121–130 of 343 posts
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Name one
Augur
>Augur's user numbers dropped off sharply after launch in 2018: from 265 daily users in early July, to 37 on 8 August.
Maybe not a scam, but this does not convince me of the value of ICO-backed projects
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Not all ICOs are scams. In some cases people have taken the time to work out a set of incentives that allows a market that previously needed to be operated by a corporate entity to be operated without central control. Such an incentive scheme has intrinsic value equivalent to the coordinating body it replaces. An ICO for such a scheme is not necessarily a scam. Certainly the vast majority of ICOs are scams, but not a…
Name one
(Link discussing Harvard endowment investing) https://www.google.com/amp/s/www.bloomberg.com/amp/news/arti...
Fight the good fight https://www.defendcrypto.org/
Note that Kik has expressly stated that they have really wanted this case to go to court for some time now. They strongly believe that the SEC guidance so far has been vague and non-committal to the point of becoming damaging. They believe they have a case that Kin is not a security and that the Howey Test is being mis-applied to many cryptos. By going through with the suit they hope to fast-forward more concrete gui…
The SEC usually acts but the penalties are usually for 1/100th of the profits.
If Kik loses here they're just going to make them pay $1M 'penalty' and move on.
"The complaint further alleges that Kik marketed the Kin tokens as an investment opportunity. Kik allegedly told investors that rising demand would drive up the value of Kin, and that Kik would undertake crucial work to spur that demand, including by incorporating the tokens into its messaging app, creating a new Kin transaction service, and building a system to reward other companies that adopt Kin. At the time Kik…
> Who even bought this stuff? A buddy of mine from my home town called me up and needed a developer to work on his "crypto-currency hedge fund." This guy has always been a bit dodgy on looking for the least amount of resistance to the most money. I tried tell tell him all the reasons it was a bad idea. He claims he had done all the research (guy is not a programmer, couldn't pass Anatomy I the two times he took it in…
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If that was the case Kik wouldn’t have spent an alleged $5M unsuccessfully trying to settle this matter. No most people don’t raise a $100M in violation of securities law...or even “testing” security laws, especially when Kik could have obtained the SECs opinion through a No Action Letter request. Why didn’t Kik avail themselves to the law and process before raising $100M from the public?
Patrick Gibbs: > First of all, you have to consider the SEC’s normal process for that sort of thing. It is very difficult and it takes a very, very, very long time for the SEC to give that kind of forward-looking advice, usually in the form of a no action letter. I mean, here we are in 2019 and they have only just recently released what I think is the very first no action letter relating to a cryptocurrency and that…
"The complaint further alleges that Kik marketed the Kin tokens as an investment opportunity. Kik allegedly told investors that rising demand would drive up the value of Kin, and that Kik would undertake crucial work to spur that demand, including by incorporating the tokens into its messaging app, creating a new Kin transaction service, and building a system to reward other companies that adopt Kin. At the time Kik…
Is that a good or bad thing?
There was a short period of time when there was immense profits to be had from buying and quickly flipping obvious scam ICOs.
For those who didn't know (like me): The Howey Test determines that a transaction represents an investment contract if "a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party," https://www.investopedia.com/terms/h/howey-test.asp
For example, what if Mr. Howey had purchased the orange grove expecting to eat 10% of the oranges and leave the remaining 90% subject to the leaseback agreement originally at issue. Is the orange grove agreement still an "investment contract" if Mr. Howey eats 10%? What if he eats 50%? 90%?
What if Mr. Howey planned to sell all of the oranges when the market price was over $X per pound and eat any oranges when the market price was below that amount?
That's the Howey grey area in which Kin is operating. Many people likely purchased small amounts of Kin with the expectation that they might use some of it for in-app purchases and hold some anticipating a profit from it appreciating in value.
Other cases that have been litigated in the wake of Howey that you might find interesting, though not necessarily helpful in applying Howey to cryptocurrency:
- United Housing Foundation v Forman[1] (1975) where "stock" issued by a housing corporation that provided a reduction in rent was _not_ an investment contract (or security at all).
- SEC v Edwards[2] (2004) where a fixed-rate leaseback agreement for payphones _was_ a security.
- SEC v Lauer[3] (1994) where the court was... flexible in their interpretation of the Howey test, finding a "common enterprise" existed where there was only one investor.
The Lauer opinion was particularly important for demonstrating that courts look to the "economic reality of the transaction" when determining whether something is or isn't a security.
[1] https://supreme.justia.com/cases/federal/us/421/837/
[2] https://www.casebriefs.com/blog/law/securities-regulation/se...
[3] https://www.courtlistener.com/opinion/1459162/ussec-v-lauer/
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The continuous pump-and-dump activity that you see in the crypto space is a clear demonstration that they should be regulated by the SEC. Regulation is unpopular among the people inside the regulated industry, but it protects society as a whole.
It's often the other way around: regulation is popular among people inside the regulated industry (it keeps competitors out, while being treated as "just business as normal" by employees of the regulated industry), while being unpopular with potential new entrants on the outside. The only industries that really fight regulation are those where there's currently a mad scramble of new startups trying to gain position (…
Really, the only example you provided that was correct was that daycares don't fight the safety standards imbued into the day care licensing requirements. (Yes, daycare is a licensed business in most states.)
Generally, regulation is not popular amongst the regulated industry. However, the lack of regulation is far less popular than the fear of unregulated competition in some markets where "startups" try to "disrupt" the status quo by imposing externalities on society rather than absorbing them internally as they would if they adhered to regulations.