Cryptomineds Video

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Let’s clarify a few things here before everyone keeps trying to blame Zcash Company for editing posts (based on Cryptomineds mis-informational video).

I’m the one who went back through all my posts to make sure they are more accurate based on what I have learned recently. I overstated Zcash Companies position on one or two posts I made way back in late 2016 when I assumed that this post: Why Equihash? - Electric Coin Company was a statement of future intent.

As you can see from this post: Your investors suck and I hope you will get forked! - #76 by zooko

I’m a community volunteer on these Forums and always have been. I don’t appreciate @cryptomined s harrassment and intentional mischaracterization of my position as a Zcash Company employee (which I am not) to try to push his own agenda.

I do not work for Zcash Company and do not represent thier position on anything. I clearly explained this fact to cryptomined here: Let’s talk about ASIC mining - #94 by Shawn and he acknowledged understanding of that fact a couple post’s later in that thread. Cryptomined was well aware that I don’t represent Zcash Company when he made that video but must have “forgot” to mention it to his viewers.

I have never gotten paid from Zcash Company, I don’t get a portion of the Founders Reward, I don’t have any “insider” information, I don’t have GitHub repository access to change Zcashs code, I don’t even have an invite to the private company Slack channel.

If you go back through my post history at no time whatsoever have I said I was a representative of Zcash Company. I never say “we” intend to do this or that. It’s always “they” or “the devs” or whatever.

So ultimately what I say with regards to Zcash Company’s position on anything is to the best of my knowledge at the time and may or may not be 100% correct, I’m only human.

For the past two years I’ve been a member on this forum I’ve always been impressed with how welcoming and thoughtful the Community has been. It’s not until this latest ASIC news that I have such negativity being expounded towards the developers and towards other Community members.

As you can see from my first post in that ASICs thread Let’s talk about ASIC mining - #2 by Shawn
I’m against ASICs for the centralized production of ASIC hardware and the company behind them. I don’t look forward to selling my 1060 rig , but I ultimately have zero say in the matter since I am just a part of the community. Whatever happens I will just move forward with my life and mine with whatever hardware I can use to contribute to the stabillity of the Zcash network.

I’m still going to be a Moderator here because I still believe in the Community and I believe that Zcash is a great technological breakthough and the world needs a more ways to preserve privacy online.

Privacy is a fundamental human right and a core tenant to individual freedom.

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Thanks, mineZcash. You are lovely part of this community, and the reason the community has always been such an open and welcoming one is thanks to your generous effort and your kind personality. :heart:

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Now I’m SUPER angry. Not at you @Zooko. I don’t like being mislead, if you can’t make an argument without being misleading (intentionally??) then all you have done is undermine your position, and now my own. I recant the statements about ethics I made, they are obviously based on incorrect information. However the remainder of my position on why I don’t agree with ASIC in the Zcash world still stand. @Shawn I appreciate you clearing the matter up, although I wish you had stepped in sooner, shoe leather taste in my mouth at the moment (foot in mouth syndrome).

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How an ASIC can change community from being lovely to Monero style. I guess there are a lot of faults made by Zcash Company and also by his community. The communication is one of the flaws of the Zcash Company, thats why the patience came to miss by the community, the straw that broke the camels back.

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Thank you for your contribution to the community!

First off: I’m not trying to argue or create division. I simply have a question…

What exactly was it he did to deserve being banned for 6 months? All I’m seeing in your post is about “you” and not the reason why he was banned; especially for 6 months.

To me, all you would have to do is explain WHY you did what you did [With the edits] and that’s the end of it. Which means, you gave your rebuttal and that’s the end of it.

No need for banning someone you correct with a rebuttal. That would also allow them to offer an apology or ask further questions to come to an understanding…

Again, I’m not trying to argue with you, demean you, disrespect you, etc… I simply HUMBLY request for cryptomined to be re-instated with full privileges once again. If there is something in the discussion I missed, then my apologies. I’m simply trying to make sure a decision was not made out of “emotions.” Especially, if that decision had to do with something the moderator was doing and may or may not have a conflict of interest. No?

Cryptomined, may have simply misunderstood the INTENT of WHY you were doing what you were doing with the edited posts. Simply provide your “intent” as to “why” you did what you did [as a rebuttal] and give him the opportunity to respond with an apology, etc… without banning him.

That was my 2 cents… Again, not trying to be difficult or create division. I have a lot of respect for CryptoMined and have known him for a while. I’ve known him long before I got involved with this forum.

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In no way am I trying to comment about any specific occurrence or or take a stance on any specific topic, this is purely regarding the responsibilities of paid vs. unpaid employees of the company.

As someone who has worked in communications and PR for the better half of a decade, I do feel the need to clarify for you that it does not matter if you are paid or volunteer. As an accepted representative of the company (moderator), you are just as responsible for your representation as such as any paid member. From a “legal” point of view, your words hold no less weight on this forum as Zooko’s regarding if you are an employee or not. All moderators and admins need to be fully aware of that before they contribute to a discussion and/or start a post for a new one.

If you make a distinction of an employee or a community member…moderators are employees, not community members. Regardless if they are volunteer employees or paid, they still have the same responsibility. The main distinction is that the company is liable for statements made by employees, but not by community members. This is something I have had direct and legal experience in (though I am not trying to pass as an expert in the law) and seems this is a distinction that both ZEC paid employees and moderators need to understand moving forward.

Added note: this is often why companies will pay their moderators in order to clarify this relationship. The more success ZEC sees int he future, the more this will be an important topic.

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This, and the rest of your post about it, is totally not true. Shawn mineZcash has absolutely no legal or moral liability like you are suggesting and neither he nor any other volunteer who exercises their free speech to state their knowledge and opinions has any responsibility for the company or for any legal or financial consequences of the company’s decisions or the evolution of the Zcash ecosystem. I think it is very important for me to be clear and emphatic about this, because it is easy for incorrect “legal-sounding” stuff like this post above to scare people into silence because they don’t understand the laws and they think they might be put at risk by contributing to an open community. That’s totally not the case.

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Just look around the forum in the last week…it is very clear and obvious that a moderator’s words do reflect on the company. There is personal opinion on if it should and the reality that it actually does. Zcash is currently a great example of this.
Now I’ll put on my PR/Communications hat and say “when you have you get technical about the legality of something, it’s too late, you have already lost the moral high ground.” This generally pertains to pointing to a contract with a client (by that time you already pissed off the client) but also pertains to perceived representatives of a company. By the time you have to clarify “they don’t speak for the company” it’s already too late. Damage control almost never works at this point and often makes things worse. Cryptomined is a case in point here, damage control actually escalated the situation with a long time supporter and respected member of the community.
A communications/PR specialist would have advised the company to own the situation instead of distancing or denial of the issue. It’s great that Shawn made the post he did, but it’s really ZcashCo that needed to make a proper acknowledgement. Anything else simply alienates your community.

As for technical legality, everything I stated is 100% correct and I really hope you and ZcashCo take this to heart. There doesn’t need to be a contract or compensation, you yourself admitted on the forum that you let the perception of his statements representing the company go to far. That perception from the community matters legally. I personally have a vested interest in you guys succeeding and have no desire to see the backlash happening recently repeat itself in the future. I want to see Zcash succeed.

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As much as I hate to say that @Tonic1080 is correct (disclaimer I know him IRL) because I will never hear the end of it next time we talk, ANY intern or volunteer you have, you (the company) can be held liable for what they write on any page owned, ran, maintained by Zcash, foundation, etc.

This is even more a liability for a nonprofit. Even if you did or did not do the following

Educate what is acceptable to post on the public page
Educate what is not acceptable to post on the public page
Educate what happens when these rules are violated

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Out of curiousity and to learn again something and to make myself gaining some knowledge i readed a bit into the matter.

Tonic1080 could be right actually, as you could be right as well. It depens more for whom shawn (a person and moderator i like and think it’s a fair balanced person by the way!) does his volunteer work here on the forum.

IF it’s the Zcash foundation, or another non profit organisation than he is not liable for whatever (Volunteer Protection Act).

IF he is doing his volunteer work for Zcash, i guess it’s a profit organisation, than this is another story indeed. In first case under US Law it’s forbidden for profit organisations to have volunteers that are NOT paid the minimal wage. Thinking about it, this makes even some sense, someone can imagine how else some coporations could expose overworking hours and whatever not. This said, in this case Tonic1080 would be right.

In case the forum is NOT allready operated/maintained by the zcash foundation, it might be a good idea to change this as soon as possible due the reasons i mentioned above and to avoid eventually some day a given problem.

Resources:

http://smallcharityweek.com/wp-content/uploads/2013/03/Risk-Toolkit-Volunteers.pdf

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Problem is that some miners seem to think that they have investor rights and can sue zcash company for the breach of (non-existent) contract which is, of course, utter nonsense although I am by no means a lawyer. I guess they are worried that those ASICs will get them out of business so they try to throw whatever they’ve got at the problem.

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Someone can only agree to this in generally. It’s amazing, in several discussions, how many community members think his their right is and what zcash HAS to do …

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I am afraid you are right.

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This is not exactly simple:

U.S. Commodity Futures Trading Commission (CFTC) considers most Crypto a commodity, and this position was upheld by a federal Judge in March. The Securities and Exchange Commission (SEC) considers some Crypto a security, specifically ICO’s. The IRS treats all Crypto as a Security at the moment.

Each Crypto coin will eventually be labeled (via a legal case, likely a Class action lawsuit), either a Security (Think IBM, Google, Intel, and regulated by the SEC) or a Commodity (Think Oil, Gold, Cotton and regulated by the CFTC). Most will be determined by Case Law and the “Howy test” for a security, 1946 US Supreme Court.

So to be safe ZCashCo should try to follow both SEC and CFTC rules and guidelines until they are defined. The one significant difference that could tip Zcash over to the Securities side is the existence of ZcashCo. Bitcoin has been ruled a Commodity but has no central company behind the coin, unlike Zcash. Therefore, ZcashCo, Officers, developers, and Employees should follow SEC and CFTC rules in any public statements or opinions. As such, the clear statement of Zcash being “ASIC Resistant” and maintaining said “ASIC Resistance”, intentional or not, could eventually receive scrutiny by the SEC and or CFTC if these statements turn out to be false. While Zcash Company has smartly created the foundation to limit legal exposure to the Zcash company, it is not a perfect isolation. A foundation did not isolate Tezos and they currently have several Class Action Lawsuits.

If Zcash is deemed a commodity it still must abide by CFTC rules modeled after the SEC rules:
Final Rule 180.1
, which is modeled on Securities and Exchange Commission Rule 10b-5, broadly prohibits manipulative and deceptive devices and contrivances, employed intentionally or recklessly, regardless of whether the conduct in question was intended to create or did create an artificial price.

BTW: This also includes Volunteers AKA(Sean) as the USDL Fair Labor Standards Act forbids Volunteers to for-profit private sector employers. So in the case of a Class action suit, Sean would be reclassified as an employee, then any and all public statements made by him would fall under SEC and or CFTC rules.

Just a few case examples below: In each case the suit is about WHAT the organization said or promoted.

Tezos foundation and Tezos project:
[see Case Nos. 3:17-cv-6779-RS; 3:17-cv-6829-RS; 3:17-cv-6850-RS (all in the Northern District of California) and Case No. 6:17-cv-1959-ORL-40-KRS (in the Middle District of Florida)]
The plaintiffs alleged that because of an internal dispute between the Tezos founders and the Tezos Foundation that was established to conduct the Tezos ICO, the Tezos project was delayed and the futures price for the Tezos token fell, losing nearly 50 percent of its value.

Nano and key members of its core team:
See Alex Brola v. NANO et al., 1:18-cv-02049 (E.D.N.Y. filed April 6, 2018)
Brola alleges that he opened an account at BritGrail for the primary purpose of investing in and exchanging a cryptocurrency called XRB, upon investment solicitations and specific instructions and representations of safety and security made by NANO representatives. Id. at *2. Brola further alleges that NANO publicly promoted BitGrail as a safe and reliable place for XRB holders to stake and exchange their XRB, and XRB holders relied on that endorsement by NANO in choosing BitGrail as their exchange. Id.

Ripple Labs, XRP and Ripple’s CEO, Brad Garlinghouse
See Coffey v. Ripple Labs, Inc, et al., CGC-18-566271 (Superior Court of California filed May 3, 2018)
According to the class action complaint, 20 billion XRP (20% of the total XRP supply) were given to the individual founders of Ripple with the remaining 80 billion XRP (80% of the total XRP supply) being retained by Ripple to sell to secure funds to be used for “company operations and [to] improve the XRP Ledger.” Statements made by Ripple blur the lines between Ripple Labs’ enterprise management business and XRP, efforts made by Ripple to list XRP on Coinbase and Gemini to increase the perceived value of XRP and limiting the supply of XRP available to the public to drive up prices.

Centra Tech, Inc., and the individuals involved in the Centra ICO:
see Rensel v. Centra Tech Inc., et al., 17-cv-24500-JLK (S.D. Fla.)
In this complaint, the plaintiff alleged that the sale constituted an unregistered offering and sale of securities. The complaint also accused the defendants of misleading investors about the nature of its relationship with Visa and MasterCard, as well as listing fake team members on its website.

There are many more examples. In the end each coin will be defined independently and via case law. As case law builds a foundation for cryto assets then the picture will gradually become more clear. Until then, expect many more class action suits in the cryto world.

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Interesting reading, readed it with interested, even learned some things like the case nano where i wasn’t aware that the nano team said bitgrail is a secure exchange.

If you don’t mind i will share my thought in 2 points.

  • First about Shawn. I said it allready in my upper post that it’s mostly up for whom he volunteers. If it’s the foundation or zcash directly. I suggested as well that if it’s zcash it would be better either the foundation is responsible/manages moderation or as you said they become employees. Just about the same i found out in some short/small research as well.

about the asic resistance and the examples in law suites you make i think differently, not that i’am a law expert, even less a US law expert, but in my business carrier i as well had to deal many times civil court. My thoughts here are unbiased and not to defend whatever asic, seriously.

  • first of all, if i remember right (no garantee here) it was written that the equihash algo is asic resistant at the time. I’am not sure that it was ever mentioned that everything at any time will be done to stay asic resistant.

  • in case i’am wrong with the previous thought there is always a backdoor in my opinion. Someone can just announce: “Sure, we are working on exactly this, asic resistance on our very own algo and this needs time, we are working on it.” I doubt there is a law that can enforce research times …

  • Most important in my opinion. All the cases you mentioned are cases from investors vs. crypto projects. My impression is that with the asic resistance mining you compare the cases with zcash not holding what miners awaited. But, miners are not investors, no matter that every miner makes it sound like he is an investor, they/we are not. Every miner that, no matter if GPU, Asic, whatever, invested into mining hardware invested into his very own business. As soon as someone begins the mining on a given project/coin he provides paid service with his business. It’s not investing!!!
    It’s even less investing into zcash as zcash does not hold the mining pool and does not do the payout directly.
    Actually in my understanding the miner provides his paid service to the miningpool which pays the miner.

Finally, i agree with you that each case will be defined independently and future will show how exactly what is threated under what circumstances as we are just at the beginning and have woken up all kind of juridsdictions, commisions, you name it.

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If Zcash gets defined as a Security then anyone that holds Zcash is an investor, miner or not. Zcash is then a stock, and by definition owning Zcash is an investor position. The “Howy test” that most Crypto pass easily, considers them a security.

Even if Zcash is deemed a commodity, it still has basically has the same rules as a security. There can be no false claims intentionally or unintentionally that could potentially change the market price. It would be easy to argue legally that “ASIC resistance” could potentially influence market price. Based on the published Zcash literature that has been show on the ASIC thread, its an open and shut case. ZcashCo should never have stated they would be “ASIC resistant” or that they would change the algo to remain “ASIC Resistant”, it was a poor decision if they did not intend to follow it up. Zooko admitted he did not intend to convey that message on an open forum. In a court of law that is basically an admission of guilt. I would not want to be in his shoes when the lawsuits come, and I expect they are.

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Just generally and out of curiousity.

A law suit by far doesn’t mean that someone gets sentenced, the outcome is important, right?

Just a fictive case. What would happen IF let’s say a person/group below <1% holdings make such claims but at the same time another group >50% holding says the opposite, in this case for example that they are fine with it and support the zcash decision?

And actually price influence would be pretty hard to claim. Would be of course easy if it falls to 2 cents per Zcash, but i think we both know this won’t going to happen.
Let’s say Zcash goes up the next months by 100%, 200% or more over the next months from now until December, how could someone claim he lost money after the price of a given Security/Commodity sky rocket, just as an example. I doubt this could hold in court.

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Unrelated information will not be considered in a legal case. Even if the 51% file a lawsuit (against whom?), their opinion is not relevant to the the claim of fraud and market manipulation based on false claims of “ASIC resistance”. The cards are stacked against Zcash for making such claims.

Again:

There is no need for the price to change, there is no burden of proof for this, just the potential. The Zcash price is irrelevant. This is about false statements by influential entities, not the market price.

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Seriously, i doubt it will work in reallity and will result in a successfull lawsuit .

Following that logic i could:

  • sue someone for an algo change as it was mentioned they are on let’s say cryptonite and never mentioned they will change it and i invested exactly because i believed in that cryptonite algo.

  • sue someone for forking as it never was mentioned when i invested that a fork will come and my investment would result in other coins forking from the one i invested…

  • sue someone that like DGB for example is going from 5 algos to 2 or 3 what they never announced but promoted their 5 algo project.

  • sue someone because i believe in a decentralized project, but somehow someone made a decision without the community.

  • sue someone for annoucing decentralization but not following this principes.

  • sue every exchange that a sudden wants KYC from me but begun without it.

  • endless list…

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No: there is no law against changing the direction of a business without notice. However, saying one thing and doing the opposite is highly illegal.

The rest of your points follow the same line. You can do anything you want with a security or commodity, there are no rules against this. The rules are ONLY when you announce something, then you MUST follow through on your announcement.

I am not sure you are understanding the difference.

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