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Why don't rich people need protection? Here's the answer: this is their protection. It reduces their competition. Seriously, these securities rules keep people

Why don't rich people need protection? Here's the answer: this is their protection. It reduces their competition. Seriously, these securities rules keep people like me from investing in AirBnB and Uber (two that I caught very early and wanted into)... but we can all go to Vegas and lose $100k in a single weekend. But putting $10k into Uber's seed round is somehow a crime I need to be protected from? Truth of the matter is this is the essence of capitalism-- it is my right to invest in Uber's seed round and Uber's right to have me as an investor (if they consent), whether I am "accredited" or not. This is basic "Freedom of association" which underpins everything from gay marriage to the right to refuse service to barefoot people. Also, of course, I've lost my own $10k on more than one occasions starting companies. (And I've made much more as well.) Why do I need protection from myself? Especially when the terms of that protection are written by people who don't know what SHA256 is. No, these regulations mainly keep the middle class and the not-quite-wealthy-enough from investing in the highest upside opportunities. I know it's better to put $10k into 10 different seed rounds than $100k into one seed round. I don't need to be accredited to know that. And I've certainly lost a lot more than that (and made even more) in the stock market using complicated options strategies involving multiple legs and expirations-- I'm the very definition of a sophisticated investor.... .... but I can't be trusted to give a startup $10k? This is what regulation tends to do, which people don't seem to get -- it raises the bar keeping the little guy out. Once again, the rich get richer and the poor and middle class have less opportunity. PS-- To those responding: Yes, I have heard "but what about the grandmas? won't anyone think of the grandmas???" before. I'm acutely aware of the history of this type of regulation in the USA. Ultimately this stuff keeps grandmas poor. You should all read G. Edward Griffens "The Creature from Jekyll Island". It's a history book about money, but it's not in the least dry. Government always has an excuse, usually a claim to be helping or protecting people, when it violates our rights. Keeping me out of Uber's seed round is a violation of my rights.

octaveguin 9y ago
The law you're referring to is more about marketing investments. You're still free to give your friend 10k for a startup. It's to prevent boiler room style organizations that quite effectively convince people without much information that an investment is sound when it's not.
- igorgue 9y ago
  You're still free to give your friend 10k for a startup. Uh? As a gift but not an investment on his company, that's illegal if you're not accredited.
  - throwawaybbqed 9y ago
    What? I can't take 10K from my parents/friends and give them equity?
    - girvo 9y ago
      Don't quote me on this, but there's a specific-ish exemption for family/friends if I recall correctly.
      - nivertech 9y ago
        there are specific exemptions for family, for friends and for fools ;)
    - rothbardrand 9y ago
      It's highly limited. If you have 300 friends you can't take $10k from each, unless they are accredited.
      - vernon99 9y ago
        This is why syndicates exist. Not a problem at all. Edit: not the only reason why they exist :) but a major one. To explain a bit more: syndicates allow you to consolidate multiple investors (not necessarily acredited) in an investment vehicle that then owns a chunk of stock in the company.
  - kobeya 9y ago
    This is incorrect. Some unaccredited investments are allowed, and above certain thresholds it just triggers onerous reporting requirements. It is not illegal to make unaccredited investments. It is illegal to market/promote to unaccredited investors however.
justonepost 9y ago
The thing is these are a huge haven for money laundering which is probably the best explanation for the amounts raised.
- rothbardrand 9y ago
  Money laundering is what you are doing when you move money from your savings to your checking to pay your visa bill. Literally, under the legal definition, that's "laundering". It's a thought crime.
  - cyphar 9y ago
    Can you point to the statute where you get that interpretation from? Preferably with court proceedings that show that a judge has actually decided that that is money laundering. Because I find that statement incredibly hard to believe. Not to mention that you're completely ignoring GP's point, which is that it seems that money laundering may be occurring in an ICO. Is your claim that people only use ICOs to transfer money from a savings to a checking account to pay their VISA bills? Seems to me like there's a more airtight argument you might be able to come up with, given your self-proclaimed experience in the topic.
    - rothbardrand 9y ago
      That's a new one, erecting a series of straw men and then demanding that I knock them down. Of course you are incredulous because you want to believe that government is good and moral and its' right to be a slave.
      - cyphar 9y ago
        I was asking you to provide evidence for this statement: > Literally, under the legal definition, that's "laundering". "Legal definitions" are defined through laws and common law interpretations of those laws. I was asking for evidence of either. Otherwise you're just making statements without any evidence. It's not a straw-man to better define your statement of "that's the legal definition" to mean "there has been a court case or statute where it has been shown that's what the law says" and then ask for proof of that. Maybe you can explain what you think a "legal definition" is and provide evidence of that?
airza 9y ago
Remember when you could do kickstarters with simulated renders of your product and everyone got scammed constantly? It's because of that
- rothbardrand 9y ago
  Never happened. Some kick starters didn't deliver, but you're factually wrong-- these laws have existed for decades before Kickstarter started-- and you ignore my point. You can lose your life savings in a weekend in Las Vegas and nobody bats an eye.
  - Nursie 9y ago
    It certainly did happen, there was a spate of kickstarter projects that turned out to be vapourware. The rules were changed after a while.
  - aleh 9y ago
    There are regulations for casinos as well.
cyphar 9y ago
It ultimately comes down to what flavour of politics you subscribe to. The key question is whether you think that the public should be protected against the abuses of the free market, or if the free market should be a complete free-for-all. For example, Dodd-Frank solved a concrete problem, and there have been countless studies that show it it responsible for stabilizing the US economy. But ultimately, wanting to die on the ICO hill is a bit odd. I thought it was fairly clear (at least, it was fairly clear to me) that the whole "industry" is mostly powered by hype -- which leads to people being swindled out of their money. Wanting to protect a completely unregulated industry's ability to fool people into wasting their money doesn't seem like a sane or sustainable position (that's how economic crashes happen). > Keeping me out of Uber's seed round is a violation of my rights. First of all, this is a story about China. Second of all, it's a story about ICOs and not non-ICO startups. Third of all, is it also a violation of your rights to not be able to fund companies in countries that are at war with your country (which I assume is the US)? Is it a violation of your rights to not be able to fund illegal activity? I'm just trying to gauge at which point does your view on "the inalienable right to invest in anything" stop short? I would expect that China is trying to come to a decision about whether ICOs should be made illegal or more regulated.
- Zarath 9y ago
  It isn't the public, it's the public not in the 1%.
- rothbardrand 9y ago
  Those "studies" are self serving. That is the political propaganda keeping you feeling safe in having your rights violated. This isn't a question of flavor of politics- but fundamental rights. Do you have freedom of association or not? Secondly, you think its "fairly clear to [you]" that these ICOs are scams. I am sure some are, but I know for a fact that many are not. I am quite capable of telling the difference (as a blockchain engineer.) The presumption that every startup failing is "people being swindled out of their money" is very odd one for a discussion forum run by y-combinator. Is y-combinator being swindled when an investment fails? And you're still sidestepping the point: It's my right to apply my own discernment to what are good and what are bad investments. Not people who don't know the difference between SHA1 and SHA2.
TrevorAustin 9y ago
It ... sounds like you wouldn't have any trouble getting accredited?
- rothbardrand 9y ago
  Lets assume I am accredited. This isn't about me getting mine. This is about the fact that the regulations deny you a chance to join me.
  - vasilipupkin 9y ago
    they do not. crowdfunding from non accredited investors is already allowed. http://www.investopedia.com/articles/entrepreneurship-small-business/050216/guide-crowdfunded-investments-nonaccredited-investors.asp http://www.investopedia.com/articles/entrepreneurship-small-...
- craigsmansion 9y ago
  Very good point. It sounds like "Why are there laws that prevent fools from giving their money to me?" The more replies I read, the more I'm convinced these regulations are working exactly as intended: to protect the innocent from free-for-all sociopaths.
  - ShabbosGoy 9y ago
    It's not about money, it's about the freedom to associate with a group that I am aligned with. What do you think the Chinese government has to gain from these regulations? Protection of the consumer? This is China we're talking about here.
  - CryptoPunk 9y ago
    Why does it sound like that to you? I've seen no evidence that the majority in this thread arguing against the ban have revealed that scamming people out of their money is their ultimate motivation. Assuming bad faith based on cartoonish ideological stereotypes is not fair.
anilshanbhag 9y ago
The problem is that companies doing ICOs aren't Uber. Peek your head into /r/ethtrader. You will find people putting their retirement savings, mortgaging houses, etc and these people aren't technically savvy and can be easily taken for a ride. While you might have good apples, there are going to be tons of bad apples, people just coming with a white paper and asking for millions of dollars. Coming back to your question, the rich don't need protection as its ok to lose money when you are rich. The 'not rich' need protection as if they lose all their savings, it will seriously harm their lives.
- rothbardrand 9y ago
  That's your presumption. You think they aren't technically savvy. Hell, I think some of them aren't myself, but it's not my right, and it's not your right, to say what they can or cannot do with their property. And a lot of those non-"savvy" people have outperformed me, for instance by buying ETH at the ICO. You guys keep presuming that the only choice is "people losing all their money" and that these regulations stop that. The reality is, these regulations keep the poor people poor, not keep them from losing all their money. As I have pointed out, you can go to Las Vegas and lose all your savings in a weekend. That dog don't hunt.
  - piva00 9y ago
    It boils down if you are willing to accept that stupid people are going to pay for their stupidity (on very real and life-altering consequences) or if they should be shielded from it. Personally I belong to the side where I'm willing to give up some personal freedoms for a better collective life, that includes saving very stupid people from very stupid decisions that might affect the rest of their lives (and their families').
    - maehwasu 9y ago
      His point is that the government not only doesn't ban many forms of stupid decisions, but actively encourages ones that provide significant revenue, particularly in the gambling and consumer spending spheres. "Tu quoque" is actually a pretty useful heuristic for analyzing whether a party's stated goals for a policy align with its actual ones.
lettergram 9y ago
Although I read what you wrote and to a large extent agree, I have to say, love the name: RothbardRand (Murry Rothbard was a major figure in Austrian School of economics and modern libertarianism. Ayn Rand a philosopher, and developer of the philosophical framework of Objectivism) Makes sense why you feel this way. What I will say, is no one stopped you from investing in Uber, besides Uber. Tomorrow I can go out and sell half my C-Corp to a friend. Legally, no one is stopping me, besides me and my contract(s). My company isn't publically traded, and as such, I haven't released shares to be bought and sold. That being said, if you're talking about "accredition" - that shouldn't stop you from being able to invest in a friend's or aquantences company. At least until you have 35 of said people.. Which I agree is B.S., at the same time - it's just a way to ensure you don't get massive companies like Uber getting billions of funding and providing no services. It's an attempt at curbing a dot-com-esqu bubble. Overall, I do think this is government over reach, but I do see the point. There are ways around that FYI, for example there isn't a reason a financial advisor couldn't invest on your behalf.
- Taek 9y ago
  If Uber had made shares available to unaccredited investors, they would have gotten in trouble. I'm quite certain that the grandparent was not in the list of Travis's top 35 people to raise $10k from, and as such he had no legal opportunity to buy shares, even if Uber had wanted to sell them.
3pt14159 9y ago
We tried libertarianism. It doesn't work. I realize the futility of trying to explain this to someone with the username "rothbardrand" but I used to be a libertarian and I finally broke out of it, so maybe this will give someone else teetering on the edge some things to think about. 1. Libertarianism sweeps negative externalities under the rug. Air quality, noise pollution, the costs to society when an elderly person goes bankrupt. The counter arguments are thin. If you don't ban building in a flood plain, people will build in the flood plain. Then the flood will happen and we'll all be worse off. 2. Libertarianism is inefficient because it demands that people become experts in a wide, wide array of topics in order to be healthy and financially secure. Sometimes becoming an expert in a topic is to experience it. For example, I used to be addicted to nicotine. It's one thing to explain with words how addictive it is, it's another to actually be addicted. By introducing a bit of a nanny state we can use laws and taxes as a kind of cross generational memory and save people from having to learn some of the lessons we had to learn. 3. Libertarianism doesn't address the concept of power. It pits the whole world through the lens of rights when there are other concerns like foreign citizens owning portions of companies critical to our national security or owning large portions of our media. 4. Libertarianism underestimates how much work the state puts towards fighting international crime. We use the financial system to track where mafias hide money and how they organize their money laundering schemes. The problem with leaving libertarianism is that after years of thinking about everything through the lens of rights and the individual one is left with the question "well, what matters then?" and the answer is difficult, but here is my best shot: The world is one of consequence. So when think about policies we should be concerned with our ends, but we should choose our ends as if we didn't know who we were in the world beforehand. So my answer is roughly "consequentialism tempered by individual / human rights". You don't get to buy into Uber's round because they aren't a public company. If they become a public company they have to open their books. Why? Because widespread fraud happened before this and it wasn't just to little old grandma. Sorry about the violation of your rights, but if I didn't know who I would be beforehand, this is what I think would lead to the best average outcome. As for the middle class not being able to invest in the best companies, I agree with you that we should change some of our regulations. I agree that the rich are getting richer because not enough companies are going public. Let's fix the regulations that empower investment banks at the expense of the entrepreneurs and potential investors, and while we're at it let's raise taxes on the super rich and close their loopholes. But at the same time let's acknowledge something else: The middle class and the poor have it best in countries like Sweden or Switzerland or Canada where we have more government not less. Where we have more international cooperation not less. Where we have more "collectivism", more education, more consumer protections, more environmental regulation, more investment into research. And yes we also have rights too, but they're not these absolute mathematical truths and it doesn't mean we should let a bunch of people skirt fiscal regulation by raising a bunch of money anonymously with ICOs.
tuna-piano 9y ago
The US recently started allowing startups to raise money from non-accredited investors. It's just that most legitimate startups still prefer raising from legitimate investors. This has left "startups" like this "company" YayYo, which raise money from TV commercials stating that they'll become the next Uber. http://www.businessinsider.com/yayyo-ipo-ads-tv-ramy-el-batrawi-sec-rule-jobs-act-2017-5 http://www.businessinsider.com/yayyo-ipo-ads-tv-ramy-el-batr...
seanmcdirmid 9y ago
Gambling is also very illegal in china.
mcguire 9y ago
Most seed rounds are not Uber. What about Quirky, Homejoy, Zirtual, Secret, Grooveshark, Rdio, Leap, Theranos, Sprig, Beepi, ...
flylib 9y ago
Knowing about Uber isn't enough, you need access to their seed round which is on a selective basis
matz1 9y ago
Nobody care of your rights, if you think you deserve it you have to fight for it. What concrete action have you take to fight it ?
vasilipupkin 9y ago
I don't understand. To invest in Uber seed round you had to be an accredited investor. That's a pretty low bar in the US. But now, crowdfunding rules have removed this requirement for those raising less than 5 million.
empath75 9y ago
Name one ICO that is a legitimate business.
- vasilipupkin 9y ago
  most ICOs are done by startups that haven't built their businesses yet - that's why they are raising money. Many of them seem like legitimate businesses that could fail but also could succeed.
  - uberrr 9y ago
    So you can't name a single legitimate business that's doing an ico?
    - vasilipupkin 9y ago
      filecoin. storj. factom, ripple, omega one. golem, iconomi there are tons of them.
      - gritzko 9y ago
        Filecoin? Consider Bit Torrent seeding/bandwidth. It is too cheap to count for at least 10 years. Even tit-for-tat is no longer necessary since LEDBAT was rolled out (circa 2010). The stuff they are going to count "on the blockchain" is too cheap to count! Well, and blockchain transactions are kind of expensive and slow. See the problem?
        vasilipupkin 9y ago
        the question was to name legitimate businesses doing ICOs. filecoin is certainly legitimate. You are talking about how their tech might fail and how their business might not work. that's great, and you could very well be correct, but that's not what we are discussing here
        9y ago
krzkaczor 9y ago
I need to say that you have some great points ;) It's really exciting to read opinion so close to my heart. Currently, I work at Neufund where we want to do exactly what you described: open access to broad range of investment opportunities for everyone by using cryptocurrencies. Check it out! https://neufund.org/ https://neufund.org/
Mendenhall 9y ago
Did they do this to "protect" people, or for more control? Almost any ban can be said to be done to protect people. Cant have them reading some books for their own good!
devwastaken 9y ago
I don't understand why you're talking about Uber and regulations, when this is China we're talking about. You seem to be on a completely different subject, because the article says nothing about law, and says its a decision by China's Central Bank. "Ultimately this stuff keeps grandmas poor." Again, completely off topic to the post. But, when you talk about 'regulations', you should be making yourself clear, because you're covering massive territory and calling it all 'bad' with that statement, which is certainly not true.
deleted 9y ago
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PKop 9y ago
In addition to that book you mentioned, check out “Scandal of Money” by George Gilder (quick read) covering the concept of these sort of regulations as well as the nature of sound money vs extreme “financialism” that has replaced it over the last few decades in developed economies... along with increased regulation essentially separating main street from Wall Street / Silicon Valley. He describes how a return to sound money through Bitcoin and perhaps a new gold standard, as well as reducing these sorts of regulations you describe would enable a renewed prosperity of the middle class.. for a whole host of reasons worth reading in the book.
JamesBarney 9y ago
When did you have the opportunity to invest in Uber or AirBnB? I really don't think at any point of time were random accredited investors with 10k able to invest in Uber...
prostoalex 9y ago
1) In the alternate reality where you did invest in AirBnb and Uber, how did you manage to concentrate your investments in those two companies, and reject thousands of contenders who eventually folded down? If you also invested in 10,000 photo-sharing apps and "Yo" clones, what are the total portfolio returns? 2) In that alternate reality, what advantage did your money have over YC, Andreessen Horowitz or Benchmark money? Were you able to connect founders to top government decision makers, or bulk up their growing management team with hard-to-get candidates? If the answer is "yes", you could've been awarded advisory shares in Uber and AirBnb without being a qualified investor (a gift is a gift, after all). But since more likely the answer is "no, my money is no different than money from a joe schmoe down the street", you will likely be required to overpay for a ridiculous valuation at seed stage. What effect would that have on your portfolio as a whole?

octaveguin 9y ago

The law you're referring to is more about marketing investments. You're still free to give your friend 10k for a startup. It's to prevent boiler room style organizations that quite effectively convince people without much information that an investment is sound when it's not.

igorgue 9y ago
You're still free to give your friend 10k for a startup. Uh? As a gift but not an investment on his company, that's illegal if you're not accredited.
- throwawaybbqed 9y ago
  What? I can't take 10K from my parents/friends and give them equity?
  - girvo 9y ago
    Don't quote me on this, but there's a specific-ish exemption for family/friends if I recall correctly.
    - nivertech 9y ago
      there are specific exemptions for family, for friends and for fools ;)
  - rothbardrand 9y ago
    It's highly limited. If you have 300 friends you can't take $10k from each, unless they are accredited.
    - vernon99 9y ago
      This is why syndicates exist. Not a problem at all. Edit: not the only reason why they exist :) but a major one. To explain a bit more: syndicates allow you to consolidate multiple investors (not necessarily acredited) in an investment vehicle that then owns a chunk of stock in the company.
- kobeya 9y ago
  This is incorrect. Some unaccredited investments are allowed, and above certain thresholds it just triggers onerous reporting requirements. It is not illegal to make unaccredited investments. It is illegal to market/promote to unaccredited investors however.

justonepost 9y ago

The thing is these are a huge haven for money laundering which is probably the best explanation for the amounts raised.

rothbardrand 9y ago
Money laundering is what you are doing when you move money from your savings to your checking to pay your visa bill. Literally, under the legal definition, that's "laundering". It's a thought crime.
- cyphar 9y ago
  Can you point to the statute where you get that interpretation from? Preferably with court proceedings that show that a judge has actually decided that that is money laundering. Because I find that statement incredibly hard to believe. Not to mention that you're completely ignoring GP's point, which is that it seems that money laundering may be occurring in an ICO. Is your claim that people only use ICOs to transfer money from a savings to a checking account to pay their VISA bills? Seems to me like there's a more airtight argument you might be able to come up with, given your self-proclaimed experience in the topic.
  - rothbardrand 9y ago
    That's a new one, erecting a series of straw men and then demanding that I knock them down. Of course you are incredulous because you want to believe that government is good and moral and its' right to be a slave.
    - cyphar 9y ago
      I was asking you to provide evidence for this statement: > Literally, under the legal definition, that's "laundering". "Legal definitions" are defined through laws and common law interpretations of those laws. I was asking for evidence of either. Otherwise you're just making statements without any evidence. It's not a straw-man to better define your statement of "that's the legal definition" to mean "there has been a court case or statute where it has been shown that's what the law says" and then ask for proof of that. Maybe you can explain what you think a "legal definition" is and provide evidence of that?

airza 9y ago

Remember when you could do kickstarters with simulated renders of your product and everyone got scammed constantly? It's because of that

rothbardrand 9y ago
Never happened. Some kick starters didn't deliver, but you're factually wrong-- these laws have existed for decades before Kickstarter started-- and you ignore my point. You can lose your life savings in a weekend in Las Vegas and nobody bats an eye.
- Nursie 9y ago
  It certainly did happen, there was a spate of kickstarter projects that turned out to be vapourware. The rules were changed after a while.
- aleh 9y ago
  There are regulations for casinos as well.

cyphar 9y ago

It ultimately comes down to what flavour of politics you subscribe to. The key question is whether you think that the public should be protected against the abuses of the free market, or if the free market should be a complete free-for-all. For example, Dodd-Frank solved a concrete problem, and there have been countless studies that show it it responsible for stabilizing the US economy. But ultimately, wanting to die on the ICO hill is a bit odd. I thought it was fairly clear (at least, it was fairly clear to me) that the whole "industry" is mostly powered by hype -- which leads to people being swindled out of their money. Wanting to protect a completely unregulated industry's ability to fool people into wasting their money doesn't seem like a sane or sustainable position (that's how economic crashes happen). > Keeping me out of Uber's seed round is a violation of my rights. First of all, this is a story about China. Second of all, it's a story about ICOs and not non-ICO startups. Third of all, is it also a violation of your rights to not be able to fund companies in countries that are at war with your country (which I assume is the US)? Is it a violation of your rights to not be able to fund illegal activity? I'm just trying to gauge at which point does your view on "the inalienable right to invest in anything" stop short? I would expect that China is trying to come to a decision about whether ICOs should be made illegal or more regulated.

Zarath 9y ago
It isn't the public, it's the public not in the 1%.
rothbardrand 9y ago
Those "studies" are self serving. That is the political propaganda keeping you feeling safe in having your rights violated. This isn't a question of flavor of politics- but fundamental rights. Do you have freedom of association or not? Secondly, you think its "fairly clear to [you]" that these ICOs are scams. I am sure some are, but I know for a fact that many are not. I am quite capable of telling the difference (as a blockchain engineer.) The presumption that every startup failing is "people being swindled out of their money" is very odd one for a discussion forum run by y-combinator. Is y-combinator being swindled when an investment fails? And you're still sidestepping the point: It's my right to apply my own discernment to what are good and what are bad investments. Not people who don't know the difference between SHA1 and SHA2.

TrevorAustin 9y ago

It ... sounds like you wouldn't have any trouble getting accredited?

rothbardrand 9y ago
Lets assume I am accredited. This isn't about me getting mine. This is about the fact that the regulations deny you a chance to join me.
- vasilipupkin 9y ago
  they do not. crowdfunding from non accredited investors is already allowed. http://www.investopedia.com/articles/entrepreneurship-small-business/050216/guide-crowdfunded-investments-nonaccredited-investors.asp http://www.investopedia.com/articles/entrepreneurship-small-...
craigsmansion 9y ago
Very good point. It sounds like "Why are there laws that prevent fools from giving their money to me?" The more replies I read, the more I'm convinced these regulations are working exactly as intended: to protect the innocent from free-for-all sociopaths.
- ShabbosGoy 9y ago
  It's not about money, it's about the freedom to associate with a group that I am aligned with. What do you think the Chinese government has to gain from these regulations? Protection of the consumer? This is China we're talking about here.
- CryptoPunk 9y ago
  Why does it sound like that to you? I've seen no evidence that the majority in this thread arguing against the ban have revealed that scamming people out of their money is their ultimate motivation. Assuming bad faith based on cartoonish ideological stereotypes is not fair.

anilshanbhag 9y ago

The problem is that companies doing ICOs aren't Uber. Peek your head into /r/ethtrader. You will find people putting their retirement savings, mortgaging houses, etc and these people aren't technically savvy and can be easily taken for a ride. While you might have good apples, there are going to be tons of bad apples, people just coming with a white paper and asking for millions of dollars. Coming back to your question, the rich don't need protection as its ok to lose money when you are rich. The 'not rich' need protection as if they lose all their savings, it will seriously harm their lives.

rothbardrand 9y ago
That's your presumption. You think they aren't technically savvy. Hell, I think some of them aren't myself, but it's not my right, and it's not your right, to say what they can or cannot do with their property. And a lot of those non-"savvy" people have outperformed me, for instance by buying ETH at the ICO. You guys keep presuming that the only choice is "people losing all their money" and that these regulations stop that. The reality is, these regulations keep the poor people poor, not keep them from losing all their money. As I have pointed out, you can go to Las Vegas and lose all your savings in a weekend. That dog don't hunt.
- piva00 9y ago
  It boils down if you are willing to accept that stupid people are going to pay for their stupidity (on very real and life-altering consequences) or if they should be shielded from it. Personally I belong to the side where I'm willing to give up some personal freedoms for a better collective life, that includes saving very stupid people from very stupid decisions that might affect the rest of their lives (and their families').
  - maehwasu 9y ago
    His point is that the government not only doesn't ban many forms of stupid decisions, but actively encourages ones that provide significant revenue, particularly in the gambling and consumer spending spheres. "Tu quoque" is actually a pretty useful heuristic for analyzing whether a party's stated goals for a policy align with its actual ones.

lettergram 9y ago

Although I read what you wrote and to a large extent agree, I have to say, love the name: RothbardRand (Murry Rothbard was a major figure in Austrian School of economics and modern libertarianism. Ayn Rand a philosopher, and developer of the philosophical framework of Objectivism) Makes sense why you feel this way. What I will say, is no one stopped you from investing in Uber, besides Uber. Tomorrow I can go out and sell half my C-Corp to a friend. Legally, no one is stopping me, besides me and my contract(s). My company isn't publically traded, and as such, I haven't released shares to be bought and sold. That being said, if you're talking about "accredition" - that shouldn't stop you from being able to invest in a friend's or aquantences company. At least until you have 35 of said people.. Which I agree is B.S., at the same time - it's just a way to ensure you don't get massive companies like Uber getting billions of funding and providing no services. It's an attempt at curbing a dot-com-esqu bubble. Overall, I do think this is government over reach, but I do see the point. There are ways around that FYI, for example there isn't a reason a financial advisor couldn't invest on your behalf.

Taek 9y ago
If Uber had made shares available to unaccredited investors, they would have gotten in trouble. I'm quite certain that the grandparent was not in the list of Travis's top 35 people to raise $10k from, and as such he had no legal opportunity to buy shares, even if Uber had wanted to sell them.

3pt14159 9y ago

We tried libertarianism. It doesn't work. I realize the futility of trying to explain this to someone with the username "rothbardrand" but I used to be a libertarian and I finally broke out of it, so maybe this will give someone else teetering on the edge some things to think about. 1. Libertarianism sweeps negative externalities under the rug. Air quality, noise pollution, the costs to society when an elderly person goes bankrupt. The counter arguments are thin. If you don't ban building in a flood plain, people will build in the flood plain. Then the flood will happen and we'll all be worse off. 2. Libertarianism is inefficient because it demands that people become experts in a wide, wide array of topics in order to be healthy and financially secure. Sometimes becoming an expert in a topic is to experience it. For example, I used to be addicted to nicotine. It's one thing to explain with words how addictive it is, it's another to actually be addicted. By introducing a bit of a nanny state we can use laws and taxes as a kind of cross generational memory and save people from having to learn some of the lessons we had to learn. 3. Libertarianism doesn't address the concept of power. It pits the whole world through the lens of rights when there are other concerns like foreign citizens owning portions of companies critical to our national security or owning large portions of our media. 4. Libertarianism underestimates how much work the state puts towards fighting international crime. We use the financial system to track where mafias hide money and how they organize their money laundering schemes. The problem with leaving libertarianism is that after years of thinking about everything through the lens of rights and the individual one is left with the question "well, what matters then?" and the answer is difficult, but here is my best shot: The world is one of consequence. So when think about policies we should be concerned with our ends, but we should choose our ends as if we didn't know who we were in the world beforehand. So my answer is roughly "consequentialism tempered by individual / human rights". You don't get to buy into Uber's round because they aren't a public company. If they become a public company they have to open their books. Why? Because widespread fraud happened before this and it wasn't just to little old grandma. Sorry about the violation of your rights, but if I didn't know who I would be beforehand, this is what I think would lead to the best average outcome. As for the middle class not being able to invest in the best companies, I agree with you that we should change some of our regulations. I agree that the rich are getting richer because not enough companies are going public. Let's fix the regulations that empower investment banks at the expense of the entrepreneurs and potential investors, and while we're at it let's raise taxes on the super rich and close their loopholes. But at the same time let's acknowledge something else: The middle class and the poor have it best in countries like Sweden or Switzerland or Canada where we have more government not less. Where we have more international cooperation not less. Where we have more "collectivism", more education, more consumer protections, more environmental regulation, more investment into research. And yes we also have rights too, but they're not these absolute mathematical truths and it doesn't mean we should let a bunch of people skirt fiscal regulation by raising a bunch of money anonymously with ICOs.

tuna-piano 9y ago

The US recently started allowing startups to raise money from non-accredited investors. It's just that most legitimate startups still prefer raising from legitimate investors. This has left "startups" like this "company" YayYo, which raise money from TV commercials stating that they'll become the next Uber. http://www.businessinsider.com/yayyo-ipo-ads-tv-ramy-el-batrawi-sec-rule-jobs-act-2017-5 http://www.businessinsider.com/yayyo-ipo-ads-tv-ramy-el-batr...

seanmcdirmid 9y ago

Gambling is also very illegal in china.

mcguire 9y ago

Most seed rounds are not Uber. What about Quirky, Homejoy, Zirtual, Secret, Grooveshark, Rdio, Leap, Theranos, Sprig, Beepi, ...

flylib 9y ago

Knowing about Uber isn't enough, you need access to their seed round which is on a selective basis

matz1 9y ago

Nobody care of your rights, if you think you deserve it you have to fight for it. What concrete action have you take to fight it ?

vasilipupkin 9y ago

I don't understand. To invest in Uber seed round you had to be an accredited investor. That's a pretty low bar in the US. But now, crowdfunding rules have removed this requirement for those raising less than 5 million.

empath75 9y ago

Name one ICO that is a legitimate business.

vasilipupkin 9y ago
most ICOs are done by startups that haven't built their businesses yet - that's why they are raising money. Many of them seem like legitimate businesses that could fail but also could succeed.
- uberrr 9y ago
  So you can't name a single legitimate business that's doing an ico?
  - vasilipupkin 9y ago
    filecoin. storj. factom, ripple, omega one. golem, iconomi there are tons of them.
    - gritzko 9y ago
      Filecoin? Consider Bit Torrent seeding/bandwidth. It is too cheap to count for at least 10 years. Even tit-for-tat is no longer necessary since LEDBAT was rolled out (circa 2010). The stuff they are going to count "on the blockchain" is too cheap to count! Well, and blockchain transactions are kind of expensive and slow. See the problem?
      - vasilipupkin 9y ago
        the question was to name legitimate businesses doing ICOs. filecoin is certainly legitimate. You are talking about how their tech might fail and how their business might not work. that's great, and you could very well be correct, but that's not what we are discussing here
        9y ago

krzkaczor 9y ago

I need to say that you have some great points ;) It's really exciting to read opinion so close to my heart. Currently, I work at Neufund where we want to do exactly what you described: open access to broad range of investment opportunities for everyone by using cryptocurrencies. Check it out! https://neufund.org/ https://neufund.org/

Mendenhall 9y ago

Did they do this to "protect" people, or for more control? Almost any ban can be said to be done to protect people. Cant have them reading some books for their own good!

devwastaken 9y ago

I don't understand why you're talking about Uber and regulations, when this is China we're talking about. You seem to be on a completely different subject, because the article says nothing about law, and says its a decision by China's Central Bank. "Ultimately this stuff keeps grandmas poor." Again, completely off topic to the post. But, when you talk about 'regulations', you should be making yourself clear, because you're covering massive territory and calling it all 'bad' with that statement, which is certainly not true.

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PKop 9y ago

In addition to that book you mentioned, check out “Scandal of Money” by George Gilder (quick read) covering the concept of these sort of regulations as well as the nature of sound money vs extreme “financialism” that has replaced it over the last few decades in developed economies... along with increased regulation essentially separating main street from Wall Street / Silicon Valley. He describes how a return to sound money through Bitcoin and perhaps a new gold standard, as well as reducing these sorts of regulations you describe would enable a renewed prosperity of the middle class.. for a whole host of reasons worth reading in the book.

JamesBarney 9y ago

When did you have the opportunity to invest in Uber or AirBnB? I really don't think at any point of time were random accredited investors with 10k able to invest in Uber...

prostoalex 9y ago

1) In the alternate reality where you did invest in AirBnb and Uber, how did you manage to concentrate your investments in those two companies, and reject thousands of contenders who eventually folded down? If you also invested in 10,000 photo-sharing apps and "Yo" clones, what are the total portfolio returns? 2) In that alternate reality, what advantage did your money have over YC, Andreessen Horowitz or Benchmark money? Were you able to connect founders to top government decision makers, or bulk up their growing management team with hard-to-get candidates? If the answer is "yes", you could've been awarded advisory shares in Uber and AirBnb without being a qualified investor (a gift is a gift, after all). But since more likely the answer is "no, my money is no different than money from a joe schmoe down the street", you will likely be required to overpay for a ridiculous valuation at seed stage. What effect would that have on your portfolio as a whole?