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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

#51

Post by notahacker »

lawn wrote: post #40
JumpCrisscross wrote: post #34

Earlier quoted context omitted.

> 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).

The obvious question is whether that actually matters all that much for securities, since the broker/exchange adds negligible risk and overhead for the buyer relative to the trust in the public company needed to buy a stake in it and the costs of meeting regulatory requirements for public companies.

Anybody who's more worried by the potential complications of T+2 settlement when purchasing blue chip stocks than the Wild West world of ICOs shouldn't be investing.

Re: SEC tightens the noose on ICO-funded startups

#52

Post by CryptoPunk »

The laws need to change. The SEC should only get involved when someone defrauds another party through misrepresentation. Mandatory disclosure, registration, and KYC requirements are all infringements on the right to privacy and free contract.

That the poorest households spend 9% of their income on state-run lotteries, yet people can't try their hand at investing their own money in businesses/projects that haven't been vetted by a centralized government agency, shows the opportunistic and disingenuous appeal to virtue that's used to sell the public on the need to be controlled.

Re: SEC tightens the noose on ICO-funded startups

#53

Post by wiredfool »

lawn wrote: post #40
JumpCrisscross wrote: post #34

Earlier quoted context omitted.

> 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).

There's a 95% accurate O(1) solution to determine if an ICO transaction has integrity.

Re: SEC tightens the noose on ICO-funded startups

#54

Post by hal9000xp »

harryh wrote: post #47
hal9000xp wrote: post #29

In the eyes of SEC, ICOs are nothing more than equity crowdfunding. It means that SEC doesn't like any sale of unlisted assets to unaccredited investors. By SEC definition accredited investor is an investor who has either $1M of liquid net worth or stable income not less than $200k per year. Original intent of the government was to bar unsophisticated investors from high risk investments. While I understand logic of…

Even without the SEC, you would not have been able to invest in Spotify. They had zero interest in taking your money when they could raise money much more easily from professional investors capable of writing 8 figure checks. It's very important to understand this and the adverse selection problem that would emerge if laws were changed. There's a reason that only scammers did ICOs.

> only scammers did ICOs

This is absolutely incorrect. One of many examples - Tezos.

Re: SEC tightens the noose on ICO-funded startups

#55

Post by harryh »

hal9000xp wrote: post #54
harryh wrote: post #47

Earlier quoted context omitted.

Even without the SEC, you would not have been able to invest in Spotify. They had zero interest in taking your money when they could raise money much more easily from professional investors capable of writing 8 figure checks. It's very important to understand this and the adverse selection problem that would emerge if laws were changed. There's a reason that only scammers did ICOs.

> only scammers did ICOs This is absolutely incorrect. One of many examples - Tezos.

Oh, I probably overstated a little bit. But I'm confident that 90%+ of them were scams.

Re: Tezos - "Inside the Crypto World's Biggest Scandal"

https://www.wired.com/story/tezos-blockchain-love-story-horr...

Re: SEC tightens the noose on ICO-funded startups

#56

Post by hal9000xp »

harryh wrote: post #55
hal9000xp wrote: post #54

Earlier quoted context omitted.

> only scammers did ICOs This is absolutely incorrect. One of many examples - Tezos.

Oh, I probably overstated a little bit. But I'm confident that 90%+ of them were scams. Re: Tezos - "Inside the Crypto World's Biggest Scandal" https://www.wired.com/story/tezos-blockchain-love-story-horr...

I'm aware with situation with Tezos (btw, which had been resolved) because I'm with them from very beginning.

That's my whole point. The government tries to protect me because it thinks I'm too stupid. And you tell me that such opportunities for small investors doesn't exist anyway.

But opportunities do exist, I just showed.

Another example. I watched interview of Revolut founder. He said they sold some of their equity to limited number of small investors for marketing purposes. He said that these early-stage small investors are best advertisers of their products because they are enthusiastic.

P.S. Every single time I'm talking about this I swiftly get downvoted. I'm so disappointed by the fact that vast majority of hacker news readers are far-left socialists.

Re: SEC tightens the noose on ICO-funded startups

#57

Post by empath75 »

browsercoin wrote: post #42

Had an interesting conversation if you have been involved in any ICO sales and live in North America, seek legal counsel immediately . Do not listen to idiots telling you this is good for the space, they don't know just how much reach SEC has when it comes to securities fraud. The investigation will likely span many years but they will eventually get to your ICO and will hit you with wire fraud and felony, which won'…

I would be very surprised if anyone not engaged in fraud or tax evasion or money laundering saw jail time. Of course, that leaves like 2 ICOs.

Re: SEC tightens the noose on ICO-funded startups

#58

Post by empath75 »

CryptoPunk wrote: post #52

The laws need to change. The SEC should only get involved when someone defrauds another party through misrepresentation. Mandatory disclosure, registration, and KYC requirements are all infringements on the right to privacy and free contract. That the poorest households spend 9% of their income on state-run lotteries, yet people can't try their hand at investing their own money in businesses/projects that haven't bee…

> The SEC should only get involved when someone defrauds another party through misrepresentation.

So basically ICOs, then.

Re: SEC tightens the noose on ICO-funded startups

#59

Post by baseten »

jhabdas wrote: post #27
seibelj wrote: post #9

The great hope of the JOBS act was to allow unaccredited ("mom and pop") investors to get exposure to early-stage startups, in a safer way, so that the huge gains went to average people instead of well-connected rich people and VC's. The problem currently with crowd-funded securities offerings is the overall cost of capital (legal and regulatory), lack of liquidity post-raise, and that most of the good opportunities…

> One is the change to accredited investor laws to allow people to prove investor competence without meeting arbitrary income / asset requirements. No one, absolutely no one should sit on their thumbs waiting around for regulatory clarity from a slow moving ship unless they have too much to lose. It's time to up the ante and move out of the US. If they keep adding laws instead of deleting them the exodus of seed stag…

It doesn't appear that the quantity of laws on the books or the nanny state are preventing seed stage companies from leaving our stable mature market. There must be something else keeping them here in droves. hmm?

Re: SEC tightens the noose on ICO-funded startups

#60

Post by s73v3r_ »

olivermarks wrote: post #20
wmf wrote: post #5

Earlier quoted context omitted.

I was really pessimistic about security tokens because no exchange could legally trade them, but now a few exchanges are getting certified so it may be possible to dump these tokens. How many buyers there will be is still in question.

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.

No they haven't. They've said from the beginning that if it looks like a security, smells like a security, walks like a security and talks like a security, then it's a security.

It's people trying to play the, "Well, it's different cause it's on a computer!" game that are muddying the waters.

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