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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

#51

Post by [deleted] »

joosters wrote: post #46
api wrote: post #42

Is there an honest non-scummy way to raise capital through this mechanism for something without an inherent scarcity built into the system and that doesn't carry nasty future litigation risks (or at least doesn't carry them more than a SAFE or a convertible note)? My impression so far is no but I could be wrong.

None so far. There's plenty of crowdfunding sites that could be used instead, but ICOs allow the companies to raise money before they even produce a beta of their software. They also have no investor protection, so the company has no obligations to deliver. Finally, these people know that there is a pool of investors out there who think that crypto coins are bound to increase in value, so they will throw money at any…

[deleted]

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

#52

Post by anovikov »

joosters wrote: post #43
anovikov wrote: post #30

Most ICOs usually exclude Americans. Because these scamsters know it's a bad idea to get Uncle Sam angry.

Bizarrely, some of these non-American ICOs still advertise in the US. I can't remember the exact ICOs, but some have paid for billboard ads, taxi ads, and so on. I suspect that the 'no Americans' is just a tickbox that they know is easy for their investors to ignore.

Absolutely. Not much different from 'i am over 18' checkbox on a porn site.

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

#53

Post by VarFarYonder »

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.

> Bitcoin was supposed to be a medium of exchange.

Who decides what it is supposed to be? If serves as a place to store value, then it can do that regardless of what people think it is supposed to be.

Maybe bitcoin will never be used for smaller, more common transactions, and it will remain solely a store of value. But I think it is simply a matter of time before a solution is found to the technical problem of creating a cryptocurrency (or maybe cryptocurrencies) that can serve the purpose of handling many smaller transactions.

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

#54

Post by foepys »

solotronics wrote: post #47
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.

the financial past is littered with the corpses of BTC shorts. Something to consider is that most of the ICO buyers would prefer to exit to BTC rather than exit to fiat currency. Possibly an ICO crash would make BTC go even higher. Actually, short BTC please.. I need more fuel for my long position :]

> the financial past is littered with the corpses of BTC shorts.

It's also littered with the corpses of "very good investments" that will "make you rich quick".

Without any securities standing behind Bitcoin but the promise that it will go higher, it comes down to gambling. Everybody hopes that another fool will come around and pay more than they did before. Bitcoin represents nothing but a currently 150GB large database of transactions. There are no machines (that are useful outside of Bitcoin), no IP, just a few million hashsums on a lot of computers.

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

#55

Post by alistproducer2 »

I was involved with one of the bigger ICO right at the beginning of the ICO craze. I had pretty regular conversations with the project founder and was in talks to become the dev evangelist. The project had raised ~$5 million in ETH (this is when ETH was trading around $80). Despite the fact that this project had raised a crazy amount of money the whole project was being conceptualized and coded by a single 23 old guy who was promising features that much larger projects with teams of the best people in the field were yet to solve. Not to mention the project was blatantly lying about it's PoW algorithm.

When I tried to point out that the project should use some of that money to organize the software engineering aspect the founder got pissed off with me accusing me of trying to run the project. They had a second round and raised even more money (in addition to the insane capgains on their first round).

I check the github from time to time and it appears they've got at least 2 other devs involved and may actually bring a blockchain to market but this doesn't hide that fact that the project needed nowhere near the amount of money they raised. Hell they could've used a couple hundred grand from the first round and literally just paid a team of people to build the blockchain for them. did I get off of a gravy train? Yes. But there are more things to life than money.

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

#56

Post by eterm »

ajross wrote: post #49
rib3ye wrote: post #37

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…

The problem is the whole idea of cryptocurrency as a growth investment. The symptom is a bunch of copycat scams trying to freeload on the broader market. Without the bull market of the early '90's, Belfort would have had no one to sell to. Same deal here. The root cause is the insanity happening in bitcoin (and now Ethereal, I guess). Mark my words: this will all come crashing down. I can't tell you when or why, but…

The worst of is that early adopters will cash out boat loads of money and use that fact to claim they were right all along, as if somehow the top of the pyramid making money proves it's not a pyramid.

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

#58

Post by JumpCrisscross »

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…

> This is an article about everyone getting smarter and restructuring their offering where necessary, and continuing to move forward

The article specifically states "only three projects have said they are canceling or postponing the sale of coins because of the warning." It's not a doom and gloom article. It's just saying the vast majority of ICOs are (a) probably noncompliant and (b) doing nothing about it.

> the SEC still answers to the courts

The SEC is an independent agency [1]. Congress delegated to it the Congresses' powers to make rules in and around securities with the Securities Act of 1934, as amended [2]. Courts grant agencies, like the SEC, wide rule-making authority [3]. In any case, the SEC "answers to" the courts in the same way the Congress does.

> the SEC is not mandated by Congress to undermine interstate commerce

The SEC is a creature of the federal government. Its specific jurisdiction is interstate commerce. In fact, one way to get around some SEC rules (though not all--consult a lawyer before doing something stupid) is to exclusively conduct your business within a single state.

[1] https://en.wikipedia.org/wiki/Independent_agencies_of_the_Un...

[2] https://en.wikipedia.org/wiki/Securities_Exchange_Act_of_193...

[3] https://en.wikipedia.org/wiki/Exxon_Mobil_Corp._v._Saudi_Bas...

Dislaimer: I am not a lawyer. This is not legal nor securities advice.

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

#59

Post by JumpCrisscross »

ringaroundthetx wrote: post #40
kgwgk wrote: post #33

Earlier quoted context omitted.

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.…

> 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

If the SEC categories an asset as a security, it has rule making powers over the trading of those assets provided an American buys or sells the asset, inadvertently or not. Many respected lawyers and lawmakers, as well as the SEC, say many ICOs look like securities.

Note that coins offered in ICOs being securities isn't a death knell to the concept. Just to the scammy elements of the market.

Disclaimer: I am not a lawyer. This is not legal nor securities advice. Don't be a dummy and treat Internet comments as anything but casual banter.

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

#60

Post by Radim »

eterm wrote: post #56
ajross wrote: post #49

Earlier quoted context omitted.

The problem is the whole idea of cryptocurrency as a growth investment. The symptom is a bunch of copycat scams trying to freeload on the broader market. Without the bull market of the early '90's, Belfort would have had no one to sell to. Same deal here. The root cause is the insanity happening in bitcoin (and now Ethereal, I guess). Mark my words: this will all come crashing down. I can't tell you when or why, but…

The worst of is that early adopters will cash out boat loads of money and use that fact to claim they were right all along, as if somehow the top of the pyramid making money proves it's not a pyramid.

  Mark my words: this will all come crashing down. I can't tell you when or why, but it's not sustainable.
The irony: lots of people feel the same way about the "real" debt-based modern economy. A ridiculous Ponzi scheme, clearly unsustainable in the long run.

As always, the time horizon matters when talking about investments and sustainability. Given the right time window, everything works, and everything fails.

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