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Case #95
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Evidence Period
4 days 6 hoursVoting Period
7 days 6 hoursAppeal Period
7 daysEnforcement
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Check the details on Kleros Court
Creator
11 Jurors
Jury Decision:
No** with 10 votes (90.9%)
- No**
- Pending
No**
Vote:
No**
Date:
July 7 2019, 14:26
No**
Vote:
No**
Date:
July 8 2019, 15:24
No**
Vote:
No**
Date:
July 4 2019, 23:48
No**
Vote:
No**
Date:
July 6 2019, 00:27
No**
Vote:
No**
Date:
July 9 2019, 12:59
No**
Vote:
No**
Date:
July 3 2019, 18:00
No**
Vote:
No**
Date:
July 3 2019, 18:00
Pending
Vote:
Pending
Date:
No**
Vote:
No**
Date:
July 10 2019, 08:38
No**
Vote:
No**
Date:
July 10 2019, 08:38
No**
Vote:
No**
Date:
July 8 2019, 00:06
Evidence
Badge challenge
See earlier cases. The main point is less than 10% of the token is currently circulating, which is a clear violation of 5.2
Submitted by: 0x27fE...6C67 in June 19 2019, 18:42
Spendcoin Moved Funds Bitrex
Spendcoin claimed in the previous dispute that they distributed tokens via Proof-of-Purchase. I show here that they moved the tokens directly to Bitrex themselves. This is a dishonest action. So in addition to violating 5.2 they also violate 2.1
Submitted by: 0x27fE...6C67 in June 19 2019, 20:25
Correction on Math
I need to make a correction on my previous evidence. I was using 1bn as the total supply instead of 2bn while calculating the percentages. So from those transactions I included is ~3.5% that ended up on Bitrex. My point still stands. If you look at this address in the entire 60 day window nearly all of the relatively small movements of Spendcoin from this foundation address end up on Bitrex either immediately or within a hop or two. Looking at the total Spendcoin in and out from this address: 1,166,642,635 is the total amount in (58% of the supply). 1,011,224,807 (50.5%) has been moved out and not been touched since. The remaining ~7.5% has been moved out onto Bitrex within the last 60 days. The point remains Spendcoin itself has moved massive amounts of the token to the exchange in the last few months.
Submitted by: 0x27fE...6C67 in June 19 2019, 22:29
Spendcoin Responses to Challenger and Juror 1/3
Thank you Juror for your information provided. We have responded to each of the Challengers issue with factual evidence exposing his misrepresentations. We are looking forward to receiving the Ethfinex Badge. My apologies in advance for 3 separate files as they were too big as they contain graphics to make the arguement visual. Thank you for your time.
Submitted by: 0xedCC...f797 in June 20 2019, 16:52
Juror's Notice #2
(1) I will wait for Submitter to reply to the new arguments before, potentially, giving a new preliminary opinion or posing further questions on the facts.
(2) For now, I just want to know whether Challenger take back their 2.1 and 5.2 argumentation completely.
Submitted by: 0xb841...1b33 in June 21 2019, 14:24
Spendcoin responses to "New Arguements" with factual defenses proving it meets all points of listing badge
The Challenger has now conceded to the argument of 10%+ circulating as it has been proven with blockchain data that it meets that requirement. Therefore since this argument was the only one used in denial, Spendcoin should meet the requirements now. However, the Challenger has raised new issues in his attachment above which were not raised before. Therefore, in an abundance of caution, Spendcoin has addressed all issues with factual evidence on why the Challenger is making a misrepresentation of the facts and why Spendcoin should receive the Ethfinex listing badge based on 3.1, 3.2, 1.1.2, and 1.1.5. Thank you members of the jury for your time.
Submitted by: 0xedCC...f797 in June 21 2019, 14:58
Spendcoin response to the Jurors questions
Dear Juror, please see responses to the questions. We will also be submitting another response to the Challengers statements as they are misconceptions of the facts. i believe his opinions are driven by the fact they may earn money if they win. We will be giving a detailed explanation before the evidence period is over. Thank you.
Submitted by: 0x4631...401e in June 22 2019, 04:17
On Token Utility
My full case against point 3.2 here both in existing utility and future utility.
Submitted by: 0x27fE...6C67 in June 22 2019, 07:26
Juror's Inquiry
I am currently writing down all the facts that my decision will rely on.
My current impression is that the outcome of this trial will depend on the following question: What do I have to do if I want to become a validator?
Submitted by: 0xb841...1b33 in June 22 2019, 09:00
Double Post
Sorry for the duplicate post above seems as though a transaction was stuck in MetaMask.
Submitted by: 0xedCC...f797 in June 23 2019, 16:16
Spendcoin Responses to Jury and Token utility
Dear Juror,
As a quick summary Validators need to be voted in by the network. They would be assumed to submit a proposal to the community or a set up a website to Spendcoin holders to vote for them by securing or improving the network.
Nevertheless, I have given an official response in the attachment and I have given responses to why we have utility.
Submitted by: 0xedCC...f797 in June 23 2019, 16:18
Further discussion on Validators
Thank you for your response. I am still trying to fully grasp how Validators are elected and I don't find the whitepaper to be very specific on this voting process.
1) When only a majority vote by the SPND holders is necessary to become a validator, does this mean that one can become a validator without KYC?
2) How does the vote take place? Is casting a vote some kind of on-chain transaction or does consensus among client nodes determine who the validators are?
Submitted by: 0xb841...1b33 in June 23 2019, 16:49
Spendcoin Juror Response
Hi Juror,
Sorry for the confusion. Yes the Validators are voted in by Token Weight of the Voter as a standard Proof-of-Stake.
Example: 1 SPND = 1 Vote Weight (100 SPND = 100 Vote Weight). The highest 41 Validators based on Vote Weight are able to secure the network. They do not need KYC to become Validators.
So to answer your questions:
1) Yes Anyone can be a Validator by vote. There is NO KYC required.
2) Vote takes place on-chain by either the node CLI or web client/wallet. These vote weights are in real time so if user wants to remove their vote and give it someone else they may do so by their address and vote command.
Thank you. Please let me know if you have further questions.
Submitted by: 0xedCC...f797 in June 23 2019, 17:32
Juror #1: Preliminary Judgement
In my preliminary judgement I explain why I believe that all claims except the violation of rule 1.1.5 cannot lead to a denial of the badge. I can still change my mind though. When it comes to 1.1.5 I am still undecided.
Submitted by: 0xb841...1b33 in June 23 2019, 20:33
Application of Rule 1.1.5
I believe that Rule 1.1.5 is applicable here. The sub rules for rule 1.1. are the requirements that can be checked by the jurors to determine whether the token is a security under Swiss law. It is still in the primary document so there has been no policy change. Complying with U. S. legal standards does not necessary mean that Swiss standards are met. There are very different approaches when it comes to defining "security", as the different treatment of crypto currency in Europe and the U. S. shows. Furthermore, when 1.1.5 implied being a security under Swiss law before it still does unless legislation in Switzerland has changed. Switzerland is planning to deregulate blockchain but has not done so yet. Therefore, I will consider compliance with Rule 1.1.5 in my final judgement.
Submitted by: 0xb841...1b33 in June 23 2019, 22:54
Spendcoin Responses about Jurors Reasoning
I would disagree about 1.1.5. There is no chance in this planet that Spendcoin would be deemed a security by any jurisdiction. Anyone who follows Cryptocurrency for the last 3 years knows the USA has the most strict interpretation of what is a security (SEC) in comparison to the rest of the world. The framework for other countries is less than the USA's interpretation of securities and anyone who has been following crypto should agree here. If you pass USA framework for securities analysis it would be a common sense judgement that it would definetely pass Swiss especially being a country known for financial benefits.
There is no amount of Spendcoins you can earn by holding more Spendcoins based on a company profits divided by others. Jurors should use common judgement here to rule in favor of the submitter for 1.1.5
Submitted by: 0xA1E2...3555 in June 24 2019, 17:36
Any proof of distribution form Spend Coin?
If the tokens are effectively distributed, we would need to see the transactions and who they were distributed to.
Submitted by: 0x5e7B...9FD1 in June 25 2019, 15:11
Any summary on other issues
I recall that 2.2 and 3.1 were also subject to dispute.
Could both parties provide evidence supporting their case on those points?
Submitted by: 0x5e7B...9FD1 in June 25 2019, 15:13
Spendcoin Responses
For 2.1: https://spend.com/company
The team is highly fit, and capable. Their backgrounds and experiences combined shows decades of work in these fields.
For 5.2
There is no way to easily distinguish the distributions without exposing user information which is in violation of our privacy policies. The best way to explain this is that the distributions have been consistently going to the 3 custodian addresses since the beginning. So either no rewards were distributed or all were if you're looking at with a grain of salt. SO Jurors would have to then assume either Spendcoin was lieing from the beginning and no rewards have been distributed or there has been distribution and it has been going to the same place in the same format since the beginning
Submitted by: 0xA1E2...3555 in June 25 2019, 19:28
For Juror on 3.1
This was explained in the evidences above but to sum it up:
Answer: We will answer each point of this issue at hand:
1. The token has plenty of present day utility to stake for services and in the future when
Spendchain launches to run Settlement, Merchant, and Validator nodes as well as
goverance voting of the network.
2. Spendchaind and Spend.com all have novel technology that is in a niche market with
low number of competitors as in comparison to other niches.
3. Spend App does require Spendcoins to use the higher tier services. Spendchain is a
Cosmos SDK and Tendermint based blockchain that will be highly customized in its road
map of features and whitepaper (https://spend.org/roadmap)
4. The economic benefits are highly sustainable. The challenger doesn’t understand
Interchange and Merchant Rewards networks which is how Spend will operate after the
distribution incentive runs out (see ebates.com)
5. Spend fully passes all securities law frameworks. It is listed on the Bittrex USD market
and USA market which required extensive legal opinion about the framework of the
token. The token never held an ICO and was launched when utility was available for
immediate use. Once Spendchain launches there will no central control. All these
allegations are meritless without evidence.
Submitted by: 0xA1E2...3555 in June 25 2019, 19:30
Summary of Points From Challenger For Juror 3
My main claim is that it is a clear violation of 5.2 because of exactly the reason you state. There is no proof. They have not been distributed on-chain but instead sit on Bitrex in wallets controlled by Spend. We cannot just take their word that all of the tokens have been distributed.
I did not raise point 2.2. I argued 2.1 originally, because the transactions moving funds to Bitrex looked like foul play. I think it is fair to say that, while they do remain suspicious to me for many reasons I have pointed out and juror 2 also pointed out, they have a reasonable enough explanation that I can withdraw this claim. I have no serious proof they are improper persons and it is quite a serious charge.
On 3.1, a summary of my argument is as follows. 3.1.1: The Spend App is not a beta product for Spendcoin. It is all offchain and does not use any properties of the token, nor does it ever intend to. The app can be used normally without owning any Spendcoin. There are some ways you can use Spendcoin for extra benefits but it is not a real use of the token, just marketing to get people to buy and hold it. A beta product for Spendcoin would be Spendchain which does not have a beta version.
3.1.2: They recently open sourced some code but there is very little original code written so far. It is mostly just a fork of Cosmos.
3.1.3: The whitepaper for Spendchain presents no novel uses of cryptography or mathematics. The token most certainly has no novel uses of cryptography or mathematics as it is not even used on chain.
Submitted by: 0x27fE...6C67 in June 25 2019, 23:30
Submission of Evidence
I would like to know if the Jury can explain their rulings.
For 5.2 we will be submitting proof that can be verified of distributions to users and a more detailed look of the system. Even though this exposes us to some issues, we believe its necessary to win the votes of the jurors
Submitted by: 0xedCC...f797 in June 28 2019, 18:09
Tip on Reapply
I already justify my vote for denying because of 5.2. I am happy to hear you will be adding transparency for us. I personally would accept next time if there is better evidence for distribution. Kleros sometimes shows justifications from juror on their court app but not all cases show it so I do not know if they will have it for this case. A tip for you to save money and time: I have seen in other disputes it will still be denied if you appeal because new information presented after it starts is not fair for challenger. I recommend you publish this information somewhere, and then re-apply for badge. Maybe you will not be challenge if you do this so people can know.
Submitted by: 0x503c...3886 in June 28 2019, 19:12
SpendChain - Most Likely a Fraud.pdf
Please see the attached PDF. 1️⃣Shifting the burden of proof - now the ball is in the court of the submitter. Most likely a fraud - until proven otherwise. 2️⃣Let’s try something new for a change - https://docs.google.com/document/d/1tokaqLcMaRkYJNZHZmlaVV5waZYhTpTibeytrb7vZIM/edit?usp=sharing - link to the live Google Doc in case I want to change something?
Submitted by: 0x85A3...5567 in July 3 2019, 23:15
Spendcoin Response to Juror for Appeal
Hi Juror, as standard rule of law on an appeal , we are not raising new challenges. That would warran a new badge request. We are however argueing that our previous challenges on 5.2 and other items were actually correct by showing more supporting evidence. We are not changing our stance our raising new issues to counter the arguements made. We are merely showing more evidence. We are also going to be attaching a Swiss Legal Opinion letter from a well known Swiss Legal firm. This should negate all outstanding issues.
Submitted by: 0xedCC...f797 in July 4 2019, 19:29
Spendcoin on Appeal Support
Hi Jurors,
On an appeal, we are NOT raising new responses to the challenger to sway a decision. We are actually staying firm to our original arguments, but now providing more evidence to support the claim. in a legal dispute, on appeal, an appellant can not typically raise new issues unless its a change of matter of law, they can however provide more evidence to the original argument to show they are correct. In this case we will showing more evidence on 5.2 as we have a method of showing user distributions that can be proven and also posting a Swiss Legal opinion on the status of the token from a top firm in Switz. This will back up our remarks without changing our defense or raising new topics.
Submitted by: 0xedCC...f797 in July 4 2019, 19:29