5 ms·

I guess I'd ask this question: Is it ethical to want to bring in unaccredited investors to a market that's known for being scammy and overhyped?

by pfraze 9y ago

twalla 9y ago
Fundamentally, I see it as democratizing investment and removing arbitrary hurdles for those without millions in the bank to seek higher risk/reward investments. In practice, I'm seeing teams doing ICOs do shady things like change the terms halfway through raising capital, leaving early contributors with a diluted stake or teams that straight up don't deliver with no way for share(token?)holders to hold the team accountable - basically this kind of behavior seems a whole lot easier when you took small sums from thousands of nobodies instead of millions from a handful of deep-pocketed somebodies.
- JumpCrisscross 9y ago
  > for those without millions in the bank to seek higher risk/reward investments I question whether those risk-reward blends are appropriate for those without substantial excess capital. The current limits are somewhat arbitrarily placed, I agree, but someone with $50,000 in savings probably shouldn't be investing in start-ups.
  - redial 9y ago
    Isn't that up to them?
Fomite 9y ago
The worried part of me thinks this is the build up for just another example of "In which cryptocurrencies discover that banking and securities regulations were created for a reason".
relyio 9y ago
It doesn't bother the government when the middle class spend its hard earned money in gambling, sport events or entertainment. Somehow, there's suddenly a moral imperative to protect those poor sheep from doing as they please with their property. But, wait, only if their capital inflow will dilute the returns of established investors. It's to protect the middle class of course, though one can only wonder why the blatant double standard. I have no idea! The "accredited investor" regulations are a sham, an unfair and artificial barrier to entry that ought to be removed. Yes, some people will get abused. This might even create local instability. But, that is clearly the long-term optima. Those who lose money to scams can leave it to law enforcement to do their job. Others who invest more they can afford to lose into bad apples will learn that you should always hedge risk. As a whole, society gets smarter when it is allowed to make mistakes, even costly ones. Smarter and less fragile.
- JumpCrisscross 9y ago
  > Those who lose money to scams can leave it to law enforcement to do their job Law enforcement rarely resolves securities disputes. It requires lawyers teeing up the evidence for courts and regulators. Disclaimer: I am not a lawyer. Don’t do mean things with securities.
  - relyio 9y ago
    I guess it would depend how sophisticated the scam is. When I wrote that, I had outright thievery in mind.
    - exelius 9y ago
      Any *coin fiasco would take the government years to figure out. Nobody is even sure if the laws on the books would cover some of the scenarios that are popping up. A lot of it would be solved if people really understood what they're buying with these ICOs, but many just see it as "magical Internet money that's making cash obsolete".
- lazyasciiart 9y ago
  > It doesn't bother the government when the middle class spend its hard earned money in gambling Isn't gambling heavily regulated in the US to the point of being barely legal in many states? Isn't that basically how many Indian tribes make money - by being outside this regulation?
  - relyio 9y ago
    I'm by no means an expert on the matter, but I believe you're thinking of running Casinos specifically. For example, scratching games or lotteries are legal in almost every state in the US. And for those states where casinos are allowed, no one will ask you questions as long as you are +21.
  - brandnewlow 9y ago
    Running a casino is heavily regulated. Gambling at a casino is open to anyone over 21 where its legal. That was the OP's point.
fgjjgutjvnu 9y ago
I understand the reasoning behind such regulation. On the other hand, for example doing a startup is also highly risky. Should it therefore also be regulated, only people with enough savings (and perhaps education) should be allowed to do startups? I don't think it is easy to answer, clearly not allowing people to take risks is also taking away there freedom and chances for making a better living. Not allowing people to take risks (and consequently, start businesses) ultimately leads towards a communist worlds were people can only pick from a selection of government ordained jobs.

I guess I'd ask this question: Is it ethical to want to bring in unaccredited investors to a market that's known for being scammy and overhyped?

by pfraze 9y ago

I guess I'd ask this question: Is it ethical to want to bring in unaccredited investors to a market that's known for being scammy and overhyped?

twalla 9y ago

Fundamentally, I see it as democratizing investment and removing arbitrary hurdles for those without millions in the bank to seek higher risk/reward investments. In practice, I'm seeing teams doing ICOs do shady things like change the terms halfway through raising capital, leaving early contributors with a diluted stake or teams that straight up don't deliver with no way for share(token?)holders to hold the team accountable - basically this kind of behavior seems a whole lot easier when you took small sums from thousands of nobodies instead of millions from a handful of deep-pocketed somebodies.

JumpCrisscross 9y ago
> for those without millions in the bank to seek higher risk/reward investments I question whether those risk-reward blends are appropriate for those without substantial excess capital. The current limits are somewhat arbitrarily placed, I agree, but someone with $50,000 in savings probably shouldn't be investing in start-ups.
- redial 9y ago
  Isn't that up to them?

Fomite 9y ago

The worried part of me thinks this is the build up for just another example of "In which cryptocurrencies discover that banking and securities regulations were created for a reason".

relyio 9y ago

It doesn't bother the government when the middle class spend its hard earned money in gambling, sport events or entertainment. Somehow, there's suddenly a moral imperative to protect those poor sheep from doing as they please with their property. But, wait, only if their capital inflow will dilute the returns of established investors. It's to protect the middle class of course, though one can only wonder why the blatant double standard. I have no idea! The "accredited investor" regulations are a sham, an unfair and artificial barrier to entry that ought to be removed. Yes, some people will get abused. This might even create local instability. But, that is clearly the long-term optima. Those who lose money to scams can leave it to law enforcement to do their job. Others who invest more they can afford to lose into bad apples will learn that you should always hedge risk. As a whole, society gets smarter when it is allowed to make mistakes, even costly ones. Smarter and less fragile.

JumpCrisscross 9y ago
> Those who lose money to scams can leave it to law enforcement to do their job Law enforcement rarely resolves securities disputes. It requires lawyers teeing up the evidence for courts and regulators. Disclaimer: I am not a lawyer. Don’t do mean things with securities.
- relyio 9y ago
  I guess it would depend how sophisticated the scam is. When I wrote that, I had outright thievery in mind.
  - exelius 9y ago
    Any *coin fiasco would take the government years to figure out. Nobody is even sure if the laws on the books would cover some of the scenarios that are popping up. A lot of it would be solved if people really understood what they're buying with these ICOs, but many just see it as "magical Internet money that's making cash obsolete".
lazyasciiart 9y ago
> It doesn't bother the government when the middle class spend its hard earned money in gambling Isn't gambling heavily regulated in the US to the point of being barely legal in many states? Isn't that basically how many Indian tribes make money - by being outside this regulation?
- relyio 9y ago
  I'm by no means an expert on the matter, but I believe you're thinking of running Casinos specifically. For example, scratching games or lotteries are legal in almost every state in the US. And for those states where casinos are allowed, no one will ask you questions as long as you are +21.
- brandnewlow 9y ago
  Running a casino is heavily regulated. Gambling at a casino is open to anyone over 21 where its legal. That was the OP's point.

fgjjgutjvnu 9y ago

I understand the reasoning behind such regulation. On the other hand, for example doing a startup is also highly risky. Should it therefore also be regulated, only people with enough savings (and perhaps education) should be allowed to do startups? I don't think it is easy to answer, clearly not allowing people to take risks is also taking away there freedom and chances for making a better living. Not allowing people to take risks (and consequently, start businesses) ultimately leads towards a communist worlds were people can only pick from a selection of government ordained jobs.