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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

#81

Post by eximius »

phaed wrote: post #79
modeless wrote: post #30

Earlier quoted context omitted.

I think this is more negative for ICOs than your quotes imply. Look at this: > By and large, the structures of initial coin offerings that I have seen promoted involve the offer and sale of securities and directly implicate the securities registration requirements and other investor protection provisions of our federal securities laws. Basically, almost all ICOs so far are illegal. He says that it's possible to make…

> 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.

Re: Statement on Cryptocurrencies and Initial Coin Offerings

#82

Post by AlexCoventry »

phaed wrote: post #79
modeless wrote: post #30

Earlier quoted context omitted.

I think this is more negative for ICOs than your quotes imply. Look at this: > By and large, the structures of initial coin offerings that I have seen promoted involve the offer and sale of securities and directly implicate the securities registration requirements and other investor protection provisions of our federal securities laws. Basically, almost all ICOs so far are illegal. He says that it's possible to make…

> 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.

Unless they're using expensive KYC procedures, I doubt that many ICOs have done enough to exclude US investors that the law will excuse them from SEC regulations.

Re: Statement on Cryptocurrencies and Initial Coin Offerings

#83

Post by AlexCoventry »

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.

Yes, they are on the hook in that case. (Not lawyer, not legal advice.)

Re: Statement on Cryptocurrencies and Initial Coin Offerings

#84

Post by derefr »

lojack wrote: post #21
Frogolocalypse wrote: post #12

Earlier quoted context omitted.

I think that is a very considered and wide ranging statement. The proof is in the pudding though. He looks like he has called out some ICO's, but until enforcement proceedings start, it is still not clear. I can't see how any pre-mined ICO, like ripple, wouldn't be treated like a security given those statements. As a long time crypto investor, even i recognise that ico's are out of control. It is my opinion that if y…

I don’t understand why being premined makes any difference? A company could easily create an equity pool and a new mineable currency, and make that currency worth a proportional amount of equity. That would very clearly fall under the umbrella of security. Similarly someone could create a premined currency and evenly distribute it to anyone who asked for it, in exchange for nothing with no guarantees about it being r…

If anyone can mine a thing for themselves (i.e. create more supply of it), then that thing is a commodity. (Gold, for example, is a commodity.) By definition, no one entity can really restrict the supply or trade of a commodity; and thus the government can't really make useful laws about what any one entity does with their holdings of a commodity.

Any valuable thing that isn't a commodity, is a security. Every fiat currency is a security. Stocks and bonds are securities. Etc. The government can regulate securities (or rather, regulate their issuers, because there is a clear issuer), and so they do.

The definition of security isn't really vague; it's just a definition of exclusion. Replace security with "non-commidty" whenever it comes up and things might be clearer.

Re: Statement on Cryptocurrencies and Initial Coin Offerings

#85

Post by arkem »

dweekly wrote: post #78
ikeboy wrote: post #66

Earlier quoted context omitted.

I think most of the money that's going in is by people with more than the 250k limit. Above that you can market pretty much anything as long as you're honest, I think. So I don't think it would be affected much, except that ordinary users wouldn't be able to use it (unless they could get it on exchanges, which may be under different laws?) Not a simple question, I guess.

What's the 250k limit? (If you're speaking of Accredited Investors, the limit is $1m in net worth not including primary residence.)

Maybe they're referring to the 200k income threshold for the other accredited investor test?

Re: Statement on Cryptocurrencies and Initial Coin Offerings

#86

Post by drawkbox »

As I have stated previously, these market participants should treat payments and other transactions made in cryptocurrency as if cash were being handed from one party to the other.

I think for a long time this is how crypto is viewed, it is risky but people are willing to take the risk currently. More reputable US sources like Coinbase are making this possible rather than historical risky bets like mtgox, btc-e etc. In the statement they do mention whether an ICO is domestic/foreign in their research as something you should look out for in terms of the "security" of your purchase, but also whether or not the SEC can even do anything about it.

Regulation will be coming along and they have a blueprint for how that might happen, i.e. securities vs tokens/coins/currency. Before the regulation the risk is higher but probably also the reward.

At this point cryptocurrencies and ICOs are an unstoppable train, either the SEC will be able to regulate currencies + securities or some new group will be formed to handle oversight in the US at least.

Re: Statement on Cryptocurrencies and Initial Coin Offerings

#87

Post by Kiro »

AlexCoventry wrote: post #82
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.

Unless they're using expensive KYC procedures, I doubt that many ICOs have done enough to exclude US investors that the law will excuse them from SEC regulations.

Why would I care what the SEC thinks if I'm outside the US?

Re: Statement on Cryptocurrencies and Initial Coin Offerings

#88

Post by bufferoverflow »

zemo wrote: post #80
modeless wrote: post #30

Earlier quoted context omitted.

I think this is more negative for ICOs than your quotes imply. Look at this: > By and large, the structures of initial coin offerings that I have seen promoted involve the offer and sale of securities and directly implicate the securities registration requirements and other investor protection provisions of our federal securities laws. Basically, almost all ICOs so far are illegal. He says that it's possible to make…

> almost all ICOs so far are illegal. a lot of them are offering to sell you an asset that they advertise as being sure to appreciate, with the subtext that you will sell the asset at a later point for a gain. Selling something purely to be a store of value and appreciation is basically the textbook definition of a security, isn't it?

How many ICOs "advertise as being sure to appreciate"? I've looked at like 40 different ones, bought into none, but none of them promised any return on investment. That's some straw man argument.

Re: Statement on Cryptocurrencies and Initial Coin Offerings

#89

Post by maneesh »

wmf wrote: post #58
iMuzz wrote: post #43

Earlier quoted context omitted.

> Every single existing token is either a security or a commodity My optimism could totally be misplaced! But here's an excerpt from the SEC statement that seems to go beyond your "security or commodity" classification. > A key question for all ICO market participants: “Is the coin or token a security?” As securities law practitioners know well, the answer depends on the facts. For example, a token that represents a…

But no actual tokens work that way because no one would get rich off them.

Volts work that way. Earn crypto for doing healthy habits. Use it to unlock new apps and courses for behavior change.

It becomes a lot easier when you realize money isn't real, it's a constraint. Like oxygen, it only matters when you don't have it --- once you do, it becomes irrelevant -- a story that allows you to represent incentives to do positive deeds.

https://pavlok.com/volts

Re: Statement on Cryptocurrencies and Initial Coin Offerings

#90

Post by ars »

Kiro wrote: post #87
AlexCoventry wrote: post #82

Earlier quoted context omitted.

Unless they're using expensive KYC procedures, I doubt that many ICOs have done enough to exclude US investors that the law will excuse them from SEC regulations.

Why would I care what the SEC thinks if I'm outside the US?

Most countries have securities laws, not just the US.

Are you sure your country doesn't?

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