Time to have a real talk about the future of this project. I'm just going to be open about what's going on in my mind with you guys.

This has been a really wild ride. Thanks for the support and enthusiasm you have shown for this project! We've gotten way more attention and caused way more drama than I expected (sorry /u/carlslarson and /u/jtnichol). To me this was a fun idea that seemed possible that I wanted to do in my spare time.

But with all the attention, I've been growing concerned with legal issues related to running the bridge. The thought of trying to find a lawyer that can understand this space, and having to talk to them in person about bridging "donuts" from Reddit to Ethereum is ... daunting? embarrassing? I don't even know what kind of lawyer to talk to. So I'm starting by reaching out to the community. If you happen to be a lawyer who understands this space, I can compensate you for your time and would love to hear from you. But I'm asking for any input from everyone knowledgeable on the subject.

Given that we're currently on a path to put the bridge on hold indefinitely, this is the perfect time to talk about these issues. Reopening the bridge will not only depend on the outcome of various polls in /r/ethtrader but also on some legal clarity.

The possible issues that have been pointed out to me (keeping in mind that the bridge is not an exchange; it just allows people to wrap their donuts in an Ethereum token that can be used as a proof to redeem the Reddit donut later on):

• The Howey Test. Would donuts be considered securities or utility tokens or something else under the SEC?
• Custodianship. The bridge operator has to hold Reddit donuts for users who have tokenized them, so that they can be redeemed at a later date. Are there regulations that may apply to this?
• Liability. If there's a hack, what type of legal liability does the bridge operator have to users?
• AML/KYC. Does the bridge operator have an obligation to follow KYC rules?
• Anything else?

I think it's unfortunate that the legal environment feels so threatening to trying out an experiment like this, but it is what it is, and I can't ignore these concerns.

It seems to me at this point that the best plan for my sanity is to continue with the planned closing of the bridge for now to give us time to regroup and deal with the various issues involved. Furthermore, we'll have time to implement additional decentralization into the system for a 2.0 launch that we can do with a little bit better planning this time on all fronts :) . I want /r/donuttrader to be the hub of conversations about how to make this possible.

I know the Ethereum community has a lot of experience navigating the legal terrain related to building dapps, so I hope we can get some good input from the community on this.

I urge anyone with existing ERC-20 donuts who wants to convert back into Reddit donuts to do so before the bridge closes. While this project seems to have enough support behind it, and I'm hopeful that these issues can be worked out, there is no guarantee that the bridge will ever reopen once it's closed. Anyone keeping donuts on-chain should be aware of that risk.