So today's post is somewhat personal in nature. I am writing to reflect on issues we are having within one of the projects I am involved with.
This specific project is an Autonomous Decentralized Society call ADSactly, which I am sure many of you on steemit have already heard of.
It is a society that helps connect cryptocurrency investors with project creators and project creators with cryptocurrency enthusiasts.
The ADSactly Society
Our society is planning to launch several cryptocoins, assets, and tokens. However at the time of this writing, only one of these have been created - the rest are still in the works.
As a society, ADSactly is very multi-faceted. We have countless projects that are going on in the cryptospace.
Some relate to marketing, some relate to music, some relate to shopping, and some relate to getting involved with existing projects such as encouraging our members to use steemit as a means of getting them started in cryptocurrency and a way to give back to our members by upvoting their content and helping them earn steem rewards.
The point is our society has a lot of crypto projects going on that have not yet paid off.
A Society is not a Business
Building a society is not like building a business, an ICO, or any other thing to be compared to. Its a long and slow process riddled with errors and learning and structuring and restructuring.
We have started out with some plans and completely changed the idea before the plan ever came to exist. We have made promises we can't keep.
It's all part of the growing and learning process of creating a decentralized society.
It's also something that is incredibly hard to have to try to explain to our members.
We have been threatened several times by unhappy members with everything from spreading rumors we are a scam to lawsuits.
A society is not an investment program
What happens is we bring in members to our society and we explain to them that in the future they will get returns from joining. Unfortunately the word returns is a bad word as it implies an investment - and our society is not an investment.
Our returns will be given when all our coins are launched - just like any other crypto project.
After a new member joins, we then take their membership fee's and add it with other membership fee's in a "crowd funded pool" so to speak. We then invest that pool to further increase the overall money we have to create our society.
This practice is sadly becoming a problem. Those who have joined our society only seem to remember one single thing about when they joined - the promise of returns.
So when they see we have increased the overall crowdfunded pool value through cryptoinvesting - they seem to believe we would, or even legally could, give them returns from that fund.
It's against the law
Almost every modern country has laws, even in the cryptocurrency sector, that prevent someone from becoming a crypto broker without being licensed as such.
To trade for others and give returns on those trades is illegal if you are not registered. So we cannot give returns to our society members from invested money.
Rather what we can do is wait until our coins launch and give back by granting members coins - the number and types of coins is yet to be determined as they don't yet exist, but logically it will be based on how much the member paid into our society.
The value of those coins, will be based on all our investments as well as the returns from all the society projects we have going on.
Handling Bad Investors
There are only two legal ways that we can handle our members who thought they were investors.
First we can treat this as a crowd funded project and refuse them a refund - as typically with a crowd funded project, when you put your money in your don't get it back until a launch.
The other method is logically that we can issue them a refund.
If we do this, by law we can not give back so much as one penny on the return because we cannot pay investors back from the money from other investors - that is a ponzi scam.
This means we would have to give them back the dollar value that they invested.
As cryptocurrency is not regulated, and it would ultimately bankrupt our society if every member tried, we can only refund the dollar value at the time of the investment.
So if someone bought in for 1 bitcoin when bitcoin was $500 they would be refunded $500 not 1 bitcoin.
We believe this would be the only way fair to members, and legal to uphold.
Protecting the Society
Because we have had a few threats over the last few months about lawsuits if we don't give people returns, it has made me stop and think about how to protect our society as a whole.
This is something very important to me, and so far I have not come up with a valid solution.
If we had better trust in our society I would like to have several key members hold all our trading platform passwords and all our wallet keys.
This way if someone did file a lawsuit against another founding member, we could lock them person from accessing any of our society funds - even under things such as threats of 20 years in jail - which has been known to cause people to do crazy things.
Unfortunately we don't have that level of trust in our society yet.
So it is something I think about. I wonder if there is even a solution.
We try to keep members informed and keep them under the realization that this is not an investment - but there are many people involved and mixed messages end up getting tossed out and people misunderstand what and why they are joining.
As I say, creating a society is very tough work - especially one revolving around this crazy new world of blockchain and cryptocurrency.
If you have ideas for solutions on how to ensure our societies money is protected in the event of lawsuits please do leave comments below. If you have no idea about the ADSactly Society and would like to know more also please leave me a comment below.