From your reply in your other thread, which you inappropriately entitled “Why My Faith in Terra Increased AFTER the Attack on Luna” (archival snapshot):
That’s some “faith” you’ve got there!
In substantial essence, you have “faith” in a project that you “know is going to get nuked”. You “got burned”, and you think that others shouldn’t invest—and yet, you are now manning the ramparts to defend Terra. Well, no matter. You are “just here for fun and games” (!).
Anyone who considers your opinion is a real lunatic.
Newsflash: Shorting a currency is not illegal. If it were, then Soros would be in prison.
Pegs are a hard problem. A currency peg needs to be able to withstand this type of attack. Do Kwon called himself and still calls himself the “Master of Stablecoin”. He was supposed to solve this problem with the algorithmic wizardry of the Terra peg. He expressed full confidence that the peg would be restored, at least as late as May 11. Many people trusted him, including me.
Why are you trying to let him and TFL off the hook, and divert people into a fool’s errand of nonexistent remedies that all England couldn’t pursue against Soros? Is it your idea of “fun and games”?
(Much though I personally hate anyone who shorts Bitcoin… sigh.)
Apropos the thread topic, I will substitute a better question: Who is @wlawyer, @wassielawyer on Twitter?
The moderators here have not objected to a thread that blatantly seeks to dox @FatMan. Therefore, I am sure they won’t mind my asking for tips here: Anyone with information about @wlawyer/@wassielawyer, please see my website for my email and PGP key.
@wlawyer has presented himself as a faux Mr Reasonable, pretended disinterest, given a boatload of bad legal advice under the cover of some worthless disclaimers, and thus greased the skids for TFL to convert perfectly legal, fungible virtual asset tokens into what is constructively an illegal unregistered security—replete with retroactively imposed shareholder classes, all substantively based on paid-in equity.
That’s the injury. Atop it, the insult is that once he drops his nice-guy mask, @wlawyer shows the arrogant contempt for retail investors that illustrates why they get screwed by “tradfi”. Someone who is trying so hard to engineer a regulatory disaster for all cryptocurrency should take stock (so to speak), and realize that he is in no position to bandy about low-grade, broad-brush insults ad maximam nauseam.
As for him, at the very least, the relevant bar needs to see some complaints about this. That is, of course, if he even is a lawyer as he proclaims, and not just “playing lawyer on the Internet”.
More generally, the SEC also needs to hear about this—as do the securities regulators in other jurisdictions. I hate to say that. I do not like running to the SEC, et al. I discussed this briefly in my tweet thread, which Twitter suppressed. In this circumstance, I do encourage non-anonymous parties with lawyers to get the securities regulators involved ASAP.
Those of us who care about crypto need to get out in front of this: If TFL creates an unregistered security (as the hardfork will do), and exchanges start trading it, then the future regulatory fallout for all crypto could be immense. That would be unfair and unjust. But more oft than not, that’s just how the world works. A prompt crackdown by securities regulators could limit the damage: Let them take down Terra now, so that innocent projects don’t suffer later.
If the hardfork occurs, then Terra will have retroactively created four separate classes of quasi-shareholder stock based on some notion of capital contributions. That’s what this is—de facto, constructively, in substance, no matter how anyone may mince words to evade that substance. That’s how every judge will see it, on grounds of, “It looks like a duck, walks like a duck, and quacks like a duck.”
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Class A stock: LUNA holders who purchased and staked before a given date—the magic date being based on market price, as a proxy for paid-in equity. These shares have had post-crash, pre-fork voting rights. Thus, they can make self-interested votes for the fork—to the detriment of Class C and Class D shareholders. Post-fork, they will receive disproportionately much larger amounts of new tokens.
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Class B stock: LUNA holders who purchased before a given date, but did not stake. These shares receive the same proportions of post-fork token as Class A shares, but they have no voting rights between the crash and the fork.
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Class C stock: LUNA holders who purchased after a given date. They are deprived of pre-fork voting rights. Post-fork, they will receive drastically lesser proportions of new tokens on the theory that, in TFL’s arbitrary opinion, they paid-in inadequate capital contributions.
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Class D stock: UST holders. They have no pre-fork voting rights. Post-fork, their $1.00 IOUs will be arbitrarily converted to volatile, largely locked and illiquid shares in the new Terra enterprise going forward. Note that this is also Terra’s conversion of a liability, which Terra’s past marketing materials have explicitly advertised as a “liability”, into an asset: Post-fork, UST holders’ notional capital contributions will be balance sheet assets for Terra, instead of debts they must repay. Whence I come, such a sleight-of-hand is called theft.
Thanks to @wlawyer for almost explicitly spelling this out in his forum posts, on Twitter, and now on Substack. He purports himself to be a corporate restructuring lawyer, and he certainly treated this as a corporate restructuring of shareholder interests!
For a very recent example (archive with pinpoint highlight of quotation in context):
The Do Kwon Framework consists of splitting the stakeholders up into multiple classes.
I couldn’t have said it better myself, except that “stakeholders” is a flimsy euphemism for “shareholders in the peremptory conversion of fungible tokens to what is constructively an unregistered security”.
@wlawyer is practically making my case for me—and for the regulators who will bite into this, as soon as they realize what TFL is doing here. In the context, @wlawyer speaks of “equity” in a way that glibly slides back and forth between multiple distinct definitions of the word. That is a well-known rhetorical trick. It may fool unsophisticated readers. It does not fool me. I doubt that it will fool a judge.
You can’t have your cryptocurrency-tokens-are-not-securities cake and eat it, too. @wlawyer should also know that shareholders have shareholder rights, which are accorded by law and custom—not by Do Kwon’s whimsy.