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what it is fundamentally because you can say...
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therefore, it's property, but if the rights that you are given look and act like a share.
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some sort of token that just simply gives you a right to...
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different terms. they are [inaudible 00:02:07] issued by a wide range of people.
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there's a wide range in peter, then valkenberg from [inaudible 00:02:15]. the last conversation ended on a really strong point because what he was saying was quite a few of these.
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and if you've got something like that, then they really should not be treated the same as if someone is trying to raise money for a venture, like more of a...
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i think that, and it shouldn't be shoehorned definitely into the normal profit.
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sure, maybe at the end of the day they're trying to make a profit.
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in other words, i think that they benefit from, not a legal perspective.
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but from an everyday person who's participating in this ecosystem.
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they want the affiliation with an ipo.
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these tokens can be used for pretty much anything.
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i think a really good case study for looking at icos and how...
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so ethereum in late 2014.
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actually, in earlier 2014, they were toying with the idea of how to actually make this platform a reality. and they were looking at a lot of different funding mechanisms.
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with an equity token, then that discussion changed rather abruptly.
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and the ethereum foundation was born in zurich, switzerland, and it was incorporated as a non-profit.
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was it sold tokens of ether as a presale of software.
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so this has become not only a model for successful fundraising, but also a repeatable model.
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and then, ethereum has gotten a lot of buy-in from a lot of large traditional industry players. and i think it's great, and i...
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participated in the ethereum presale and i really liked the platform, so this isn't a negative.
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so i think that's one of the reasons why now we're seeing so many icos. and i, for one.
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i don't know about any of you, but i get asked at least a few times a month to be a consultant on a new ico project.
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they are just flooding my inbox. when i go to conferences.
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i'm asked. crowds of people are saying, "hey, i'm working on this ico project..."
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i'm working on this project and we plan to ico in the next month, in the next two months, in the...
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so i think that this is the up-and-coming and i think that from a legal perspective, how we started the...
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that said, really, it depends on how these tokens are being marketed and how people view what their role will be and what they can do with these.
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but my favorite ico is ponzico.win.
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basically, it is all the things that we as lawyers hate about icos put together in a really...
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really funny way. the white paper is fantastic and i think that this thing has actually raised a significant amount of money.
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similarly, they've got the typical ico website, which is less fraudulent economics and not quite blockchain.
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i totally agree. i think that one thing we haven't touched on yet is how hungry the market is and how one of the plus sides of...
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you have to be an accredited investor in order to invest in most of the new and up-and-coming.
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companies. and this blows the lid off of that in a global way.
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some other cryptocurrency, right? because typically, they don't accept anything else, but...
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investors. and i think it's interesting to explore why those barriers are there.
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in light of the internet and the proliferation of information and the availability of information.
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i think maybe these barriers could be revised.
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i think this provides a good opportunity to do that.
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no, i think that's actually a really good point that you raise.
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is that, fundamentally, this shows there is a lack of capital in the market and people need capital to be able to build platforms and programs.
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investing in a program. but as i think alex said...
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token piece of data, piece of music, pebble watch kind of way, well...
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but as this music improves in value, there's more to come back to me.
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because i think with anything that looks...
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people are going to think they're buying into the promise of yes, a risk.
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if there is nothing happening in the background that actually supports that expectation.
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just thinking about how the human beings respond to the purchase of something.
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really interested in this idea of secondary markets and the idea that everything...
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i remember when my family was really into beanie babies.
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this tiny stuffed animal, and while it might be super cute...
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the secondary market was really the catalyst for a lot of those purchases.
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the law is very good when we are directed and we're doing things.
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made very clear and square and consistent way like most of us lawyers like to do things.
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when these things cross boundaries and cross borders.
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think often regulation isn't in a position to handle that because if it's...
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so my point was going to be that yes, we...
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okay? we wouldn't have the internet. and this is something new, and what a lot of people worried about is that, is that the law stifling innovation? and one of the...
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[inaudible 00:08:19] crypto valley, and now apparently...
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and i know that's one of the things that peter and matt would say, they're worried about in the states.
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the sec cutting back, and for the ico blockchain capital.
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had to go do it in singapore, and then they could do summon to the us but there was limited to 99 us investors. so it's a us company having...
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so i just think it's applying existing framework or thinking to something new is quite damaging.
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and that might be completely divorced from their physical prisons.
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incorporate and not serve us clients. and the reason is because of the regulatory hurdle.
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basically, unlike elsewhere in the world where no one wants to deal with this, and the us.
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that everyone wants to claim jurisdiction. and so, it's really confusing.
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particularly for those that are looking to ico.
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state and federal laws to deal with. and so, from a business...
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perspective, it often makes more sense for them to simply incorporate outside of the us and exclude us customers.
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so i think it's interesting that as i travel around the world, i...
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really excited about san francisco, and not that i don't love san francisco as well.
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i don't know. again, it's questions rather than answers.
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a geo-locator couldn't exclude me from the sale.
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... then are we necessarily requiring identity to be tied in with all these icos and what are-
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... the implications of that, and what are the implications of having startups in this space-
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so, i'm now an east citizen of estonia, i-
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... have actually registered. it only took me about three days to get approved, and i could now set up a business in estonia. i could use the estonian-
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... company that i've incorporated as the vehicle to do those purchases for me.
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... the geo-locator, and this is a really good point because-
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... we know who your computer is, we know where you are, and you are excluded or, "please note, you are bound by australian law."
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there's been no move to...
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... the expense. it's expensive to do that.
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we need to tokenize the litigation and have an ico to fundraise-
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most lawyers will say, "this isn't worth pursuing."
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alex's point i think is really important, that we're a little bit too old-fashioned in the way that we regard the law.
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... for failure to meet whatever your obligations were-
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i don't know that anyone's working on actionable smart contracts for that.
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i think it's a bit worrying when these ico-
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they're really not ready to set up the crowdfunding project-
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it's actually really an interesting point that when the arbitral clauses have to be set up at the time which you set up the venture, at the time which you-
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... contract. and i have heard people say in the past-
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"oh, but arbitration's great for blockchain disputes."
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they don't realize that arbitration isn't jurisdiction.
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and you're completely right, as you're setting it up-
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think about what... unfortunately, where you're going to have to deal with disputes, when things are-
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... and arbitration i think actually is the right way of doing it.
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we know, off the call, and i'll be happy to add you-
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... arbitration clause builder, and of course they have lots of disclaimers that say, "you shouldn't use this if you're not a lawyer, and consult with your lawyer."
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