Overstock.com has proved itself to be a pioneer in bitcoin advocacy, helping push a number of major merchants to consider accepting digital currency when it became the first marquee name to do so this January.

Now, in a new interview with CoinDesk, CEO Patrick Byrne has opened up about how Overstock may be seeking to further develop its plans for promoting decentralisation in the global financial market.

The Utah-based e-commerce giant launched a new open-source wiki page on its website on 29th July. Entitled 'How to issue a cryptosecurity', the page provides a broad overview of the topic, and lists the pros and cons of the various major players in the marketplace including Counterparty, Ethereum and NXT. The offerings all allow users to trade securities person to person, without a centralised mediator such as a stock exchange.

Speaking to CoinDesk about the wiki, Byrne confirmed that the page seeks to crowdsource opinion from the digital currency community so that the company can shape its stance on whether it would be able to introduce such an offering.

Choosing his words carefully, Byrne said:

"I can't say that we have the intention to actually do it, but I can say that my intention is as firm as the intention can get while being still exploratory. If it gets any more solid, I will have to notify the Securities and Exchange Commission (SEC)."

If introduced, Overstock would be the first publicly traded company to also offer a cryptosecurity as an option to investors. Byrne suggested any Overstock offering, should it move past the exploratory phase, would not be focused on raising revenue, saying:

"If we hypothetically issued such stock, it would really be in a small amount. [...] We're doing it because we want to figure out how to do it and show how to do it [so] other people can fund their companies using the system we develop."

Cryptocurrency crowdsales

have become an increasingly popular and sometimes contentious way for bitcoin startups to launch and raise money, with leading Canadian exchange CAVIRTEX and the now defunct Neo & Bee providing notable examples of the varying results produced so far through this approach.

Eliminating corruption

Throughout the conversation, Byrne stressed that he believes that cryptosecurities have the potential to vastly impact the traditional investment industry.

Noting how he thinks cryptosecurities could be even more powerful than cryptocurrencies in the long term, Byrne remarked:

"If every payment went to bitcoin, it would be a $16tn industry. If every exchange on the stock market went to a cryptosecurity it would be a $4qn industry."

Byrne went on to suggest that he believes the Depository Trust & Clearing Corporation (DTCC) – a financial services company that provides clearing and settlement for the majority of US securities transactions, should be disintermediated by a block chain-based solution, and that doing so could prove more valuable to society than replacing central banks.

"The central bank is not good institutional design, it's bad institutional design," Byrne said. "It's good people trying to do the right thing. [...] In the case of the DTCC, I think that it's a corrupt organization that shows [the] influence of organized crime."

Cryptosecurities, he asserted, hold the potential to eradicate the need for such centralized parties, and any steps toward this future, he suggested, would be beneficial.

How the offering could work

Though the specifics of a final offering would likely be shaped by the cryptosecurities exchange platform Overstock chooses, the end result would aim to be similar to a traditional common stock, with the same associated economic and legal rights.

Byrne stated:

"Hypothetically, we would want to make it as close to an equivalent to our common stock as possible and trade at the same price."

Speaking to CoinDesk in the past, some of the burgeoning cryptosecurity sector's major players acknowledged that the legality of securities trading using decentralised block chain-based platforms is still murky, especially as laws around traditional crowdfunding remain opaque.

Still, without guidance from the SEC, Byrne suggested that Overstock could seek to be the company that raises the issue, adding:

"We're open-sourcing how to create an alternative to the current corrupt institutions that dominate Wall Street. If their lap dog, the SEC, subpoenas me, I intend to open-source their subpoena and open-source my response. And when the DOJ indicts me, I'll post that online and we'll open-source our response to that."

Obstacles ahead

Should Overstock go ahead with such a proposal, it acknowledges it would likely encounter a number of issues. The wiki page currently names transaction recordkeeping and legal requirements, for example, as two areas that need further clarity.

In part, Byrne explained, the company's new wiki page is an attempt to find solutions to these obstacles. He said:

"We're basically open-sourcing the answers. Instead of asking some law firm to spend $1m to try and figure it out, we're turning it over to the world and say 'Hey you folks who want to see this happen, come and help figure out some of these questions on our wiki'."

Still, Byrne cautioned that while he's enthusiastic about the project, the SEC will have the final say on whether Overstock could even issue a cryptosecurity.

"I agree that it's too exploratory to do now, but that's why we have the blank wiki page," Byrne said. "As the issues get resolved on that wiki page it will become less and less risky."

In particular, Byrne suggested that Overstock is hoping securities lawyers and stockbrokers can contribute to the page as it continues to explore the possible offering.

To learn more about Overstock’s proposal, visit the full wiki page.

Source: Coindesk
Original Post: Patrick Byrne: Overstock Exploring Block Chain-Based Public Stock Offering

Alleged Silk Road creator Ross Ulbricht has suffered a setback in his efforts to fight federal narcotics and money laundering charges after a US court rejected his bid to dismiss the suit.

Ulbricht’s lawyer originally sought to dismiss the charges in late March, citing flaws in the legal definition of money laundering. As well, the dismissal filing challenged allegations that Ulbricht directly conspired with Silk Road users.

On 9th July, US District Judge Katherine Forrest rejected the defendant’s claims regarding the validity of the charges, saying that there are sufficient grounds for Ulbricht to be prosecuted based on the government's case. According to court documents, the court dismissed Ulbricht’s claims that bitcoin does not fall within money laundering laws.

Forrest noted:

“Bitcoins carry value - that is their purpose and function - and act as a medium of exchange. Bitcoins may be exchanged for legal tender, be it US dollars, euros, or some other currency. Accordingly, [the defense’s] argument fails.”

She also wrote in her decision that prosecutors have cause to prove Ulbricht acted as the ringleader of Silk Road, saying that “whether the government can prove the facts alleged is not a question at this stage.”

Judge rejects defense arguments

Ulbricht’s defense countered the suit’s money laundering and narcotics charges, outlining a number of questions that sought to cast doubt on the validity of the prosecution’s case.

Among the challenges, the defense argued in court documents that Ulbrich did not act in a managerial capacity within the Silk Road community and that the evidence does not support these claims. Forrest disagreed, saying that the allegations were appropriate as written.

When challenging the argument that bitcoin doesn’t fall under the definition of legal money, Forrest stated that the technological usage of bitcoins make them a medium of exchange, saying that the broad legal boundaries money laundering laws operate within can be interpreted to include digital currencies.

She wrote:

“There is no doubt that if a narcotics transaction was paid for in cash, which was later exchanged for gold, then converted back to cash, that would constitute a money laundering transaction. One can launder money using bitcoin.”

Trial set for November start

With the motion to dismiss all charges rejected, the case is now expected to move to trial with a 3rd November start date. Ulbricht, who has plead not guilty, faces life behind bars for charges that also include computer hacking and continued criminal enterprise, the latter of which carries a minimum sentence of 20 years alone.

His defense will focus on a series of points, including the argument that Silk Road, like other e-commerce sites, should not be held responsible for illegal activities perpetrated on the platform. Ulbricht's family told CoinDesk in an April interview that the government has overreached in its case by misusing legal language to attack the alleged Silk Road operator.

Since Ulbricht was first arrested and charged in connection with Silk Road, efforts began to fund his defense.

A recent Twitter post by bitcoin magnate Roger Ver netted nearly 17,000 retweets, with Ver promising to donate $10 for each one. Ulbricht's mother, Lyn, recently told CoinDesk that the family has had some success in raising funds in the past few months.

Judge image via Africa Studio / Shutterstock

Source: Coindesk
Original Post: Ross Ulbricht Loses Bid to Dismiss Federal Silk Road Suit