Regulatory Concerns and Unsolicited Feedback

General DFINITY
1

Hello all,

I am writing this today because I have some concerns about projects like “Hot-or-Not” and how they are handling certain issues. One major problem is the overwhelming presence of “soft-core pornography” videos on the platform. These videos appear to be uploaded by fake or catfish accounts, which is a significant problem considering the foundation’s goal of directly paying content creators for their work. Essentially, the platform has turned into a marketplace for stolen videos, allowing those who uploaded them to potentially profit while the original creators receive nothing. This not only taints the foundation’s vision but also exposes the project to potential lawsuits and cease and desist orders. It could also attract attention from regulatory bodies like the FCC and SEC, which could lead to serious consequences for the project.

Another issue I’ve noticed is that many of these videos are clearly stolen from the popular app TikTok, and they don’t even attempt to hide the TikTok label. This is a clear infringement on copyright laws, and it’s surprising to see that the application’s community, developers, and content moderators take no action to prevent or remove such infringements. This lack of enforcement is a significant concern and highlights a disregard for copyright regulations.

Moreover, there’s a possibility that this project could be considered an unregistered security offering. Although this is a topic of debate, I believe it’s worth addressing the potential legal ramifications, particularly in highly regulated areas. While I am excited about the progress and potential of this technology, I feel that the community is too eager to launch and gain funding support without fulfilling their ethical obligations to the community, the projects they claim to develop for, and the original content creators. It’s crucial for them to create effective safeguards for investors and content creators, but it seems they are neglecting these responsibilities.

I believe Coinbase US, Binance US, and other major exchanges might delist the ICP token until the legal situation surrounding these concerns is resolved. This would be a tragic outcome for me and other investors, as it would render our investments worthless unless we move to a location where selling the tokens is allowed without penalties. One possible workaround could be to swap the accumulated ICP on a decentralized exchange (DEX) with CkBTC or the upcoming CkETH, and then sell them on Coinbase as Bitcoin or Ethereum. However, this approach implies participating in a “tax-evasion-like scheme” in regulated areas, as DEXs currently do not provide adequate reporting to demonstrate the taxable event of swapping ICP for other cryptocurrencies. Furthermore, it suggests engaging in transactions involving “unregistered securities” in areas where such ownership is not permitted, potentially leading to criminal offenses. This overlooked and underestimated issue is concerning, and I feel that both users and investors, especially in the US, are not giving it enough attention and consideration.

Overall, I want to clarify that I don’t intend to diminish the progress made by the community in the IC ecosystem. However, I believe it’s essential for current developers, investors, and community members to be less driven by excitement and impatience and instead hold themselves accountable for the biases and shortcomings present within the IC. The community needs to address these concerns and develop effective plans of action, rather than relying solely on the DFINITY foundation to handle legal matters. This reliance raises questions about the level of control and influence DFINITY has over the blockchain, and it’s important to address these ethical concerns as well.

12 Likes
2

I agree. There are a lot of nuances that I think are being overlooked with hot or not and in the sales in general. Since the SNS launches are marketed as decentralization sales, but are just essentially buying stocks in incomplete products which can’t be decentralized yet due to reliance on web2 services and other technicalities.
These definitely seem more like securities than giving ownership of a product over to the community and rewarding work that’s already been done through a sale. A decentralization sale, not a early stage funding round
We are in the wild West, which can be fun but also can hurt a lot of people who aren’t looking at the fine details

7 Likes
3

Yes, I want to express that this is not limited to, “Hot-or-Not”. However, the project is a good example. I would like to see any (all) projects being geo-blocked in the USA, and not allow any US investor in them (unless they are permitted to invest in unregistered securities). In my opinion, these concerns and “grey areas” are exactly why the SEC would feel urged to file charges for the list of tokens and coins.

This is not a surprise by any means I might add… Several community members (myself included) have alluded to these possibilities on several occasions and in several forum posts. However, it seems (on the surface) it is being outright ignored, and (or) unconsidered.

I would like to see the community “do what it needs to do”, for it to continuously be listed and sold on a variety of exchanges. Then, any services outside of the scope of the USA should be geo-blocked automatically, and those who wish to “risk” using a VPN to bypass the block should be slapped with a giant warning of sorts completely removing liability from the projects team/ community. However, this may (or does in some cases) directly violate the “censorship resistance” claims on the IC. It appears to be a “catch-22”.

Another, valuable nugget I keep thinking of, is how removing the sale and purchasing of ICP from the USA will not only hinder investor’s ability to exit effectively. It will also block any (all) developers wishing to participate in a project. This is because, you can’t fully deploy on the IC without purchasing and using cycles, which would require accumulating ICP tokens (which would be illegal in certain areas) making it impossible for even current developers to continue. Essentially, this could very well result in several individuals losing their jobs (income) entirely if they only are employed as a dev. on the IC. Personally, in my opinion, these are going to be highlighted in any case made. The SEC would essentially be forcibly “firing” x amount of law-abiding citizens/ employees. To me, that will be an infringement on the worker’s rights, and could be interpreted as being unconstitutional.

These things are well above my (and a vast majority of community members) “pay grade” as they say. So, this of course only points to various speculation(s), however, I have only seen “echoes” of known community members regarding these issues. While I applaud the conviction (possible blind faith), I do not see any discussions of real actionable steps or attempts to align itself accordingly. Just a “trust me bro” type of situation, along with no actual response from leadership addressing these issues or concerns. Which only leaves me with less conviction by the day.

My hope is, that discussions and actionable plans are being made and ready to address these issues. Not only inside a sealed courtroom (until made public), but within the wider developing community. If troves of developers are essentially “fired”. Not even being able to even accumulate cycles and continue their projects, then one could assume Cycles would lose any/ all monetary value and thus, resulting in a total collapse of the ICP token much like we saw in other well-known cases in the recent past.

If it were up to my control, and I was the centralized party (Dfinity), I would think it would make sense to label the IC security, register it, pay for what it needs to do, and hope it recovers (of course this is in the event the USA does deem it as an unregistered security). Otherwise, if lawsuit(s) ends with centralized exchanges like Coinbase and Binance needing to register as brokers and follow the strict guidelines, then they still may not list the tokens again (or at least until they follow those guidlines in the USA).

Thank you for allowing me the opportunity to hold this “thought exercise” of sorts,

Best,

2 Likes
4

PAYING TAXES IS AN INDIVIDUAL CHOICE.

If someone sells an asset, they clearly know how much of a percentage they should pay to their jurisdictions. It’s upon them to make that choice of paying taxes and keep track on the numbers.

Not long ago someone was making a comment about their career of doing repair work on real estate. The person mentioned that they often got paid in cash and that they kept track on the payments and then paid taxes appropriately according to their income.
Which further supports my point that taxes are paid on an individual person basis.

In our societies Billionaires pay different taxes from regular people; and in majority of the time the Billionaires pay way less taxes. Maybe our focus should pivot towards making everyone pay fair share in their taxes rather than micro targeting crypto investors.

3 Likes
5

I respect your opinion, however, I have to disagree. While, this might apply in certain geographic locations. It does not cover all. Nor does the real estate scenario apply to the scenarios I mention. Specifically, the developers not even being able to purchase cycles due to the lack of ability to purchase ICP tokens (legally).

I understand your point of view, and while I may even agree with certain points, this is only in “hypotheticals”, in practice this is not some of our realities, or even a plausible response to growing concerns.

I understand that taxes are (to some) a “hot point”. However, unfortunately, as we may soon see, this is not, nor would it ever be considered an “individual choice”. Perhaps individuals’ responsibility. However, labeling it as a “choice”, is not only a dangerous precedent to set, it also opens a floodgate of potential legal consequences. While this may not be widely understood by all. I would urge you to (try) read(ing), the various criminal offenses and (or) charges associated with the acts I mentioned as a citizen of the USA.

Please see the examples below…

(Cited from: https://www.irs.gov)

=================================================
Example of several investigations and related charges (2023)

(Cited from: https://www.irs.gov)

=================================================
A brief breakdown of the IRS Procedures

(Cited from: https://www.irs.gov)

=================================================

Several resources including the updated 2023 Tax codes (USA)

(Cited from: https://www.irs.gov)

=================================================

2 Likes
6

Basically what you are saying is US CITIZENS needs to do ABC…

The INTERNET COMPUTER is tailored to be a UNIVERSAL TOOL, it is not tailored to specifically satisfy US LAWS.

US CITIZENS need to educate themselves on safe and appropriate practices while doing their taxes.

Like I said before, the focus should rely on the tax regulators to EDUCATE THEIR SUBJECTS ON DOING TAXES APPROPRIATELY.

3 Likes
7

I do not believe you are quite understanding what I am saying, or the concerns I am raising. This undoubtedly goes beyond very basic tax reporting concepts. I am not saying US citizens need to ABC. I do not believe you are taking the appropriate time to fully understand or interpret the content. Perhaps, this is on me (poor delivery/ several different points not presented with concision).

In more direct terms, this is not just about reporting on any earnings, this is about USA users, investors, and developers, not having any ability to buy, purchase, sell, or use ICP tokens period. IF any are owned, then in this scenario, your ICP tokens are essential, “Lost tokens”. If the SEC is successful in their bid with Coinbase and Binance, and there are NO exchanges (in the USA) able to LEGALLY sell or purchase ICP tokens then no one (in the USA) would be able to effectively use any part of the IC ecosystem as the utility portion of the coin can no longer be used.

I was attempting to use the “hot-or-not” project as an excellent case example. This project, unfortunately, already raises several red flags, yet is still being offered to the wider community in the USA. Despite it being a questionable security. This is not an “up to the user to DYOR” this is a standard requirement when even offering these projects (or investments) to the public. Not to mention the copyright issues mentioned above surrounding the obvious “tik-tok” labeled videos. I wouldn’t be surprised if this becomes a larger issue than it is currently. This is a perfect example of said violations of rules and regulations.

While I may not exactly agree that they should be seen as securities, this is the “fine details” that are not to be taken lightly. They will if provoked, “throw the book at you”, just to set a firm example for following cases. Especially, if it becomes a “hot topic” they will essentially destroy you.

1 Like
8

I am not the one who brought up the topic on tax evasion.

You are the one who was talking about ICP being delisted from trading based on Tax issues.

And I was saying the society would be better if Billionaires paid their fair share in Taxes. I believe the regulators should do a better job on enforcing fair taxation among the Billionaires club. That would serve justice in the society and boost development in societies.

My other suggestion was to educate the public on proper ways of doing taxes rather than preventing them from buying assets.

9

Not legal or financial advice. I’m not an accounting or legal expert.

I think you’re having a very fatalistic view on crypto in the U.S. If Coinbase and Binance.us died tomorrow, the ability to use crypto and ICP in the U.S. wouldn’t vanish. There are other exchanges the user would transition to. It just depends on how bad you want to use it. You can buy Bitcoin directly through Cash App if necessary. You can still use Kraken. I believe you can buy XLM through MoneyGram (haven’t tried). Kucoin doesn’t geoblock. Since it has been pretty widely accepted Bitcoin is not a security, all you have to do is buy it, send it to any exchange you want, and convert it to ICP or go right to ckBTC. That’s all legal. Your coins are never “lost”.

The SEC vs Ripple case has been going on over 2 years. Others companies have settled. IF the SEC decided to open a case against Dfinity for selling an unregistered security, it would be in court for years unless they settled.

You can still buy XRP on several exchanges, develop on it, use it, etc while the case is ongoing. Then, if Ripple loses, they’ll be fined X amount, and continue on. It’s not like if they lose the value goes to zero. It just means they violated a U.S. civil code and have to pay a fine and promise not to do it again.

If you’re in the U.S. using coins that at some point in time are determined to be unregistered securities doesn’t mean you have done anything wrong and are going to be penalized for it. It means the token issuers did something wrong in the eyes of U.S. law and the issuers need to make it right for U.S. users. History has shown this is done by paying a fine.

I have to disagree with you here. You do not have to participate in the sale. Unless you’re a regulator in the U.S., it’s not up to you to determine whether what they’re doing is legal or not. If you think it’s illegal, you can report it to the authorities in your jurisdiction and let them handle it. If they want to offer what you believe might be unregistered securities to U.S. users, that’s up to them, and they can suffer any consequences that come from that, if any.

I don’t believe Dfinity and ICP will somehow disappear and all the utility will vanish because some projects aren’t operating to the letter of any and all U.S. laws. Might it start to look bad for ICP if they all start to rug, die, or start to all get sued. Sure. But I don’t believe that will happen.

Hopefully this post will age well. Ha ha!

2 Likes
10

I’d never assume legal or financial advice to be the outcome of any of my “topics” or just general posts discussing my personal views on the IC and various projects built on it. However, the disclaimer is appreciated and should have been added to my OP among the others as well. I am only trying to facilitate discussion or a “thought exercise” with the IC community. I also appreciate the thoughtfull rebuttle or challenge to my own (current) thought processes.

Yes, this scenario is fatalistic as you put it. Agreed. I am coming at this from that viewpoint as a means to walk through these fatal scenarios. I appreciate the XRP Ripple example. Yes, they are still having legal “battles”, and in the meantime, things appear to continue. However, if the Ripple team, does fail. Yes, they would be slapped with a fine and told not to do it again. It would also imply that the SEC was correct or successful in their bid to label these projects as “unregistered securities”. Meaning, if they don’t become registered securities they would automatically be in violation. Making the whole “do not do it again” concept mute because it is going to occur regardless due to the nature of these projects.

If Coinbase and Binance lose the legal battles, it does imply or set the precedent that any exchange offering these coins or tokens to the public (in the U.S) would also be in violation of the same if they offer them to the public. Meaning Kucoin would have to follow suit and not offer (de-list) them to USA users, or be fined and again end up in a redundant scenario of paying a fee, saying you won’t do it again but by nature have to do it again to even develop the projects. Thus, it would forcibly diminish a developing industry.

Not only would it create this fine, and automatic re-violation, it would (to the US court system) see these projects as unregistered securities. Yes, I do not (nor am I) participate in them. However, that is not the legal quarrel at hand. The issue arises when they are offered to the public without registering in the first place. Making it the project’s responsibility to not offer them to certain subsets or populations. There are some who are able to particiapte in unregistered offerings. Again, this is not the issue. The issue would be that if labeled as securites they would be forced to register as securites and follow the rules and regualtions surrounding securities. Which, by nature, violates some crypto projects as a whole, but I personally beleive at the very least include the ICP subjecting the entire global community to play by the same rules.

I think the problem lies beyond “rup pulls” making the IC look bad and all getting sued. Me making light, of the Tik-Tok videos tradmark label on these “possible unregistered securities” such as “Hot-or-Not” really was to speak of the depth or extent of the “crimes or violations” these projects will be portrayed to have commited or vioated in (any) court battle. Yet, it is willingly being allowed and ignored due to the on-going nature of these court cases. In my opionion, this only cements the view(s) of opposition as being true.

I also want to push back on how you (and myself more often than not) assume ICP or Dfinity wont disappear. If the NNS continues to operate as it does now, allowing the SNS functionality to be built into the NNS dapp directly, and offering these projects (even to non US places) then it would entangle not just Dfinity in on going legal battles but the Blockchain that they operate on (The IC). It would imply that the IC is the medium in which these unregistered securites are delivered. Forcing a possible cease and desist of any (all) ic related network activites, at the very least until it seperates itself from the SNS projects.

2 Likes
11

Each project is different, so each case will have to be tried on its own merit, in its own court. There can’t be any “automatic” violation. Because of that, each case could end quickly, or take years, depending on the circumstances.

There’s also the argument that it is impossible to register at the current time. The SEC is arguing projects can register no problem, they just have to go in and register, yet, not one single large project has been able to. Your argument is based around the ability for projects right now to register as a security, and it is currently not possible to do so. (This is all based on what I’ve read/heard. I have not tried to register a crypto as a security in the U.S. myself.) Politicians are currently arguing about this. There’s also SEC jurisdiction to consider. Some politicians are arguing the SEC doesn’t have jurisdiction to do what it is doing. Even some former and current members of the SEC disagree with the general direction. With all of the arguing going on, it’s impossible for projects to do what they say they should do.

My whole point is, the legal regulations of crypto in the U.S. are in a state of flux and I’m hoping it will get clear within the next couple years. But right now, it’s not clear what projects need to do, so some are going to say screw it and offer it in the U.S. anyway, and some will geo block.

People are going to violate U.S. laws regardless. You will never stop all of it. Take a look at Apple, Microsoft, Samsung, Tesla, Amazon, etc… and what lawsuits they’re currently going through. Just because they’re violating some law somewhere, even in the U.S. doesn’t mean I’m not going to use them. Same goes for these projects.

It might IMPLY that, but again, you have to go case by case. If they aren’t hit with a lawsuit, they can operate however they want until that happens. If they are hit with one, they can fight it, or change. Binance.us still offers staking rewards. Kraken removed theirs. Just because Kraken paid the fine and accepted the SEC reasoning on staking, doesn’t mean Binance.us automatically has to follow suit. Which they haven’t. There are other exchanges and ways to stake your tokens for a return. When Kraken gave in, it didn’t seem to diminish the industry in a significant way to me (as far as staking).

Again, I push back that there is no such thing as an automatic re-violation. Everything has to be tried in the court on its own merit. And trials take a long time.

My argument here, and several other large crypto projects, is that it is impossible to register right now.

That’s the nature of litigating in court. One side tries to make the other side look like they’re wrong in whatever way possible. Can you prove the videos are stolen or infringing on trademark laws? Did the Hot or Not poster ask permission from the Tik-Tok creator to put their video up? I see the Tik-Tok mark on videos posted to Instagram, Twitter, Youtube, etc. If a Tik-Tok creator is having their videos scraped, its up to them to send out the takedown notices, or file the trademark infringement cases. Then it is the responsibility of the platform to remove it. That’s nothing unique to crypto or Hot or Not.

If it’s not illegal, then it should be allowed to continue. In my opinion. The U.S. government can bring a case against anyone they feel is violating the law. If the SEC was so sure what a security was when it came to crypto, we wouldn’t be having the arguments in congress and the courts right now.

Sure, it’s possible. There are several court cases where someone just sues anyone involved in any possible way no matter how small. Consider banks. Do banks get sued when someone wires money to a fraudulent account? I’m sure someone has sued a bank after making that mistake. But it would be very hard to prove the bank was at fault for it. I’m sure people sue credit card companies for letting them make purchases they shouldn’t be making. That’s going to happen no matter what. It happens in all other industries, crypto will be no different.

It can be IMPLIED, but can it be proven that the IC was somehow at fault. That’s an argument for lawyers/courts, which again, could take years to figure out.

4 Likes
12

First, I want to agree with your overall sentiment. Again, I am not attempting to diminish or jeopardize any project(s). On the contrary, I want them to succeed so I am challenging, or entertaining the “fatal scenarios”. Soley as a means to engage the community in hypotheticals. Second, I appreciate the viewpoints.

This was a good/ valid point to consider.

This is where I suppose as a supporter/enthusiast of the IC I could do some poking around myself. However, I may be limited to the resources I have available and might very well find I do not have the ability or access to the required channels to even understand the process as it stands. I will poke down that rabbit hole in the next few weeks and see where it takes me.

This I want to challenge because, it is a clear violation of trademark infringement, and a while back there was an entire wave of individuals trying to create an “only fans” type product, hence the connection to the softcore porno videos where females are again going to be neglected an\y proper monetary compensation for their “likeness” or content in general. I think the hot-or-not project was, or is a good precursor to set the precedent on the IC. That being it could end up being “more of the same” where content creators are taken advantage of. I see the argument that the individuals who created these original videos have no “reasonable way” of knowing that their likeness is even being stolen or used in a variety of Catfish accounts. Therefore, could not reasonably bring proper charges and receive adequate compensation for the use of their likeness without consent. It still is setting the example, and being endorsed by the IC.

This is a fair assessment of another industry and practice that resonates with my overall question or tone.

Finally, this is where we (as regular community members) will inevitably end up. You are correct. However, I think it’s important to have these conversations amongst ourselves (in a meaningful way) so it can ease the tension inside us average users not looking to do anything except continue our journey without the fear of repercussions from “big brother”.

Again, thank you for your time engaging…

Best,

2 Likes
13

I didn’t get that feeling at all from the initial post.

Thanks! I can appreciate yours as well. Just because I disagree with you on some doesn’t mean I am right either. I could be wrong and welcome healthy discussion.

No problem, I love a challenge! :rofl: Prove to me which one is a violation. Just because it has a Tik-Tok stamp on it doesn’t mean it’s a violation because (I’m assuming) you have no direct knowledge of the agreement between the content creator, Hot or Not poster, Hot or Not as a company, or Tik Tok as a company. You can say it’s a clear violation all you want, but if you don’t have any proof to back it up, in the eyes of the court, it doesn’t mean anything. (I’m sure there are tons of violations across multiple platforms, web2 and web3, my point is you need proof to back it up.)

The U.S. patent and trademark office (USPTO) has been around for over 200 years and there are still blatant violations across the physical and virtual world. The precedent for this behavior has been set by humanity long ago and the IC, or the platforms that function on it, will not be able to prevent all of it or even MOST of it.

As a creator, it’s impossible to know every place your work/likeness is being pirated. If I created a an image that was legally trademarked by me and posted it to this forum (I live in the U.S.), and another user who lives in Japan decides to print the image as a poster and sell it on the streets of Japan without my permission, I would most likely never know.

Does that mean the forum is at fault for allowing that to happen? Who’s responsibility is it to go after that person in Japan? The forum owners who allowed the download? The branch of the Japanese government that handles that type of thing? You can’t have a crime or violation without a victim, and if I (the trademark owner) do not file a suit/claim against that person, then there’s nothing that can be done. And you are correct, it will be impossible to enforce that 100% or know of all of the places the image is being pirated. BUT, when I post that on the internet for public consumption, I know that if it is stolen/pirated I am the one who is responsible for going after the people who stole it.

In my opinion, the IC is not “endorsing” this because it is not designed to be an enforcer of trademark and patent laws. I can take a picture off the internet and mint it as an NFT on at least 5 different blockchains and sell that on the open market in under an hour. Even if someone creates an app for the specific purpose of skirting those laws and that app happens to be built on the IC, doesn’t mean Dfinity/IC is endorsing it.

In my mind, that’s like saying ski mask manufacturers endorse robberies because they don’t try to actively keep people from covering their face with them when they rob stores/people. Ski masks aren’t created for that, but they’re definitely used for it.

I’m not worried. I use the best tools I can find to report any losses/gains I make which is what my accountant says I’m required to do. I haven’t started any businesses/projects (yet), but when/if I do, I’ll do my best to comply with current rules/regulations. But, if there’s no clear guidance on how to do something, I’ll have to wing it and take some risks!

For sure! Best to you as well.

2 Likes
14

Yes, you are correct in your assumption. I do not have direct knowledge. This almost makes me want to reach out to the original video creators and attempt to prove the violations. However, that would be a bit too vindictive for me. Again, I want these projects to succeed, and that would be a self-defeating purpose just to prove trademark infringement haha! It is tempting though. I did not understand the extent that these rules and regulations have (in the USA). It was not until I started my journey in coding and software development/ engineering that these topics have become so prevalent. My objective is to slowly learn and continue to develop my project. So, these happenstances are excellent opportunities for beginners and students (like myself) to really “dive in” and challenge/ create our ethical standards and best practices. Honestly, in my opinion, the IC community for better or worse has a lot of excellent “case studies”, or newly developing projects that help students like myself see the various aspects of development, production, and release to the community.

Also, this argument may have been thee best rebuttal/ comparision I was searching for yet. I appreciate this prospective and push back. This was constructive (for me personally).

I follow these rules and practices as well. Again, I only have ICP tokens in a 8 year undissolving neuron. I have no issues (anymore) with reporting the taxes on gains and losses. This has become routine or basic/ fundemental at this point in my journey. My issues, concerns, areas I am studying (for my own project) are “deeper” now, and lie in these god awful grey areas.

Thanks again,

2 Likes
15

Random update, that I was curious about your thoughts on…

Kucoin States/ Announced:

Please take note of the following:

"* Starting from July 15, 2023 (UTC), newly registered users must complete their KYC in order to use KuCoin’s products and services.

  • For users who registered before July 15, 2023 (UTC), if their KYC is not completed, they will only be able to use services such as Spot trading sell orders, Futures trading deleveraging, Margin trading deleveraging, KuCoin Earn redemption, ETF redemption, and will not be able to use the deposit service (withdrawals are not impacted).

The above enhancement will not impact the security of your funds in your account. However, to ensure the normal usage of your account, please submit KYC required information as soon as possible.

Protect customer’s assets is our primary duty. We will timely update the KYC requirements and corresponding limits according to the relevant legal obligations, integrate with the properties of various products and network environments. Please pay attention to our announcements on the platform so that to consistently be informed the latest information.

If you have any questions regarding the enhancement, please visit our Help Center for more information, join our Telegram Group, or contact our Online Support Team. We are here to provide you with more assistance and guidance.

Thank you for your understanding and support.

The KuCoin Team"

So, again, my question is, what exchange are USA users and (or) investors supposed to use, to deposit and sell their already purchased and staked ICP, if Coinbase de-lists it. The only one that allows people in the USA to access their services is (or seems to be I could be mistaken and would love to know) Kraken, which is only available in certain states. In NYS for example, these individuals could be at a total loss of monetary value if no exchange arrives with the credentials to serve the US community…

Binance has recently reported their deposit addresses will be retiring for the ICP token as well. Only selling can occur.

I’m trying to remain optimistic here… however, I really would love any ideas for future planning.

EDIT: I am sifting through all the exchanges listed on Coinmarkecapt.com, and there does not appear to be any that are operating in the USA, and if they are it is only a very few states. Which, would mean moving, becoming a resident there, selling, reporting it in that state, then moving back, or I now live in this whole other place just to unload my Neuron?

16

https://govt.westlaw.com/nycrr/Browse/Home/NewYork/NewYorkCodesRulesandRegulations?guid=I7444ce80169611e594630000845b8d3e&originationContext=documenttoc&transitionType=Default&contextData=(sc.Default)&bhcp=1

https://govt.westlaw.com/nycrr/Browse/Home/NewYork/NewYorkCodesRulesandRegulations?guid=I5be30d2007f811e79d43a037eefd0011&originationContext=documenttoc&transitionType=Default&contextData=(sc.Default)

https://govt.westlaw.com/nycrr/Browse/Home/NewYork/NewYorkCodesRulesandRegulations?guid=Ie3242420479311e6b718fc8ac47ba487&originationContext=documenttoc&transitionType=Default&contextData=(sc.Default)

17

Just to reiterate, I am not a financial/legal expert and am not qualified to give financial/legal advice. Here’s my opinion though.

You can use any of them that don’t geo-block U.S. users. All this announcement says is they’re going to start requiring KYC to use all of their services. In the specific case you mentioned, if you want to sell ICP with a spot trading sell order, you wouldn’t have to KYC anyway. Converting it to cash from USDT/USDC to withdraw after you sold it is a different story.

If you sell your ICP for USDT/USDC and hold that in a wallet, as long as whatever stablecoin you choose doesn’t de-peg into a death spiral, the monetary value is still there. Again, you might have to find a creative way to get it into your hands as cash, or into your bank though. Or, you can just leave it there until the regulations get sorted out or new exchange options pop up.

I can only use Binance.us so what Binance does with their tokens doesn’t change anything for me. Where did you see this announcement? I couldn’t find it using a quick Google search.

This is just my personal opinion and what I use to keep myself mentally healthy. Again, I’m not a financial/legal advisor or expert. I only invest money I can afford to lose. If the whole industry imploded tomorrow and I could not recover any of my funds, I would be fine and could chalk it up to a lesson learned. There are so many other ways to be successful and slowly build a fortune that don’t involve crypto in the U.S., and bring less risk. For future planning, don’t invest in something unless you have a sold exit strategy you’re comfortable with and has a well established infrastructure in the U.S.

There are lots of “if” and “could” statements in your post. As much as things COULD get worse, they also could flip and get better. I’m confident they will get better over time, it’s just a matter of waiting it out. If Gensler gets fired/replaced next year, things could get better. If Prometheum (the new exchange who claims to have SEC approval) is legit, that’s a potential new way for you to exit. Also, if Prometheum is successful, that just opens the doors for more exchanges to follow in their footsteps and enter the market or update their policies to operate in the U.S.

But, if you want out now because you’re worried, then get out. Do what’s best for you.

2 Likes
18

No, sadly, inside the memo it states that users will no longer be able to deposit or use their services (besides the few/ limited ways listed). Meaning individuals (like myself) with an 8-year stake will have no feasible way to exit. USA users will no longer be able to complete a KYC verification, which means they cannot deposit any ICP tokens to their wallet at all Again my neuron is an 8-year non-dissolving neuron.

Again, Binance.us is only limited to very specific states. It is not able to even be accessed outside those jurisdictions.

This is the article on Binance’s page telling users about retiring deposits. Now, I would ask that after July and when this occurs, if you are able to still deposit in the US. I would (again) have to relocate.

This sadly, is a “trust me bro” in my opinion. I would love to do it in these ways, however, as mentioned it’s not possible.

As I know none of this is actual advice in highly regulated areas that is going to be considered a tax evasion scheme. It is going to require knowingly breaking laws, using an illegal swap, and then selling the other asset (which I could sell and report profit if any).

As much as I respect this opinion, it does not address nearly 1/4 of what should be anyone’s concern regardless. Personally, I have enough invested in a neuron (you cannot exit from). While yes, I am completely fine if it loses any and all value. Again, this should/ is not how these situations can even be justified.

This I already am doing, I stopped investing several months back. Again, I respect the opinion but it is completely beside the point. Whether I lose any monetary value or not. Rules and regulations such as this were nonexistent. Even my tax attorney said what I was doing was legal. Then, because the Token gets removed, from any (possibly) all exchanges (in the same area it was just legal to purchase and buy in months ago). Getting rid of it becomes committing a tax crime. Even to get rid of and exit and never look at ICP again I would at this point have to knowingly commit fraud essentially. All because Dfinity/Coinbase didn’t play by the rules, and the SEC is more Ludacris than Ludacris the rapper.

To summarize, I can lose any/ all monetary value and I will be fine. Anyone who ever invested in anything would have these same issues if any of their investment became worthless. Yes, at the end of the day, you will, “have to walk it off” You are right, but there is no one who wouldn’t say (having around 1030 ICP mind you) this isn’t a reasonable response.

Again, my issue is NOT wanting to “get out” I’ve been here for over a year, and my neuron is capped at the max and my maturity is staying in “auto-stake”? Like I’m not just a $50 invested “wooowhooo moon it”, type of individual. I’m someone who took this journey rather seriously, and if after going into the second year my rewards get slashed on the regular, then I cannot even use the coin. Unless I use it in the ecosystem which would open a floodgate of Ponzi scheme suits.

My intentions are to still continue the journey and hopefully create my own project. However, there is no talk or really addressing of these rather HUGE issues incoming. I won’t sit and sift through Twitter arguments, and at the end of the day, there is just subjective “trust me bro” when I do applaud that mindset it just isn’t plausible for what I assume will be several individuals once it’s de-listed.

I apologize if my tone gives off the impression I want to exit and scream F ICP because I think anyone in my shoes would be anxious, and pretty frustrated. Especially, with the lack of a true plan of action, and inability to exit or permit my neuron ownership with my Ledger attached to the II. As much as I respect Dfinitny and the team I have to say they are looking more and more culpable.

Really, all I could reasonably do (hypothetically speaking), is contact my tax attorney and ask him to contact the NYS attorney general (or contact them directly) and present my situation allowing them to handle it. Which, would be extremely counterintuitive to my objectives and journey to this blockchain

CORRECTION: NOT de-listed, but blocked from a majority of the US

1 Like
19

I’m confused. If you have an 8 year stake, you can’t exit for 8 years anyway. The crypto landscape will look vastly different in 8 years. My view is it will get better/easier for us in the U.S. I’m not saying “trust me bro”, I’m saying that is my belief, but you should do whatever you believe is right.

My understanding of this memo is not they are retiring some deposit addresses. When you want to transfer money into an exchange, that exchange will provide you with an address. Some people will “store” that address so they don’t have to verify it every time they want to send a specific crypto to their exchange of choice. This memo is telling users those addresses they have used previously MAY be retired, and they will need to use a new one. You can’t use Binance in the U.S. at all. They geo-block. So you can’t deposit if you live anywhere in the U.S. regardless. This is a non-issue for me as a U.S. user.

It’s only tax evasion if you don’t pay taxes. I pay my taxes and keep track of my accounting. When I say creative, I don’t mean illegal. I mean using different apps, exchanges, wallets that allow U.S. users to legally trade crypto. I have no idea why you think you have to perform illegal swaps at any point in the process.

I don’t know what “situations” you’re referring to at present. Right now, you can get into and out of crypto legally in the U.S., including ICP. It’s possible every exchange closes in the U.S. and you’re stuck. It’s also possible the market expands and you’ll have multiple exchanges to use in the future. Glass half full/empty scenario in my mind. I’m looking at half full. Not asking you to “trust me bro”, I’m saying that’s what I think. I could be wrong.

We’ll just have to agree to disagree here. The laws can be interpreted by you one way, and me another. I don’t believe this is true.

Let me give an example of how I think about this scenario outside of crypto. I go and buy a tool off eBay/offerup/facebook marketplace. The seller sends it to me, I use it, I’m happy. A month later, I sell it at a garage sale. A day after I sell it, the police show up at my door saying they saw I purchased a stolen tool off eBay/offerup/facebook and they want it back to return to the original owner. But, I already sold it. In the eyes of the law, did I commit a crime? In your view, I did, in my view, I did not. I did nothing wrong in this scenario. It all comes down to your intent and specific circumstances around your situation.

Based on this, your outlook of the ecosystem and mine are vastly different. Ha ha! Nothing wrong with that, I’m just saying this is another place where I would respectfully disagree. I see a lot of people building on ICP that are not planning schemes.

Maybe because some people don’t view them as HUGE? I don’t. I have other strategies that are all legal where I live and am confident it will work out. I could be wrong for course. Still not worried.

It sounded to me like you were concerned because a lot of CEX off ramps were being shut down. If you’re locked for 8 years and don’t want to exit, why does it matter over the short term?

Ok, you don’t want to exit, are staked for 8 years, and want to create your own project.

Since you’re in for the long haul, write up a plan of action that you feel would satisfy your concerns and submit it to the NNS or the Feedback board and see where it goes. Get involved with governance and try to drive ICP in a direction you think is better. If you don’t like the CEX options, write to your legislator and let them know. In my mind, there are plenty of ways to make changes if you put in the sweat equity.

If you’re not trying to exit, I don’t know why you would need to do any of these, but again, I am not in your situation. I don’t break any laws or evade taxes and am confident I will be able to continue to do so. Again, glass half full here. :rofl:

1 Like
20

I second this :white_check_mark: Any crypto investor would be wise to pay taxes considering the targeted :dart: approach by regulators on the market. At the end of the day regulators would want to keep the market alive and open inorder to drive up their tax incomes :100: and boost innovation :dizzy:

At the current time, the laws in place can not even dictate who to oversee the crypto market. However as time passes, just like the mist of the morning due, the chaos would clear up and pave way to a more transparent process of governance in the digital world. :pray:

1 Like