Core Team Legal (September)

[glennaustin]

Dash Core Group September 1st Funding Proposals
DCG is submitting 3 funding proposals for the September 1st budget cycle:
1) DCG Compensation: $600,000 (https://www.dash.org/forum/threads/core-team-compensation-september.39897/#post-194032)
2) DCG Taxes: $210,000 (https://www.dash.org/forum/threads/core-team-taxes-part-2-of-3-september.39898/#post-194035)
3) DCG Legal: $125,000 (current proposal)

This is $25,000 less than we initially communicated (https://www.dash.org/forum/threads/...q3-2018-cross-posted-to-allow-comments.39820/) due to the recent price action and the desire to free up a portion of available Dash funding to the community should all 3 DCG proposals pass.

This Proposal
This is a cross-posted at https://www.dashcentral.org/p/Core-legal-201809

This proposal funds Dash Core Group’s planned legal expenses. DCG has been pursuing a number of legal initiatives utilizing existing legal budget funding for the benefit of the Dash network. In the immediate future we will require additional funding to complete these projects and provide funding for our regular corporate legal expenses. Current projects include:

1) Seeking a no-action letter from the SEC (in progress), confirming that Dash is not a security
2) Responding to exchange and broker requests for legal opinions on Dash’s SEC security status
3) Formation of a “Dash Ventures” investment vehicle capable of generating returns and distributing gains to the masternode network
4) Investigating potential responses to JFSA recent action around “privacy” coins
5) Finalizing the trust set-up and payment of on-going expenses related to the trust. DCG official summary communication describing the setup can be found at https://www.dash.org/forum/threads/dash-core-group-legal-structure-details.39848/#post-193885
6) Fees related to engaging a tax accountant to assist in filing required federal and state taxes
7) Maintaining Director’s and Officer’s insurance to mitigate the personal risk current officers and directors are exposed to while making daily management decisions for the Dash Network’s benefit

Determining the exact costs for legal projects at the outset is impossible, and determining a likely range for many items is highly variable. For example, the project with the SEC is most determined by the complexity of the SEC’s response to our letter. Total costs could range from $35,000 to $150,000, though we will gain insights into the costs as we proceed and gauge the SEC’s response. We also believe that the strength of our legal argument already presented to the SEC is extremely strong, so this might result in a final cost at the lower end of that range. The effort to create “Dash Ventures” requires greenfield legal work, literally creating an entity without precedent. This is another example where legal discovery along the way can significantly alter the costs. Because of the uncertainty, we plan to request funding associated with our run-rate costs and provide updates on our progress rather than attempt to estimate the final costs upfront. This will prevent DCG from inadvertently drawing more funding from the network than is needed during this time to complete the scope of work.

We last funded the legal budget on July 3rd 2018. That budget is currently being used to support this run-rate including expenses for day-to-day legal work such as drawing up and reviewing vendor, partner, integration, and escrow contracts, creating one-off legal opinions to ensure DCG is in compliance with rules & regulations, etc. It is also supporting the ongoing projects related to Dash Ventures and the SEC no-action letter listed above.

Prior to the July budget cycle, the legal budget was funded in October 2016. These are the deliverables DCG was able to accomplish with those funds:

1) Legal opinion on a number of masternode-related topics (tax treatment, potential legal liability, mixing, etc.) which are provided on the dash.org website
2) Creation of a generic ATM compliance program to encourage the adoption of Dash by ATM operators
3) Formation of Dash Core Group, Inc. and establishing and maintaining filing requirements with the Internal Revenue Service and State of Delaware
4) Creation of the Dash DAO Irrevocable Trust and related trustee services in New Zealand and Switzerland
5) Initial investigation into the formation of a “Dash Ventures” investment vehicle to benefit the network
6) Day-to-day legal expenses including drawing up contracts with vendors, strategic partners, integration contracts, updating and managing corporate documents, etc.
7) Legal work for over 30 escrow contracts
8) Numerous one-off legal opinions necessary to ensure Dash Core Group Inc. is in compliance with rules and regulations
9) Creating and filing provisional patents on key aspects of functionality introduced in the Evolution releases
10) Legal opinion research, letters, and questionnaires associated with inquiries from exchanges on the securities-law status of Dash
11) Privacy policy and other required website legal reviews and content
12) Filing and defending the Dash trademark in various jurisdictions, including resolution of a legal dispute with another entity

If you have any questions, please direct them to @RyanTaylor in this Dash Forum post to ensure we are notified of your request.

Requested funding is as follows for the September 1st budget cycle:
· 600.00 Dash for legal expenses ($125,000 USD @ $208.325 per Dash)
· 5.00 Dash proposal reimbursement
Total: 605.00 Dash

Note: Any unused budget will be applied toward other legal expenses.

Manually vote YES on this proposal:
dash-cli gobject vote-many 4f874295366f85cb01bb005b6a1a341687242fa955a017c1f75bc1335a0ea558 funding yes
OR from the qt console:
gobject vote-many 4f874295366f85cb01bb005b6a1a341687242fa955a017c1f75bc1335a0ea558 funding yes

Manually vote NO on this proposal:
dash-cli gobject vote-many 4f874295366f85cb01bb005b6a1a341687242fa955a017c1f75bc1335a0ea558 funding no
OR from the qt console:
gobject vote-many 4f874295366f85cb01bb005b6a1a341687242fa955a017c1f75bc1335a0ea558 funding no

 

[Unstoppable]

IMO this should be a budget proposal completely separate from funding essential core functions.

IMO bundling a voluntary adventure into unknown territory with mission-critical legal opinions dispelling FUD around Dash and its Masternodes status regarding the Howey Test (security or not a security) is not appropriate.

You make a good point here. Perhaps Dash Ventures is something that should have been a separate proposal.

 

[Arthyron]

@Arthyron, IMO it would be more constructive and helpful if you elaborated on why you rated my post "Dislike" rather than engage in hit-and-run down invalidation tactics. I've seen you write very long posts explaining in excruciating depth your disagreements with others, and so am baffled at your lazy labeling-as-argument-substitute. Instead of mere gainsaying, let's engage in actual discourse as @Unstoppable has done.

Quite simply because based on previous interactions you've shown explicit disinterest in engaging in genuine discourse, but since you asked, I'll be happy to elaborate:

I too noticed that Dash Ventures was a project initiated by Ryan and/or the rest of Core without seeking a separate proposal, and I have a lot of theories about how and why that is (hint: the Cayman Islands as jurisdiction), but until the Q2 call later this week that's largely speculative. The reason I believe it was not put up as its own proposal is because I suspect it has something to do with better facilitating Core's operations as an entity in a more favorable environment and arrangement in tandem to the Trust established in New Zealand and administered in Switzerland. DV not only represents an opportunity for the network to maintain stronger, more constrained business relationships with the proposals it funds and to increase/establish an actual ROI beyond network effects--which seems to be its primary purpose--but it also opens up possibilities for a different manifestation and/or arrangement and/or organization of the Core Development Group's activities. Like I said, this is just my theory, but I suspect that's why it was initiated as part of Core's operations and not as a separate proposal, and pending what the Q2 call reveals, I'm completely ok with it, thus I disagree with your opinion.

I think these are all critical projects in order to bring about the infrastructure needed to take the network in to its next Evolution-evolution era. For the MNOs and the DAO to have actual legal standing and relationships and contracts with other network actors, and for us to make critical infrastructure progress in some of our integration partnerships so that the major advances brought about by Evolution will have a meaningful impact on Dash's presence and place in the industry--as simply having some new tech isn't by itself sufficient for the task--I believe all of these things must transpire concurrently or at least before Evolution drops so that the plane has somewhere safe to land and doesn't crash and burn, so to speak. Depending on the exact details and outcomes of this critical legal work, I think we can more or less provide an ideal environment to jumpstart the next era of Dash, but only if we square away all of these preconditions, thus I don't see anything problematic with all of these pursuits being bundled together, thus I disagree with your opinion, though of course (B) follows from (A).

I think Dash is already something that hasn't previously existed in the world before, and already lots of herculean legal efforts have been underway to provide this unprecedented arrangement with a legitimate legal standing, so the complexities that I anticipate being necessary for the aforementioned fertile ground likely require an unprecedented arrangement as well. The DAO is something unprecedented, and so our solutions and developments will likely need to be as well. There's no harm in trying to go about this the right way. If it turns out we run in to regulatory obstacles, then we'll just have to adjust accordingly, but in any business situation, it's important to know where your boundaries are and where you are in relationship to them, and so far, as per Ryan's recent interviews, the preliminary legal research and precedents have yielded favorable results, so again, I disagree with you. The DAO will be what it will be, and I see no reason that we ought not to be everything we can be if we pursue those ends through their proper channels, thus I disagree with you on (C).

Was that long and excruciating enough for you?