5 ms·

> it isn't because the elite banksters are trying to protect their monopoly To quote The Dude "Well, that's just like your opinion, man". I think your point is

by mbesto 9y ago

> it isn't because the elite banksters are trying to protect their monopoly To quote The Dude "Well, that's just like your opinion, man". I think your point is that the intention of the law is so that people are manipulated into buying securities they can't afford (e.g. scams). This is true, however some would argue that this legislation is yet another reason the rich continue to stay rich, which is a legitimate argument. So I wouldn't be so dismissive of that opinion.

tptacek 9y ago
I do not understand the underlying logic of this argument. It seems to suggest that but for pesky SEC RegD rule, there'd be 10,000% appreciation opportunities for everyone, not just the wealthiest investors. How do people making this argument think money works? People that can commit $20,000,000 to an investment with the stroke of a pen are going to get the best opportunities no matter how they're structured: they can offer better terms. Literally the only thing retail investors could conceivably offer to compete with them is "willingness to be screwed over without recourse". Stipulate a future in which essentially no ICO is regulated, and most new venture raises happen with publicly traded ICOs. Follow that thought to its conclusion and explain to me how the best opportunities are going to provide 10,000% gains, rather than markets acting the way all logic in either direction about ICOs dictates they must act, and pricing risk and opportunity accordingly? I see how, in the post- free-ICO world, you'll be able to bet that restaurant review coupons will 10x your money. Coupons for everything. 10x your money on dog washing and cat sharing; that'll happen too. What I don't see is why the truly credible teams doing truly important work with a real chance of success are going to offer securities on those same terms. How does that work? How stupid would you have to be to look at a market where restaurant review coupons are worth $15MM because they're certain! to 9x your investment, and then go to market with the next generation of, say, the Cisco Catalyst 9400 switch on those exact same terms? Aren't restaurant review coupons in some sense the ceiling on how too-good-to-be-true these ICO deals can be? I mean: that business is obviously not going to work. A reasonably sophisticated person can only put money on it in the hopes that someone dumber will buy it off them in a week or two.
- sillysaurus3 9y ago
  Aren't restaurant review coupons in some sense the ceiling on how too-good-to-be-true these ICO deals can be? I mean: that business is obviously not going to work. A reasonably sophisticated person can only put money on it in the hopes that someone dumber will buy it off them in a week or two. Your argument hinges on the assumption that the government should protect people from this outcome. If they make a bad bet, it's their bet to lose. Right now, churches ask for thousands of dollars via mail. People send them with the hopes that they are "planting a seed" and to "watch that seed grow." All of this behavior goes on without society collapsing. What's the key difference? Why do people need to be protected when suddenly they have a chance of winning real returns, however remote?
  - tptacek 9y ago
    View few people mortgage their houses and send the proceeds to a church expecting to pay for their kids college tuitions.
- mbesto 9y ago
  > I do not understand the underlying logic of this argument. Just because you don't understand the logic of the argument doesn't invalidate it.
  - tptacek 9y ago
    That's obviously true, but doesn't get us anywhere.
    - mbesto 9y ago
      I generally appreciate your commentary and authority on certain topics, but the "I'm right, you're wrong" / "I can't understand this rationale so I'm going to dismiss it" attitude here certainly isn't going to get us anywhere either. I think we both agree that allowing anyone to invest without an accreditation is probably harmful, however don't you think it's worth discussing/investigating the negative externalities of such an accreditation?
cycrutchfield 9y ago
The laws exist for a good reason, and it's because historically many folks with insufficient means lost their shirts due to such scams. A judgment was made that between restricting such risky schemes to those with the means to handle that risk ("the rich") and letting people lose their shirts, restricting such risky schemes was the lesser of two evils. And I tend to agree.
- tptacek 9y ago
  Can we be clear that the law does not restrict "risky schemes", but rather "schemes that refuse to follow disclosure laws"? There are thousands of publicly traded companies and a lot of them are batshit. What allows them to trade without SEC molestation is that they (a) register, (b) publish audited financials, and (c) follow the SEC's rules about promotion. The difference between a restaurant review coupon ICO and a pink sheet biotech firm isn't risk. Both will almost certainly fail. The difference is that the ICO refuses to publish audited financials, and demands the right to shoot Youtube videos extolling a once-in-a-lifetime opportunity to 9x an investment. That's what the SEC is protecting retail investors from.

by mbesto 9y ago

tptacek 9y ago

I do not understand the underlying logic of this argument. It seems to suggest that but for pesky SEC RegD rule, there'd be 10,000% appreciation opportunities for everyone, not just the wealthiest investors. How do people making this argument think money works? People that can commit $20,000,000 to an investment with the stroke of a pen are going to get the best opportunities no matter how they're structured: they can offer better terms. Literally the only thing retail investors could conceivably offer to compete with them is "willingness to be screwed over without recourse". Stipulate a future in which essentially no ICO is regulated, and most new venture raises happen with publicly traded ICOs. Follow that thought to its conclusion and explain to me how the best opportunities are going to provide 10,000% gains, rather than markets acting the way all logic in either direction about ICOs dictates they must act, and pricing risk and opportunity accordingly? I see how, in the post- free-ICO world, you'll be able to bet that restaurant review coupons will 10x your money. Coupons for everything. 10x your money on dog washing and cat sharing; that'll happen too. What I don't see is why the truly credible teams doing truly important work with a real chance of success are going to offer securities on those same terms. How does that work? How stupid would you have to be to look at a market where restaurant review coupons are worth $15MM because they're certain! to 9x your investment, and then go to market with the next generation of, say, the Cisco Catalyst 9400 switch on those exact same terms? Aren't restaurant review coupons in some sense the ceiling on how too-good-to-be-true these ICO deals can be? I mean: that business is obviously not going to work. A reasonably sophisticated person can only put money on it in the hopes that someone dumber will buy it off them in a week or two.

sillysaurus3 9y ago
Aren't restaurant review coupons in some sense the ceiling on how too-good-to-be-true these ICO deals can be? I mean: that business is obviously not going to work. A reasonably sophisticated person can only put money on it in the hopes that someone dumber will buy it off them in a week or two. Your argument hinges on the assumption that the government should protect people from this outcome. If they make a bad bet, it's their bet to lose. Right now, churches ask for thousands of dollars via mail. People send them with the hopes that they are "planting a seed" and to "watch that seed grow." All of this behavior goes on without society collapsing. What's the key difference? Why do people need to be protected when suddenly they have a chance of winning real returns, however remote?
- tptacek 9y ago
  View few people mortgage their houses and send the proceeds to a church expecting to pay for their kids college tuitions.
mbesto 9y ago
> I do not understand the underlying logic of this argument. Just because you don't understand the logic of the argument doesn't invalidate it.
- tptacek 9y ago
  That's obviously true, but doesn't get us anywhere.
  - mbesto 9y ago
    I generally appreciate your commentary and authority on certain topics, but the "I'm right, you're wrong" / "I can't understand this rationale so I'm going to dismiss it" attitude here certainly isn't going to get us anywhere either. I think we both agree that allowing anyone to invest without an accreditation is probably harmful, however don't you think it's worth discussing/investigating the negative externalities of such an accreditation?

cycrutchfield 9y ago

The laws exist for a good reason, and it's because historically many folks with insufficient means lost their shirts due to such scams. A judgment was made that between restricting such risky schemes to those with the means to handle that risk ("the rich") and letting people lose their shirts, restricting such risky schemes was the lesser of two evils. And I tend to agree.

tptacek 9y ago
Can we be clear that the law does not restrict "risky schemes", but rather "schemes that refuse to follow disclosure laws"? There are thousands of publicly traded companies and a lot of them are batshit. What allows them to trade without SEC molestation is that they (a) register, (b) publish audited financials, and (c) follow the SEC's rules about promotion. The difference between a restaurant review coupon ICO and a pink sheet biotech firm isn't risk. Both will almost certainly fail. The difference is that the ICO refuses to publish audited financials, and demands the right to shoot Youtube videos extolling a once-in-a-lifetime opportunity to 9x an investment. That's what the SEC is protecting retail investors from.