This is a typical SEC action against a get-rich-quick Ponzi-type scheme. Read the SEC's note on Ponzi schemes.[1] The original Charles Ponzi only promised a 50% return in 90 days. Bernie Madoff promised about 10-15% a year. This "ICO" promised 1300% in 30 days.
SEC Emergency Action Halts PlexCoin ICO
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Re: SEC Emergency Action Halts PlexCoin ICO
#52It's worth noting the SEC describes the perpetrator as "a recidivist Quebec securities law violator". Apparently this isn't the first scam he's run.
Re: SEC Emergency Action Halts PlexCoin ICO
#53"PlexCoin" also seems like a name likely to run into trademark issues with the makers of the media management/DVR software Plex (plex.tv).
Re: SEC Emergency Action Halts PlexCoin ICO
#54Earlier quoted context omitted.
"Regulation" isn't a one-dimensional thing. You can simultaneously hate scam ICOs and still not want most other aspects of cryptocurrencies to be regulated. There are lots of different regulations that different people find acceptable.
I agree - I'm an attorney. But are we picking and choosing here? Because my bet is, and has been for quite sometime, that when all is said and done, the 'regulations' we are talking about are those that already exist and are applied to securities.
I'm sure that most of securities law will apply, but there might be new opportunities provided by the tech that need to be worked out - for instance funding protocol development.
The innovation also might also shift political attention to some drawbacks with the current regulatory regime that could use updating - for instance the rather blunt instrument of the accredited investor regime, or the custodian requirement.
And the regulators will have to deal with changes to their own incentive structures - for instance the opportunity for regulatory arbitrage.
For all the mistrust of banks and regulators in Bitcoinland, having those institutions take you seriously is what winning looks like.
Re: SEC Emergency Action Halts PlexCoin ICO
#55Earlier quoted context omitted.
Scam =/= terrible investment idea. Tezos and Filecoin, for example, are not scams. They are serious projects that are attempting to bring something useful to the market. That said, they raised wayyy too much money, and may end up being terrible investments that don't return any profit, but that applies to many startups as well. PlexCoin offered guaranteed 1300% returns or your money back. That is a pure scam.
> Scam =/= terrible investment idea. Any ICO marketed as an investment is likely illegal in the United States. Not necessarily a prima facie scam, but in violation of the Securities and Exchange Act.
> Securities and Exchange Act
These are two separate acts: the Securities Act of 1933 [1] and the Securities Exchange Act of 1934 [2]. (Pedantic, pardon me.)
[1] https://www.sec.gov/about/laws/sa33.pdf
[2] https://en.wikipedia.org/wiki/Securities_Exchange_Act_of_193...
Re: SEC Emergency Action Halts PlexCoin ICO
#56This is really good to see. Separating the scam ICOs from the non-scam ICOs is only going to become more important in the future.
I can't envision a future where they are anything but a scam. The tokens have no legal or economic connection to any business activity produced by the token creators so I don't see why any ICO token would be worth any more than any other besides hype.
Well, if the company ACTUALLY produces what was promised, and gives the token owners what they are owed, then it wasn't a scam.
Re: SEC Emergency Action Halts PlexCoin ICO
#57Okay so I will play the Devils advocate here. They have good intentions and basically shrug off bad publicity and continue with their project. Then SEC step in shutting them down and bankrupting them before even charges were filled or they had their chance to defend themselves. Now moving forward months/years later they lack of funds or bad publicity made it they are forced to go down. So yeah in such scenario public and SEC will always be correct it was a scam :) every single time - just cut off founders hands, throw a fine, maybe jail time. Im sure its hard to meet potential business partners, make presentations or sales, when you behind bars.
Re: SEC Emergency Action Halts PlexCoin ICO
#58It's worth noting the SEC describes the perpetrator as "a recidivist Quebec securities law violator". Apparently this isn't the first scam he's run.
Did not know SEC has jurisdiction over Canada, thanks.
Re: SEC Emergency Action Halts PlexCoin ICO
#59"PlexCoin" also seems like a name likely to run into trademark issues with the makers of the media management/DVR software Plex (plex.tv).
That's not really how trademark works.
It is only similar/same industries where that applies.
The rule of thumb is consumer confusion. Is an average person going to mix up the 2?
In this case, the answer is likely No.
Re: SEC Emergency Action Halts PlexCoin ICO
#60Earlier quoted context omitted.
Ah yes, how dare we poke and prod at the validity of current governmental systems and regulations. That feudal era was such great times, if we had only not gone against the merits of the government of the day./s There is little doubt that many ICO's are 'scams', and some people will get hurt financially because of it. The challenge with regulations is, it's easy to quantify the harm they try to stop, but it's harder…
There's no perfect system, but what we have right now is better than anything from the past, and it's only getting better. Anyway, I think under-regulation is worse than over-regulation.
And it will get better BECAUSE people are trying crazy new things, like ICOs.
Sure, there are problems, as with all new things. But the problems will be fixed eventually, and the legal system with be better because of it.
People doing something weird, and different and new and probably illegal, is THE way that our legal system gets better, as we learn to deal with new things, that might be bad OR good. And decide whether these illegal things should stay illegal, or become legal.