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Statement on Cryptocurrencies and Initial Coin Offerings

sec.gov

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Re: Statement on Cryptocurrencies and Initial Coin Offerings

#131

Post by londons_explore »

eximius wrote: post #81
phaed wrote: post #79

Earlier quoted context omitted.

> Basically, almost all ICOs so far are illegal. They are only illegal in the US if they allow US citizens to participate, and the majority ban US citizens. So I think you have it backward.

Legally speaking, are they on the hook if they merely say that and don't take preventative measures against US citizens? It could come back to haunt them if they ever want to expand to the US down the road and didn't take precautions.

A simple dropdown saying "citizenship" and then turning red with an error message saying "United States is not allowed. Did you mean United Kingdom instead?" will encourage most people to put something else.

Then the company can fairly legitimately say "The customer lied to us about their citizenship. We took all reasonable measures to determine their citizenship, because there isn't a freely available database of which people have which citizenships"

Re: Statement on Cryptocurrencies and Initial Coin Offerings

#132

Post by Frogolocalypse »

elmar wrote: post #127
Kadin wrote: post #93

Earlier quoted context omitted.

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 equ…

You fail on number one I'm afraid, and go down from there. 1. By that rationale, buying baseball cards is buying a security. Maybe if you were the ISSUER of the cards, you'd have a point. But even then, it's tenuous. Maybe if they were selling pre-release cards? 2. So baseball card buyers are buying securities? 3. Where is this supposed bitcoin enterprise? 4. Where can I buy these coins from satoshi?

Re: Statement on Cryptocurrencies and Initial Coin Offerings

#133

Post by fidrelity »

dkersten wrote: post #129
eudoxus wrote: post #128

Earlier quoted context omitted.

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?

wouldn't that apply to every trading card and collectible item then?

Re: Statement on Cryptocurrencies and Initial Coin Offerings

#134

Post by xorcist »

dkersten wrote: post #129
eudoxus wrote: post #128

Earlier quoted context omitted.

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?

There are, but many of the ICOs are controlled by a company that reserve the right to change the contract at any time.

Re: Statement on Cryptocurrencies and Initial Coin Offerings

#135

Post by xorcist »

ojr wrote: post #29
wbl wrote: post #23

Earlier quoted context omitted.

If you buy bitcoin you aren't buying it from the author of the bitcoin client to fund further development. I'm going to say not a security transaction.

the founder of bitcoin gave himself/herself a mining headstart with low difficulty, this can be seen as a founder reward

Not only is that not true. The founder of Bitcoin even took the additional steps of proving in the genesis block that he did not give him/herself a headstart. In fact, even that block containing the proof itself was made inspendable on purpose.

Re: Statement on Cryptocurrencies and Initial Coin Offerings

#136

Post by ryanSrich »

Kadin wrote: post #99
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…

> 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 I'm not sure this argument is as strong as you seem to think it is.

Considering Ethereum's market cap is currently 1/2 of a trillion dollars, I'd say it's a pretty strong argument...

Re: Statement on Cryptocurrencies and Initial Coin Offerings

#137

Post by luka-birsa »

Frogolocalypse wrote: post #118
Kadin wrote: post #95

Earlier quoted context omitted.

This is basically correct. If the thing you're buying gives you a claim on the future profits of an organization, it is probably a security under US law. If the thing you are buying has only its intrinsic value, then it is a commodity. An example would be a baseball card (intrinsic value only) vs. a card that entitled you to some fraction of that baseball player's future income over the course of their career. The la…

> a card that entitled you to some fraction of that baseball player's future income I think i have an idea for a new ico.... Call it : sportico!

We're at a stage where if you have an idea for an ICO, it's probably already funded. This is a great example - SportICO already exists and it's called SportyFI - https://icomagazine.com/sportyfi/. Raised 5M USD during the ICO.

Re: Statement on Cryptocurrencies and Initial Coin Offerings

#138

Post by Frogolocalypse »

luka-birsa wrote: post #137
Frogolocalypse wrote: post #118

Earlier quoted context omitted.

> a card that entitled you to some fraction of that baseball player's future income I think i have an idea for a new ico.... Call it : sportico!

We're at a stage where if you have an idea for an ICO, it's probably already funded. This is a great example - SportICO already exists and it's called SportyFI - https://icomagazine.com/sportyfi/ . Raised 5M USD during the ICO.

And here i thought i was being clever...

Re: Statement on Cryptocurrencies and Initial Coin Offerings

#139

Post by ojr »

xorcist wrote: post #135
ojr wrote: post #29

Earlier quoted context omitted.

the founder of bitcoin gave himself/herself a mining headstart with low difficulty, this can be seen as a founder reward

Not only is that not true. The founder of Bitcoin even took the additional steps of proving in the genesis block that he did not give him/herself a headstart. In fact, even that block containing the proof itself was made inspendable on purpose.

did they make the first million bitcoins they mined unable to spend? No founder reward means no mining so it is very true, there was an advantage, the crytokitties creators are not allowed to breed kitties, but take a cut from every sale which is more fair
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