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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

#231

Post by JumpCrisscross »

Jabanga wrote: post #213
JumpCrisscross wrote: post #193

Earlier quoted context omitted.

> 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…

> 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

There's a fair argument in weighing the upsides and the downsides of registration requirements. But saying the downsides are "all these regulations do" is intellectually dishonest. Lots of scams get stopped, or at least quarantined, by these regulations. The speed with which the ICO market went from zero to bullshit only seems to re-inforce the prudence of these rules.

> $6 million to do an IPO

Having watched private companies spend much more than that to raise private capital, I think it's safe to say filing fees aren't the primary problem the public markets have.

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

#232

Post by julian_1 »

taysic wrote: post #205
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.

I remember after the ethereum flash crash how many people were saying "screw decentralization, I'm getting a lawyer". Those sort of values go out the window when the person who loses, loses a lot. The laws are in place for the benefit of all

The flash crash on GDAX? That was the non-decentralized code of a single exchange executing.

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

#233

Post by regulation_d »

Jabanga wrote: post #213
JumpCrisscross wrote: post #193

Earlier quoted context omitted.

> 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…

I'm not sure what a "non-securities investments" in the US securities scheme would look like. An "investment contract" is sort of the catch all category for everything that tries not to look like a security, but actually is one. If something is an investment, I can't imagine that it's not a security.

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

#234

Post by EGreg »

vasilipupkin wrote: post #132
EGreg wrote: post #114

Earlier quoted context omitted.

I an not sure that is binding on the company. Can you find a source for it in US securities law or SEC memo?

https://www.sec.gov/about/offices/oia/oia_crossborder.shtml

https://www.sec.gov/rules/final/2008/34-58465.pdf

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

#235

Post by Jabanga »

JumpCrisscross wrote: post #231
Jabanga wrote: post #213

Earlier quoted context omitted.

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…

> 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 There's a fair argument in weighing the upsides and the downsides of registration requirements. But saying the downsides are "all these regulations do" is intellectually dishonest. Lots of scams get stopped, or at least quarantined, by these…

It's not intellectually dishonest, because I'm commenting on the net effect. If people are getting scammed just as much, but from other sources, then "all they do" is the net effect on the negative side.

But fair enough: if you constrain this new internet sector, then you could conceivably reduce scams, just by virtue of forcing people into higher-friction areas of the economy, where less can practically be transacted. I'm sure Cuba has pretty low scam volumes by the same virtue.

>Having watched private companies spend much more than that to raise private capital, I think it's safe to say filing fees aren't the primary problem the public markets have.

Many private companies spend FAR less than that to raise private capital. To claim that a $6 million fee for entry is not going to disenfranchise a huge subset of the population is intellectually dishonest.

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

#236

Post by julian_1 »

xorcist wrote: post #80
armenarmen wrote: post #45

Earlier quoted context omitted.

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.

Every one of these scams that have imploded, including the DAO itself, have had participants crying out for interventions. That should speak volumes about the amount of consent involved (and indeed the sophistication).

The business case may have been questionable, but the DAO was not prima facie a scam. It lost value and mission due to poor technical implementation.

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

#237

Post by dgacmu »

Jabanga wrote: post #73
Cshelton wrote: post #69

Earlier quoted context omitted.

Very smart people are scammed and conned all the time.

Of course. We don't restrict the rights of the entire population to engage in voluntary interactions to preempt crime. We punish actual criminals to deter other would-be criminals, and leave everyone else to be free. We don't require a publishing license because someone might use their right to free speech to libel someone else. We punish the libeler.

You realize that's not in the slightest bit true, don't you?

For example: Under contract law, there are certain rights that _you are legally not permitted to give away_. You can't actually sell yourself into slavery. You can't contractually disclaim gross negligence on your part. You can't have a contract that unilaterally benefits one party without consideration provided for the other. You can't accept a contract while intoxicated. You can't contractually agree to something that is a crime. ... the list goes on.

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

#238

Post by KirinDave »

brooklyntribe wrote: post #155
josh2600 wrote: post #142

Earlier quoted context omitted.

Comments like this are ludicrous. Do you really think the SEC doesn't understand distributed ledgers or ethereum contracts? Second, do you think anyone has technical staff that are capable of writing safe contracts in Solidity (Parity wallet would suggest not...). In short, the idea that people must be incompetent because they're in the government is pretty ludicrous. The SEC is consistently one of the best technical…

Actually hung out with a JP Morgan Chase banker the other day. Big into crypto. He said the SEC had no clue what was going on. They leave at 5 PM, and head home to wife's and kids, and mortgages. While the "kids" are hacking, micro-dosing, and working 100 weeks. And they are all of 17. It's not in their world. A 55 year old banker is not hacking solidity contracts at 3 AM. No way.

Maybe if they had a few of those 55year olds with kids who know how to write a goddamn language interpreter without it being a train wreck, the DAO wouldn't have been the crisis that it became.

This veneration of the church of conspicuous effort is not a new idea. It's lead many people astray. Be careful.

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

#239

Post by Jabanga »

regulation_d wrote: post #233
Jabanga wrote: post #213

Earlier quoted context omitted.

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…

I'm not sure what a "non-securities investments" in the US securities scheme would look like. An "investment contract" is sort of the catch all category for everything that tries not to look like a security, but actually is one. If something is an investment, I can't imagine that it's not a security.

The Howey Test defines an investment contract more narrowly than you imply. People lose absolutely staggering amounts of money each year on bad investments. Money is like water. It flows around these regulations. The detours just add friction that slows innovation, and diverts capital to fees for legal/accounting professionals.

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

#240

Post by darawk »

jameskegel wrote: post #202
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.

Sia is NOT ethereum. Don't call it a token

True, but that hardly seems material. I'm an investor in Sia, I like the project. Whether or not it's implemented as an Ethereum token is nearly meaningless. To be quite honest, it'd probably be better if it was, that way it could focus more on its core competencies.
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