Possible risks to Maidsafecoin, Safecoin and other cryptos from the regulators

The SEC is seeing money in those virtual currencies and is going after the bigger ones who do not obey their rules. I can see this going through the courts for a long time. Good thing SAFE/MAID has nothing to do with the USA.

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Safe Network development has little to do with the USA, but the MaidSafeCoin funding vehicle is over-exposed to US regulators. As @upstate pointed out US exchanges are moving to a “We’ll do the SEC’s job for them” self-regulating point system which raises the odds of MaidSafe coming under scrutiny, increasing the risk of MaidSafe/Coin assets being frozen until SEC fines are paid for selling to US citizens just as some non-US projects have already had to do. The arm of US regulators is long. Further risks to MaidSafe are Tether phasing out it’s OMNI in exchange for Ethereum ERC20 tokens (much to the relief of many exchanges that maintaining OMNI support just for Tether). That will leave MaidSafeCoin as the only major token on that already very quiet projects book - not a very sustainable situation now with an unknown time limit.

Realistically how long might it be until we can safely exchange MaidSafeCoin for Safecoin… I am guesstimating at least a year or two out. Is that fast enough to stay ahead of the above risks catching up with the legacy funding token MaidSafeCoin - hard to say.

This project is developing really really well in great strides, it would be a great shame to see it blindsided during it’s final lap. As I remember MaidSafe partly chose Mastercoin now Omni for it’s promise of decentralised trading. Ethereum ERC20 has delivered on that promise, we can now stake ERC20 tokens right from our hardware wallets to trade or loan safely in multiple fully and partly decentralised marketplaces. An open ended MaidSafeCoin->ERC20 token swap would help de-risk and hedge against MaidSafeCoin Omni token risks plus bring invaluable extra benefits. The innovation going on in the Ethereum space is sometimes very impressive. The Safe Network future roadmap naturally overlaps with the interests of these talented developers and a MaidSafeCoin ERC20 token would serve as a bridge between these naturally aligned communities. Also the transition from MaidSafeCoin to SafeCoin will have to be a long running one, not a one off event. ERC20 MaidSafeCoin may even transition to a medium term method for cross chain swaps which will not be available to native SafeCoin.

(Although this reply is in What’s up Today, moderators might be better served moving this post to a more relevant new or existing thread)

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Not a problem as evidence by Poloniex having done all the paperwork now to ensure every coin they list is OK for them to list. And since Poloniex is the only USA exchange to list MAID then there is no issue related specifically to the USA currently.

Bittrex international has MAID listed.

So the case above is not affecting MAID’s position or shows any risk of being charged by the SEC and that is my point.

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Poloniex/Circle also has done all the paperwork to list EOS markets so it is still a risk. Regulations by nature slowly encircle and constrict.

But you missed the point EOS was under USA laws. So even though Poloniex was allowed to trade the EOS coins EOS themselves did not follow all the laws required of them being in the USA and doing a coin offering in the USA.

Also the USA is not shutting down EOS, just fining them.

The USA cannot reach out to the UK and apply their laws, especially after the UK parliament has given the general OK for crypto coins in the UK. Also MAID did not violate any of UK law.

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I did not miss this point, I feel your trying to hand wave away the risk. Yes, the US can and has multiple times reached out to other projects located outside of the USA - and fined them heavily, frozen and seized all the tokens within their immediate influence. So far it has been low hanging fruit, their crime: Selling a token now deemed a security to US citizens. Bittrex may have an international division but that does not mean they are not vulnerable to US regulatory pressure.

Now try and tell us that MaidSafe (and most other non-US projects) did not do this and it all is Ok. You cannot, nobody can. It is a risk. The risk can be mitigated and hedged against I have discussed one positive way to do that. The more decentralised the project and it’s trading vehicle is the less likely it is to be targeted.

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Maidsafe has broken NO laws. UK or USA so whats the point

This was also indicated by an EX-SEC auditor by the list of things the SEC considers wrong

Until yesterday you could have said the same about EOS. As I said, regulations by nature slowly encircle and constrict. Your statment is true today…

Why would I have? There were a lot of issues with their ICO

Also since Maidsafe broke no laws and by the indicators that the ex-SEC auditor said the SEC look for, I have no issues thinking MAID is not at risk. Also the SEC indicated they are not worry about coins in the USA that are tokens for future purchases on a network, which MAID is.

We have 3 or more definite indicators that says MAID is not at risk so why try and make it so?

Yes the SEC could do a backflip on all they said, but since its not in the USA reach then its a very difficult uphill battle for them. First backflip then overrule UK sovereign rule of their nation.

Personally I have no fear of that happening. There is way too much for the SEC to deal with in their own country which will be easier than attempt to attack MAID which would be ever so much harder especially since it goes against their current stated rulings

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As there were with MaidSafeCoin, anything can be twisted if the motivation is right. Remember we are dealing with regulators that take a dim view of decentralised privacy (witness the crusade against privacy coins atm).

We can ignore the risk, or take positive steps to decentralised the project more and a part of that means MaidSafeCoin which we will be stuck with for the foreseeable future. Just hiding and hoping we will not be next because of three highly subjective indicators is not good risk management.

Doubt this is going to happen before the exchange of MAID for safecoin. Its been years already.

No it is not hiding, no one said it was.

Its simple facts. I gave you the highlight facts and saying things could just change is so as bad as your assertion that it is bad.

Not by the SEC, the SEC is after protecting the investors and ensuring the USA law is followed for USA securities.

MAID is not a Security and as such not even considered by the SEC. The SEC has specifically stated that coins/tokens that are future purchases of network items (this was related to networks that have not yet started) are not a security. MAID is such a token and it is not a security, has never been promoted as a security and cannot be seen as a security. It is not a privacy coin. MAID is not used for purchases of goods across the internet, MAID is a token coin for the purpose of purchasing future network items.

Other such tokens are game tokens for instance.

This was discussed at length previously and the EOS case has not changed the tone of the environment since EOS violated previously set USA laws at the time of the ICO.

Of course we cannot ignore the risk and unless the SEC does some illegal things and also goes against its previous ruling then there is no issues in my considered opinion

Here is a fact: the SEC has not actually regulated the cryptocurrency sector yet all it’s statements have been “guidance” subject to change, all subjective and not hard fact. There will only be almost no risk to MaidSafe when the sector is officially regulated and the laws printed. Everything before that such as your assertions that MaidSafeCoin is not in violation is speculation.

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A lot more than pure speculation. It is a considered opinion. And yes the SEC has given guidance and following that guidance is defense. That guidance was given so early because the SEC knows these sorts of coins are not within its ability to govern or fine.

BUT SAFE is not a security so it is not under the ruling of the SEC. There is no definition in USA law that puts MAID into a security.

So you can be worried. Personally I am not. Decentralised has no effect of any of this since the SEC does not worry about it. So we cannot do anything to change any future rulings by the SEC.

BTW since MAID is many times less a security as what BTC would be considered why then should MAID be an issue when the SEC has not considered BTC as an issue?

Anyhow there is not much more to say since you are dead set on considering the SEC as some authority that controls itself and can ignore laws and definitions.

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At this point the argument is repeating, I accept you do not consider there to be any regulatory risk here. I feel the second paragraph of my post above addresses your latest points so it may be more beneficial and productive to leave it at that. I am very happy to continue to discuss (on another thread of course) ways to help further decentralised MaidSafeCoin such as the ERC20 token version with all of the other positive benefits that will bring on top of just de-risking the reliance on two centralised exchanges within US control and influence (not to mention the apparently end-of-life Omni project).

On further consideration and although I said I would not - I am uncomfortably compelled to address your last two assertions as they may give a false sense of security.

This statement that level of decentralisation does not matter is clearly false IF you take the SEC at their word as you appear to be doing. The SEC has repeatedly been on record stating that it considers how decentralised the project is to be of the utmost importance (see link below).

Also arguably false. From the subjectively titled “SEC’s Clayton: Use of a token can evolve toward or away from being a security”

Our analysis is based on two key questions inherent in the flexible test that demarcates SEC jurisdiction over investment contracts, the Howey test. Those two questions boil down to:

Is the token valuable primarily as an investment or as a useful item?

Is there an issuer backing up that value or is the value the result of a
network of unaffiliated participants in an industry and market?

Bitcoin is the most widely used token. It’s a tool for making payments on the internet and there are hundreds-of-thousands of transactions each day. Bitcoin is also the most decentralized token, there is no issuer backing up its value, and purchasers (to the extent they rely on anyone at all) are relying on thousands of unaffiliated individuals, among them miners, exchanges, market participants, and software developers.

Safecoin will without doubt be a “useful item”, but is MaidSafeCoin a token valuable primarily as an investment? Only the SEC can tell us when it gets around to clarifying things in it’s yet-to-be-released regulations and until then it is a risk that I have been arguing should be hedged in the most positive way that also brings future benefits to the project.

At this point the whole discussion should probably be moved elsewhere, it grown out of What’s up today material…

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That is the project. Considering the project is purely decentralised then you already tick that box.

The issue is with the MAID coin. And putting it on a decentralised exchange is not a part of that statement by the SEC, and thus my statement it does not matter how decentralised (MAID is) - and I’m assuming the fact it is a omni protocol coin.

But MAID is not changing its intended purpose. It has no purpose and is not even bordering on being a security. So I do not consider it a problem and SEC advice is that it will not be anyhow since it is only a token for use on a future network to purchase goods on that network. Because it has to since it has no authority over those things

No one associated with the safe project has ever said there is any investment, there was no hidden signals given that it could be considered an investment, or any such thing.

I think you are going beyond reasonable to suggest there could be any consideration of it being a investment. Yes I know some traders and excited people out there has made remarks along that line, but people have done that with all sorts of things even as silly as everyday buttons. People’s ramblings are not what SEC look for but things the people in charge of the coin say or those speaking on their behalf or in some case things said behind doors to trading companies etc. None of that has happened to the best of my knowledge

And yes this is still only a considered opinion

I didn’t really read through comments here, but would point out that the SEC has effectively grandfathered in the early tokens and has said, from my recollection, that they won’t go after them as they had no regulations for tokens at the time the early ones were issued … and Maidsafe token was one of the early ones.

In fact I think it was only post-ethereum tokens that they are going after - that includes EOS.

EOS raised around US$4BB and I read today? that the SEC successfully sued them for US$75MM … a tidy profit for the EOS company Block One.

I’m not worried at all.

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It was the first from what I remember said by Maidsafe.

That lines up with my memory of it all.

yes as a token issued for bitcoin, I think that’s right.

No it was not. At lease Bitshares AGS/PTS funding started in late 2013. Maidsafe was april 2014, Ethereum ICO was few months after Maidsafe. Those are the serious players. There were few others scammers, who did some kind of scam crypto funding on bitcointalk forum. And there was a cryptostocks.com page in 2013 where were tons of scammers selling many kinds of “shares” in exchange for BTC. But you can say, Maidsafe was first non scam token sale right after Bitshares.

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