Not Legal Advice, 9/30/19 – Libra a Security? And Trump Administration reportedly planning to eviscerate Fourth Amendment

Welcome back to Not Legal Advice!

Two news items worth checking out this week. I wrote a 3,000 word write-up for Item 2 yesterday so you can just navigate to the post rather than repeating it here (link below).

1) Libra is a security?

Regulatory headwinds for Facebook’s new offering from the House Committee on Financial Services:

The Libra Investment Token could amount to a security since it is intended to be sold to investors to fund startup costs and would provide them with dividends. The Libra [stablecoin] token itself may also be a security, but Facebook does not intend to pay dividends and it is unclear if investors would have a “reasonable expectation of profits.” However, the offer of Libra [stablecoins] could be integrated into the offering of the Libra Investment Token, thereby deeming both securities. Like ETFs, Libra would be redeemable by certain authorized resellers and bought and sold in the open market.

2) CLOUD Act Shenanigans in England

The Times and Bloombergare reporting that the UK and the US are planning to enter into an Executive Agreement on data sharing between the two jurisdictions.

The consequence of entry into this agreement, as reported, would be to eviscerate the Fourth Amendment by forcing certain US citizens to obey UK court orders, despite the fact that UK due process protections are weaker than America’s, and UK courts are not obliged to obey the Constitution.

The reporting may be wrong, or it might not be. The US press needs to dig into this issue more deeply. Read my full write-up on this development here.

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Mel Gibson

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