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Statement on Cryptocurrencies and Initial Coin Offerings

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Re: Statement on Cryptocurrencies and Initial Coin Offerings

#121

Post by ckastner »

noway421 wrote: post #119
beagle3 wrote: post #109

Earlier quoted context omitted.

Because of FATCA and friends, essentially all financial institutions in the world now report to the US and follow its rules. If you are not a US taxpayer, and outside the US, they don't directly apply to you, but they have already affected the regulations that do apply to you.

This is literally why we need crypto

Funnily enough, I drew the opposite conclusion from grandparent's comment: To me, this is literally why the I'm-beyond-government-control crypto dream cannot work.

Re: Statement on Cryptocurrencies and Initial Coin Offerings

#122

Post by Frogolocalypse »

brucephillips wrote: post #55

Can someone explain to me how his "book of the month" club example is not a security? The managerial efforts of the club managers will increase demand for participation in the club, increasing the value of the token. What am I missing?

Because the issuers of the token (management) don't directly benefit from its use. It is the selling and profiting off the token that makes it a security. If it provides utility to the participants and doesn't provide a direct incentive to the issuer, it is not a security.

ICO's certainly bring all of these things into a discussion though, don't they?

Re: Statement on Cryptocurrencies and Initial Coin Offerings

#124

Post by kodablah »

gchokov wrote: post #113

Sounds like - do what you want at your own risk and due diligence. I can't help but think that large financial institutions and governments are also behind the crypto madness in order to make money on the retail's back. Otherwise, this would have been stopped by now.

I think they are behind it and haven't brought the hammer down because they don't want to encourage "going dark" (or even darker than they already are). Surely they're finding their enforcement arm much more limited than in traditional markets. Not embracing new markets will only make that worse.

Re: Statement on Cryptocurrencies and Initial Coin Offerings

#125

Post by ianamartin »

bufferoverflow wrote: post #88
zemo wrote: post #80

Earlier quoted context omitted.

> almost all ICOs so far are illegal. a lot of them are offering to sell you an asset that they advertise as being sure to appreciate, with the subtext that you will sell the asset at a later point for a gain. Selling something purely to be a store of value and appreciation is basically the textbook definition of a security, isn't it?

How many ICOs "advertise as being sure to appreciate"? I've looked at like 40 different ones, bought into none, but none of them promised any return on investment. That's some straw man argument.

All of them. The more coins have been mined, the fewer are left to mine and the harder they are to mine.

It's guaranteed scarcity. By design. All you have to add to that formula is the idea that there's a demand. And that's what every ICO is: hype about demand for a decreasingly available thing.

Once you have been sold that there's a demand, the appreciation is guaranteed by definition of what it is.

Re: Statement on Cryptocurrencies and Initial Coin Offerings

#126

Post by chinathrow »

seibelj wrote: post #11

An incredible display of pragmatism from our regulators. Given the commentary on HN it seems that most here want everyone involved in an ICO to be thrown in jail. ICO’s are an effective way to raise funds from a global pool of enthusiasts. The Ethereum blockchain itself was funded from an ICO, and it’s doubtful that as much money would have been raised at such advantageous terms from traditional VC for a 22 year old…

> ICO’s are an effective way to raise funds from a global pool of enthusiasts.

... and fools and frauds during an intense phase of greatest hype, FOMO (fear of missing out), pump and dump etc.

Re: Statement on Cryptocurrencies and Initial Coin Offerings

#127

Post by elmar »

Kadin wrote: post #93
zemo wrote: post #80

Earlier quoted context omitted.

> almost all ICOs so far are illegal. a lot of them are offering to sell you an asset that they advertise as being sure to appreciate, with the subtext that you will sell the asset at a later point for a gain. Selling something purely to be a store of value and appreciation is basically the textbook definition of a security, isn't it?

This is the (literal) textbook definition of a security: any note, stock, treasury stock, security future, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undi…

> 1. It is an investment of money 2. There is an expectation of profits from the investment 3. The investment of money is in a common enterprise 4. Any profit comes from the efforts of a promoter or third party

------------

Using the "Howey Test" on Bitcoin you find that Bitcoin and almost all other cryptocurrencies should be considered securities.

  1. It is an investment of money
yes, electricity and hardware are equivalent to money

  2. There is an expectation of profits from the investment
yes

  3. The investment of money is in a common enterprise
yes

  4. Any profit comes from the efforts of a promoter or third party.
yes, from Satoshi the original promoter and all subsequent miners.

Re: Statement on Cryptocurrencies and Initial Coin Offerings

#128

Post by eudoxus »

ianamartin wrote: post #125
bufferoverflow wrote: post #88

Earlier quoted context omitted.

How many ICOs "advertise as being sure to appreciate"? I've looked at like 40 different ones, bought into none, but none of them promised any return on investment. That's some straw man argument.

All of them. The more coins have been mined, the fewer are left to mine and the harder they are to mine. It's guaranteed scarcity. By design. All you have to add to that formula is the idea that there's a demand. And that's what every ICO is: hype about demand for a decreasingly available thing. Once you have been sold that there's a demand, the appreciation is guaranteed by definition of what it is.

Seeing as most ICO are ERC20 tokens on the Ethereum chain you are most certainly incorrect about your deflationary theory implying appreciation. Since most ERC20 tokens are 100% premined and sold during the ICO, there is no concept of "mining" with those ICOs (except maybe Minereum :p ).

Please avoid making generalized statements, especially ones that are flat out wrong.

Re: Statement on Cryptocurrencies and Initial Coin Offerings

#129

Post by dkersten »

eudoxus wrote: post #128
ianamartin wrote: post #125

Earlier quoted context omitted.

All of them. The more coins have been mined, the fewer are left to mine and the harder they are to mine. It's guaranteed scarcity. By design. All you have to add to that formula is the idea that there's a demand. And that's what every ICO is: hype about demand for a decreasingly available thing. Once you have been sold that there's a demand, the appreciation is guaranteed by definition of what it is.

Seeing as most ICO are ERC20 tokens on the Ethereum chain you are most certainly incorrect about your deflationary theory implying appreciation. Since most ERC20 tokens are 100% premined and sold during the ICO, there is no concept of "mining" with those ICOs (except maybe Minereum :p ). Please avoid making generalized statements, especially ones that are flat out wrong.

If they’re “pre-mined” then surely there is already a preset limited amount of tokens?

Re: Statement on Cryptocurrencies and Initial Coin Offerings

#130

Post by elmar »

Kadin wrote: post #93
zemo wrote: post #80

Earlier quoted context omitted.

> almost all ICOs so far are illegal. a lot of them are offering to sell you an asset that they advertise as being sure to appreciate, with the subtext that you will sell the asset at a later point for a gain. Selling something purely to be a store of value and appreciation is basically the textbook definition of a security, isn't it?

This is the (literal) textbook definition of a security: any note, stock, treasury stock, security future, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undi…

Using the "Howey Test" even CryptoKitties should be regulated by the SEC!
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