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Initial Coin Offerings Horrify a Former S.E.C. Regulator

nytimes.com

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Re: Initial Coin Offerings Horrify a Former S.E.C. Regulator

#61

Post by mrwong »

wpietri wrote: post #42
mrwong wrote: post #14

There will be enough marketplaces in the world that will provide a solid legal structure for ICOs. The US certainly wont be a part if them. Switzerland, Singapore and Japan already moved ahead with the legal structure. The world is global, money is global.

Not as much as you'd think. The US stock market is 39% of all publicly traded stocks. The US market is bigger than the next 8 countries put together. [1] This is in part due to the US's stringent regulations on stock market listings and accounting for publicly held firms. The more transparent and effective the market, the safer it is for investors to put their money in. [1] https://www.indexmundi.com/facts/indicators…

You assume there would be no capital flight if there would be a superior finance place in the world?

Re: Initial Coin Offerings Horrify a Former S.E.C. Regulator

#62

Post by empath75 »

rjknight wrote: post #48
stale2002 wrote: post #37

Earlier quoted context omitted.

File coin requires you to be an accredited investor. Grandmas and Joe smoes are not being scammed. You can only lose money from file coin if you are in the top 1% already, and therefore probably don't need the government to protect you.

If only accredited investors can buy FileCoin then only accredited investors can access the storage market. This does not seem feasible! And, indeed, it isn’t. FileCoin has only done a pre-sale so far, selling securities (SAFTs) to accredited investors. They haven’t explained (afaik) how the tokens will be issued and make their way into the hands of the public. That’s why I was curious to see Grundfest citing them.

Once there is an active storage market, it’s no longer a security, you’re paying for a service.

Re: Initial Coin Offerings Horrify a Former S.E.C. Regulator

#63

Post by ltr_ »

Let the people decide if they want to get ripped off or not, you cant regulate this, and you cant do nothing about people asking for crypto currencies in the internet. This is the old wild west and you cant do nothing about it. If the people buying tokens are not smart enough to see that ICOs are a scam 99% of the time, that is their own problem. This is wallstreet trying to stick their nose where they cant rip off people under their "law".

Re: Initial Coin Offerings Horrify a Former S.E.C. Regulator

#64

Post by dcole2929 »

mrwong wrote: post #30
gxs wrote: post #11

What's old is new again - this is why the SEC was created if I'm not mistaken. People were losing their shirts investing in shady companies so the government stepped in to protect people from themselves. For this reason it won't be surprising at all when we start seeing some attempts to enact regulation.

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…

Because those things are not in and of themselves scams. Is it a bad idea to buy a $2M car or a 6k hand bag? Probably but at the end of the day you still get something out of it, an overpriced car or bag. The very nature of some of these ICO's is that you are getting literally someones word that something with no intrinsic or useful value will be worth something in the future. That's fine if you actually understand the risk, and are prepared for that but because these ICOs are open to anyone with a BTC you can't really make that assumption of those investors the same way you can with an accredited investor. This would all be fine and dandy but because of the sheer amount of money involved in this it can theoretically have destabilizing effects on other money markets. Not to mention the huge potential for money laundering, ponzi schemes and other financial chicanery

Re: Initial Coin Offerings Horrify a Former S.E.C. Regulator

#65

Post by emodendroket »

narrator wrote: post #18

The funny thing about ICOs is that anyone in the world can invest anonymously AND GET PAID BACK anonymously even if they have no money, don't have a bank account, are a fugitive, in Iran or North Korea, are in prison, have unpaid child support obligations, have large unpaid IRS tax liabilities, or government fines and penalties or are using stolen funds. All the little knobs and levers that governments use to financi…

> This is probably why they are so popular even though the risks are ludicrous.

I'm thinking a lot of investors don't care about this and just have dollar signs in their eyes.

Re: Initial Coin Offerings Horrify a Former S.E.C. Regulator

#66

Post by nostrademons »

Alex3917 wrote: post #55
nostrademons wrote: post #46

Earlier quoted context omitted.

Co-ops disintegrate when the people involved can't agree on the way to spend the money. Fights break out, trust declines, and eventually the co-op breaks up in a series of acrimonious disputes (oftentimes including lawsuits and/or shady behavior). So far, this seems a common failure mode for ICOs as well. So yeah, like co-ops.

> 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…

Isn't a co-op that's run as a dictatorship basically a corporation?

The whole point of having wealth is that you can choose how you spend it. If one person chooses how to spend it, you don't actually have the wealth, they do, and it's not much of a co-op. If multiple people choose how to spend it, then you run into all the coordination-of-disparate-interest problems common to co-ops, communes, clubs, and other social ventures.

Re: Initial Coin Offerings Horrify a Former S.E.C. Regulator

#67

Post by emodendroket »

conanbatt wrote: post #49
narrator wrote: post #18

The funny thing about ICOs is that anyone in the world can invest anonymously AND GET PAID BACK anonymously even if they have no money, don't have a bank account, are a fugitive, in Iran or North Korea, are in prison, have unpaid child support obligations, have large unpaid IRS tax liabilities, or government fines and penalties or are using stolen funds. All the little knobs and levers that governments use to financi…

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.

Re: Initial Coin Offerings Horrify a Former S.E.C. Regulator

#68

Post by ataturk »

tlb wrote: post #2

They horrify me too. Some are plain fraud. Investors will lose, scammers will profit and/or go to jail. Some are promising startups, that will raise far more money than is healthy for their stage, and will die from too much money. If you don't have enough money (true for nearly everyone) it might be hard to imagine, but I've seen it when VCs give a startup too much. It makes them grow before they've found product-mar…

The only thing that horrifies me about them is that the US and the UK both went through these kinds of stock swindles at the turn of the 20th century and on into the 1920s and the run up to the Great Depression and yet since nobody reads history anymore they are completely unaware of the lessons brought forward.

Re: Initial Coin Offerings Horrify a Former S.E.C. Regulator

#69

Post by emodendroket »

brndnmtthws wrote: post #47
leereeves wrote: post #38

Earlier quoted context omitted.

That's certainly one big reason why they're popular. Many of the most popular uses for cryptocurrencies are strictly illegal.

I really doubt that. It's definitely a thing that people parrot around, but it's not likely to make up more than 5% of the actual use. Transacting in cash USD is still the preferred currency of the cartels.

The question isn't what percentage of black-market sales are BTC; it's what percentage of BTC sales (excluding speculation) are black-market.

Re: Initial Coin Offerings Horrify a Former S.E.C. Regulator

#70

Post by xadhominemx »

narrator wrote: post #18

The funny thing about ICOs is that anyone in the world can invest anonymously AND GET PAID BACK anonymously even if they have no money, don't have a bank account, are a fugitive, in Iran or North Korea, are in prison, have unpaid child support obligations, have large unpaid IRS tax liabilities, or government fines and penalties or are using stolen funds. All the little knobs and levers that governments use to financi…

I don't think ICOs are popular because sophisticated investors with unpaid child support claims suddenly have a place to park their cash.
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