July 23, 2017

Ethereum News and Links



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SEC finds TheDAO to be a security , but does not pursue enforcement against Slock.it

, but does not pursue enforcement against Slock.it Context: It was my impression at the time that Slock.it helped conjure TheDAO in order to achieve a technological work around of securities laws. It’s not surprising that the SEC fired back and claimed jurisdiction. You could argue that a federal regulator showed admirable restraint in a new technological field, all things considered.





Report affirms that the Howey test is the right way to look at tokens. Obviously some are securities, some are not. Duh.





Fact finding report was rather weak on one of the Howey prongs (“Derived from the Managerial Efforts of Others”) which may also help explain the lack of enforcement action.





Real talk : Bitcoin maximalist and ETC FUD over the last few years has claimed that the DAO fork happened because insiders would take losses on the DAO. That always seemed to be nonsense, as few ETH insiders appeared to hold substantial DAO tokens. The rumor at the time was that many people felt forking was necessary to avoid long and painful SEC enforcement actions.



: Bitcoin maximalist and ETC FUD over the last few years has claimed that the DAO fork happened because insiders would take losses on the DAO. That always seemed to be nonsense, as few ETH insiders appeared to hold substantial DAO tokens. The rumor at the time was that many people felt forking was necessary to avoid long and painful SEC enforcement actions.

The report laid an expensive yet ambiguous regulatory burden on exchanges with American customers to avoid security tokens.





Catch 22 : to not be a security under Howey, a token should have utility value. But if American consumers can’t buy the tokens because exchanges are afraid to list tokens, then it’s tough for that token to be utilized.



: to not be a security under Howey, a token should have utility value. But if American consumers can’t buy the tokens because exchanges are afraid to list tokens, then it’s tough for that token to be utilized.

This report ensures that the US will continue to far further behind in web3 . Jurisdictional competition is real, and so far regulators have not provided meaningful guidance as to how they will interpret the Howey test for token sales. The investigative report was quite reasonable, yet unfortunately some of the investor bulletin contained strong assumptions that a token sale is a security. [And the SEC was using limited resources to pay for Facebook ads for that investor bulletin?] Mixed messages.



. Jurisdictional competition is real, and so far regulators have not provided meaningful guidance as to how they will interpret the Howey test for token sales. The investigative report was quite reasonable, yet unfortunately some of the investor bulletin contained strong assumptions that a token sale is a security. [And the SEC was using limited resources to pay for Facebook ads for that investor bulletin?] Mixed messages.

Status quo of ambiguity remains : a non-zero number of projects will continue to choose to move abroad and most token sales will bar Americans from participating.



: a non-zero number of projects will continue to choose to move abroad and most token sales will bar Americans from participating.

Only way to reverse that trend is for SEC/Congress to issue either a safe harbor or clear guidance on utility tokens.



Parity bug . An attacker got about $32m USD in Ether from a bug in the Parity multi-sig wallet used by various projects

. An attacker got about $32m USD in Ether from a bug in the Parity multi-sig wallet used by various projects Bug had just a single code review when it was introduced.



Zeppelin explains the hack.



Jordan Leigh video explainer of the exploit



Timeline compiled by Bok Koo. Hacker first emptied Edgeless, then came back 13 hours later for SwarmCity and aeternity. 5 hours later, the WhiteHatGroup began safeguarding Ether and tokens worth ~$200m and finished in about 7 hours.



How to get your value back from the WHG. The WHG has already returned most of it. Thank you WHG.



But why didn’t the attacker take that $200m? It’s ridiculously easy to find a target list of vulnerably Parity multi-sigs by finding similar contracts, and the attacker had plenty of time. Presumably that attacker is sophisticated enough to realize how ridiculously harder it would be to hard fork than it was for the DAO. Perhaps the constraint was a byproduct of the DAO fork, but that seems unlikely.



Attacker appears to have picked targets based on Parity’s logo. Edgeless, SwarmCity and aeternity all have logos similar to the infinity sympol. [Can’t find the tweet where I first saw this in order to cite it.] Parity’s logo looks like 2/3 of an infinity symbol. Coincidence? Or personal pique?



Gavin Wood’s post mortem. Emin Gün Sirer’s.





Protocol





Stuff for developers





Releases

web3JS v1.0

Mist v0.9.0 - now with Swarm and ENS support





Ecosystem





Project Announcements & White papers

OpenLaw - a protocol for binding legal contract on Ethereum and IPFS

Etherep - simple Ethereum-based reputation system, on Ropsten

Dether – localbitcoins for Ethereum

NuCypher – decentralized key management?





Project Updates





Interviews and Talks





Token Sale Projects





Token Sales





General

Dates of Note



From Token Sale Calendar:

Upcoming token sale start dates:

Ongoing token sales:

You can find this calendar updated daily-ish at

TokenSaleCalendar.com

Want to be included? If you are building your project on Ethereum, email [firstname] @ticketleap.com or send @evan_van_ness a message with 1) your URL, 2) sale date and 3) a brief description of how you are using Ethereum. Listings are free. But please make sure to follow those instructions.

WARNING: list may include scams. Do your own research and due diligence before putting value at risk.

[I aim for a relatively comprehensive list of Ethereum sales, but make no warranty as to even whether they are legit; as such, I thus likewise warrant nothing about whether any will produce a satisfactory return. I have passed the CFA exams, but this is not investment advice. If you’re interested in what I do, you can find my investing thesis and token sale appreciation strategies in previous newsletters.]

I like to share it, share it (Sir Mix-A-Lot style)



Some time in early August, there will be an announcement that I’ve joined ConsenSys. Here’s a logo to draw your eye in case you were going to skip over this section:

I’m very excited about this move and will have significantly more to say in the future. The newsletters should become more regular again! In the meantime, I wanted to make it clear so that you can judge whether I favor ConsenSys projects.

My charge from Joe Lubin is pretty similar to what Status has told me: keep telling the truth and covering the space objectively, even if the truth hurts.



The link for sharing



I measure the success of each issue by how much it gets upvoted and shared. This is the link: http://www.weekinethereum.com/post/163481216423/july-23-2017





Follow me on Twitter? @evan_van_ness

This newsletter is supported by Status.im. But in case you still want to send Ether (or tokens?): 0x96d4F0E75ae86e4c46cD8e9D4AE2F2309bD6Ec45





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