The U.S Supreme Court defines a bucket shop as “An establishment, nominally for the transaction of a stock exchange business, or business of similar character, but really for the registration of bets, or wagers, usually for small amounts, on the rise or fall of the prices of stocks, grain, oil, etc., there being no transfer or delivery of the stock or commodities nominally dealt in.” This sounds very similar to what can be found on the Augur prediction markets platform, where users can place wagers on everything from assassinations to World Cup events. They can also bet on the state of securities and commodity prices, which might not sit well with regulators per the Supreme Court’s position.
The same concern is being raised over the OP_CHECKDATASIG, or DSV, opcode for Bitcoin BCH. The opcode allows for the integration of a third-party oracle – one that exists outside of the blockchain - that can publish prices for use in wagers of any type, including on the movement of Bitcoin BCH. By virtue of being an experiment in gambling against a cryptocurrency, this could ultimately prove to be a loser with financial regulators.
Several high-profile individuals in the Bitcoin BCH community, including Bitmain founder and CEO Jihan Wu and Bitcoin.com’s Roger Ver, support the integration of new tools on the blockchain in the upcoming upgrade scheduled for a week from now. Among these is DSV, which leads many to wonder what they’re hoping to achieve. If DSV is developed as intended and the Bitcoin BCH turns into a free-for-all gambling platform, this will not sit well with regulators and could ultimately lead to the demise of the cryptocurrency.
DSV also has another dangerous characteristic. It would enable the network to be halted. This means that Bitcoin BCH would no longer be available on exchanges, it couldn’t be traded through wallets and it would stop being useful as a currency.
The Commodity Futures Trading Commission (CFTC) has already started to take a closer look at Augur and believes that it could be operating in violation of the Commodity Exchange Act in that the platform is not a designated contract market. While Augur has tried to distance itself from being seen as a prediction market, it obviously realizes that there’s a connection. It even has a wager listed on the site, “Will the Forecast Foundation face an enforcement action from the SEC or CFTC before Dec. 21, 2018 for hosting unregulated derivatives markets?” The Forecast Foundation is the group behind Augur’s protocol.
If the CFTC is willing to go after Augur for not being a registered contract market, what is to stop it, or any other regulatory body, from doing the same to Bitcoin BCH?
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
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What could possibly be one of the largest private cryptocurrency lawsuits to ever hit the courts has been settled. The former CEO and one of the founders of Augur, Matthew Liston, sued the other founders this past April for $152 million over allegations that the founders had colluded with an investor to kick him out of the company. The details of the settlement were not disclosed and Liston indicates that the parties are still finalizing the details.
As reported by Forbes magazine, Liston sued for fraud, claiming that the other founders – Jeremy Gardner, Joseph Charles Krug and Jack Peterson – colluded with investor Joseph Ball Costello to force Liston out. He sought restitution for monetary loss, mental agony and damage to his reputation.
For reasons that haven’t been made clear, Liston had his lawyer, O. Shane Balloun, petition the San Francisco, California-based court to dismiss the suit. A check of court records shows that the case has been moved “off calendar,” meaning that it is no longer on the docket. Other court documents indicated last month indicated that negotiations are in progress, saying, “…the parties have reached a settlement in principle and are working diligently to finalize a written settlement agreement.”
Augur was created to allow individuals to place bets on the outcomes of real-world events, such as market crashes, natural disasters and even weather-related events. It was officially introduced this past July and was built on the Ethereum blockchain. The platform has received significant attention, driven, in part, by having Ethereum co-founder Vitalik Buterin and Lighting Labs co-founder Elizabeth Stark as its advisers.
Forbes asked Liston about the dismissal, but was only told that the case had been settled. Augur didn’t respond to requests for comment by the news outlet.
Since being pushed out of Augur, Liston hasn’t sat idle waiting for a payout. He is currently involved in other blockchain activities, such as the first religion based on the blockchain, Zero Ex Omega. The church received inspiration from decentralized ideologies and, like Augur, uses the Ethereum blockchain. He is also said to be working on an alternative competing site to Augur called Gnosis.
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
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