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SEC Charges Kik With Conducting $100M Unregistered ICO

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Re: SEC Charges Kik With Conducting $100M Unregistered ICO

#301

Post by dagw »

nyx_ wrote: post #2

"The complaint further alleges that Kik marketed the Kin tokens as an investment opportunity. Kik allegedly told investors that rising demand would drive up the value of Kin, and that Kik would undertake crucial work to spur that demand, including by incorporating the tokens into its messaging app, creating a new Kin transaction service, and building a system to reward other companies that adopt Kin. At the time Kik…

Who even bought this stuff?

A lot of 'investors' are firm believers in the Great Fool theory of investment. Basically they are completely aware that it is a scam, they're just banking on the fact that they can get in, take some profit, and get out before the rest of the world catches on that it is a scam.

Re: SEC Charges Kik With Conducting $100M Unregistered ICO

#302

Post by mamon »

harryh wrote: post #84
djsumdog wrote: post #68

Earlier quoted context omitted.

> Who even bought this stuff? A buddy of mine from my home town called me up and needed a developer to work on his "crypto-currency hedge fund." This guy has always been a bit dodgy on looking for the least amount of resistance to the most money. I tried tell tell him all the reasons it was a bad idea. He claims he had done all the research (guy is not a programmer, couldn't pass Anatomy I the two times he took it in…

It's important to note that while this person seems, you know, not very smart, the laws against unlicensed securities exist precisely to protect this kind of person from getting themselves in trouble. I'm no lawyer, but it certainly seems like Kik worked to circumvent these laws in order to raise a bunch of money to keep their business alive. I look forward to seeing where the SEC investigation/trial goes.

>> It's important to note that while this person seems, you know, not very smart, the laws against unlicensed securities exist precisely to protect this kind of person from getting themselves in trouble.

Which is counterproductive, really. Natural selection is the only effective cure for stupidity known to the mankind. Stupid people should be allowed to make stupid mistakes and suffer all the consequences.

Re: SEC Charges Kik With Conducting $100M Unregistered ICO

#303

Post by neokantian »

propter_hoc wrote: post #203
buzzert wrote: post #191

Earlier quoted context omitted.

Why Canada?

Per the complaint, Kik (a Canadian company) asked the Ontario Securities Commission whether the tokens would be considered a securities offering under Canadian law, and the OSC told them yes, so, Kik banned Canadian investors from participating in the ICO. However, Kik decided not to ask the SEC or any other foreign securities regulator their opinion, and just went ahead with the issuance in every other jurisdiction-…

As international users, we have a vested interest in reining in the proclivity of American government departments to engage in extraterritorial expansion. We should wish to see them lose or be made to lose.

Re: SEC Charges Kik With Conducting $100M Unregistered ICO

#304

Post by m-i-l »

lkrubner wrote: post #271
CryptoPunk wrote: post #244

Earlier quoted context omitted.

Do you have any evidence for that? There are other ways of addressing fraud besides violating people's right to freely contract with other consenting adults, like punishing those who commit fraud to deter others from committing the crime, and public education campaigns. The idea that the government has a right to deem a certain class of investors as "unsophisticated", and thus better off deprived of the right to deci…

About this: “The poorest households in the US spend 9% of their income on lottery tickets, showing that you can't legislate people out of misusing their funds.” You’ve explained why it’s urgent that we outlaw lottery tickets. For most of USA history Protestant and Catholic leaders were unified in their opposition to all forms of gambling, and so lottery tickets were unthinkable for most of USA history. And every prog…

> ICOs are like lottery tickets

Actually in most countries lotteries are pretty heavily regulated to ensure that they are indeed redistributing a share of ticket sales as winnings and are also fairly selecting winners. ICOs are like unregulated lotteries that might intend to keep the proceeds from all "investments" to themselves and/or unfairly distribute to insiders like the "influencers". Opportunity makes a thief.

Re: SEC Charges Kik With Conducting $100M Unregistered ICO

#305

Post by neokantian »

VikingCoder wrote: post #213
brianhama wrote: post #212

This filing makes it appear that Kik was attempting to scam investors. That is simply not true though. Take a look at the Kin Foundation’s github repos. This is one of the most active crypto projects there is. My company implemented Kin into our app with over 10 million users. 40 other apps have also implemented it. There are over 400,000 users spending Kin within our apps each month. Kik might have broken securities…

Is the technology a scam? You say no. Is the ICO a scam? Yes, it wasn't legal. "This filing makes it appear that Kik was attempting to scam investors." Yes. They were. They pretended their ICO wasn't going to break securities law.

> Yes, it wasn't legal.

Legal or illegal according to the laws in what jurisdiction? As international users, we obviously benefit from decisively reining in any American attempt at extraterritorial expansion. That is why, for example, we support the interdiction of American warships in the Black Sea (Russia) and the South Chinese Sea (China). I am waiting for the good news that either of these countries has finally sunk one of these vessels. That will be party time!

Re: SEC Charges Kik With Conducting $100M Unregistered ICO

#306

Post by xwolfi »

CryptoPunk wrote: post #292
wavefunction wrote: post #286

Earlier quoted context omitted.

People derive enjoyment from lotteries and scratch tickets. I agree that some people exhibit problematic behavior by spending some of their limited funds on these items but that is their right. I'd rather these entertainment sources be captured by the state for the good of all its people than administered privately or clandestinely.

It would be better for them to derive their enjoyment from participating in an actual investment market. They'll learn something useful instead just refining their superstitious rituals. Imagine if anyone could buy $5 worth of stock for the product they're buying at 7-11. Over-time these small purchases would let them amass a sizeable base of assets, and all the while they'd have a stake in parts of the real economy,…

But you do realize that without the lotto, they'll go to underground poker games, underground lotto games, or drink booze.

The gvt lotto was not created before people played lottery, it was invented because people want to play chance games anyway and that's a great way to build roads at the same time.

Re: SEC Charges Kik With Conducting $100M Unregistered ICO

#307

Post by xwolfi »

mamon wrote: post #302
harryh wrote: post #84

Earlier quoted context omitted.

It's important to note that while this person seems, you know, not very smart, the laws against unlicensed securities exist precisely to protect this kind of person from getting themselves in trouble. I'm no lawyer, but it certainly seems like Kik worked to circumvent these laws in order to raise a bunch of money to keep their business alive. I look forward to seeing where the SEC investigation/trial goes.

>> It's important to note that while this person seems, you know, not very smart, the laws against unlicensed securities exist precisely to protect this kind of person from getting themselves in trouble. Which is counterproductive, really. Natural selection is the only effective cure for stupidity known to the mankind. Stupid people should be allowed to make stupid mistakes and suffer all the consequences.

When the poor get poorer because of their stupidity, they don't die. They regroup, kill the rich, and take the money.

Re: SEC Charges Kik With Conducting $100M Unregistered ICO

#308

Post by xwolfi »

nostrademons wrote: post #296
otw wrote: post #240

Earlier quoted context omitted.

Can you sketch what you mean by there being a good chance some type of cryptocurrency will replace the financial system of today? Is the idea something along the lines of the double forces of greed and fear causing the perfect bubble? The one that doesn't pop because it eats its own downside on the way? Why won't governments just shut down the on-ramp exchanges if the space ever looks like more than a way to gamble o…

Over the long-term (40-50 years) I would only call it a bubble in the sense that humanity's a bubble: yes, it may pop, but a bubble that lasts > a lifespan simply becomes reality. Over the short term (4-5 years), I think we're going to see some very bubblicious behavior and many people are going to lose their shirt, but that averages out. My reasoning is this: Fundamentally, the financial industry is about time, risk…

But there's a difference between a public ICO and a public IPO: the ICO doesn't require transparency of the account, doesn't give legal ownership of the company's capital shares, and doesn't give a formal right of voting on classical issues, like electing a board member.

The ICO is a way to raise money out of chumps without giving anything in exchange, but it's not more efficient, faster or better in any way than an IPO. It's just shadier.

Re: SEC Charges Kik With Conducting $100M Unregistered ICO

#309

Post by icebraining »

CryptoPunk wrote: post #292
wavefunction wrote: post #286

Earlier quoted context omitted.

People derive enjoyment from lotteries and scratch tickets. I agree that some people exhibit problematic behavior by spending some of their limited funds on these items but that is their right. I'd rather these entertainment sources be captured by the state for the good of all its people than administered privately or clandestinely.

It would be better for them to derive their enjoyment from participating in an actual investment market. They'll learn something useful instead just refining their superstitious rituals. Imagine if anyone could buy $5 worth of stock for the product they're buying at 7-11. Over-time these small purchases would let them amass a sizeable base of assets, and all the while they'd have a stake in parts of the real economy,…

> Imagine if anyone could buy $5 worth of stock for the product they're buying at 7-11.

Yeah, and in ten years they might get $14, which will just give some extra profit to their creditors when they file for bankruptcy for unpaid medical bills, or be captured in a civil forfeiture. And if somehow they managed to keep it and actually save a couple grand, that just means they'll become ineligible for SNAP and lose much more in benefits.

People play the lottery because it represents something more than slaving yourself to make scraps. They are not stupid, and know the system is design to keep you poor, and that hoping to escape by amassing a few bucks is almost as delusional as expecting to win the lottery.

Re: SEC Charges Kik With Conducting $100M Unregistered ICO

#310

Post by CryptoPunk »

xwolfi wrote: post #306
CryptoPunk wrote: post #292

Earlier quoted context omitted.

It would be better for them to derive their enjoyment from participating in an actual investment market. They'll learn something useful instead just refining their superstitious rituals. Imagine if anyone could buy $5 worth of stock for the product they're buying at 7-11. Over-time these small purchases would let them amass a sizeable base of assets, and all the while they'd have a stake in parts of the real economy,…

But you do realize that without the lotto, they'll go to underground poker games, underground lotto games, or drink booze. The gvt lotto was not created before people played lottery, it was invented because people want to play chance games anyway and that's a great way to build roads at the same time.

Would they? If security issuance wasn't centralized through prohibitions on unregistered offerings, you don't think there would be a vibrant market for micro-cap companies, with extensive retail marketing in places like convenient stores, and with enough upside potential to take market share away from games of pure chance?

I think the real market could be potentially more exciting than lottos, if regulations didn't prevent securities from being marketed the way lottos are. In a way, the token sale frenzy demonstrated that.

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