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I consider every ICO to be a scam and that this sort of thing will become par for the course, with basically every speculator in the space losing money - except
by pbiggar 9y ago
I consider every ICO to be a scam and that this sort of thing will become par for the course, with basically every speculator in the space losing money - except those who manage to trick main street investors to cash them out.
However, this is weird: “Within hours they refunded me ethereum with a dollar amount equal to what I had contributed in early September, but since the coin has more than tripled in value since then, they kept the rest of my contribution, essentially stealing quite a lot of money from me.”
Yeah, that's bullshit. They owe you your money back, they don't owe you the gains that you would have gotten if you had speculated in Ethereum instead.
- empath75 9y agoWell, they’re making the argument that if they ‘invested’ ethereum that they should get the same amount of ethereum back, not dollars.
- cryptoz 9y agoWhat gains? 1 eth is 1th, there are no gains there. They took something like 1 eth from this person, and gave back .3 eth. That's stealing. (numbers not to scale)
- pbiggar 9y agoWhat was the price tag in? If the price tag was $1, they owe $1. If the price tag was 1 eth, they owe 1 eth. [edit: I've changed my mind. They bought an asset for $x in USD, they are owed $x in USD]
- CoryG89 9y agoApparently this is an ERC-20 token on the Ethereum blockchain, which means it is (probably) purchased using ETH.
- pbiggar 9y ago"Purchased using" is not the same as "price tag in". If I'm in the US, and I buy something from the UK, I would have paid GBP. My refund would be expected in GBP and they are not responsible for the currency fluctuations in between.
- cortesoft 9y agoIt was in eth, which is the problem. They invested one eth, and got back .3 eth.
- pbiggar 9y agoIf that's the case, then yeah, they got ripped off, and they can and should go to court to get it back. Do you know where this was posted? I'd love to read the wording.
- BWStearns 9y agoIt seems like the scam went like this: make ICO, invest all the money in ETH. If ETH spikes by the time you are required to perform, you refund with the now appreciated ETH at $ prices and call it good. Otherwise you go ahead with your shitty coin and just deal with investors being mad that they didn't become billionaires. Edit: so if that is indeed the scam then essentially the claim of wanting the returns on ETH is saying that the mark deserves them because the gains were ill gotten via transferring the risk to the mark.
- pbiggar 9y agoGood point. Yet another reason to stay the fuck away from this space.
- BWStearns 9y agoThis also makes me wonder about another "scam". * Buy some of coin X * Use that to buy some cash equivalent good that has a return policy (longer the better) * If X appreciates by the time the return policy is up, you return the goods, collecting the gains. * If X depreciates you sell the goods for cash in USD which likely won't have varied much in the intervening time. * Repeat, and you will have effectively captured 100% of the increase of X while completely derisked.
- asperous 9y agoNo one will return you the original number of BTC for refunds for this reason. But if they did then this would work.
- cortesoft 9y agoThey should return the currency you used to invest with, though, right? I mean, if I invest 100 US dollar in something, I expect 100 US dollars back if it is returned. You can't say "Well, when you invested, $100 was worth 100 euro, but now you can buy 100 euro for only $10, so here is $10. Look, you can still buy the same amount of euros, so the value is the same!" If they invested 1 eth token, give them back 1 eth token.
- debacle 9y agoThat's a drastic overstatement on the value of eth as a currency.
- adventured 9y ago> They should return the currency you used to invest with, though, right? Depends on the contract potentially. It's why most larger business arrangements that could even possibly include such a refund (as part of the contract), will have specifications covering that. I'm curious what was in their agreement, if anything. For example, if it had a clause that allows for returning the dollar invested sum. A court will usually find against you if you repay in a debased currency or similar however. If I tried to repay a loan, with no contract, in Venezuelan bolivars based on their former value on the date of the origination of the loan five years ago, that wouldn't get anywhere in a court of law, you'd lose easily.
- mancerayder 9y agoExcept in the US these are not currencies officially. All indications are that they're going to view these as securities.
- palakchokshi 9y agoNo sorry if you consider ETH to be a currency and payment was made in that currency then repayment is expected in that currency. Let's say you borrow US$1000 from a friend. That $1000 would have bought 1000 candies when you borrowed that money. One year later 1000 of the same candies costs $800 because the USD became stronger. You cannot repay your friend with 1000 candies and say you are good. You took $1000 and your friend wants $1000, not something that was equivalent to $1000 at the time you borrowed the money.
- pbiggar 9y agoI agree conceptually: if both sides consider the transaction to in ethereum-denominated currency, then there is a logical argument to what you said. But legally, ETH is not a currency. If they take this to court, the court will award the original USD price. They bought an asset worth $x. They are owed $x. When we get away from this funny money "we're inventing currencies" bullshit, there is a law of the land. An asset was promised, and they are owed the value of that asset when purchased, in USD.
- SaltyBackendGuy 9y agoExactly, what if ETH dropped to 1$? I am sure they would want their USD back.
- palakchokshi 9y agoAgreed. Like I said IF you consider ETH a currency. If you don't then that's an argument against all cryptocurrencies in general.
- eganist 9y agoCorrect, and the USG does not. IRS guidance calls all cryptocurrencies property.
- palakchokshi 9y agoI'm not a fan of cryptocurrencies myself but I am trying to argue the spirit of the transaction which considered ETH as a currency. Legally I am with you 100% that the investors are out of luck. That's the price of "investing" in a highly speculative vaporware "currency".
- debt 9y agoLast I checked AWS doesn't accept crypto. You can't eat crypto can you? So how was this person expected to build anything using literally only Ethereum(in compensation and in expenses)?
- Axsuul 9y agoYou exchange Ethereum for fiat currency.
- em3rgent0rdr 9y agoWhy can't etherium just be used for each new application instead instead of creating a new ICO for every new application?
- adventured 9y agoBecause the new token is part of the scheme (scam?). It's a core componetent of the inducement, people think/hope they're getting in extremely low on the next moonshot.
- em3rgent0rdr 9y agoIn that case, I would trust new coin apps more if they just used etherium.
- quickthrower2 9y agoYep you get your money back. Denominated in Zimbabwe dollars.
- derefr 9y ago> Yeah, that's bullshit. They owe you your money back, they don't owe you the gains that you would have gotten if you had speculated in Ethereum instead. Consider the equivalent situation in ForEx terms: you pay a Mexican company $10 USD for a product, and then, six months later—when the value of USD/MXN has gone up—you ask for a refund. You'd expect back $10 USD, right? Not some amount of USD equivalent to the amount of MXN $10USD would have bought six months ago. In this case, they paid in in ETH. So you'd expect that ETH in at point-of-sale, would equal ETH out at point-of-refund. That would be giving the investor their money back—money denominated in ETH.
- CPLX 9y agoDepends on where you are. If all the described events happened in Mexico then you'd get back pesos. If all that stuff happened in the US you'd get back dollars. If you had a contract that specified different and it was legally sound then that's what you'd do. That's how this works. You can call things currencies but that doesn't make it so, the legal system is an arm of he state, and states have one kind of currency, they get to decide what it is, and the they have guns and jails if you don't like it.
- derefr 9y ago> If all the described events happened in Mexico then you'd get back pesos. If all that stuff happened in the US you'd get back dollars. Say I'm dealing with a subsidiary of a Mexican corporation that operates in the US. They ask for payment in MXN, but both they and I know they're going to send it to their parent corporation, converting it to MXN in the process. They and I also know that, to get the refund, they'll have to pull MXN out of their treasury and convert it back to USD. But I still did pay USD to the subsidiary—my card didn't automatically convert USD to MXN to pay them or anything. I would expect, in this case, that my refund should happen from the subsidiary, and should be the original USD I transferred, even if that now costs them more to convert back than it was worth going in. However, I would also expect that if the corporation entered bankruptcy, and was unwinding its debt obligations, then I, as a creditor, would probably only see the current MXN value of the parent corporation's liability to me. (Or rather, the subsidiary—who owes me the money—would unwind with no assets held to pay out, so I would then sue the parent corporation for said assets, and end up with MXN.)
- mancerayder 9y agoHowever, this is weird: “Within hours they refunded me ethereum with a dollar amount equal to what I had contributed in early September, but since the coin has more than tripled in value since then, they kept the rest of my contribution, essentially stealing quite a lot of money from me.” Yeah, that's bullshit. They owe you your money back, they don't owe you the gains that you would have gotten if you had speculated in Ethereum instead. I agree. If it had gone down instead of up, he'd have kept his trap shut on this matter instead of being upset.
- paulie_a 9y agoEvery ico is a scam at this point and I have no expectations that will change. ICO has the reputation of ponzi
- alexnewman 9y agoI intend to prove you wrong... next week
- deleted 9y ago[deleted]
- bhouston 9y ago> I consider every ICO to be a scam I agree. I wonder if the average take of each new ICOs is decreasing as awareness of then generally being scams increases?
- philipodonnell 9y agoThe fun thing is, everyone here is calling this a scam, and while its clearly not what the investors intended, being able to park crypto funds in a way that is indexed to a specific USD amount is a legitimate service that has value: see the idea (but not the execution) behind Tether. If he had just come out and said 'give me Ethereum and I'll give it back in 6 months at the same USD exchange rate' there are a non-zero number of people who would have taken him up on that, maybe even paid for the service.