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Blockstack’s token offering is historic, but its dance with the SEC is not over

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Re: Blockstack’s token offering is historic, but its dance with the SEC is not over

#21

Post by rolltiide »

arcticbull wrote: post #5
rolltiide wrote: post #3

its sad that the operational risk is so damn high though. you have to: 1) like the idea 2) trust the management team 3) hope infrastructure gets built around it so that there could be perpetual demand for these tokens 4) hope the regulators play ball and if any thing incompetent happens with the management team, all liquidity evaporates permanently, no matter if the problem and solution were sound ideas when really y…

Correct. That's why we have an established, well worn process for raising funding for your business. You raise from accredited investors by selling the highest-risk equity, then as you become more mature, you raise from bigger, less risk-tolerant entities. Eventually, you're in a position to publish financials regularly, and raise money from a broader audience ("go public"). Your itemized list is why we do it that wa…

> The crypto community continues to speed-run the history of finance.

I think it is making it better than your classist dystopia.

In the same day: The US Treasury just talked about returning to a period of private currencies, but global this time, in response to proliferation of crypto assets being used as stores of value, currency and collateral. Central banks can still provide liquidity to the market. The unbanked have access to a global economy.

The US President gave an advertisement to bitcoin and Libra.

The SEC approved a digital Reg A+ offering, which is a rubric for all other ones.

US Congress members actively talking about the Token Taxonomy Act together to help all branches of the government adapt faster.

Re: Blockstack’s token offering is historic, but its dance with the SEC is not over

#22

Post by seibelj »

arcticbull wrote: post #20
seibelj wrote: post #19

Earlier quoted context omitted.

Thank you for describing our current system to me. I am advocating for a new system that lets people take more risk even if they are not wealthy. There is nothing magical that happens when you make $200k per year, if you make $199,999 per year you are not an idiot that needs the government to protect you from bad investments.

To be clear the system you're asking for exists, it was brought in by Obama as part of the JOBS act. Anyone can buy equity under the JOBS act and the company has far lower documentation requirements. The 'good' companies (in-demand equity) don't do it because they won't want to pollute their cap tables with 'dumb money' and the ones who are okay with that are terrible investments. It's adverse selection. [1] Getting…

To be clear, the moment one is accredited they can make all the dumb investment decisions they would like. However, beneath a magical line of $200k per year salary the government prevents you by legal force from doing so. When you make above that number you are free to be dumb. I'm advocating letting everyone make their own decisions, for better or worse.

Re: Blockstack’s token offering is historic, but its dance with the SEC is not over

#23

Post by arcticbull »

seibelj wrote: post #22
arcticbull wrote: post #20

Earlier quoted context omitted.

To be clear the system you're asking for exists, it was brought in by Obama as part of the JOBS act. Anyone can buy equity under the JOBS act and the company has far lower documentation requirements. The 'good' companies (in-demand equity) don't do it because they won't want to pollute their cap tables with 'dumb money' and the ones who are okay with that are terrible investments. It's adverse selection. [1] Getting…

To be clear, the moment one is accredited they can make all the dumb investment decisions they would like. However, beneath a magical line of $200k per year salary the government prevents you by legal force from doing so. When you make above that number you are free to be dumb. I'm advocating letting everyone make their own decisions, for better or worse.

You seem to have ignored the key points.

(1) A program that meets that vast majority of your requirements exists and exhibits terrible adverse selection issues, so you propose... expanding it? In the hopes it gets... better? Any thoughts on why that would happen?

(2) The $200K salary line is "magical" but does represent middle-class in 100% of communities in the United States. IMO it should have been indexed to inflation ($3-4M in annual income inflation adjusted), bringing it quite a bit higher. You can also qualify on the basis of $1M in assets excluding your principal residence. This provides adequate buffer in the event your investments fail outright, which the vast majority of early stage investments do. It's the same reason a 20.9 year old can't buy beer. You draw the line somewhere, for better or for worse.

(3) To the best of my knowledge there are no legal repercussions for you for investing as a non-accredited investor, though there may be for the company for failing to follow proper procedure.

(4) These laws weren't brought in because too many poor were getting rich too fast and there wasn't enough room for all the yachts in Boston Harbor. It was due to large-scale speculation literally causing the great depression [1].

(5) Remind me who pays for the welfare programs when people who aren't in a place to take financial risks, the most desperate usually, are pushed into insolvency? Taxpayers. That's why taxpayers also get a say in who can invest.

(6) Your argument reads a lot like the people who want to kill off the EPA because the rivers haven't caught fire in a while. There's a reason they don't catch fire.

[1] https://www.investopedia.com/terms/n/nonaccreditedinvestor.a...

Re: Blockstack’s token offering is historic, but its dance with the SEC is not over

#24

Post by seibelj »

arcticbull wrote: post #23
seibelj wrote: post #22

Earlier quoted context omitted.

To be clear, the moment one is accredited they can make all the dumb investment decisions they would like. However, beneath a magical line of $200k per year salary the government prevents you by legal force from doing so. When you make above that number you are free to be dumb. I'm advocating letting everyone make their own decisions, for better or worse.

You seem to have ignored the key points. (1) A program that meets that vast majority of your requirements exists and exhibits terrible adverse selection issues, so you propose... expanding it? In the hopes it gets... better? Any thoughts on why that would happen? (2) The $200K salary line is "magical" but does represent middle-class in 100% of communities in the United States. IMO it should have been indexed to infla…

It's a philosophical disagreement - I don't want the government picking who can and can't invest their own money into what investments. Many developed countries, such as Switzerland, have no such laws and the world isn't crashing down for them.

Re: Blockstack’s token offering is historic, but its dance with the SEC is not over

#25

Post by arcticbull »

seibelj wrote: post #24
arcticbull wrote: post #23

Earlier quoted context omitted.

You seem to have ignored the key points. (1) A program that meets that vast majority of your requirements exists and exhibits terrible adverse selection issues, so you propose... expanding it? In the hopes it gets... better? Any thoughts on why that would happen? (2) The $200K salary line is "magical" but does represent middle-class in 100% of communities in the United States. IMO it should have been indexed to infla…

It's a philosophical disagreement - I don't want the government picking who can and can't invest their own money into what investments. Many developed countries, such as Switzerland, have no such laws and the world isn't crashing down for them.

Which developed nations are you referring to exactly? Australia, Brazil, Canada, the entire EU, Israel, New Zealand, Singapore and the US all have accredited investor rules. The US is among the least strict. [0] It seems like Switzerland has a similar model [1, 2]:

(1) According to Art. 10 Para. 3 of the Swiss Federal Collective Investment Schemes Act (CISA), qualified investors are considered:

(e) High net worth individuals

(3) A high net worth individual is someone who can confirm in writing that they directly or indirectly have net financial investments of at least 2 million Swiss francs.

Either way, you've again side-stepped every salient point. It's fine to have a philosophical disagreement but we should be able to discuss the facts at hand. Philosophically I don't think the government should be able to tell people what they can and can't dump into the rivers because it's in their interests only to drop safe stuff in there. Reality, however, indicates that in fact that's an awful idea and we shouldn't let them.

Sadly, facts get in the way of philosophy. That's why we have regulations.

Either way you fall prey to the classic libertarian fallacy, that an individual doesn't affect the society around them in any way. Yeah you go broke investing in the South Seas 2.0 company, or BTC at $19K. Cool. You own and sell property at a loss, now you affect your neighbors property values. Now you're on welfare, and on medicaid, and now all of society has to pay for your poor investing decisions. The law is how society mitigates this risk.

[0] https://en.wikipedia.org/wiki/Accredited_investor

[1] https://www.swissfunddata.ch/sfdpub/en/group/info

[2] https://www.lexology.com/library/detail.aspx?g=a8e19e48-a4d0...

Re: Blockstack’s token offering is historic, but its dance with the SEC is not over

#27

Post by arcticbull »

Temasik wrote: post #10
arcticbull wrote: post #5

Earlier quoted context omitted.

Correct. That's why we have an established, well worn process for raising funding for your business. You raise from accredited investors by selling the highest-risk equity, then as you become more mature, you raise from bigger, less risk-tolerant entities. Eventually, you're in a position to publish financials regularly, and raise money from a broader audience ("go public"). Your itemized list is why we do it that wa…

I ain't buying your bags VCs

I guess you'd be unhappy with Square's returns (IPO at $9.00 three years ago, currently trading at $82.28, for an annualized 100% gain)? Take that, VCs.
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