4 ms·

1. ICO founders are getting a quick education in the fact that "anyone can sue anyone at any time" -- no matter what paperwork you have folks sign. 2. What are

1. ICO founders are getting a quick education in the fact that "anyone can sue anyone at any time" -- no matter what paperwork you have folks sign. 2. What are the damages if they just give the money/coins back? That's the easiest solution for these ICOs: a 100 days buy back/escrow period? 3. Another easy solution is to have these ICOs hold the proceeds in escrow and release of funds quarterly for five years to the startups/projects and giving the investors the ability to refund half or 75% of their remaining commitment (i.e. a 25-50% penalty for leaving the project early). had the founder on recently https://youtu.be/rdRSUJkvmxM https://youtu.be/rdRSUJkvmxM -- seems like people who invested knew what they were doing going in.

pdog 9y ago
> ICO founders are getting a quick education... It's not fun for them, but after raising a couple of hundred million dollars, I don't feel too sorry for them either.
paulsutter 9y ago
Video is a great background on Tezos, why they chose a Swiss foundation in Zug, how the money is budgeted, how they chose the trustees for the foundation, the token presale, etc
- jasonmcalacanis 9y ago
  my podcast is a complete front for me figuring out if i should invest in startups. :-) just had coinlist on the show as well.... they did filecoin's $200m+ ICO http://thisweekinstartups.com/andy-bromberg-coinlist/ http://thisweekinstartups.com/andy-bromberg-coinlist/
  - nivertech 9y ago
    Wow! I think you need a dedicated podcast called "This week in ICOs" or "This week in crypto" ;)
  - pdog 9y ago
    They say if you want to master something, teach it. Looking forward to more crypto-focused podcasts. It's always preferable to hear from more technical guests who aren't just trying to sell something.
    - Matt_Mickiewicz 9y ago
      Unchained is probably the best crypto podcast currently, but would love other recommendations.
      - QML 9y ago
        There's Epicenter on iTunes.
      - keypusher 9y ago
        CoinMastery is quite good, although more focused on market analysis. I think Unchained gets great guests but I cannot stand the interviewer's style.
  - datahack 9y ago
    So honest it sometimes hurts, lol. Great show btw.
charlesdm 9y ago
Not fun for them, but nevertheless a very interesting lawsuit. What I am interested in is the fact they used a Swiss foundation that they don't actually control. What happens when a US judge allocates damages for certain actions? They declare personal bankruptcy? US judgements are also not always enforceable abroad, so is it imaginable the foundation gets to keep the money regardless of the outcome of any lawsuit? I would guess so.
- paulsutter 9y ago
  Ethereum was the first cryptocurrency to form a foundation in Zug, and its a popular structure. Generally the code and system are open sourced, and a nonprofit foundation controls the money raised in the ICO. https://www.swissinfo.ch/eng/500-million-business_crypto-piggybank-foundations-proliferate-in-zug/43494680 https://www.swissinfo.ch/eng/500-million-business_crypto-pig...
  - nivertech 9y ago
    All those Zug-incorporated ICOs exploiting loopholes in civil law: 1. Tokenizing non-profit foundations (stiftungs), while traditional "stiftung foundation has no shares or members" [1] 2. Pretending that token allocations are unrelated to donations/contributions. 3. Using nonprofit foundations for clearly for-profit speculative activity. [1] https://en.wikipedia.org/wiki/Stiftung https://en.wikipedia.org/wiki/Stiftung
    - microtherion 9y ago
      As a Swiss, I'm saddened that my country seems to have found yet another way to get involved in shady financial dealings.
      - Hermel 9y ago
        The problem is not that setting up such a structure is possible, the problem is the lack of suitable alternative legal structures that are better suited for the job. For that, regulation needs to be relaxed.
corford 9y ago
>3. Another easy solution is to have these ICOs hold the proceeds in escrow and release of funds quarterly for five years to the startups/projects and giving the investors the ability to refund half or 75% of their remaining commitment (i.e. a 25-50% penalty for leaving the project early). I've seen something similar to this in another ICO. They set up an ethereum smart contract that would distribute 90% of funds raised to the project over 4 years. If an investor wanted out, they could send their tokens to the contract and (iirc) it would burn them and refund the investor with ETH at a 10% haircut to the original buy price. Alas can't quite remember the ICO or the exact details (it was in a random whitepaper I read).

pdog 9y ago

> ICO founders are getting a quick education... It's not fun for them, but after raising a couple of hundred million dollars, I don't feel too sorry for them either.

paulsutter 9y ago

Video is a great background on Tezos, why they chose a Swiss foundation in Zug, how the money is budgeted, how they chose the trustees for the foundation, the token presale, etc

jasonmcalacanis 9y ago
my podcast is a complete front for me figuring out if i should invest in startups. :-) just had coinlist on the show as well.... they did filecoin's $200m+ ICO http://thisweekinstartups.com/andy-bromberg-coinlist/ http://thisweekinstartups.com/andy-bromberg-coinlist/
- nivertech 9y ago
  Wow! I think you need a dedicated podcast called "This week in ICOs" or "This week in crypto" ;)
- pdog 9y ago
  They say if you want to master something, teach it. Looking forward to more crypto-focused podcasts. It's always preferable to hear from more technical guests who aren't just trying to sell something.
  - Matt_Mickiewicz 9y ago
    Unchained is probably the best crypto podcast currently, but would love other recommendations.
    - QML 9y ago
      There's Epicenter on iTunes.
    - keypusher 9y ago
      CoinMastery is quite good, although more focused on market analysis. I think Unchained gets great guests but I cannot stand the interviewer's style.
- datahack 9y ago
  So honest it sometimes hurts, lol. Great show btw.

charlesdm 9y ago

Not fun for them, but nevertheless a very interesting lawsuit. What I am interested in is the fact they used a Swiss foundation that they don't actually control. What happens when a US judge allocates damages for certain actions? They declare personal bankruptcy? US judgements are also not always enforceable abroad, so is it imaginable the foundation gets to keep the money regardless of the outcome of any lawsuit? I would guess so.

paulsutter 9y ago
Ethereum was the first cryptocurrency to form a foundation in Zug, and its a popular structure. Generally the code and system are open sourced, and a nonprofit foundation controls the money raised in the ICO. https://www.swissinfo.ch/eng/500-million-business_crypto-piggybank-foundations-proliferate-in-zug/43494680 https://www.swissinfo.ch/eng/500-million-business_crypto-pig...
- nivertech 9y ago
  All those Zug-incorporated ICOs exploiting loopholes in civil law: 1. Tokenizing non-profit foundations (stiftungs), while traditional "stiftung foundation has no shares or members" [1] 2. Pretending that token allocations are unrelated to donations/contributions. 3. Using nonprofit foundations for clearly for-profit speculative activity. [1] https://en.wikipedia.org/wiki/Stiftung https://en.wikipedia.org/wiki/Stiftung
  - microtherion 9y ago
    As a Swiss, I'm saddened that my country seems to have found yet another way to get involved in shady financial dealings.
    - Hermel 9y ago
      The problem is not that setting up such a structure is possible, the problem is the lack of suitable alternative legal structures that are better suited for the job. For that, regulation needs to be relaxed.

corford 9y ago

>3. Another easy solution is to have these ICOs hold the proceeds in escrow and release of funds quarterly for five years to the startups/projects and giving the investors the ability to refund half or 75% of their remaining commitment (i.e. a 25-50% penalty for leaving the project early). I've seen something similar to this in another ICO. They set up an ethereum smart contract that would distribute 90% of funds raised to the project over 4 years. If an investor wanted out, they could send their tokens to the contract and (iirc) it would burn them and refund the investor with ETH at a 10% haircut to the original buy price. Alas can't quite remember the ICO or the exact details (it was in a random whitepaper I read).