W3C home > Mailing lists > Public > public-webpayments@w3.org > May 2015

Re: FYI: US authorities throw the book at Ripple Labs

From: Timothy Holborn <timothy.holborn@gmail.com>
Date: Fri, 08 May 2015 14:26:20 +0000
Message-ID: <CAM1Sok1kyj0EG5zgEWFa5NC312uuYpsnbsDjb08dzDRmSjTP9w@mail.gmail.com>
To: Jeffrey Cliff <jeffrey.cliff@gmail.com>, Joseph Potvin <jpotvin@opman.ca>
Cc: Adrian Hope-Bailie <adrian@hopebailie.com>, Web Payments CG <public-webpayments@w3.org>
None of us live in isolation, and most don't understand what linked-data
is, et.al. It's unfortunate, but going for the jugular, well, imho, it's a
bad strategy...

All of the below is an opinion, on a complex subject... So, consider it a
thought piece, following up on a few things I've noticed overtime..

What's missing on the web is transactional evidence. Ripple and Bitcoin
applies a solution to that problem, demonstrated via payments use-cases,
which is a blunt instrument for new technology of this type, imho.

In Bitcoin land, The development of computational farms, energy use,
stabilisation of mining requirements, etc. brings about other more complex
issues imho.

Whilst the technology is truely remarkable, the corporate structures, our
systems of law, need to catch up, and the technology is far from being
mature. IMHO, to do that, test cases need to exist on large scale; which is
why I focus on a lot of civics projects for that specific purpose.

Someone corrupting a heritage record or forging a photo, or document, isn't
as big a deal as someone who leaves the building with the finances from an
emerging technology, financial exchange... Not that this is the case with

In the case of ripple, et.al. Alternative applications exist.

The cost of getting patent / priority dates is enormous. Arguably
specialised, regardless of the situation the true inventor of something is
in, only few can turn their work into something that can be protected in a
manner that was envisaged by the copyright clause, or patent law, etc.

Often patents have overlaps, and another argument could be raised about how
linked-data and semantic analysis might be applied to patent databases,
cross referencing claims, etc. do courts understand the science enough to
evaluate those sorts of analytics opportunities?

In other areas, Digital receipts, very difficult. Warrantees for cheap
products might be more useful, if the reciept was easier to keep, and
that's just one use-case.

Technically proving who sent a particular email in a manner that's good for
a judge. Whether it's a corporate presentation or a letter of demand; or a
lovers quarrel that the parties would prefer not to be forwarded or shared,
or have it evident that that was their wishes should it be in anycase.

There are many digital knowledge economy business cases. Yet, there are
others; that aren't so easy, like Money or prescriptions for
pharmaceuticals. These more legislative use cases, are probably not amongst
the 'low hanging fruit' go to market varieties that'll help innovators get
to a point where their around a table on good economic foundations to do
bigger deals with encumbants.

The web-science concepts of it all, perhaps more particularly embedded into
linked data research areas, is broader than the pure mathematical merits of
a particular solution.

Re: net neutrality, cdns are probably up there too, a small provider pays a
large amount, especially if something new goes "bang" and demand rockets
before revenue models have been made viable... I think our Aussie national
broadcasters pay more to deliver GB's to Aussies, than Netflix or Google. I
think there's a way to hook into Google and use their platform, but it
likely breaches their TOS.

The theory of a level playing field, over internet, is a v.good objective...

So, overall in summary, imho...

Following from some discussions earlier, it's important we stagger scope
around newer technologies so babies don't get thrown out with bath water,
based on unfortunate circumstances that whilst debatable, may be too costly
and too early to consider using in particular use cases, that may be
compatible with the standards work but not necessarily incorporated into it
as a mandatory requirement.

Equally, these new technologies have applications outside of the raw 'cash'
use-cases, and, I'm not sure how law deals with things like e-contracts,
whether they be digitally verifable messages, documents/ priority dates or

If it is law that is being upheld, then providing access to justice is an
admirable endeavour, perhaps one that some might find disruptive, yet if
accessibility is achieved, at least it would be a fair fight between honest
people (or people made to be honest) regardless of how much money they've
got in contrast to the other.

In the meantime, it's important to consider the needs of safe harbour
whilst harmonising future payment systems, whether that be means to
acknowledge commercially transmitted intellectual property, or a blunter,
financial instrument...

It seems in the world where it costs us to eat, bath, be clothed, healthy
and homed - that safety does not mean free. Open source has been an
important step. Finding and building technology to show provenance, and the
contributions of all people towards a work; well, that might forge a
foundation for new business systems that in-turn, may stimulate economy
through identification of processes that were previously transparent to the

IMHO, Safety includes acknowledgement. And I think we all need to
acknowledge, it'll take the world a while to catch-up, and we'll need to be
the tutors, whilst maintaining our own safety, to find the pathways that
in-turn translate our systems of law, 'rule of law', with internet, as to
provide safety to others, in the interests of progress for us all...

People are never perfect. I don't think the law is built for that right
now, yet, to make attempts towards progress, I think we must consider than
its far better than any profession built upon the principle that by
understanding the gaps, an excellent quality of life can be achieved by
maintaining a job that requires professional attentions and go to market
works, that seeks to exploit those gaps, without cognisance... Professions
that seek to breach the spirit of the law whilst ensuring processes are in
place to not be held accountable to it, wether that be via means of proxy,
or otherwise; technology is shifting, and fewer dark places may exist in
future; yet, it's not all that simple, ever.


Whilst I doubt ripple ever intended to break the law,

I do question the go to market strategy, and I think the event overall
reinforces the strength of the webpayments and credential groups works

As noted, just a few ideas...

Currently, where one person speaks freely to another; who works for a large
company that would never employ the person who had the idea, but would
easily and quickly execute that work with existing staff.

Well, whilst the idea may only be 0.00000001% of the total effort required:
the calculation is still greater than 0 or less than zero, if you take into
account the cost of living those minutes for any human being, who's fed,
clothed, warm and healthy.

On Fri, 8 May 2015 at 12:16 am, Jeffrey Cliff <jeffrey.cliff@gmail.com>

> This is quickly becoming a net neutrality issue -- what's happening
> here is that the US government is trying to make our network no longer
> neutral to all participants.  In particular, participants that it
> chooses to no longer participate will no longer have the option to
> participate at what sounds like the protocol level.  Perhaps it is too
> soon to tell -- they've only so far made changes to RippleTrade and
> optional changes elsewhere -- but this announcement does not bode
> well.  Depending how they implement these changes, it will break
> financial inclusion for the budding network: Ripple Labs may not have
> a problem with that (since they have been focusing more on "including"
> only banks, completely ignoring the histoiry of Ripple as a way to
> live *without* banks).   As Joseph Potvin points out, though, this is
> only the first state actor to want this power.  How will they react
> when the government of Cuba or the the Hague or something tries to
> freeze the US government's accounts for money laundering in central
> america?  I think we all know -- this power will only be usable by
> *some* network participants.
> Anonymity is a stopgap to these kinds of problems occurring -- it
> forces the network, at least, to be honest.  I think we're going to be
> increasingly forced to recognize that what we are allowing, by our
> inaction, is a power grab over future network participants that cannot
> yet speak for themselves.
> Networks should beyond everything else be neutral and neither prevent
> users from using them for political reasons, nor inadvertently do so.
> Jeff Cliff
> On 07/05/2015, Joseph Potvin <jpotvin@opman.ca> wrote:
> > RE: "the technology should not intentionally circumvent laws and
> > regulations"
> >
> > Nor inadvertenty.
> >
> > Joseph
> >
> > On Thu, May 7, 2015 at 8:57 AM, Adrian Hope-Bailie <
> adrian@hopebailie.com>
> > wrote:
> >
> >> p.s. To emphasize my first point, a quote from the article above:
> "Ripple
> >> Labs will improve the tools being used to analyze transactions on the
> >> protocol — but the protocol itself remains unchanged."
> >>
> >> On 7 May 2015 at 14:55, Adrian Hope-Bailie <adrian@hopebailie.com>
> wrote:
> >>
> >>> Joseph,
> >>>
> >>> I agree with you that the legalities surrounding payments are important
> >>> to our work but I would only say so to the point that the technology
> >>> should
> >>> not intentionally circumvent laws and regulations and provide
> mechanisms
> >>> for regulators to be able to do their jobs.
> >>>
> >>> Wrt the Ripple Labs case, I think this article provides a more balanced
> >>> view on the matter than many of the click-bait headlines that have been
> >>> doing the rounds:
> >>>
> http://www.americanbanker.com/news/bank-technology/what-ripples-fincen-fine-means-for-the-digital-currency-industry-1074195-1.html
> >>>
> >>> Personally, I think the first (and only when I looked) comment on the
> >>> article Tim linked to above says it all.
> >>>
> >>> In many respects, this is a sign that the traditional finance and
> >>> payments industry is waking up to the reality that digital currencies
> >>> and
> >>> the amazing technologies that are emerging on the back of them are not
> >>> just
> >>> a passing fad and are starting to take them seriously (either as
> >>> threats,
> >>> opportunities or both).
> >>>
> >>> Adrian
> >>>
> >>> On 7 May 2015 at 14:19, Joseph Potvin <jpotvin@opman.ca> wrote:
> >>>
> >>>> RE: "“Innovation is laudable but..."
> >>>>
> >>>> Official notices here:
> >>>> http://www.fincen.gov/news_room/nr/html/20150505.html
> >>>> http://www.fincen.gov/news_room/nr/pdf/Ripple_Facts.pdf
> >>>>
> >>>> For a W3C context, it's worth considering that this involves just one
> >>>> of
> >>>> the multitude of legal jurisdictions. This is why, in my post to this
> >>>> list
> >>>> yesterday entitled "Ongoing alignment of W3C Web Payments
> specification
> >>>> development to other in-scope global standards",  I referred to the
> >>>> fully
> >>>> global multi-jurisdictional forum which works at the 'root' level of
> >>>> e-commerce law, maintaining a set of so-called model laws:
> >>>> UNCITRAL WG IV: Working Group IV: Electronic Commerce, United Nations
> >>>> Commission on International Trade Law
> >>>>
> >>>>
> http://www.uncitral.org/uncitral/en/commission/working_groups/4Electronic_Commerce.html
> >>>>
> >>>> It's not a matter of going-all-legal, so to speak. It (usually) not
> >>>> very
> >>>> difficult just to take the legal parameters as business architecture
> >>>> documentation. Not doing so creates deep architectural bugs that
> >>>> inevitably
> >>>> result in cases like this one against Ripple Labs. These scenarios
> suck
> >>>> valuable resources and mindshare out of otherwise brilliant
> >>>> initiatives.
> >>>>
> >>>> Joseph Potvin
> >>>>
> >>>>
> >>>>
> >>>> On Thu, May 7, 2015 at 4:57 AM, Timothy Holborn <
> >>>> timothy.holborn@gmail.com> wrote:
> >>>>
> >>>>> FYI...
> >>>>>
> >>>>> "Ripple Labs has been fined $700,000 by the US Financial Crimes
> >>>>> Enforcement Network (FinCEN) in the first successful civil
> enforcement
> >>>>> action against a virtual currency exchange."
> >>>>>
> >>>>> SOURCE: http://www.finextra.com/news/fullstory.aspx?newsitemid=27314
> >>>>>
> >>>>>
> >>>>
> >>>>
> >>>> --
> >>>> Joseph Potvin
> >>>> Operations Manager | Gestionnaire des opérations
> >>>> The Opman Company | La compagnie Opman
> >>>> jpotvin@opman.ca
> >>>> Mobile: 819-593-5983
> >>>>
> >>>
> >>>
> >>
> >
> >
> > --
> > Joseph Potvin
> > Operations Manager | Gestionnaire des opérations
> > The Opman Company | La compagnie Opman
> > jpotvin@opman.ca
> > Mobile: 819-593-5983
> >
> --
> GENERATION 26: The first time you see this, copy it into your sig on any
> forum and add 1 to the generation
Received on Friday, 8 May 2015 14:26:53 UTC

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