approved and published on 03/02/2018
We are pleased to announce a new press release by the official spokesperson of the BitShares Blockchain. For the sake of transparency, these press releases are, as usual, published on the Steem blockchain.
EDIT: New version of this report was published. Language and formatting was improved.
With this report we, the BitShares Blockchain Foundation, want to give some more insight into the current progress. The expansion of the tradability of the BitShares core token BTS against fiat (thanks to Lykke) is among our major focus points and goes hand in hand with clarifying legal aspects of BTS. We will only announce results and not “might be”, or “ongoing”, or “we hope”. It is either happening or there is nothing to talk about, and we do not want to waste everyone’s time. Nevertheless, we want to give a narrative of processes involved.
Let’s start with saying to the unaware reader: The BBF is of the opinion that the BitShares core token BTS is not a security or a financial product. The BitShares Blockchain is decentralized and has recently realized that it needs to improve on explaining who and what it is by voting a global spokesperson. The process of eliminating incorrect or unclear spread information on the internet is taking shape and the Community takes steps to be the first among its peers to pursue a no-action letter from the SEC with the approval of the corresponding worker for funding in this matter. We thank the Community for their votes on the worker and want to explain the difficulties and subtleties involved when dealing with legal issues regarding crypto-currencies.
A major focus is put on establishing contact to exchanges regarding the listing of BTS. The very first thing that happens these days is that their lawyers step in. The time where creative ideas are first elaborated by technically oriented people are no more, that can only happen after they are authorized to move on by their lawyers. Every step of the way. The rules have significantly changed and we want you, the Community, to be aware of that. On top of everything, all personnel involved is usually required to sign a non-disclosure agreement (NDA), that restricts us as a natural person from open communication of the progress until mutual announcements are prepared and approved. All announcements that involve the BitShares Blockchain Foundation have received a written confirmation of the other party before it is released. Obtaining such a written confirmation also involves the legal teams of both parties and makes the process time-consuming. On the other hand, it gives us the chance to establish ourselves as a trusted party, which helps a lot in moving on. We build more and more towards an image of being a no-nonsense, credible, professional entity that represents the interests of the BitShares Blockchain. In the current hype all around blockchains we need to be very selective and be aware of potentially undesirable contacts to sustain our own standing.
Going back to the initial topic of this section, the PaulHastings initiative towards the legal team of Bittrex Inc. resulted in a clear answer from them as to what their needs are in a legal opinion. Those initiatives have been put forward even before the worker was approved, which is thanks to Mr. Hernand. With the worker active now, we put everything in motion as matters are pressing. We asked Mr. Morgan’s assistance in getting through to the legal team of Poloniex Inc., with the hope to be able to establish contact to the technical team of Poloniex to sort out the reappearing technical problems with BTS withdrawal and deposit.
Following up on some remarks now. With respect to a second legal team, getting a second law office in is usually only necessary when the knowledge level or manpower is not sufficient to cover the case, or if you have more than one party involved at your side, or if you have a major disagreement within your legal team. The rest is an insult at the level we are dealing with - and expensive, thus we did not change the worker as we did not see any benefit just now for the Community. This also avoids stacking up hours that will go to lawyers convincing each other instead of the SEC. We are confident about our chosen legal team, please find the curriculum vitae of the lawyers involved below:
We want to state that none of the persons involved at BitShares Blockchain Foundation or their respective businesses have, either in the past or current, had an agreement with PaulHastings. We have the possibility to dissolve the assignment any time.
Be aware that both in the no-action letter and the Lykke case, old-fashioned legal entities must sign agreements to get things done. In the past that has been the Community’s Achilles heel, as nobody was ever home when it really mattered. With the unique solution the Community now has with the BitShares Blockchain Foundation we can go past this. Nevertheless, and to be frank, it is our head on the chopping block, and Dutch law is quite straightforward in this. We therefore act according to the NDAs, procedures and agreements. It goes without explanation that this is the reason why we are so specific about what we do and don’t do.
As to suggestions to wait until we might get a subpoena from the SEC (let’s not stir up things where you might get a no) there never will be one, it is an impossibility in itself. BitShares Blockchain or BTS is no legal entity in itself to subpoena. Based alone on that very fact, third parties might be ordered by the SEC to delist BTS and effectively isolate (or kill off, whatever you want) trade. Next step is a shutdown of any exchange not doing that. This is the current procedure everywhere, with deadlines in place. Comply or die. At that stage, the Community will be in a weaker position to do anything. First, our funding will be compromised. What can you do then? Someone opening a BTC account and awaiting donations from private individuals, surrendering the control of the Community in the process? Provided you get funding in a single day, it will take hell of a long time to get things sorted out, at which point everyone will have moved on. Getting back to where we are now is a doubtful thing. From the experience of this week, we know that in Europe, with the changes in law per January 1st 2018, similar outings as a no-action letter are extremely hard to come by. Fear and massive demand on SEC type of regulators is a subjective impression we have. We believe the BitShares Blockchain needs to pioneer those advances, while being fully transparent and understood.
Recently, we have put a warning at the top of some of the documentation websites. We have also sent the owner of the domain BitShares.org, Stan Larimer, a request in the past to transfer the website to the BBF as the content is already Community driven. This request was refused. We therefore go towards the future with other domains, which will be announced in the near future. The reason for the warning is easily explained. The content of www.BitShares.org gets us constantly in severe trouble when dealing with legal issues (e.g. Bittrex), and we ask to not underestimate that. We are sitting ducks if the Community does not get their official information side cleaned up. We proposed the way forward for this with this worker, which also is approved and we are grateful for the continuing support by the Community. The split between technicalities and legalities is a vital one. The legal teams worldwide follow the same working method for analysis of the BitShares Blockchain and its core token BTS. Get this: usually the start of discussions is that they think that BTS is the blockchain. They also usually do not get the fact that other assets are on the BitShares Blockchain without being BTS. You all might think that sort of view is ridiculous, still it is what it is. Even the technical wording will be point of attention. As to the www.BitShares.org site, our lawyers strongly advise us to take the content offline this very second. Consequences are that severe. The domain is not owned by the Community, but the content is. As we feel this is important to do, and we usually give the BTS holders the final call, a subsequent worker in this matter will be published in the very near future.
On the accounting we report details on all workers that are escrowed by the BBF. Of course, when there remain funds after the work is done, it goes back into the working budget of the BitShares Blockchain. In case of overspending, you either try to get a subsequent worker approved, or you do what Blockchain Projects BV did with the Blockchain Academy worker: you pay the rest yourself. The BitShares Blockchain Foundation only handles and escrows the funds. It is not an address to come to when your funding falls short, since there is no authority here to decide that. That is where the normal voting process of workers comes into place. Governance by the Community.
The last thing we address is concerning the Chinese Community, and the worker we initiated on Chinese translations. The Chinese part of our Community is very active. We like to accommodate that in our outings and do not want misunderstandings here. Of course we are always happy if someone would want to do things in this area. We can’t however have just anyone doing that under the flag of the BBF due to legal repercussions to the Foundation if the wording is somewhat different in its details. We ask for understanding in that and are very happy and grateful we now have the possibility to professionally translate announcements. Good news is that the Chinese part of our Community is working hard to organize a conference for Graphene based development in Shanghai. I think it is safe to say we are all very, very appreciative of their efforts! Due to conflicting dates with other events they are now heading for early May. Keep an eye out for their promotion and if you are a first timer, get a visa in time to join.
We hope that we have provided some insight into some processes. These are exciting times when the world is adjusting to the new realities of Blockchains. Thank you all for your continued efforts and support.
On the promotion side, we were given the opportunity to give an introduction to the BitShares Blockchain and BTS on February 21st at the Geneva Day of the Blockchain & Bitcoin conferences. Almost 100% of the audience was unaware of the BitShares Blockchain or BTS, and we explained the unique governance by voting and some hard facts of the Bitshares Blockchain itself. It must have been effective as many people jumped on Fabian Schuh and myself with questions afterwards. Noticeable is that many struggled to get answers in their situations on scalability and speed, users and developers on a variety of other blockchains.
Note: DEEX sponsored the promotional visit for the BitShares Blockchain Foundation. DEEX also offered to sponsor the Russian translations of our reports from now on.