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Re: Regulatory Considerations running an ILP node (Re: [Ledger] Bootstrapping Interledger)

From: Andrew Bransford Brown <andrewbb@gmail.com>
Date: Thu, 10 Nov 2016 16:56:19 -0500
Message-ID: <CAPS+YFJ3SXHhBWk1k=B2ox1G0qLgUtcqsFdqjVQ6NU4Z55riXA@mail.gmail.com>
To: Jacob Pratt <jhprattdev@gmail.com>
Cc: Adrian Hope-Bailie <adrian@hopebailie.com>, Tony Arcieri <bascule@gmail.com>, Tom Haas <tjhaas@gmail.com>, Interledger Community Group <public-interledger@w3.org>, Interledger Mailing List - IETF <ledger@ietf.org>
If it's designed right, you won't have any regulatory concerns.

I offer $10
My terms 1 OSTK
You offer $8
I offer $9
You agree
I deliver $9
You deliver 1 OSTK
End transaction.

Time stamps on each "event".  That has sufficient granularity to describe
any transaction (currency, stock, bonds, grocery store transactions).  It's
a real-time system, and provides its own audit trail.  Algorithms monitor
for status.

Andrew B. Brown
(512) 947-8282

On Thu, Nov 10, 2016 at 3:43 PM, Jacob Pratt <jhprattdev@gmail.com> wrote:

> Sorry, I'm a bit confused by this email. Will the testing for ILP be done
> using actual currency or dummy currency? Initially you say dummy currency,
> which is what I think would make more sense, but later you are speaking of
> the risk and potential losses, which would only be affiliated with actual
> currency.
> Jacob H. Pratt
> On Wed, Nov 9, 2016 at 4:39 PM, Andrew Bransford Brown <andrewbb@gmail.com
> > wrote:
>> My suggestion is that if you start getting into "credit units" of some
>> kind, you're on the wrong track.  I say this from an accounting and trading
>> perspective.
>> The value being traded exists somewhere at all times and its location and
>> owner must be known at every step in the transaction.
>> Andrew B. Brown
>> (512) 947-8282
>> http://KidsCourtyard.com
>> On Wed, Nov 9, 2016 at 4:00 PM, Adrian Hope-Bailie <adrian@hopebailie.com
>> > wrote:
>>> As I mention in the wiki, the goal is to test the capabilities of the
>>> protocol by bootstrapping a real network of ILP nodes (not create an
>>> unregulated payment network).
>>> I think it's important for this to be a network moving real value
>>> otherwise it's difficult to motivate people testing things built on top of
>>> the protocol to even consider ILP. We're only going to test this properly
>>> when there is some skin in the game, we just need to make sure nobody
>>> stands to lose more than they can afford to risk.
>>> As I have also said in the wiki, we have the advantage of a number
>>> highly valued crypto-currencies that offer us "permission-less innovation"
>>> and the opportunity to move real value without (in most cases) breaking any
>>> laws. If your particular situation prohibits you from running an ILP node
>>> for fiat currencies but you can transmit and exchange crypto legally then
>>> that's the way you can move real value.
>>> Obviously, every person that chooses to run an ILP node should evaluate
>>> their own situation and not do anything illegal. For some, that might mean
>>> sticking to fake money initially or developing a community currency system
>>> between small groups of peers.
>>> Most importantly though, we should continue to only move small amounts
>>> both because we don't want anyone to risk more than they can afford to lose
>>> in helping to bootstrap this project (which is still under heavy
>>> development) but also because we don't want to raise the ire of regulators
>>> when our immediate goal is to test the protocol not become an unregulated
>>> payment network.
>>> Finally, and this may be obvious, but I want to be clear, that by
>>> running a node and exchanging real value using this immature protocol, you
>>> are taking a risk. I (and I think I speak for everyone else involved in the
>>> project) take no responsibility for any losses anyone incurs, whether
>>> direct or indirect, in being a part of this. We are being pioneers and
>>> there are risks.
>>> Be responsible, only exchange small amounts and make sure you understand
>>> the applicable regulations for your specific case before you proceed.
>>> On 9 November 2016 at 21:59, Tony Arcieri <bascule@gmail.com> wrote:
>>>> On Wed, Nov 9, 2016 at 11:42 AM, Andrew Bransford Brown <
>>>> andrewbb@gmail.com> wrote:
>>>>> I'd suggest a State exchange to avoid SEC regulations while building
>>>>> the market.  Once you cross state lines, then pass the SEC regs.
>>>> It's a little more complicated than that. Individual states within the
>>>> US have their own money transmitter laws, which often apply to money
>>>> transfers within the state in addition to transfers between states or
>>>> countries.
>>>> Setting up a test network with a fake currency that has no actual value
>>>> sounds ok, but if you are moving real money, even within a single state
>>>> (state laws providing), you'll want to have a money transmitter license
>>>> before you do so. For transmitting money between states, you'll need
>>>> licenses for every state you plan on operating in.
>>>> --
>>>> Tony Arcieri
>>>> _______________________________________________
>>>> Ledger mailing list
>>>> Ledger@ietf.org
>>>> https://www.ietf.org/mailman/listinfo/ledger
Received on Thursday, 10 November 2016 21:56:53 UTC

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