identifier and credentialing work
associated with "public permissionless networks" happen somewhere else?

Where do you think that work should be incubated or conducted?

IETF has the SATP working group which seems like perhaps a better place to
address technical issues associated with "value networks".

https://datatracker.ietf.org/wg/satp/about/

OASIS and ISO also have several blockchain specific projects, I can't speak
to if they have any applicable to law enforcement, but certainly DIDs do.

I am hopeful this thread will result in some improvements to the W3C
process or documents.
If it does not yield improvements, it would seem the debate is being had in
the wrong place.

Regards,

OS

On Tue, Jun 20, 2023 at 10:18 AM Melvin Carvalho <melvincarvalho@gmail.com>
wrote:

>
>
> út 20. 6. 2023 v 16:32 odesílatel Phillip Shoemaker <phillip@identity.org>
> napsal:
>
>> Overall, I believe the the United States is going to be on the wrong side
>> of history here. Many countries are embracing crypto innovations, and are
>> therefore writing new laws to encourage and help guide this industry. The
>> United States is using old methods of thinking to regulate cryptocurrency
>> (read: innovation) out of this country.
>>
>> Chaals asks the question “Do you agree that our groups should adhere to
>> US securities law”, and while I agree we should adhere to laws in general
>> (worldwide, rather than selecting which country’s laws we should adhere to
>> and which ones we should ignore), I need to point out that the concept of a
>> security is not black and white.
>>
>> Earlier in this thread, it was mentioned that securities are items that
>> are promoted/marketed as having lasting value with an expectation of
>> profit. I should point out that if the above were the only required checks,
>> then none of the listed tokens would be on the list. Solana, for example,
>> has never marketed SOL as an investment, and they in fact have told people
>> not to expect profit: it is a token to power their chain. Many of these
>> tokens were created as utility tokens, meant to feed the meter, or to power
>> the video game. These are simple arcade tokens. It isn’t the company’s
>> fault, that speculators come along and hype the token. The bottom line is
>> that the SEC needs to provide a way to determine what is a security and
>> what is not, and make it less subjective than it is now. I personally
>> believe that if the SEC continues this attack, all tokens will ultimately
>> be listed, including BTC and ETH.
>>
>
> Regarding Solana, I'd like to direct your attention to points 127-140 in
> the link below:
>
> https://www.sec.gov/litigation/complaints/2023/comp-pr2023-102.pdf
>
>
>>
>> What we are seeing is an attack on crypto from the US government, and
>> when the administration changes, or the SEC chair loses his job, we will
>> see the government move back to a more moderate position. Is this the game
>> the W3C wants to play, to constantly waver in their approach because of
>> inconsistent guidance from the US government?
>>
>> Until there is clear and consistent guidance from the United States
>> Government, I think this thread is much ado about nothing. I personally
>> believe that the W3C should approach legalities here cautiously, as we
>> serve a global community, not a US community.
>>
>> - - -
>> Phillip Shoemaker
>> Executive Director, Identity
>> E: phillip@identity.org
>> M: 1.408.835.8444
>>
>>
>>
>> On Jun 20, 2023, at 1:05 AM, Melvin Carvalho <melvincarvalho@gmail.com>
>> 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
>>>> <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=1687853203000000&usg=AOvVaw3XFKdKbaffi4OK2pDlKe8o>
>>>>
>>>> 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=1687853203000000&usg=AOvVaw3hmi4g5w05phsr8vAQYoxP>
>>>>>
>>>>> 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
>>>
>>
>>

-- 


ORIE STEELE
Chief Technology Officer
www.transmute.industries

<https://transmute.industries>