9 ms·

Investor Alert: Public Companies Making ICO-Related Claims

113 points by hudon 9y ago

zwarag 9y ago
One would say that if you have the money you earned it and you would research the company you're going to give your money. But most of this "Alerts" are just common sense. What am I missing or why are they releasing these alerts?
- ringaroundthetx 9y ago
  Did you read the alert? Tiny bulletin board companies are using buzzwords to get stock traders to buy their shares for no reason. The alert is that one of the buzzwords is "ICO" and "token sale". Just like when the buzzword was "internet" or "business chat" or "self driving car". It is just an alert about the buzzword being used in the stock market, before people FOMO. This alert isn't about or geared towards ICOs or token sales.
  - jcmoscon 9y ago
    Not only investors, but I think we all should consider these buzzwords while doing startup job search ;)
- deeths 9y ago
  If the SEC gives guidance that something is high risk, and you are paying someone to managing your money with the understanding that you want a low-to-moderate risk portfolio, then if they lose it on what the SEC calls high risk, now you have a case against them being irresponsible. I don't think this is so much to educate investors as it is to provide some liability incentive for investment managers to inform their investors about the risks in their portfolios if they're taking these sorts of bets.
aml183 9y ago
This is just penny stocks finding new ways to scam investors. ICO is the big buzzword.
elecengin 9y ago
Matt Levine has a great (humorous) overview of the First Bitcoin Corp shenanigans (scroll to the second section): https://www.bloomberg.com/view/articles/2017-08-25/insider-trading-bitcoin-and-libor https://www.bloomberg.com/view/articles/2017-08-25/insider-t...
- mintplant 9y ago
  A very entertaining read. > "We have been very busy generating more than 100 unique cryptocurrencies ranging from disrupting the air-miles-loyalty industry to providing solutions to the cannabis industry." 100?! So they're just copy/pasting the Bitcoin source under different altcoin names, and calling it innovation? > "In order to purchase and support WEED anyone that sends 1 President Johnson coin ($GARY) to the Company’s Omni Layer Bitcoin Wallet will receive 1 WEED coin into their Omni Wallet." Wow.
  - nathancahill 9y ago
    No need to copy/paste: http://build-a-co.in/ http://build-a-co.in/
  - vit05 9y ago
    I am translating the White Paper of some of them, there is a lot of copy and paste. Including the advisor's bio. Some of this coins just invent important people are helping them, but they do not have any idea that Coin even exists.
seibelj 9y ago
ICO's of some form are unquestionably the future of raising capital for most tech companies up to a certain size (at least until ICO investors can consistently put in $1bil+). I'm saying this as someone who is living the ICO experience (https://airtoken.com https://airtoken.com). Compared to traditional angel / VC raising, this is hands down the best use case for blockchain so far. VC's and angel groups will become pre-sale stakers and stamps of approval for companies to boost the ICO, but the days of entrepreneurs spending months traveling around wining and dining the richest people in tech are over.
- alphaalpha101 9y ago
  I don't understand how these coins have value. Surely things only have value if they: 1) have some scarcity, and 2) have some useful purpose. I can see how these coins get scarcity, but what is their useful purpose? What can I do with FacebookKillerCoin or TwitterKillerCoin or EAGamesKillerCoin? If they're just essentially 'gift card currency' and the company will buy them off me in exchange for their products, why use a blockchain in the first place? Just call them loyalty points or whatever.
  - pbhjpbhj 9y ago
    Monetary value isn't entirely founded on use-value of anything though. 'Coins' have value because a corpus of people has agreed it; you can exchange one for anything of you can convince someone else the coin has a particular value (which might just mean that it works as a stable exchange currency).
- amluto 9y ago
  Paraphrasing somewhat snarkily, you seem to be saying that selling securities of limited intrinsic value to as many clueless investors a as you can find is the future of fundraising. Screw Reg D, the SEC, any concept of selling only to informed investors, having some legal force behind your securities, etc. Why bother pitching to people who are actually qualified to review your claims and business model? IANAL, but I think the penalties for improperly selling securities are pretty severe, for good reason.
aphextron 9y ago
Stuff like this combined with the general credit bubble is giving me the feeling the Next Big One is going to be 10x worse than '08.
- 1_2__4 9y ago
  It will be. Especially in the Bay Area.
- kwelstr 9y ago
  I think it will be 10x worse than the 90's tech bubble. I was there, it was painful.
  - lazzlazzlazz 9y ago
    What precisely makes you think it will be 10x worse?
  - TuringNYC 9y ago
    My bigger question would be how much housing prices and rent would go down. They tend not to go down as much due to subsidies and stickiness. Absurd housing costs are the key thing keeping me away from the bay area, but it is so bad I'd need a 50% drop to make it close to reasonable.
    - whatnotests 9y ago
      They won't go down while Chinese and Indians are moving in.
      - quoquoquo 9y ago
        so what about the greedy white people that sell to newcomers at inflated prices in turn pricing out their "own"?
        whatnotests 9y ago
jmcgough 9y ago
I feel like a lot of ICO are a way to bypass regulation that protects investors. Smells like we've hit peak tulip mania.
- zdkl 9y ago
  Peak? We haven't seen anything yet. Wait till the big financial group behind ethereum figure out how to legally interface their security/options/bond pools to a coin token for sale to the general public.

113 points by hudon 9y ago

One would say that if you have the money you earned it and you would research the company you're going to give your money. But most of this "Alerts" are just common sense. What am I missing or why are they releasing these alerts?

ringaroundthetx 9y ago
Did you read the alert? Tiny bulletin board companies are using buzzwords to get stock traders to buy their shares for no reason. The alert is that one of the buzzwords is "ICO" and "token sale". Just like when the buzzword was "internet" or "business chat" or "self driving car". It is just an alert about the buzzword being used in the stock market, before people FOMO. This alert isn't about or geared towards ICOs or token sales.
- jcmoscon 9y ago
  Not only investors, but I think we all should consider these buzzwords while doing startup job search ;)
deeths 9y ago
If the SEC gives guidance that something is high risk, and you are paying someone to managing your money with the understanding that you want a low-to-moderate risk portfolio, then if they lose it on what the SEC calls high risk, now you have a case against them being irresponsible. I don't think this is so much to educate investors as it is to provide some liability incentive for investment managers to inform their investors about the risks in their portfolios if they're taking these sorts of bets.

aml183 9y ago

This is just penny stocks finding new ways to scam investors. ICO is the big buzzword.

elecengin 9y ago

Matt Levine has a great (humorous) overview of the First Bitcoin Corp shenanigans (scroll to the second section): https://www.bloomberg.com/view/articles/2017-08-25/insider-trading-bitcoin-and-libor https://www.bloomberg.com/view/articles/2017-08-25/insider-t...

mintplant 9y ago
A very entertaining read. > "We have been very busy generating more than 100 unique cryptocurrencies ranging from disrupting the air-miles-loyalty industry to providing solutions to the cannabis industry." 100?! So they're just copy/pasting the Bitcoin source under different altcoin names, and calling it innovation? > "In order to purchase and support WEED anyone that sends 1 President Johnson coin ($GARY) to the Company’s Omni Layer Bitcoin Wallet will receive 1 WEED coin into their Omni Wallet." Wow.
- nathancahill 9y ago
  No need to copy/paste: http://build-a-co.in/ http://build-a-co.in/
- vit05 9y ago
  I am translating the White Paper of some of them, there is a lot of copy and paste. Including the advisor's bio. Some of this coins just invent important people are helping them, but they do not have any idea that Coin even exists.

seibelj 9y ago

ICO's of some form are unquestionably the future of raising capital for most tech companies up to a certain size (at least until ICO investors can consistently put in $1bil+). I'm saying this as someone who is living the ICO experience (https://airtoken.com https://airtoken.com). Compared to traditional angel / VC raising, this is hands down the best use case for blockchain so far. VC's and angel groups will become pre-sale stakers and stamps of approval for companies to boost the ICO, but the days of entrepreneurs spending months traveling around wining and dining the richest people in tech are over.

alphaalpha101 9y ago
I don't understand how these coins have value. Surely things only have value if they: 1) have some scarcity, and 2) have some useful purpose. I can see how these coins get scarcity, but what is their useful purpose? What can I do with FacebookKillerCoin or TwitterKillerCoin or EAGamesKillerCoin? If they're just essentially 'gift card currency' and the company will buy them off me in exchange for their products, why use a blockchain in the first place? Just call them loyalty points or whatever.
- pbhjpbhj 9y ago
  Monetary value isn't entirely founded on use-value of anything though. 'Coins' have value because a corpus of people has agreed it; you can exchange one for anything of you can convince someone else the coin has a particular value (which might just mean that it works as a stable exchange currency).
amluto 9y ago
Paraphrasing somewhat snarkily, you seem to be saying that selling securities of limited intrinsic value to as many clueless investors a as you can find is the future of fundraising. Screw Reg D, the SEC, any concept of selling only to informed investors, having some legal force behind your securities, etc. Why bother pitching to people who are actually qualified to review your claims and business model? IANAL, but I think the penalties for improperly selling securities are pretty severe, for good reason.

aphextron 9y ago

Stuff like this combined with the general credit bubble is giving me the feeling the Next Big One is going to be 10x worse than '08.

1_2__4 9y ago
It will be. Especially in the Bay Area.
kwelstr 9y ago
I think it will be 10x worse than the 90's tech bubble. I was there, it was painful.
- lazzlazzlazz 9y ago
  What precisely makes you think it will be 10x worse?
- TuringNYC 9y ago
  My bigger question would be how much housing prices and rent would go down. They tend not to go down as much due to subsidies and stickiness. Absurd housing costs are the key thing keeping me away from the bay area, but it is so bad I'd need a 50% drop to make it close to reasonable.
  - whatnotests 9y ago
    They won't go down while Chinese and Indians are moving in.
    - quoquoquo 9y ago
      so what about the greedy white people that sell to newcomers at inflated prices in turn pricing out their "own"?
      - whatnotests 9y ago

jmcgough 9y ago

I feel like a lot of ICO are a way to bypass regulation that protects investors. Smells like we've hit peak tulip mania.

zdkl 9y ago
Peak? We haven't seen anything yet. Wait till the big financial group behind ethereum figure out how to legally interface their security/options/bond pools to a coin token for sale to the general public.