Earlier quoted context omitted.
Where do we draw the limit at limiting adults for their own good?
Initiation of force or fraud.
How does the above scenario of limiting who can invest fall under these?
Initial Coin Offerings Horrify a Former S.E.C. Regulator
151–160 of 194 posts
Re: Initial Coin Offerings Horrify a Former S.E.C. Regulator
#152Earlier quoted context omitted.
+1000 This is right on the mark. Remove accredited investor requirements, and all that money will go to better options, like for example, YC startups. Nothing could do more damage to the investor monopolies of the world than opening this funding venue.
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.
> Accredited investors requirement is what allows one not to be a subject to Blue Sky laws.
You think its a fair trade to lock 95% of Americans out of the investment market in order to protect the elderly?
New law: accredited investing means passing a 1 week course to obtain an investment license, which must be renewed bianually.
Now we can keep Grandma Suzy safe (because she hasn't passed the class) without locking 95% of Americans out of the investment market.
Re: Initial Coin Offerings Horrify a Former S.E.C. Regulator
#153Earlier quoted context omitted.
Yes! This is a great example of how costly regulation actually is. I am horrified at the SEC, not at ICO's. Figure how all that moeny could be going, for example, to YC startups, for a fraction of what they give investors.
The SEC came into being because without it a bunch of people were being scammed. Which is exactly what we're seeing with ICOs. I don't see what's horrifying.
So it used to be "only white, male landowners are responsible enough to invest" and now its "only the very richest Americans are responsible enough to invest".
The SEC is blatantly discriminating. Why can't I sign a piece of paper and accept responsibility for myself? I'm a grown man with 200k+ in assets, I don't need the government to protect me.
Re: Initial Coin Offerings Horrify a Former S.E.C. Regulator
#154Earlier quoted context omitted.
> Co-ops disintegrate when the people involved can't agree on the way to spend the money. That's because currently most co-ops are either run by hippies, or else exist only as tax dodges. But there's no reason they can't be run as dictatorships, the only real requirement is that the majority of the wealth generated gets captured by the people creating it. As the tools for running co-ops get better, we'll see more exa…
> That's because currently most co-ops are either run by hippies, or else exist only as tax dodges. Maybe in the U.S., but there is between 1 and 2 billion people working in coops. You just don't know about it since corps don't want people to know there is another, probably better way, to run a business.
> there is between 1 and 2 billion people working in coops
Owner co-ops or worker co-ops? E.g. there are over a hundred million Americans who are members of co-ops, and millions of Americans who work for co-ops. But the number of Americans who actually work for worker co-ops (as opposed to owner co-ops like REI or Ace Hardware) is only a few thousand.
Re: Initial Coin Offerings Horrify a Former S.E.C. Regulator
#155Earlier quoted context omitted.
Why dont we regulate everything like that. Why do we allow people to spend 2M$ on a Car or 6k$ on a bag? Why do we allow people to buy unlimited lottery tickets or gamble everything away in the casino? Those examples have cleary less benefit for society then the dumbest investment strategy. Let people invest, sure tons if people will lose their shirt but they will learn from it and stay away. Everyone else in the soc…
> Those examples have cleary less benefit for society then the dumbest investment strategy They also carry less risk. Few people who "lose their shirt" say "oh well, I didn't do my diligence." Instead, they blame the system. Their anger becomes political capital. Moreover, inept investment combined with leverage can decimate an economy in a way frivolous personal spending does not. If you want to learn about why thes…
>> Why dont we regulate everything like that. Why do we allow people to buy unlimited lottery tickets or gamble everything away in the casino?
> They also carry less risk. Few people who "lose their shirt" say "oh well, I didn't do my diligence."
No they don't. Plenty of people lose their entire life savings in casinos, and plenty of poor people spend money on lottery tickets when they should be spending money on food.
You have not sufficiently explained how gambling is less risky than investing.
Re: Initial Coin Offerings Horrify a Former S.E.C. Regulator
#156Earlier quoted context omitted.
Why dont we regulate everything like that. Why do we allow people to spend 2M$ on a Car or 6k$ on a bag? Why do we allow people to buy unlimited lottery tickets or gamble everything away in the casino? Those examples have cleary less benefit for society then the dumbest investment strategy. Let people invest, sure tons if people will lose their shirt but they will learn from it and stay away. Everyone else in the soc…
The problem is not people spending money on "worthless/ frivolous" things. Investor protection are about Fraud protection. NOT, because it is good or bad to spend money on something. If you spend 2 Million dollars on a car, you are getting exactly what you were sold. If you buy a lottery ticket, you are getting exactly the odds that were promised to you. But investments are a different story. Someone is trying to pro…
> If you buy a lottery ticket, you are getting exactly the odds that were promised to you.
Casinos and the state lotteries do everything they can to convince people they will make profit. Do you think a regular Joe can calculate the expected value of a scratch card? Sure, he knows he has a 1/1,000,000 chance of winning the jackpot and a 1/25 chance of winning $20. He is being misled.
Therefore, since gambling companies are legally allowed to mislead regular people, then there is no reason to protect them from investing and maybe actually making a profit.
Re: Initial Coin Offerings Horrify a Former S.E.C. Regulator
#157Lot's of things horrify me.
Re: Initial Coin Offerings Horrify a Former S.E.C. Regulator
#158Earlier quoted context omitted.
> That's because currently most co-ops are either run by hippies, or else exist only as tax dodges. Maybe in the U.S., but there is between 1 and 2 billion people working in coops. You just don't know about it since corps don't want people to know there is another, probably better way, to run a business.
> there is between 1 and 2 billion people working in coops Owner co-ops or worker co-ops? E.g. there are over a hundred million Americans who are members of co-ops, and millions of Americans who work for co-ops. But the number of Americans who actually work for worker co-ops (as opposed to owner co-ops like REI or Ace Hardware) is only a few thousand.
I thought all worker co-ops are owner co-ops? I see "membership" used in all of the numbers I find, so I guess workers counts are much smaller -- but there are tons of them in S.E. Asia.
Re: Initial Coin Offerings Horrify a Former S.E.C. Regulator
#159Founder of the first ICO platform here (April '14, SWARM) and early contributor to the Ethereum project.
I half-left the industry for a few reasons:
(1) Current crypto-markets highly favor "smoke and mirror" hype-driven approach to product as opposed to a user and product centric approach.
(2) Most "businesses" in the space are basically about skimming money off the top of a frothy market and effectively encouraging the scammy parts of the system. I suppose I could be making a lot of money this way right now but would highly violate my personal ethics to do so.
(3) It is exceedingly difficult to tie any sort of standard value to a blockchain-issued token, partially because of the complex regulatory framework around such offerings
(4) The libertarian bias of the industry effectively forces a massive head on collision between the incumbents (e.g. the SEC) and folks trying to circumvent their control, also effectively guaranteeing some version of "blood on the streets."
That said, as someone who founded the first platform dedicated to these topics I obviously think there are a lot of positive elements that are possible. Including:
(1) Streamlining and adding efficiency to capital markets by removing middlemen
(2) Funding novel highly sophisticated technological projects that would be difficult to get funding for in the VC world (Ethereum, DASH)
(3) Creating broader incentivization than exists in traditional funding models such that users of a product are directly incentivized by its success
(4) Allowing for novel forms of governance and organizations that are not bound by the legal system of any specific legal jurisdiction (e.g. DAOs)
All of these ultimately have high value. However, I think what we are likely to see is a major phase of consolidation after the current hype cycle wears off (much as what happened with "the DAO").
The reality is that ICOs are mostly scammy and useless projects at the moment with a few shining examples.
DISCLOSURE: I don't mean to critique any particular political philosophy in this post. If I have criticism it is more directed to tactics and strategy.
Re: Initial Coin Offerings Horrify a Former S.E.C. Regulator
#160Earlier quoted context omitted.
If you are an investor, accreditation rules eliminate 95+% of the population as competition for your investment. That means you will get higher returns and better negotiation terms. Even founders cant invest in their own bethren! Think about that. YC startup founders could get together, talk to each other, and NOT be able to invest in each other. Neither could employees that have access to internal financials. You co…
Yes, that all sounds fine. Protect average people, not startups trying to get rich. Yes. Yes. Yes. Life does not revolve around startups. Yes. Also, the people applying for home loans weren't compulsive gamblers. The banks literally told them they were qualified.
You are protecting investors from competition. Harming startups, harming founders, employees and consumers.