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SEC tightens the noose on ICO-funded startups

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Re: SEC tightens the noose on ICO-funded startups

#31

Post by CPLX »

Karunamon wrote: post #25
CPLX wrote: post #15

Earlier quoted context omitted.

> Obviously there are tons of issues (breaking securities laws, sketchy companies, bubble mentality, and why actually do any work when you already have the money, among many others). But this shows that demand for small seed-stage companies is there. It’s worth noting that absolutely nobody is confused about there being demand for highly speculative investment in small sketchy seed stage companies. That demand has be…

Disastrous for anyone other than those who jumped in without doing their due dilligence? My main gripe with the whole "accredited investor" thing is that its literally legalized classism (and I'd argue a violation of the equal protection doctrine, but that's another theory), as the income requirements eliminate a huge swathe of investing for anyone but the 1%. Nothing is stopping an uninformed investor from loading t…

As a society we believe that allowing people of modest means to be swindled out of their savings is an unacceptable outcome and have enacted a large battery of laws to avoid it.

These laws came about from very real and serious experiences that were, in fact, catastrophic for many communities. It's a real live problem, and it goes back a long way.

If you want to argue about the details that's great, but any discussion has to start with the reality that an unregulated market leads to really unwanted outcomes here.

You can also do the "who cares if people want to get swindled let them" approach, but recognize that you've been outvoted on this topic, we've decided to protect people like we try to protect people from unsafe food, consumer products scams, and many other situations.

Re: SEC tightens the noose on ICO-funded startups

#32

Post by zjaffee »

CPLX wrote: post #4

> All of this SEC action may sound like very bad news for ICOs, but many in the industry have a more optimistic take: regulatory clarity will bring growth It will be an interesting test I suppose. If ICO’s are in fact a novel technology that offers some kind of advantage, then this statement will be correct. If the entire and total value of ICO as a concept was that it was a means to sidestep existing regulations by…

As someone whose generally bearish on crypto currencies, I do see one clear benefit to ICOs over traditional exchanges. Namely the fact that you can trade them 24 hours a day, 7 days a week, from anywhere in the world with an internet connection, in any currency (theoretically) and on no fixed exchange (although it's likely that the number of exchanges will be limited to reduce price instability).

Re: SEC tightens the noose on ICO-funded startups

#33

Post by CPLX »

will_brown wrote: post #21
olivermarks wrote: post #20

Earlier quoted context omitted.

Malta have very well defined laws about ICO's on the books from November 1st, the UK and USA have been disasterously vague about guidance for what constitutes a security so far, which doesn't help anyone except the bankers.

I think the issue of what constitutes a security is very well defined in the US...it’s just no one has framed their token in such a way it’s not a security (despite all the claims to the contrary) and otherwise the ICOs have not complied with securities laws because...well move fast break things. I’m not sure why a company doesn’t just come out and do an ICO: a) with a token that’s not a security or b) a token that i…

Because the only reason for tokens is to create a little confusion that allows people to think they'll be allowed to violate securities laws.

Re: SEC tightens the noose on ICO-funded startups

#34

Post by JumpCrisscross »

zjaffee wrote: post #32
CPLX wrote: post #4

> All of this SEC action may sound like very bad news for ICOs, but many in the industry have a more optimistic take: regulatory clarity will bring growth It will be an interesting test I suppose. If ICO’s are in fact a novel technology that offers some kind of advantage, then this statement will be correct. If the entire and total value of ICO as a concept was that it was a means to sidestep existing regulations by…

As someone whose generally bearish on crypto currencies, I do see one clear benefit to ICOs over traditional exchanges. Namely the fact that you can trade them 24 hours a day, 7 days a week, from anywhere in the world with an internet connection, in any currency (theoretically) and on no fixed exchange (although it's likely that the number of exchanges will be limited to reduce price instability).

> you can trade them 24 hours a day, 7 days a week, from anywhere in the world with an internet connection, in any currency (theoretically) and on no fixed exchange

This describes securities, generally. You and I can transact to trade shares of Uber in renminbi on a Saturday. We can transact, over the counter and using a broker, to trade shares of Apple in Canadian dollars the following day. The Apple trade would need to be reported to the national ticker, for transparency purposes, but that’s about it.

We concentrate public equity trading into fixed windows and currencies to increase liquidity. It’s a convenience. Privately-negotiated trading is still common for large blocks of public securities.

Re: SEC tightens the noose on ICO-funded startups

#35

Post by JumpCrisscross »

Karunamon wrote: post #25
CPLX wrote: post #15

Earlier quoted context omitted.

> Obviously there are tons of issues (breaking securities laws, sketchy companies, bubble mentality, and why actually do any work when you already have the money, among many others). But this shows that demand for small seed-stage companies is there. It’s worth noting that absolutely nobody is confused about there being demand for highly speculative investment in small sketchy seed stage companies. That demand has be…

Disastrous for anyone other than those who jumped in without doing their due dilligence? My main gripe with the whole "accredited investor" thing is that its literally legalized classism (and I'd argue a violation of the equal protection doctrine, but that's another theory), as the income requirements eliminate a huge swathe of investing for anyone but the 1%. Nothing is stopping an uninformed investor from loading t…

> other than those who jumped in without doing their due dilligence?

Diligencing private securities is expensive. Getting information is expensive, the legal work is expensive, the negotiations are expensive. This is fundamental to the lack of reporting requirements and standardisation. Small checks simply don’t make sense in these markets.

Re: SEC tightens the noose on ICO-funded startups

#36

Post by hyprCoin »

JumpCrisscross wrote: post #35
Karunamon wrote: post #25

Earlier quoted context omitted.

Disastrous for anyone other than those who jumped in without doing their due dilligence? My main gripe with the whole "accredited investor" thing is that its literally legalized classism (and I'd argue a violation of the equal protection doctrine, but that's another theory), as the income requirements eliminate a huge swathe of investing for anyone but the 1%. Nothing is stopping an uninformed investor from loading t…

> other than those who jumped in without doing their due dilligence? Diligencing private securities is expensive. Getting information is expensive, the legal work is expensive, the negotiations are expensive. This is fundamental to the lack of reporting requirements and standardisation. Small checks simply don’t make sense in these markets.

[dead]

Re: SEC tightens the noose on ICO-funded startups

#37

Post by CPLX »

zjaffee wrote: post #32
CPLX wrote: post #4

> All of this SEC action may sound like very bad news for ICOs, but many in the industry have a more optimistic take: regulatory clarity will bring growth It will be an interesting test I suppose. If ICO’s are in fact a novel technology that offers some kind of advantage, then this statement will be correct. If the entire and total value of ICO as a concept was that it was a means to sidestep existing regulations by…

As someone whose generally bearish on crypto currencies, I do see one clear benefit to ICOs over traditional exchanges. Namely the fact that you can trade them 24 hours a day, 7 days a week, from anywhere in the world with an internet connection, in any currency (theoretically) and on no fixed exchange (although it's likely that the number of exchanges will be limited to reduce price instability).

You can trade pretty much any security 24/7 these days, and people do.

Re: SEC tightens the noose on ICO-funded startups

#38

Post by [deleted] »

charlesdm wrote: post #16
JumpCrisscross wrote: post #6

Cooley's invention of the Simple Agreement for a Future Token (SAFT) [1] was genius. Not only did they earn fees on selling people the boondoggle, they'll also cash in on defending every company, and every employee at said company, who unlawfully sold these securities. [1] https://saftproject.com/static/SAFT-Project-Whitepaper.pdf

Isn't this just an interpretation of the law? Yes, the SEC may try to enforce their view of the law, but is it actually the correct one? It only takes one SAFT token company to take things to court, and have a judge rule in their favour, to basically legitimise all tokens - no? (Note: I have no clue who is right here, but just because it's the SEC doesn't mean they are automatically right. Same applies to the IRS etc…

[deleted]

Re: SEC tightens the noose on ICO-funded startups

#40

Post by lawn »

JumpCrisscross wrote: post #34
zjaffee wrote: post #32

Earlier quoted context omitted.

As someone whose generally bearish on crypto currencies, I do see one clear benefit to ICOs over traditional exchanges. Namely the fact that you can trade them 24 hours a day, 7 days a week, from anywhere in the world with an internet connection, in any currency (theoretically) and on no fixed exchange (although it's likely that the number of exchanges will be limited to reduce price instability).

> you can trade them 24 hours a day, 7 days a week, from anywhere in the world with an internet connection, in any currency (theoretically) and on no fixed exchange This describes securities, generally. You and I can transact to trade shares of Uber in renminbi on a Saturday. We can transact, over the counter and using a broker, to trade shares of Apple in Canadian dollars the following day. The Apple trade would nee…

The obvious difference is transactions without a third party. You can also verify ICO token integrity on the blockchain yourself (via open source apps).
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