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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

#211

Post by Fej »

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…

At one point, financial regulations were somewhat optional. The SEC was created to put an end to securities fraud, because it turns out that having no rules on speculation is a bad idea.

Do we need to repeat history, just to prove that financial regulations are a good idea? We had a Depression once. I'd not like to do it again.

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

#212

Post by [deleted] »

armenarmen wrote: post #68
vkou wrote: post #58

Earlier quoted context omitted.

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.

DAOs and the JOBS act for sure open up opportunities for crooks to do some "boiler-maker-esque" stuff. I cannot disagree with that. And I do not doubt that gullible people can be hoodwinked by bad people. I would say that fraud and property theft can be handled on a case by case basis. That protecting hypothetical gullible crypto enthusiasts at the expense of the entire industry and putting up huge legal barriers to…

[deleted]

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

#213

Post by Jabanga »

JumpCrisscross wrote: post #193
smokeyj wrote: post #166

Earlier quoted context omitted.

Why shouldn't mom-and-pop get the choice to invest in SEC regulated companies? If you like what the SEC has to offer, you can keep it. Taking away that choice seems paternalistic at best, corrupt at worst.

> Why shouldn't mom-and-pop get the choice to invest in SEC regulated companies? When retail, i.e. unaccredited investors, get hurt (a) there are more of them and (b) it more often than not puts them into dire, sometimes existential, straits. The latter leads to political backlash and instability, e.g. the 1930s. Basically, you must have a nest egg to act as a safety cushion before you can invest in risky things. Thi…

People are going to make bad investments, no matter how much the SEC restricts. There are a huge number of non-securities investments available, and people pour huge amounts of money in them. A government is never going to be able to protect individuals from their own bad judgment.

All these regulations do is drive up the cost of directly accessing public capital markets (at last count, $6 million to do an IPO), and contribute to growing income disparity [1].

[1] https://www.brookings.edu/research/make-elites-compete-why-t...

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

#214

Post by uncoder0 »

hudon wrote: post #170
modeless wrote: post #52

Earlier quoted context omitted.

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.

Are we sure Ethereum is safe? Bitcoin never did a premined token sale but the Ethereum Foundation did, so it looks much more like theDAO than Bitcoin does.

Yeah this is my question... A lawyer that spoke @ Devcon 2 almost a year ago seemed to think Ether(ETH) did not pass the Howey test.

http://www.ibtimes.co.uk/devcon-2-ethereum-may-pass-howey-te...

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

#215

Post by darawk »

wmf wrote: post #174
darawk wrote: post #75

Earlier quoted context omitted.

You're right, but in the case of things like Storj and Sia, for instance, the ICO token is used to pay for the services offered by the network. What it really is, is a tradable pre-sale. It's as if you could trade the perks offered by a Kickstarter. I'm not sure if that would make it exempt or not, but it is an interesting legal question.

the ICO token is used to pay for the services offered by the network . And the ICO token is also used (and sometimes explicitly advertised) for investment as well. Uh oh.

Yes. That's why it's an interesting legal question.

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

#216

Post by Jabanga »

jpetso wrote: post #157
Jabanga wrote: post #108

Earlier quoted context omitted.

>Your personal autonomy is restricted by the government, massively, period, generally for everyone's own good. They decide what and how much medicine you can put in your body. Whether you can gamble, and where, and on what, and how much. What drugs you can take. What speed you can drive. Whether you must go to school or not based on your age. Which food you can buy at the supermarket. These restrictions violate peopl…

Basic rights are defined by various charters, constitutions, international agreements, and that's about it. If you find that one of those restrictions contradicts the ones applicable to your country and legal system, you have a good shot at changing it. (Point in case: gay marriage, and other Supreme Court rulings.) As for all other rights, those are determined by the government that is democratically voted in. If mo…

>Maybe moral right, but that depends on highly subjective morals and might therefore still get you into legal trouble.

We're intelligent human beings. We should be able to arrive at some kind of consensus on what our moral rights our, through rational discourse. That's what I'm trying to do right now. My argument starts with what "the law" means:

https://www.theatlantic.com/politics/archive/2016/06/enforci...

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

#217

Post by 52-6F-62 »

hudon wrote: post #170
modeless wrote: post #52

Earlier quoted context omitted.

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.

Are we sure Ethereum is safe? Bitcoin never did a premined token sale but the Ethereum Foundation did, so it looks much more like theDAO than Bitcoin does.

I think there might be a gotcha there. SEC rulings only apply to dealings within the United States. Being that Ethereum is [at least in general, if arguably not] decentralized, and largely pegged to a Canadian, and started in Switzerland it might not be so simple. The Ethereum Foundation itself is a Swiss nonprofit.

Of course, it remains to be seen what this will turn into. Even if it comes crashing down in the United States, that has little effect on the viability in the rest of the world... especially as of late.

I just wouldn't want to try and run an ICO in the US as a resident of the US!

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

#218

Post by ThrustVectoring »

wuliwong wrote: post #195
ThrustVectoring wrote: post #180

Earlier quoted context omitted.

Should they also have the choice to take non-FDA approved drugs?

I would say yes. :)

Keep in mind that having this right available will kill people.

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

#219

Post by joosters »

clarky07 wrote: post #147
joosters wrote: post #135

Earlier quoted context omitted.

Are they obliged to check this, though? The only checks I've ever seen are making investors tick a box on a webpage to confirm that they aren't a US citizen. Is that good enough, or are these ICOs expected to do more thorough checking? Some ICOs have advertised their sales in the US, I wonder if the SEC will look on that as offering their tokens to US citizens, whatever the wording they put on their websites?

Most that I've seen also don't allow US IP addresses.

Can their ethereum contracts reject transactions based upon IP address? I don't think that's possible.

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

#220

Post by aaron-lebo »

rdlecler1 wrote: post #199

Ironically ether & bitcoin started dropping last night around midnight. Makes me wonder if any SEC folks were involved in insider trading. Anyone care to speculate on what this will do to ether/bitcoin values? Does this concentrate interest in the existing players or does it hurt demand and speculation therefore depressing prices?

Nothing especially strange in the price data, just the usual ups and downs. There's a downward trend as of about 14 hours ago, but good luck pinning that on insider trading. Woo $222 to $215. That could happen any day. These charts seem to be a Rorschach test, but:

https://coinmarketcap.com/currencies/ethereum/

As far as what this will do, your best bet is to stock up on fortune cookies and astrology mags because they're probably about as informed as anything else on the matter. Preferably cookies, because at least you can eat those.

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