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Despite S.E.C. Warning, Wave of Initial Coin Offerings Grows

nytimes.com

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Re: Despite S.E.C. Warning, Wave of Initial Coin Offerings Grows

#31

Post by s73ver »

AznHisoka wrote: post #18
vanattab wrote: post #3

I am thinking a short position in bitcoin is in my near future. I am not saying bitcoin is doomed to fail but I am pretty confident this shit coin crazy is going to hit the fan sooner or later and it's going to drag the "legitimate" crypto currencies down.

And I'm investing in Bitcoin. Just because it is at its peak doesn't mean it can't go even higher! I might be crazy, but your perspective isn't any more rational than mine :)

Isn't that the problem, though? Bitcoin was supposed to be a medium of exchange. Cash for the internet, in other words. Investing means that people really aren't going to be doing that, and it's just going to sit on a dusty flash drive on the shelf.

Re: Despite S.E.C. Warning, Wave of Initial Coin Offerings Grows

#32

Post by wmf »

ringaroundthetx wrote: post #21

Even the SEC realizes that not all token sales are securities. Some people in the industry simply aren't getting it, they are creating a straw man which the agency isn't even arguing for. > The agency said that it would focus on coins that should be categorized as securities. So there are all these people on the periphery just HOPING for their prophecy of a heavy handed government breaking the cryptocurrency rush. Th…

It looks like around 90% of ICOs are securities and "restructuring" them to not be securities would probably make them unprofitable and thus pointless. The only way for most ICOs to comply with SEC regulations is to not exist.

Re: Despite S.E.C. Warning, Wave of Initial Coin Offerings Grows

#33

Post by kgwgk »

ringaroundthetx wrote: post #21

Even the SEC realizes that not all token sales are securities. Some people in the industry simply aren't getting it, they are creating a straw man which the agency isn't even arguing for. > The agency said that it would focus on coins that should be categorized as securities. So there are all these people on the periphery just HOPING for their prophecy of a heavy handed government breaking the cryptocurrency rush. Th…

Matt Levine, today: https://www.bloomberg.com/view/articles/2017-08-08/ico-risks...

"To me, it seems odd that people would pay millions of dollars to reserve space on a new cloud storage network, and obvious that they're really paying that money for a speculative investment."

"If you do an illegal securities offering, people who bought your securities have a right to get their money back. If token prices keep rising everywhere, this is not a big concern -- why would anyone want their money back when they have such valuable cloud storage? But if the ICO mania fades, expect a lot of lawsuits from investors who are shocked to learn that they were buying unregistered securities."

Re: Despite S.E.C. Warning, Wave of Initial Coin Offerings Grows

#34

Post by ringaroundthetx »

wmf wrote: post #32
ringaroundthetx wrote: post #21

Even the SEC realizes that not all token sales are securities. Some people in the industry simply aren't getting it, they are creating a straw man which the agency isn't even arguing for. > The agency said that it would focus on coins that should be categorized as securities. So there are all these people on the periphery just HOPING for their prophecy of a heavy handed government breaking the cryptocurrency rush. Th…

It looks like around 90% of ICOs are securities and "restructuring" them to not be securities would probably make them unprofitable and thus pointless. The only way for most ICOs to comply with SEC regulations is to not exist.

while simultaneously reaffirming that regulated broker-dealers can trade securitized tokens that are properly registered bringing trillions of dollars into the crypto space overnight when TD Ameritrade and ETrade starts trading these.

Re: Despite S.E.C. Warning, Wave of Initial Coin Offerings Grows

#35

Post by grey-area »

problems wrote: post #13
JumpCrisscross wrote: post #10

Earlier quoted context omitted.

> You can short btc on several platforms, including Bitfinex There is a horrible counterparty correlation in this trade. If Bitcoin goes up, you're out your short and lose lots of money. If Bitcoin crashes, the exchange runs into problems and you probably lose your original investment. Balanced against those is the limited profit potential from a marginal drop in the price of Bitcoin.

Why would the exchange run into problems in such a case? Some are certainly more reputable than others, but for the most part there's no reason to worry there.

Questions around the solvency of bitfinex have been circulating for years. Do they even allow USD withdrawals at present? Their actions are weirdly reminiscent of the long fall of mt gox.

Re: Despite S.E.C. Warning, Wave of Initial Coin Offerings Grows

#36

Post by polotics »

d3vnet wrote: post #17

So how about making investors explicitly state that they are not US persons?

Makes no difference I think. Burden of proof is on the emitter. Matt Levine at Bloomberg has it explained perfectly: The ICO emitters seem to have no idea that once the SEC declares an ICO to be a security, any US-person investor who had put their money in such an unregistered security and lost some, is entitled by the full force of the law to all of their $, paid back in full...

Re: Despite S.E.C. Warning, Wave of Initial Coin Offerings Grows

#37

Post by rib3ye »

The problem is projects like these: http://bitqyck.me/ A classic hard-sell 80s pump and dump scam reborn in the ETH era. Bitqyck came to my attention through a family friend with very limited understanding of cryptocurrency, but just enough financial literacy to be in an investment group being fed these scams by people they trust as technical leadership. I imagine, ultimately, these people will demand protection from having to vet ICOs themselves, and twenty years later there will be an awesome movie about this time starring Leo DiCaprio.

Re: Despite S.E.C. Warning, Wave of Initial Coin Offerings Grows

#38

Post by wmf »

s73ver wrote: post #31
AznHisoka wrote: post #18

Earlier quoted context omitted.

And I'm investing in Bitcoin. Just because it is at its peak doesn't mean it can't go even higher! I might be crazy, but your perspective isn't any more rational than mine :)

Isn't that the problem, though? Bitcoin was supposed to be a medium of exchange. Cash for the internet, in other words. Investing means that people really aren't going to be doing that, and it's just going to sit on a dusty flash drive on the shelf.

At this point there's no way to prevent Bitcoin speculation so people might as well give up on using it as a medium of exchange.

Re: Despite S.E.C. Warning, Wave of Initial Coin Offerings Grows

#39

Post by 33W »

CamelCaseName wrote: post #16
jimmykennedy wrote: post #12

Earlier quoted context omitted.

It's also weird to assume that it'll "drag the "legitimate" crypto currencies down". It's much more likely that the legit ones will be a "safety" asset and only gain in credibility with large investors.

Historically that has not been the case, when BTC falls, everything else does as well.

I see BTC as the crypto reserve currency, so it would make sense for the others to fall with it.

Re: Despite S.E.C. Warning, Wave of Initial Coin Offerings Grows

#40

Post by ringaroundthetx »

kgwgk wrote: post #33
ringaroundthetx wrote: post #21

Even the SEC realizes that not all token sales are securities. Some people in the industry simply aren't getting it, they are creating a straw man which the agency isn't even arguing for. > The agency said that it would focus on coins that should be categorized as securities. So there are all these people on the periphery just HOPING for their prophecy of a heavy handed government breaking the cryptocurrency rush. Th…

Matt Levine, today: https://www.bloomberg.com/view/articles/2017-08-08/ico-risks... "To me, it seems odd that people would pay millions of dollars to reserve space on a new cloud storage network, and obvious that they're really paying that money for a speculative investment." "If you do an illegal securities offering, people who bought your securities have a right to get their money back. If token prices keep rising…

Everybody and their brother with a soundboard has stated an opinion about ICOs and the SEC guidance. Literally anyone influential has said something and if they haven't, expect them to say it tomorrow.

The gradient of opinions is just as abstract as the weeks before.

It would be a mistake to take that as canonical just because you respect that particular entrepreneur's non sequitur criticism of existing token sales. When the argument is that not all token sales are securities offerings, not even the SEC has made that mistake, and the argument is that new token sales don't have to be securities offerings, but they can be too.

Here is what the SEC will never get: they will never get investor protection from this asset class. Their entire regulatory framework is around that.

Congress can modify the SEC's mandate to support this. Congress can create a completely new agency and regulatory framework to provide for more applicable confidence and protections in this asset class.

The SEC will never ever ever use the Securities Act of 1933 and the Securities Exchange Act of 1934 as currently written to ensure a fair market of all cryptographic token issuances.

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