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

nytimes.com

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

#111

Post by regulation_d »

age_bronze wrote: post #108

I don't get why regulation is needed. The whole thing is by definition very high risk investment, and I think it'd be silly for any "scam-victim" to claim he didn't know he's entering a high risk, and also high chance of scam, deal. In the end of the day, why is it the government's job to protect idiot people's money? And that's coming from the country where gambling is legal? The whole thing is based upon get-out-of…

I mean, we need regulation because 1929.

We need regulation because regulation promotes confidence in the market which increases participation in the market.

Security regulation is among the easiest government regulation to justify from a market perspective.

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

#112

Post by xadhominemx »

JumpCrisscross wrote: post #103
xadhominemx wrote: post #96

Earlier quoted context omitted.

There are competency exemptions. For example, "knowledgeable employees" of private investment firms are allowed to participate in PE deals even if they are not accredited investors.

> "knowledgeable employees" of private investment firms are allowed to participate in PE deals even if they are not accredited investors. These people almost always earn more than $200,000 a year and so qualify as "accredited investors" under the SEC's definition. Keep in mind, too, that start-ups can compensate their unaccredited employees with equity just the same. Disclaimer: I am not a lawyer. This is not legal n…

>These people almost always earn more than $200,000 a year and so qualify as "accredited investors" under the SEC's definition

Actually not, because accredited investors must have cleared $200k for the two previous calendar years and most people who co-invest under the knowledgeable employees exemption are PE associates who have been on the job for less than two years.

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

#113

Post by microcolonel »

If you don't trust ICOs to provide the desired effect, don't participate in them. An ICOs has the same trust dynamic as a Kickstarter, and as long as somebody is okay with that, then I don't see why they should be protected from themselves preemptively.

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

#114

Post by notyourday »

conanbatt wrote: post #95
notyourday wrote: post #88

Earlier quoted context omitted.

Accredited investors requirement is what allows one not to be a subject to Blue Sky laws. We did not have it before Blue Sky laws were added. Let me assure you civilized societies need to have a separation between 82 year old grandma Suzi and Paris Hilton.

Are you account for the damage done by restricting investment into this? They say as much money moved into ICO's in the last 6 months as VC funding in the valley. To the very least, thats double the funding for tech startups: higher wages, more founders and higher absolute investment returns. The tragedy is that scam ICO's make it because they cant put it into better investments due to regulation. Its the classic cas…

Yes, I do. ICOs are scams.

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

#115

Post by xadhominemx »

JumpCrisscross wrote: post #98
mrwong wrote: post #17

Earlier quoted context omitted.

Wallstreet has a monopoly on IPOs, they are clearly threatened by the ICO boom. Its just the internet all over again. Candlemakers wanted to ban light bulbs. Newspaper wanted to regulate online media. They all failed. So will wallstreet. Its just a matter of time, the forcing function is way to strong.

> Wallstreet has a monopoly on IPOs, they are clearly threatened by the ICO boom For a longest time, Wall Street had three tricks: securitization (breaking cash flows into securities), portfolios (putting securities in a box) and leverage (borrowing and lending). (One could argue swaps are a fourth.) That's it! IPOs? Securitise a company. CDO? Portfolio mortgage securities. Mortgages? Securitise them! Now there are b…

Even if blockchains/cryptocurrencies replace fiat currencies and ICOs replace IPOs on a stock exchange, little about Wall Street does will actually change. Securitizing and aggregating securities into portfolios, lending, marketing and pricing securities, advising issuing entities, etc., the things investment bankers occupy themselves with every day, do not go away because of cryptocurrencies and ICOs.

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

#116

Post by scotty79 »

> But Mr. Grundfest said it was clear that almost everyone buying tokens at this point was buying them with the hope that their value would go up, not because the buyer wanted to use them on some future computer network.

So beanie babies were securities too?

This is just silly. Surely there's some better definition of what a securities are.

In some countries security is either equity or fixed income instrument. As I understand ICO-s are neither.

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

#117

Post by exogen »

wtfrmyinitials wrote: post #107
Chirael wrote: post #59

Earlier quoted context omitted.

I think the idea of accredited investors is that those investments are very risky, and it limits them to people who can "afford" the risk. An accredited investor may be able to bear the brunt of 9 investments being a total loss, to get to the 10th that hits it out of the park, while a non-accredited investor may have her/his life savings (or a substantial enough part of it) wiped out on the first 1 or 2 deals. I'm no…

I don't need the government to protect me from myself. Adults should be able to make their own decisions

Predatory companies love people like you. Now people have lost their homes and grandparents are being swindled out of their retirements – good thing the government allowed companies to do whatever they want! Corporations are awesome! It was pretty cool when the banks told people they were qualified for loans, knowing they shouldn't be, then used that to their advantage to steal those people's houses. Fuck the government, am I right???

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

#118

Post by banderman »

wtfrmyinitials wrote: post #107
Chirael wrote: post #59

Earlier quoted context omitted.

I think the idea of accredited investors is that those investments are very risky, and it limits them to people who can "afford" the risk. An accredited investor may be able to bear the brunt of 9 investments being a total loss, to get to the 10th that hits it out of the park, while a non-accredited investor may have her/his life savings (or a substantial enough part of it) wiped out on the first 1 or 2 deals. I'm no…

I don't need the government to protect me from myself. Adults should be able to make their own decisions

The track record of humanity's decision making indicates that your statement is not accurate for a significant portion of the population.

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

#119

Post by conanbatt »

notyourday wrote: post #114
conanbatt wrote: post #95

Earlier quoted context omitted.

Are you account for the damage done by restricting investment into this? They say as much money moved into ICO's in the last 6 months as VC funding in the valley. To the very least, thats double the funding for tech startups: higher wages, more founders and higher absolute investment returns. The tragedy is that scam ICO's make it because they cant put it into better investments due to regulation. Its the classic cas…

Yes, I do. ICOs are scams.

And in good part provoked by the regulations you are in principle protecting..the people that put money into the ICO's most likely cannot legally invest in any startup in the U.S.

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

#120

Post by stale2002 »

rjknight wrote: post #48
stale2002 wrote: post #37

Earlier quoted context omitted.

File coin requires you to be an accredited investor. Grandmas and Joe smoes are not being scammed. You can only lose money from file coin if you are in the top 1% already, and therefore probably don't need the government to protect you.

If only accredited investors can buy FileCoin then only accredited investors can access the storage market. This does not seem feasible! And, indeed, it isn’t. FileCoin has only done a pre-sale so far, selling securities (SAFTs) to accredited investors. They haven’t explained (afaik) how the tokens will be issued and make their way into the hands of the public. That’s why I was curious to see Grundfest citing them.

The different between an ICO and a regular old "creating a new alt coin" is that the Altcoin already exists, here and now.

And ICO does not exist yet. It is a promise that you will recieve something in the future, but that you can't get now.

Once file coin actually exists, in the here and now, and works, THEN it is totally OK for regular people to buy and sell it.

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