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China's Central Bank Bans ICOs

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Re: China's Central Bank Bans ICOs

#181

Post by negamax »

tudorconstantin wrote: post #129

I assume most of the HN readers are from USA and I can't believe my eyes what I'm reading here. People cheering a government's ban on what its citizens can do with their lawfully earned money. I worked for my money, I paid huge amounts of taxes on them. Why is it ok for somebody to come and tell me what I can and can't do with them, and then telling me it's in my best interest to not be allowed to invest them.

This is much welcome ruling and US should follow suit. Current modus operandi is of pump and dump to lure unsuspecting people. Some ICOs are borderline scams. Using Facebook ads to promise the riches. It's almost disgusting

Re: China's Central Bank Bans ICOs

#182

Post by heymijo »

tudorconstantin wrote: post #129

I assume most of the HN readers are from USA and I can't believe my eyes what I'm reading here. People cheering a government's ban on what its citizens can do with their lawfully earned money. I worked for my money, I paid huge amounts of taxes on them. Why is it ok for somebody to come and tell me what I can and can't do with them, and then telling me it's in my best interest to not be allowed to invest them.

What I'm seeing is the classic regulation vs. non debate.

What's missing is recognition of the historical precedent of regulating what people can/cannot do with their money in the USA and China's proposed plans to follow suit.

Before the JOBS Act, for 70+ years the American Securities and Exchange Commission was very specific about what non-accredited investors could do with their money. [0]

While China does not have an "accredited investor" status, its version of the SEC put forth a proposal in 2014 that would create accredited investor regulations almost exactly in line with the American SEC's regulations. [1]

Intent may be worth looking at here.

China sites terrorist financing and money laundering as problems with ICO's. I don't know the veracity of that concern, but I do know that citing terrorism, child pornography, prostitution/human trafficking, etc. are nearly impossible to argue against and thus can be used as a means to pass regulations/legislation that is rife for abuse (see the USA Patriot Act).

On the other hand, China banned exchanges allowing people to buy bitcoin in Yuan back in 2013, but today support for buying bitcoin has returned (from the article).

It seems both China and America (via the SEC) are trying to figure out what to do with ICOs. Regulation seems inevitable, but each country has thus far taken a different tact.

Does any of this make regulating/banning ICOs right or wrong? I don't know, but that seems like a different debate.

[0] https://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=8edfd12967...

[1] https://www.crowdfundinsider.com/2015/10/75384-crowdfunding-... (See "Challenges: Policy and Regulatory Challenges) section)

Re: China's Central Bank Bans ICOs

#183

Post by samsonradu »

rothbardrand wrote: post #154
samsonradu wrote: post #145

Earlier quoted context omitted.

Because when the whole system collapses due to gigantic bubbles explodind (caused by the lesser financially educated masses) the government will likely use your tax money to keeps thing afloat and you won't like that either. Your money only has value in an economically stable context.

First off, bubbles are a side effect of the money cycle which is created by central banking -- both the Dotcom and 2008 bubbles were created by the Fed selling money below cost, building a massive carry trade in, for instance, houses. Secondly, if there is a crash, the best thing to do is nothing. Let the people who invested poorly get wiped out-- it's better for the economy. (There are examples of this too- crashes…

> First off, bubbles are a side effect of the money cycle which is created by central banking -- both the Dotcom and 2008 bubbles were created by the Fed selling money below cost, building a massive carry trade in, for instance, houses.

I agree, though I think at the root it's created by people investing irrationally and the wisdom of crowds that comes with it. Part of that can be mitigated by good regulation.

> Secondly, if there is a crash, the best thing to do is nothing. Let the people who invested poorly get wiped out-- it's better for the economy.

This is quite a harsh and risky thing to say. It is the fair solution, however sentiment and trust plays a big role in economics. If big(ger) banks had failed back then it would have been much worse for everyone.

> Bailouts are part of the game-- thats how they scam us. Bailouts don't protect us (that's the con.)

I think the scam actually happens through the years prior to the bailout, when institutions close their eyes to the bubbling up of the economy. Once the crash moment is reached there is not much left to do.

Thanks for the book reference, I have a very long flight tomorrow and I was actually looking for some books!

Re: China's Central Bank Bans ICOs

#185

Post by Nursie »

CryptoPunk wrote: post #177
Nursie wrote: post #172

Earlier quoted context omitted.

Ah, so protecting people from scams is now banning people from their own decisions? I suppose we should drop all laws about fraud really, why should we ban people from freely transacting with "microsoft" support services who just want to help them with their computer?

But banning them from participating in an entire class of financial transactions is not just protecting them from scams. There are token sales that are not scams. It's prohibiting them from entering into legitimate investments that simply don't have government approval (e.g. a securities sale that doesn't ask them for their ID, and thus doesn't meet securities regulations).

At this point there are enough scams to make people cheer for the ban. Perhaps a better answer would be regulation in a similar way to more traditional IPOs.

>> an securities sale that doesn't ask them for their ID, and thus doesn't meet securities regulations

Perhaps it's just not a good idea to have such a thing? Or perhaps the seller side of the equation, where you can't run an ICO without being registered and regulated, is needed.

I know, this circumscribes some of the allure of the whole area - that it's free of regulation, that it democratises finance etc etc. But like other avenues in life, perhaps we are being shown why the regulations exists in meatspace in the first place.

BTW I'm not trying to argue that all regulations and government actions are correct and useful, I'm very sympathetic to the idea that we are over-governed and over-regulated, in lots of ways. But perhaps not here.

Re: China's Central Bank Bans ICOs

#186

Post by igorgue »

unkown-unknowns wrote: post #66
Tepix wrote: post #62

Is this truly a ban on all ICOs, i.e. the technology? Is there a decent translation of the report at http://www.pbc.gov.cn/goutongjiaoliu/113456/113469/3374222/ ? I don't see why projects such as "useless etherum token" https://uetoken.com/ should be banned. You may want to ban trading the token to prevent money laundering but that would apply to all crypto coins.

> https://uetoken.com/ Did they actually do an "ICO" or was it showing as "finished" from the get-go? Let's find out! 30 seconds later. https://web.archive.org/web/20170627123240/https://uetoken.c... https://etherchain.org/account/0xbe5c1c298d0088886146a906cdf... So they did but apparently nobody sent them any money, unless they also used some other addresses. Another 60 seconds after that. Actually they have a link…

https://coinmarketcap.com/assets/useless-ethereum-token/

250USD as in yesterday.

Re: China's Central Bank Bans ICOs

#187

Post by omarchowdhury »

Nursie wrote: post #158
aleclarsoniv wrote: post #149

Earlier quoted context omitted.

I'm not sure this argument holds much weight. All investments have inherent risk. It's the job of the investors to assume how much risk they're taking. You cannot ban all digital currencies simply because a large amount of ICOs are poorly thought through, if not malicious. That would block a huge amount of innovation in a technology with huge potential to revolutionize many markets, if not all markets. It's the equiv…

In this subthread I am arguing that someone who can create an altcoin or ICO from their home in a weekend is not necessarily a financial genius who should be paid millions, as it's fairly easy to do. In other subthreads I am saying why I think the ban on ICOs might be welcomed, even if it could take the good down with the bad. I'm not arguing in any thread for an outright ban on digital currencies.

You only argued a portion of the point I was making. Simply making a cryptocurrency isn't enough. Differentiating in a way where I would be convinced to buy it, now that will obviously take genius since the mere creation of a cryptocurrency is commodity code. And it's not fair to say that just launching an ICO will mean an influx of money either, that is, token buyers are just shoving money into anything, because I can show you failed ICOs as well.

Re: China's Central Bank Bans ICOs

#188

Post by CryptoPunk »

askmike wrote: post #156
CryptoPunk wrote: post #119

Earlier quoted context omitted.

You can't make a blanket characterisation of token sales like that. They're not categorically scams.

Which is a lot people in this thread want regulation as opposed to a flat out ban.

We have a regulation against fraud already. New proposed regulations are about banning unvetted token sales, to preempt possible scams, which is limiting people's contracting rights when there is no evidence of a crime - only a possibility of a scam based on a generalisation.

Re: China's Central Bank Bans ICOs

#189

Post by rothbardrand »

richardknop wrote: post #104
omarchowdhury wrote: post #73

Earlier quoted context omitted.

If someone has the knowledge to create a cryptocurrency in a weekend, in a garage, and have the foresight to operate from a friendly jurisdiction, and convinces people to buy it; then please let me know who that person is so I can invest in them. I'd love to get them out of a garage and into an office to see what they can really do.

I can create a new cryptocurrency over a weekend. It's not really that hard and most of these ICOs are just copycats with few parameter changes. Projects which actually develop something new are very few so kudos to them. Majority are just quick copies of existing code and rebranding.

No. 2013 was a lot of clones of bitcoin with a few parameters changed. Nowadays ICOs I'm seeing involve a lot of very hard work.

The risk is that the teams may way under-estimate how much work it is (And I think that's what's going to cause them to fail)

but they are a lot more ambitious than you are characterizing.

Re: China's Central Bank Bans ICOs

#190

Post by GotAnyMegadeth »

lettergram wrote: post #155
CryptoPunk wrote: post #144

Earlier quoted context omitted.

You're intelligent and thus should be free. But the law can't create multiple classes of people with different sets of rights, so to protect the stupid, who can't handle that amount of freedom, your rights need to be limited as well. ^ I assume this is how supporters of such laws think about the issue.

Ugh what? If you're not directly hurting someone there shouldn't be a law against it. For instance, a law against DUIs make sense, it's so you don't kill people. A law requiring seat belt wearing - not so much.

Unless you have state run health care, in which case a law enforcing seat belt wearing (I assume that's what you meant?) could save everyone money.
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