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SEC compliance comes with extensive fees, delays, and a century of legalese. Coin offerings do not have to fall in the tens of millions of dollars. It's a pract

SEC compliance comes with extensive fees, delays, and a century of legalese. Coin offerings do not have to fall in the tens of millions of dollars. It's a practical way for smaller startups to raise small amounts of money. For instance the first company that started Musk's rise was Zip2 - and it was started with money that was in the 5 figures. A coin offering instead of angel investors could have been an interesting option for a similar company now a days. For companies on this scale, having to hire a legal team to ensure compliance is a significant burden. How much do you think this will end up costing companies to comply with? Ultimately we'd all like to have 100% honest ICOs. But you have to balance the cost of compliance with the expected results. Many ICOs already block American investors and that was before this. How will this effect the rates of scams? How will this effect the rate of perfectly up and up ICOs that are not made available to US investors?

chickenfries 9y ago
If an ICO is perfectly up and up they should abide by the same regulation as other securities. If you can’t afford the regulation then you can’t afford to sell securities. It seems like ICO boosters have a hard time believing that everyone isn’t a libertarian who wants there to be no regulation on ICOs.
- kodablah 9y ago
  > If you can’t afford the regulation then you can’t afford to sell securities. People are growing tired of the pay-to-play barriers to entry. Why can't we have the regulations without the financial burdens? (Hint: the answer is not about following the regulations themselves, but artificially limiting supply to make for easier enforcement. Otherwise there are too many to meaningfully regulate.)
  - s73ver_ 9y ago
    "Why can't we have the regulations without the financial burdens?" If you can find people willing to work for your without pay, you can.
    - kodablah 9y ago
      I'm questioning the amount of work required as the burden, not the humans. IIRC, the SEC filings require multi-thousand dollar fees. Many government services do not (or not at that level). Do you believe all of those other government services are making people work without pay? I don't think it's fair that you blindly assume the fees are equal to the administrative costs when it seems clear to me they are set at a level to detract the action.
      - chickenfries 9y ago
        How many government services require hours of work by lawyers per application? If you can't cough up a few thousand dollars or take our a small business loan to hire some lawyers, why should I believe that you're trustworthy enough to skirt regulations?
        kodablah 9y ago
        I'm saying the application shouldn't require hours of work by lawyers any more than filing for an LLC or my tax filings require individual lawyer review. In my head, I read the last statement like "why should the law trust you if you don't have enough money, and why should you be allowed to do something without the law's trust?" I believe enforcement should be reactive on regulation skirting within reason. Akin to an audit, an arrest, or anything else. You agree to abide by laws, you may even sign something or fill out a form to that effect. That there is an extra step to see if you "really" agree seems to be a way to artificially limit filing counts. I admit I am not that knowledgeable on possible history where too many did fraudulent filings requiring this individual-lawyer-review preemption.
        chickenfries 9y ago
        > I admit I am not that knowledgeable on possible history where too many did fraudulent filings requiring this individual-lawyer-review preemption. So youre criticizing an institution while being ignorant of the conditions that caused that institution to come about? I suspect you’re not alone in this thread but this kind of ahistoricity makes it impossible to have any kind of reasonable civic discourse. Democracy demands that we educate ourselves. Read about the Great Depression, the creation of the SEC and why it was needed in the first place. The current situation with ICOs where you have some legitimate businessses and some scams advertising themselves to Main Street investors is very similar to the situation with securities before the SEC.
  - chickenfries 9y ago
    No I think people in general are quite happy with the SEC and pay-to-play barriers. The boosters looking to make money of ICOs and such may be tired of the SEC, but that's like saying unlicensed drivers are tired of the cops.
    - kodablah 9y ago
      > I think people in general are quite happy with the SEC and pay-to-play barriers I think you are probably right. But as crowdfunding (er, "crowd investing") becomes more available to the masses and the SEC cracks down on it more, a whole group of people that otherwise were unfamiliar w/ these rules aren't going to remain happy. I would not be surprised to see the barriers relaxed (but not the regulations of course).
s73ver_ 9y ago
If you're only focusing on the costs of compliance, then you're looking at the wrong thing. "Coin offerings do not have to fall in the tens of millions of dollars." The amount of money does not matter; a scam is a scam. "For companies on this scale, having to hire a legal team to ensure compliance is a significant burden." That sucks for them. But the alternative is far, far worse. "A coin offering instead of angel investors could have been an interesting option for a similar company now a days." Why? If the only reason is that they don't have to comply with the reporting and transparency regulations, then it's not a good reason. "But you have to balance the cost of compliance with the expected results." Why? And, quite frankly, why should an ICO be treated any differently than any other security? They are exactly the same; and have absolutely nothing differentiating them from traditional securities. "How will this effect the rate of perfectly up and up ICOs that are not made available to US investors?" I'm going to say it won't. Perfectly up and up ICOs will be able to get compliance, and will thus be open to all.

chickenfries 9y ago

If an ICO is perfectly up and up they should abide by the same regulation as other securities. If you can’t afford the regulation then you can’t afford to sell securities. It seems like ICO boosters have a hard time believing that everyone isn’t a libertarian who wants there to be no regulation on ICOs.

kodablah 9y ago
> If you can’t afford the regulation then you can’t afford to sell securities. People are growing tired of the pay-to-play barriers to entry. Why can't we have the regulations without the financial burdens? (Hint: the answer is not about following the regulations themselves, but artificially limiting supply to make for easier enforcement. Otherwise there are too many to meaningfully regulate.)
- s73ver_ 9y ago
  "Why can't we have the regulations without the financial burdens?" If you can find people willing to work for your without pay, you can.
  - kodablah 9y ago
    I'm questioning the amount of work required as the burden, not the humans. IIRC, the SEC filings require multi-thousand dollar fees. Many government services do not (or not at that level). Do you believe all of those other government services are making people work without pay? I don't think it's fair that you blindly assume the fees are equal to the administrative costs when it seems clear to me they are set at a level to detract the action.
    - chickenfries 9y ago
      How many government services require hours of work by lawyers per application? If you can't cough up a few thousand dollars or take our a small business loan to hire some lawyers, why should I believe that you're trustworthy enough to skirt regulations?
      - kodablah 9y ago
        I'm saying the application shouldn't require hours of work by lawyers any more than filing for an LLC or my tax filings require individual lawyer review. In my head, I read the last statement like "why should the law trust you if you don't have enough money, and why should you be allowed to do something without the law's trust?" I believe enforcement should be reactive on regulation skirting within reason. Akin to an audit, an arrest, or anything else. You agree to abide by laws, you may even sign something or fill out a form to that effect. That there is an extra step to see if you "really" agree seems to be a way to artificially limit filing counts. I admit I am not that knowledgeable on possible history where too many did fraudulent filings requiring this individual-lawyer-review preemption.
        chickenfries 9y ago
        > I admit I am not that knowledgeable on possible history where too many did fraudulent filings requiring this individual-lawyer-review preemption. So youre criticizing an institution while being ignorant of the conditions that caused that institution to come about? I suspect you’re not alone in this thread but this kind of ahistoricity makes it impossible to have any kind of reasonable civic discourse. Democracy demands that we educate ourselves. Read about the Great Depression, the creation of the SEC and why it was needed in the first place. The current situation with ICOs where you have some legitimate businessses and some scams advertising themselves to Main Street investors is very similar to the situation with securities before the SEC.
- chickenfries 9y ago
  No I think people in general are quite happy with the SEC and pay-to-play barriers. The boosters looking to make money of ICOs and such may be tired of the SEC, but that's like saying unlicensed drivers are tired of the cops.
  - kodablah 9y ago
    > I think people in general are quite happy with the SEC and pay-to-play barriers I think you are probably right. But as crowdfunding (er, "crowd investing") becomes more available to the masses and the SEC cracks down on it more, a whole group of people that otherwise were unfamiliar w/ these rules aren't going to remain happy. I would not be surprised to see the barriers relaxed (but not the regulations of course).

s73ver_ 9y ago

If you're only focusing on the costs of compliance, then you're looking at the wrong thing. "Coin offerings do not have to fall in the tens of millions of dollars." The amount of money does not matter; a scam is a scam. "For companies on this scale, having to hire a legal team to ensure compliance is a significant burden." That sucks for them. But the alternative is far, far worse. "A coin offering instead of angel investors could have been an interesting option for a similar company now a days." Why? If the only reason is that they don't have to comply with the reporting and transparency regulations, then it's not a good reason. "But you have to balance the cost of compliance with the expected results." Why? And, quite frankly, why should an ICO be treated any differently than any other security? They are exactly the same; and have absolutely nothing differentiating them from traditional securities. "How will this effect the rate of perfectly up and up ICOs that are not made available to US investors?" I'm going to say it won't. Perfectly up and up ICOs will be able to get compliance, and will thus be open to all.