Initial Coin Offerings Horrify a Former S.E.C. Regulator

They horrify me too.

Some are plain fraud. Investors will lose, scammers will profit and/or go to jail.

Some are promising startups, that will raise far more money than is healthy for their stage, and will die from too much money. If you don't have enough money (true for nearly everyone) it might be hard to imagine, but I've seen it when VCs give a startup too much. It makes them grow before they've found product-market fit, and when they realize their fit isn't quite right they're too large to change course quickly.

The second is more sad, because not only will investors lose their money but the world will lose an otherwise promising startup.

Don't like it? Don't invest. No reason for you to go around poo-pooing it though.

For the same reason that urban areas need tighter building codes than rural, tightly linked economies need to more closely regulate what our neighbors do lest we be caught in the consequences.

ICOs externalize many consequences.

I know you didn’t mean it this way, but that sounds like the economy as a whole

Just replace “investors” with workers, and scammers with “moneyed special interests.” Some go to jail to satisfy the proles, but otherwise nothing really changes to help the workers

And we keep talking about the pattern within itself, at a lower abstraction, ignoring the level where it matters to most

I am horrified by what was/is allowed legally at wall street. Not that ICO's are any better.