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Finally somebody in position of power stepped in to stop this mad online casino. I was not expecting this sensible move from China, was hoping EU or US would le

Finally somebody in position of power stepped in to stop this mad online casino. I was not expecting this sensible move from China, was hoping EU or US would lead the way on regulating this crypto fraud. I hope Fed/ECB follow the Chinese Central Bank and ban ICOs too and start regulating crypto and enforcing some basic rules.

bhaak 9y ago
Did you not get the SEC memo? The US doesn't have to ban ICOs as most of them are securities and unregistered selling of securities is already illegal.
- richardknop 9y ago
  That SEC memo was weak. They should have made much more forceful statement. Thousands (likely tens of thousands) of US citizens are still investing in ICOs, there needs to be much stronger action taken to stop their gambling.
  - dmichulke 9y ago
    Because you and the SEC know much better than all of them? You know we're talking about the same SEC that didn't saw the real estate bubble coming in 2007/08 (size > trillions, CDOs are obviously fine) or the dotcom bubble in 2000 (size > trillions, they approved the IPOs, right)? If so, please give me reasons (instead of opinions or references to SEC "authority") as to why the ICOs in a 175 bn market are "dangerous".
    - richardknop 9y ago
      My opinion is not important. The issue is lots of unsophisticated investors are betting their savings / money they can't afford to lose on cryptocurrency in hopes to flip their investment quickly and get rich. This is something which should be regulated so you can't just randomly dump your IRA/401k to buy some random cryptocurrency generated over a weekend by some person in a garage with shell company in Cayman Islands.
      - omarchowdhury 9y ago
        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.
        hohenheim 9y ago
        You took the comment literally. I think OP's point is still valid. There should be regulations around sophisticated scams.
        richardknop 9y ago
        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.
        rothbardrand 9y ago
        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.
        davidgerard 9y ago
        This doesn't appear to be an accurate description of the ICO market as it exists. The hardest work in ICOs is the marketing. At the back end, they literally put in the fine print that the thing you just bought is worthless. https://davidgerard.co.uk/blockchain/icos-magic-beans-and-bubble-machines/ https://davidgerard.co.uk/blockchain/icos-magic-beans-and-bu... Look up the EOS fine print. They took down the PDF, but I kept a spare: https://davidgerard.co.uk/blockchain/references/EOS%20Token%20Purchase%20Agreement%20-%20June%2022,%202017.pdf https://davidgerard.co.uk/blockchain/references/EOS%20Token%... TODO this evening: write up a blog post on the ICO for (I am not making this up) synthetic rhino horn dick pills.
    - verroq 9y ago
      Most of these ICOs are utter garbage and the only reason people "invest" in a garbage coin is because they think there is some greater fool that will buy it off them. To give them credit people have made many times their money buying and reselling but it would be idiotic to let this madness continue.
      - ryanlol 9y ago
        >it would be idiotic to let this madness continue. Why? Inevitably the fools will just run out of money. This "problem" seems to take care of itself.
        verroq 9y ago
        Because these "fools" once they run out of money will be out on streets taking social security. Then it becomes our problem again.
        Zarath 9y ago
        Isn't moral hazard awesome?
        Nursie 9y ago
        Yup, it is. Without something akin to moral hazard, we'd have a much more risk averse society, much slower economy etc. We'd also have hoards of people starving in the street, as humans are not good at long term planning, or risk assessment. So yeah, I'm all for "moral hazard".
        CryptoPunk 9y ago
        Then force them to save a certain amount per month. What they do with their disposable income should be left to their discretion.
        Nursie 9y ago
        So now you are going to decide what consenting adults can do with their money, by deciding they can't invest in ICOs and other scam^H^H^H^H unregulated schemes until they have put enough away to satisfy you. I'm not sure this is qualitatively different to a ban, really.
    - ig1 9y ago
      If you want to learn more about the history what you want to look for is "Blue Sky Laws" there's a brief history here: http://digitalcommons.law.yale.edu/cgi/viewcontent.cgi?article=2679&context=fss_papers http://digitalcommons.law.yale.edu/cgi/viewcontent.cgi?artic... The context was unsophisticated investors were being exploited without appreciating the risks involved. They thought they were investing when they were essentially gambling and the underlying security was essentially worthless.
    - kchoudhu 9y ago
      Blue sky laws exist for a reason. Go ahead and google the term.
  - bhaak 9y ago
    No, the SEC memo wasn't weak. It basically said "we are watching this space" which will frighten anybody who knows that the SEC isn't in a hurry to investigate. They can get you for things from years past (IIRC 10), so they don't have to rush things.
hasenj 9y ago
Actually I think such bold decisions can only be made by a government that is not encumbered with lobbies and business interests.
- baq 9y ago
  what makes you think china's institutions aren't?
  - hasenj 9y ago
    Oppressive regimes are usually effective at making decisions that hurt many individuals (even unfairly) for the (supposed?) benefit of the collective.
    - baq 9y ago
      that's very optimistic if not naive. the ones who usually benefit are the oppressors, the rest are left to their own devices if they aren't causing problems - real or perceived - or even are deemed to cause problems in the future even if they do nothing wrong right now. the collective benefits only in utopia circumstances, ie. never.
      - SZJX 9y ago
        Well this is really the same for all kinds of libertarian/capitalist regimes. Branding China as an "oppressive regime" is really just political propaganda speech. If you say China is an oppressive regime so is US, and the US might be even more of a slave state really. China nowadays has even more reckless capitalism than that in the US, and the gap between the rich and the poor is expanding incredibly fast.
    - SZJX 9y ago
      Nah that kind of view is just naive. First I don't think a simple moniker of "oppressive regime" makes any sense except for political propaganda purposes. If you say China is an oppressive regime so is the US, and the US might be even more of a state basically based on slavery really. Second, the truth is the capitalism in China is even wilder and more libertarian in a sense than that in the US. It's just that the central authority still acts quickly enough. The rich people are still basically in the same bunch, whether it's the officials or the businessmen, and the gap between the rich and poor is widening ridiculously fast.
CryptoPunk 9y ago
It's not sensible at all. It's none of anyone's business what two consenting adults do with their money. The idea of a third party dictating the range of acceptable contractual engagements is absolutely terrible and has profound negative unintended consequences, with the worst of them being licensing barriers to create rent-seeking opportunities (only one new bank created in the UK over the last 100 years).
- pmlnr 9y ago
  "only one new bank created in the UK over the last 100 years"? You are quite mistaken here, from the top of my head, Tesco (late 90s) and Monzo (very recent) are 2 examples, and I'm not even into finance.
  - CryptoPunk 9y ago
    I'm basing it on this: http://www.computerweekly.com/news/450400615/Digital-only-Atom-banks-is-now-open-to-public http://www.computerweekly.com/news/450400615/Digital-only-At... >The bank was the brainchild of Anthony Thomson, who set up Metro Bank in 2009, which was the first new banking organisation to open in the UK since the end of the 19th century. >In April 2016, Atom launched its banking app after regulators lifted a restriction on its authorisation.
    - joosters 9y ago
      The BoE lists all registered banks and building societies at: http://www.bankofengland.co.uk/pra/Pages/authorisations/banksbuildingsocietieslist.aspx http://www.bankofengland.co.uk/pra/Pages/authorisations/bank... - FWIW, it includes Tesco Bank there. Perhaps Computer Weekly is not the best source of this information? Anyway, there's well over a hundred banks listed, and around forty building societies, so there's hardly a lack of competition.
      - CryptoPunk 9y ago
        It's not just ComputerWeekly. 'First new banking license issued in the UK since the 19th century' gets a lot of hits on Google. I'm pretty sure it would have been corrected if it were incorrect.
patrickaljord 9y ago
Yeah, what's with consenting adults freely and willingly contracting with each others. I'm glad the powers that be put an end to that madness.
- skummetmaelk 9y ago
  I'm not saying ICO's are scams, but do you think scamming should be legal?
  - patrickaljord 9y ago
    I believe in freedom of association, I also believe that the market is driven by reputation, therefor bad actors (in this case scammers) cannot thrive (see how bad vendors get eliminated by the market on ebay or amazon without government help, just bad reputation).
    - sasas 9y ago
      Oh yes they can thrive .. for quite a while .. remember Jordan Belfort? https://en.m.wikipedia.org/wiki/Jordan_Belfort https://en.m.wikipedia.org/wiki/Jordan_Belfort
      - patrickaljord 9y ago
        If the scam is very well executed, it will thrives for a bit longer even with laws against scams, as your link shows. However, once publicly exposed, the scammer's bad reputation will ensure no one will trust doing business with him again in his field, much more so than any anti-scamming laws that punished him with those 22 months in jail.
        askmike 9y ago
        > the scammer's bad reputation will ensure no one will trust doing business with him again in his field That doesn't like a problem for people who can fill a ~20 million ICO in half an hour, do they need to work (=be trusted) ever again?
Loic 9y ago
I had a discussion about crypto currencies with a pretty high level EU diplomat from the trade commission. His point was simple, as soon as they will consider the crypto currencies as a medium to escape taxes and general "rules" (whatever it means) they will simply ban or regulate them to put them back into the control of a central authority.
- AndrewKemendo 9y ago
  Seriously, I had this conversation with someone on Twitter and it was like they had no clue this was an option. A state power isn't going to let some random currency come in and compete with their sovereign currency rules.
  - kobeya 9y ago
    And they will stop people from making bitcoin transactions how, exactly? It's a bit silly to come in and dismissively say "the state will regulate it anyway" when the whole point of the technology is that it technologically prevents central actors (like a state) from interfering. It's a bit like saying "nah, the MPAA and RIAA will shut down filesharing." Nope. They shut down Napster (which was centralized), but BitTorrent works just fine thank you very much and the media industry has fundamentally changed as a result.
    - mcguire 9y ago
      The same way they stop you from falsifying your taxes records now. Is this a trick question?
      - kobeya 9y ago
        No it's not a trick question. Tax fraud investigation relies on bank cooperation. Bitcoin doesn't cooperate with anybody. They can make toothless voluntary requests though. More likely society evolves in the face of bitcoin to integrate or at least mitigate it rather than fight it, just like music delivery is chiefly now by streaming subscription services rather than album sales.
binocarlos 9y ago
I read a comment only yesterday: "I don't know any half decent Ethereum developers who are not currently millionaires". I felt poor and excluded. Then I remembered how it felt in 2000 where all you needed was a website for pet food and folks would throw money at you.

bhaak 9y ago

Did you not get the SEC memo? The US doesn't have to ban ICOs as most of them are securities and unregistered selling of securities is already illegal.

richardknop 9y ago
That SEC memo was weak. They should have made much more forceful statement. Thousands (likely tens of thousands) of US citizens are still investing in ICOs, there needs to be much stronger action taken to stop their gambling.
- dmichulke 9y ago
  Because you and the SEC know much better than all of them? You know we're talking about the same SEC that didn't saw the real estate bubble coming in 2007/08 (size > trillions, CDOs are obviously fine) or the dotcom bubble in 2000 (size > trillions, they approved the IPOs, right)? If so, please give me reasons (instead of opinions or references to SEC "authority") as to why the ICOs in a 175 bn market are "dangerous".
  - richardknop 9y ago
    My opinion is not important. The issue is lots of unsophisticated investors are betting their savings / money they can't afford to lose on cryptocurrency in hopes to flip their investment quickly and get rich. This is something which should be regulated so you can't just randomly dump your IRA/401k to buy some random cryptocurrency generated over a weekend by some person in a garage with shell company in Cayman Islands.
    - omarchowdhury 9y ago
      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.
      - hohenheim 9y ago
        You took the comment literally. I think OP's point is still valid. There should be regulations around sophisticated scams.
      - richardknop 9y ago
        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.
        rothbardrand 9y ago
        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.
        davidgerard 9y ago
        This doesn't appear to be an accurate description of the ICO market as it exists. The hardest work in ICOs is the marketing. At the back end, they literally put in the fine print that the thing you just bought is worthless. https://davidgerard.co.uk/blockchain/icos-magic-beans-and-bubble-machines/ https://davidgerard.co.uk/blockchain/icos-magic-beans-and-bu... Look up the EOS fine print. They took down the PDF, but I kept a spare: https://davidgerard.co.uk/blockchain/references/EOS%20Token%20Purchase%20Agreement%20-%20June%2022,%202017.pdf https://davidgerard.co.uk/blockchain/references/EOS%20Token%... TODO this evening: write up a blog post on the ICO for (I am not making this up) synthetic rhino horn dick pills.
  - verroq 9y ago
    Most of these ICOs are utter garbage and the only reason people "invest" in a garbage coin is because they think there is some greater fool that will buy it off them. To give them credit people have made many times their money buying and reselling but it would be idiotic to let this madness continue.
    - ryanlol 9y ago
      >it would be idiotic to let this madness continue. Why? Inevitably the fools will just run out of money. This "problem" seems to take care of itself.
      - verroq 9y ago
        Because these "fools" once they run out of money will be out on streets taking social security. Then it becomes our problem again.
        Zarath 9y ago
        Isn't moral hazard awesome?
        Nursie 9y ago
        Yup, it is. Without something akin to moral hazard, we'd have a much more risk averse society, much slower economy etc. We'd also have hoards of people starving in the street, as humans are not good at long term planning, or risk assessment. So yeah, I'm all for "moral hazard".
        CryptoPunk 9y ago
        Then force them to save a certain amount per month. What they do with their disposable income should be left to their discretion.
        Nursie 9y ago
        So now you are going to decide what consenting adults can do with their money, by deciding they can't invest in ICOs and other scam^H^H^H^H unregulated schemes until they have put enough away to satisfy you. I'm not sure this is qualitatively different to a ban, really.
  - ig1 9y ago
    If you want to learn more about the history what you want to look for is "Blue Sky Laws" there's a brief history here: http://digitalcommons.law.yale.edu/cgi/viewcontent.cgi?article=2679&context=fss_papers http://digitalcommons.law.yale.edu/cgi/viewcontent.cgi?artic... The context was unsophisticated investors were being exploited without appreciating the risks involved. They thought they were investing when they were essentially gambling and the underlying security was essentially worthless.
  - kchoudhu 9y ago
    Blue sky laws exist for a reason. Go ahead and google the term.
- bhaak 9y ago
  No, the SEC memo wasn't weak. It basically said "we are watching this space" which will frighten anybody who knows that the SEC isn't in a hurry to investigate. They can get you for things from years past (IIRC 10), so they don't have to rush things.

hasenj 9y ago

Actually I think such bold decisions can only be made by a government that is not encumbered with lobbies and business interests.

baq 9y ago
what makes you think china's institutions aren't?
- hasenj 9y ago
  Oppressive regimes are usually effective at making decisions that hurt many individuals (even unfairly) for the (supposed?) benefit of the collective.
  - baq 9y ago
    that's very optimistic if not naive. the ones who usually benefit are the oppressors, the rest are left to their own devices if they aren't causing problems - real or perceived - or even are deemed to cause problems in the future even if they do nothing wrong right now. the collective benefits only in utopia circumstances, ie. never.
    - SZJX 9y ago
      Well this is really the same for all kinds of libertarian/capitalist regimes. Branding China as an "oppressive regime" is really just political propaganda speech. If you say China is an oppressive regime so is US, and the US might be even more of a slave state really. China nowadays has even more reckless capitalism than that in the US, and the gap between the rich and the poor is expanding incredibly fast.
  - SZJX 9y ago
    Nah that kind of view is just naive. First I don't think a simple moniker of "oppressive regime" makes any sense except for political propaganda purposes. If you say China is an oppressive regime so is the US, and the US might be even more of a state basically based on slavery really. Second, the truth is the capitalism in China is even wilder and more libertarian in a sense than that in the US. It's just that the central authority still acts quickly enough. The rich people are still basically in the same bunch, whether it's the officials or the businessmen, and the gap between the rich and poor is widening ridiculously fast.

CryptoPunk 9y ago

It's not sensible at all. It's none of anyone's business what two consenting adults do with their money. The idea of a third party dictating the range of acceptable contractual engagements is absolutely terrible and has profound negative unintended consequences, with the worst of them being licensing barriers to create rent-seeking opportunities (only one new bank created in the UK over the last 100 years).

pmlnr 9y ago
"only one new bank created in the UK over the last 100 years"? You are quite mistaken here, from the top of my head, Tesco (late 90s) and Monzo (very recent) are 2 examples, and I'm not even into finance.
- CryptoPunk 9y ago
  I'm basing it on this: http://www.computerweekly.com/news/450400615/Digital-only-Atom-banks-is-now-open-to-public http://www.computerweekly.com/news/450400615/Digital-only-At... >The bank was the brainchild of Anthony Thomson, who set up Metro Bank in 2009, which was the first new banking organisation to open in the UK since the end of the 19th century. >In April 2016, Atom launched its banking app after regulators lifted a restriction on its authorisation.
  - joosters 9y ago
    The BoE lists all registered banks and building societies at: http://www.bankofengland.co.uk/pra/Pages/authorisations/banksbuildingsocietieslist.aspx http://www.bankofengland.co.uk/pra/Pages/authorisations/bank... - FWIW, it includes Tesco Bank there. Perhaps Computer Weekly is not the best source of this information? Anyway, there's well over a hundred banks listed, and around forty building societies, so there's hardly a lack of competition.
    - CryptoPunk 9y ago
      It's not just ComputerWeekly. 'First new banking license issued in the UK since the 19th century' gets a lot of hits on Google. I'm pretty sure it would have been corrected if it were incorrect.

patrickaljord 9y ago

Yeah, what's with consenting adults freely and willingly contracting with each others. I'm glad the powers that be put an end to that madness.

skummetmaelk 9y ago
I'm not saying ICO's are scams, but do you think scamming should be legal?
- patrickaljord 9y ago
  I believe in freedom of association, I also believe that the market is driven by reputation, therefor bad actors (in this case scammers) cannot thrive (see how bad vendors get eliminated by the market on ebay or amazon without government help, just bad reputation).
  - sasas 9y ago
    Oh yes they can thrive .. for quite a while .. remember Jordan Belfort? https://en.m.wikipedia.org/wiki/Jordan_Belfort https://en.m.wikipedia.org/wiki/Jordan_Belfort
    - patrickaljord 9y ago
      If the scam is very well executed, it will thrives for a bit longer even with laws against scams, as your link shows. However, once publicly exposed, the scammer's bad reputation will ensure no one will trust doing business with him again in his field, much more so than any anti-scamming laws that punished him with those 22 months in jail.
      - askmike 9y ago
        > the scammer's bad reputation will ensure no one will trust doing business with him again in his field That doesn't like a problem for people who can fill a ~20 million ICO in half an hour, do they need to work (=be trusted) ever again?

Loic 9y ago

I had a discussion about crypto currencies with a pretty high level EU diplomat from the trade commission. His point was simple, as soon as they will consider the crypto currencies as a medium to escape taxes and general "rules" (whatever it means) they will simply ban or regulate them to put them back into the control of a central authority.

AndrewKemendo 9y ago
Seriously, I had this conversation with someone on Twitter and it was like they had no clue this was an option. A state power isn't going to let some random currency come in and compete with their sovereign currency rules.
- kobeya 9y ago
  And they will stop people from making bitcoin transactions how, exactly? It's a bit silly to come in and dismissively say "the state will regulate it anyway" when the whole point of the technology is that it technologically prevents central actors (like a state) from interfering. It's a bit like saying "nah, the MPAA and RIAA will shut down filesharing." Nope. They shut down Napster (which was centralized), but BitTorrent works just fine thank you very much and the media industry has fundamentally changed as a result.
  - mcguire 9y ago
    The same way they stop you from falsifying your taxes records now. Is this a trick question?
    - kobeya 9y ago
      No it's not a trick question. Tax fraud investigation relies on bank cooperation. Bitcoin doesn't cooperate with anybody. They can make toothless voluntary requests though. More likely society evolves in the face of bitcoin to integrate or at least mitigate it rather than fight it, just like music delivery is chiefly now by streaming subscription services rather than album sales.

binocarlos 9y ago

I read a comment only yesterday: "I don't know any half decent Ethereum developers who are not currently millionaires". I felt poor and excluded. Then I remembered how it felt in 2000 where all you needed was a website for pet food and folks would throw money at you.