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anon136

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Anon136's Silver Bullion Gateway
« on: April 30, 2014, 04:34:11 pm »

So this procedure is going to sound a bit ridiculous but I'm trying to minimize my legal risk. What I have to do to avoid that is to never touch fiat at any point in this process. I will explain.

Dry cleaners issue claim checks on their inventory, those claim checks can be traded by the people holding them, anyone who brings back one of the claim checks is entitled to the article of clothing that this check is a claim on. Interestingly you would think these claim checks would open them up to the wrath of the financial regulators since these things are clearly financial securities, but they don't! As far as i am aware the SEC doesn't regulate dry cleaners. I intend to leverage that by emulating a dry cleaner's business in every way that I can.

So what I will need is for you my loyal customers to acquire >=0.999 silver shot from a reputable source and set the destination address on your order to a PO Box of my specification. In exchange I will issue you an appropriate number of tokens (claim checks) minus my fee (payed in 999 silver shot), which you may use to reclaim your silver at any time. If you try to reclaim it immediately than it will be returned unprocessed because this is what would happen at a dry cleaners. However if you wait a couple of weeks before you return that claim check than the silver will be returned to you in the form of a hand poured 10 ounce bar. The process of pouring and processing the bar is the analogue to cleaning the cloths that the dry cleaner has in inventory.

Do note that this only seems complicated to people who want to be involved in the production process. in some sense what i am doing is outsourcing some of the labor and in exchange you will be compensated by presumably being able to sell the bars for a little premium on the open market. To the lay person who just wants to use nxt to buy a few bars of silver, he will not be involved in this behind the scenes process at all, he will just go onto the open market and buy a token from one of you guys, send it to me, and promptly receive his silver bar in the mail.

I hope this makes some sense. Sorry for making it so complicated but you have to do what you have to do in order to avoid getting thrown in jail. If this thing becomes profitable than i will probably use some of the profits to hire a lawyer and maybe if it becomes big enough than ill just get licensed but until that time one can not be too careful.

*edit* This is only so limited in the beginning. I will move on to taking other things later if this works out. At some point i hope to also refine scrap and other PM's. One step at a time though.
« Last Edit: April 30, 2014, 04:43:08 pm by anon136 »
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anon136

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Re: Anon136's Silver Bullion Gateway
« Reply #1 on: April 30, 2014, 04:48:36 pm »

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DoM P

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Re: Anon136's Silver Bullion Gateway
« Reply #2 on: April 30, 2014, 07:44:22 pm »

I think you're not getting the picture right.

First of, you think you can imitate the way dry cleaners work. But you don't. Those "claim checks" do not entitle you to anything, they are not titles of ownership. They're here only to help the employee to find your clothes. Very often, customers lose these pieces of paper, but they get their clothes back anyway. So, legally, the 2 situations don't compare.
Secondly, you are underestimating the state. Those guys don't want you to do that, so, if you ever find a way to do that legally, they'll find a way to make it illegal. Check out what happened to egold for example (http://en.wikipedia.org/wiki/E-gold)
Thirdly, as a general rule, you should not think that if something seems right and logical to you, it will necessarily be seen the same way in court. Chances are they won't. So my advice to you would be to start by seeing a lawyer or, at the very least, by checking you theory out on a forum dedicated to legal advice.
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anon136

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Re: Anon136's Silver Bullion Gateway
« Reply #3 on: April 30, 2014, 09:38:04 pm »

I think you're not getting the picture right.

First of, you think you can imitate the way dry cleaners work. But you don't. Those "claim checks" do not entitle you to anything, they are not titles of ownership. They're here only to help the employee to find your clothes. Very often, customers lose these pieces of paper, but they get their clothes back anyway. So, legally, the 2 situations don't compare.
Secondly, you are underestimating the state. Those guys don't want you to do that, so, if you ever find a way to do that legally, they'll find a way to make it illegal. Check out what happened to egold for example (http://en.wikipedia.org/wiki/E-gold)
Thirdly, as a general rule, you should not think that if something seems right and logical to you, it will necessarily be seen the same way in court. Chances are they won't. So my advice to you would be to start by seeing a lawyer or, at the very least, by checking you theory out on a forum dedicated to legal advice.

Yes the intention is not to create a sustainable business plain at this time. It is to at-least provide me with enough of a buffer that if they contact me it will be to request that I stop doing what im doing (see mike caldwell http://www.wired.com/2013/12/casascius/) rather than sending men to my house to arrest me on the spot. I intend to use my profits if i have any to hire a lawyer. I don't want to spend all of that money though if the community isnt even interested anyway.

Additionally i can explicitly make no commitment to send people silver in the event that they send me a token. I can make it clear that if i do happen to send a silver bar that this is completely by my choice, and if i chose not to than this would just mean that you had sent me a donation in silver for some of the other hard work i have done for this community. That would make my service quite a bit different from e-gold i think since they did in-fact make a commitment to honor an agreement.

again though this is all just to provide a temporary buffer while i see if this business plan is actually going to work. if it is than ill just use the profits to come into compliance with all of the regulations.
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DoM P

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Re: Anon136's Silver Bullion Gateway
« Reply #4 on: April 30, 2014, 09:54:54 pm »

It is to at-least provide me with enough of a buffer that if they contact me it will be to request that I stop doing what im doing (see mike caldwell http://www.wired.com/2013/12/casascius/) rather than sending men to my house to arrest me on the spot.
You could perfectly get both. Imagine you're scamming people and the authorities identify you, would you think they'll politely ask you to please stop ? If what you're planning is considered illegal, you'll end up in court, and you will need a lawyer. You may as well start by that.
Just my 2 cents...

Additionally i can explicitly make no commitment to send people silver in the event that they send me a token. I can make it clear that if i do happen to send a silver bar that this is completely by my choice, and if i chose not to than this would just mean that you had sent me a donation in silver for some of the other hard work i have done for this community. That would make my service quite a bit different from e-gold i think since they did in-fact make a commitment to honor an agreement.  :o

Yeah, well, this business model can't work. How do you expect people to even start trusting you if you tell them : "You pay me, and, maybe, but just maybe, I'll do something for you" ?
People on the other side are customers, and you're asking for their money. Don't start like this, or you will never see the first one of them.
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rlh

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Re: Anon136's Silver Bullion Gateway
« Reply #5 on: May 01, 2014, 01:49:15 am »

I'm not sure where you are located or what your intent is but in the US there are barter laws and laws governing the taxation of transactions for the expressed purpose of business, even if they do not use fiat.  I'm not a lawyer but I've been around crypto for a while, and I've read through a lot of federal law on this topic.

Most people tend to think that the government wants us to use their fiat and anyone using anything else as a means of transferring wealth, or value, as a business is illegal.  This isn't true at all.  Trading as a business is completely legitimate but transactions that involve profit, even from trades, are to be taxed.

Ok, so let's now assume you want to start a barter business.  Sure, you may not haggle with your customers but if you are trading items, instead of currency for a product, it is a barter business.  You, as the business owner now have to record every transaction and reasonably discern the fair market value of everything you trade.  At the end of the year, you have to take those numbers and use them as the basis for your income.

Ah, but can't you "cheat" the government by undercutting your estimations of what you trade?  Nope!  If you run a barter business, and each year the government sees that you make "nothing" or only a couple thousand dollars a year, you will get audited.  The auditor will then look at what you do and if it looks at all shady, he will hit-you-hard.  Boom, you will owe back-taxes and you could possibly, even face jail time.

In the end, you might have the option to barter/trade for all of your transactions but you can not do this legally and keep your income off the grid as to avoid taxes and the potential of being audited.  If you want to do it legally, you will find that managing such a business is such a huge headache that... it will be easier to deal in fiat. 

The government isn't so interested in controlling your money-- they just want to be sure that it's tracked so they can skim what they feel is their "fair share".  Oh, and when that fair share is due, they choose the medium of payment which is, obviously, fiat.  You can barter in tokens and silver all that you want, but come April 15th, you better finds some way to get enough fiat to cover your taxes.  Otherwise, you are breaking the law.
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anon136

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Re: Anon136's Silver Bullion Gateway
« Reply #6 on: May 01, 2014, 02:22:02 am »

Yeah, well, this business model can't work. How do you expect people to even start trusting you if you tell them : "You pay me, and, maybe, but just maybe, I'll do something for you" ?

Yes actually I do. People here know me and they know how to read between the lines. They would understand that even if we have a contract that protects me from being legally liable to pay there are other means of holding people to account. Look i wish i could just do peaceful business in peace but that's not the world we live in. The million + dollars it would probably cost to get this thing close enough to regulatory compliance to be able to guarantee delivery within the legal framework would be a cost that would have to be passed on to customers. a HUGE cost. so large it would almost certainly outweigh the benefits of being able to hold me legally accountable in the courts for failure to deliver.

Of course i could be wrong and if i am than oh well.
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anon136

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Re: Anon136's Silver Bullion Gateway
« Reply #7 on: May 01, 2014, 02:33:51 am »

I'm not sure where you are located or what your intent is but in the US there are barter laws and laws governing the taxation of transactions for the expressed purpose of business, even if they do not use fiat.  I'm not a lawyer but I've been around crypto for a while, and I've read through a lot of federal law on this topic.

Most people tend to think that the government wants us to use their fiat and anyone using anything else as a means of transferring wealth, or value, as a business is illegal.  This isn't true at all.  Trading as a business is completely legitimate but transactions that involve profit, even from trades, are to be taxed.

Ok, so let's now assume you want to start a barter business.  Sure, you may not haggle with your customers but if you are trading items, instead of currency for a product, it is a barter business.  You, as the business owner now have to record every transaction and reasonably discern the fair market value of everything you trade.  At the end of the year, you have to take those numbers and use them as the basis for your income.

Ah, but can't you "cheat" the government by undercutting your estimations of what you trade?  Nope!  If you run a barter business, and each year the government sees that you make "nothing" or only a couple thousand dollars a year, you will get audited.  The auditor will then look at what you do and if it looks at all shady, he will hit-you-hard.  Boom, you will owe back-taxes and you could possibly, even face jail time.

In the end, you might have the option to barter/trade for all of your transactions but you can not do this legally and keep your income off the grid as to avoid taxes and the potential of being audited.  If you want to do it legally, you will find that managing such a business is such a huge headache that... it will be easier to deal in fiat. 

The government isn't so interested in controlling your money-- they just want to be sure that it's tracked so they can skim what they feel is their "fair share".  Oh, and when that fair share is due, they choose the medium of payment which is, obviously, fiat.  You can barter in tokens and silver all that you want, but come April 15th, you better finds some way to get enough fiat to cover your taxes.  Otherwise, you are breaking the law.

All of my "profit" if you will, will just be in silver. It should be super easy to calculate. It wont be like other barter businesses because its a homogeneous good with a clear cut market price. The profit would come in any time someone sent me silver. The moment it arrives at my door and i open the box is the moment i "profit". So all I would have to do is when ever i received silver in the mail. weigh it. multiply that times that market price. then multiply that times what ever my margin is. Then i just add that number into a spreadsheet. It would literally take like 2 minutes.

i mean i see what you are saying, if you are trading tractors for pool toys for lawn gnomes to increase your total number of wind chimes yea that could get really confusing. but silver is a homogeneous good with a relatively strait-forward market price.
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rlh

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Re: Anon136's Silver Bullion Gateway
« Reply #8 on: May 01, 2014, 02:50:08 am »

To be clear, I'm not trying to say you can't, or shouldn't do this.

If your primary goal is to minimize the use of fiat, then yes, you can do this.  Just as you state, Silver (and other commodities that are easy to track pricing) will be fairly easy to manage.

End the end, just be sure that you have enough fiat in the bank to cover what ever "profits" you've made on paper.  If you do your due diligence, you will be fine.  Just be sure you keep a clear enough paper trail so that if you get audited, you can show the tax man all your work, and then promptly show him the door! ;)

Kudos to you if this works, though.
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anon136

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Re: Anon136's Silver Bullion Gateway
« Reply #9 on: May 01, 2014, 03:18:03 am »

To be clear, I'm not trying to say you can't, or shouldn't do this.

If your primary goal is to minimize the use of fiat, then yes, you can do this.  Just as you state, Silver (and other commodities that are easy to track pricing) will be fairly easy to manage.

End the end, just be sure that you have enough fiat in the bank to cover what ever "profits" you've made on paper.  If you do your due diligence, you will be fine.  Just be sure you keep a clear enough paper trail so that if you get audited, you can show the tax man all your work, and then promptly show him the door! ;)

Kudos to you if this works, though.

jesus i hope so. im scared to death of all of the regulatory shit that i know i have no reasonable way of complying with so im sure as hell going to dot all of my i's and cross all of my t's when it comes to taxes. hopefully i can fly under the radar until it generates enough profit for me to become compliant. if not i hear white color jail isn't so bad. i wonder if they will let me work on my programming while i am in there.
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Daedelus

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Re: Anon136's Silver Bullion Gateway
« Reply #10 on: May 01, 2014, 11:27:58 am »

It might not be relevant right now but could you give an indication if you plan to sell shares on the AE? Whether on launch day or soon/months after? Trying to get AE launch info all in one place  ;D ;D

That would be super  ;D Thanks

https://nxtforum.org/news-and-announcements/asset-exchange-ipos-launch-day-listings!/new/#new


(You may have already spoken about this in the thread. Full disclosure: it is still on my to do list to read  :-[ )
Thanks  ;D
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anon136

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Re: Anon136's Silver Bullion Gateway
« Reply #11 on: May 01, 2014, 02:49:03 pm »

It might not be relevant right now but could you give an indication if you plan to sell shares on the AE? Whether on launch day or soon/months after? Trying to get AE launch info all in one place  ;D ;D

That would be super  ;D Thanks

https://nxtforum.org/news-and-announcements/asset-exchange-ipos-launch-day-listings!/new/#new


(You may have already spoken about this in the thread. Full disclosure: it is still on my to do list to read  :-[ )
Thanks  ;D

lol i do the same thing. sometimes i would rather just ask than read a whole thread. i wont personally be selling shares on the exchange. im not sure what my margins will be yet but lets say 5%. if someone sends me 100 ounces of silver than i would send them 95 tokens and then THEY could list those tokens on the AE. So you ask will i be listing tokens on the exchange the answer is no, if you ask, will tokens of mine be listed on the exchange than the answer is yes.
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Daedelus

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Re: Anon136's Silver Bullion Gateway
« Reply #12 on: May 01, 2014, 03:05:22 pm »

It might not be relevant right now but could you give an indication if you plan to sell shares on the AE? Whether on launch day or soon/months after? Trying to get AE launch info all in one place  ;D ;D

That would be super  ;D Thanks

https://nxtforum.org/news-and-announcements/asset-exchange-ipos-launch-day-listings!/new/#new


(You may have already spoken about this in the thread. Full disclosure: it is still on my to do list to read  :-[ )
Thanks  ;D

lol i do the same thing. sometimes i would rather just ask than read a whole thread. i wont personally be selling shares on the exchange. im not sure what my margins will be yet but lets say 5%. if someone sends me 100 ounces of silver than i would send them 95 tokens and then THEY could list those tokens on the AE. So you ask will i be listing tokens on the exchange the answer is no, if you ask, will tokens of mine be listed on the exchange than the answer is yes.

Thanks, very clear  ;D  I panic when I see walls of text  :D

This question came up on the new megathread by xibeijan:

"suppose i'm trading one of Anon136's silver bullion coupons on the NXT decentralised exchange.   Can I redeem it for the silver bar and how?"

I guess there is no actual silver being traded and you are not offering this, they are just like ETFs?

https://bitcointalk.org/index.php?topic=587007.440
« Last Edit: May 01, 2014, 03:09:23 pm by Daedelus »
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anon136

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Re: Anon136's Silver Bullion Gateway
« Reply #13 on: May 01, 2014, 05:51:44 pm »

It might not be relevant right now but could you give an indication if you plan to sell shares on the AE? Whether on launch day or soon/months after? Trying to get AE launch info all in one place  ;D ;D

That would be super  ;D Thanks

https://nxtforum.org/news-and-announcements/asset-exchange-ipos-launch-day-listings!/new/#new


(You may have already spoken about this in the thread. Full disclosure: it is still on my to do list to read  :-[ )
Thanks  ;D

lol i do the same thing. sometimes i would rather just ask than read a whole thread. i wont personally be selling shares on the exchange. im not sure what my margins will be yet but lets say 5%. if someone sends me 100 ounces of silver than i would send them 95 tokens and then THEY could list those tokens on the AE. So you ask will i be listing tokens on the exchange the answer is no, if you ask, will tokens of mine be listed on the exchange than the answer is yes.

Thanks, very clear  ;D  I panic when I see walls of text  :D

This question came up on the new megathread by xibeijan:

"suppose i'm trading one of Anon136's silver bullion coupons on the NXT decentralised exchange.   Can I redeem it for the silver bar and how?"

I guess there is no actual silver being traded and you are not offering this, they are just like ETFs?

https://bitcointalk.org/index.php?topic=587007.440

thanks for alerting me to that. much appreciated.
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anon136

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Re: Anon136's Silver Bullion Gateway
« Reply #14 on: May 04, 2014, 12:42:12 am »

I bought all the supplies that I need to get started today :)
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