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SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities

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Re: SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities

#51

Post by Jabanga »

dmitrygr wrote: post #39
oneplane wrote: post #30

Earlier quoted context omitted.

Why? Nobody is forcing crypto currenency on anyone. I get that registered companies might have some other deal with the govenment and with hacker organisations, but a free and open (and non-country-bound) system should really not be 'managed' by some random organisation in a random country.

Same reason SEC exists. Because many people are easy to manipulate, and plenty of malicious people out there will convince (not force) them to invest in their ICO, etc.

Then we should limit who people can vote for, since voters are so easy to manipulate into voting against their own interests. The basic principles of liberal democracy assume that a person has an absolute right to make decisions for their own life. These kinds of restrictions are unconscionable restrictions on the right of free people to their personal autonomy.

Re: SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities

#52

Post by modeless »

Animats wrote: post #21
joeyspn wrote: post #2

BOOM! the game just changed... > In light of the facts and circumstances, the agency has decided not to bring charges in this instance, or make findings of violations in the Report, but rather to caution the industry and market participants: the federal securities laws apply to those who offer and sell securities in the United States, regardless whether the issuing entity is a traditional company or a decentralized a…

Yes. The SEC is indicating that they're not going to apply this retroactively. Any upcoming Initial Coin Offering to US persons, though, is in trouble. Like all the ones listed here.[1] [1] https://www.icoalert.com/

I would not count on them not applying this retroactively. The DAO is safe (along with Bitcoin and Ethereum themselves) but everyone else is not. I've heard interviews with some ICO people and it's clear that they know what they're doing is legally questionable. They're doing it anyway because of the obscene amount of money on the table. The SEC will not look kindly on these people.

Re: SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities

#53

Post by cloakandswagger »

brucephillips wrote: post #41
DennisP wrote: post #16

Earlier quoted context omitted.

It might not change the overall ecosystem that much. Many companies doing ICOs are already locating themselves in friendlier jurisdictions, and making some effort to block U.S. contributors.

I imagine blocking U.S. contributors would significantly affect the ecosystem.

Status prohibited US citizens from participating in their ICO and they still raised $100M.

Anyone tech savvy enough to contribute money to an ICO is tech savvy enough to connect to a non-US VPN before doing it.

Re: SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities

#54

Post by s73ver »

m777z wrote: post #11

I'm not terribly happy with the decision, though I can't say I'm surprised. I enjoy the drama of the Wild West that is Ethereum and the rest of the cryptocurrency ecosystem. Minimal regulation encourages innovation, while regulated markets can exist for people who want stability and certain guarantees to prevent fraud (or at least make it difficult). I wonder what would happen if financial regulations became more "op…

Then almost no company would seek that "seal of approval", the regulations would be worthless, and just about every US Citizen would be worse off.

Re: SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities

#55

Post by vasilipupkin »

Animats wrote: post #21
joeyspn wrote: post #2

BOOM! the game just changed... > In light of the facts and circumstances, the agency has decided not to bring charges in this instance, or make findings of violations in the Report, but rather to caution the industry and market participants: the federal securities laws apply to those who offer and sell securities in the United States, regardless whether the issuing entity is a traditional company or a decentralized a…

Yes. The SEC is indicating that they're not going to apply this retroactively. Any upcoming Initial Coin Offering to US persons, though, is in trouble. Like all the ones listed here.[1] [1] https://www.icoalert.com/

it's not just US persons. Germany has securities laws, France has securities laws, etc. I mean that German equivalent of SEC can go after those selling securities to Germans without following German securities laws

Re: SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities

#56

Post by brucephillips »

zazpowered wrote: post #48
brucephillips wrote: post #41

Earlier quoted context omitted.

I imagine blocking U.S. contributors would significantly affect the ecosystem.

Most ICOs already try to block US contributors but it's usually only based on IP which can easily be gamed

Interesting. Do you know why they were doing this? Just in anticipation that the SEC would crack down?

Re: SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities

#57

Post by EGreg »

This is a serious question to the lawyers on HN. In your non-advice way, can you tell us your opinion on the following?

So given that now we have a serious precedent for considering all ICOs aa securities, what are the steps a company needs to take to make sure their ICO is legal under US LAW??

1. Does it need to register the ICO somehow? If so, how exactly are the securities registered?

2.!What regulations apply now? Do the 1933 blue sky laws apply and Regulation D and the usual exceptions - including JOBS act crowdfunding provisions - apply?

3. Can anyone buy the ICO or does the company now need a private placement memorandum?

4. And even so, isn't the secondary market for the tokens constitute "transferring" of securities? What does a company need to make sure all that is legal, short of fulfilling all the reporting requirements of a Public company?

Basically what happens now to all the ICOs done so far by companies like Brave? What are they going to do?

Look at the title of this article and tell me - is it accurate?

https://www.forbes.com/sites/laurashin/2017/05/18/want-to-ho...

Re: SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities

#58

Post by vkou »

armenarmen wrote: post #45
dmitrygr wrote: post #5

Good. This should help bring some sanity and accountability. they were both quite needed

There's no room for buyer beware? I mean c'mon. People participating in ICOs are still pretty sophisticated technically. Seems like we're regulating interactions between well informed consenting adults.

How familiar are you with the history of securities laws? Do you know why they were drafted?

Every con artist in history has claimed that their mark knew what they were getting into.

Re: SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities

#59

Post by ddoolin »

PhasmaFelis wrote: post #25
m777z wrote: post #11

I'm not terribly happy with the decision, though I can't say I'm surprised. I enjoy the drama of the Wild West that is Ethereum and the rest of the cryptocurrency ecosystem. Minimal regulation encourages innovation, while regulated markets can exist for people who want stability and certain guarantees to prevent fraud (or at least make it difficult). I wonder what would happen if financial regulations became more "op…

> I enjoy the drama of the Wild West that is Ethereum and the rest of the cryptocurrency ecosystem. "Drama" is not really a desirable characteristic for most users of a market.

I would say there's plenty of drama in already-regulated markets, wouldn't you? I think the OP simply meant this particular flavor of drama.

Re: SEC Issues Report Concluding DAO Tokens, a Digital Asset, Were Securities

#60

Post by Jabanga »

isubkhankulov wrote: post #46
Jabanga wrote: post #43

Earlier quoted context omitted.

>but to protect U.S. citizens from being scammed all the time. US citizens shouldn't be treated like children that need to protected from their own stupidity.

history has proven this sentiment wrong

This is not a sentiment that can be proven wrong. It's a statement on basic rights.

And history shows that attempts to control complex industries with cookie cutter rules imposed from on top create the most dysfunctional industries in the economy, namely finance, pharmaceuticals, and healthcare.

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