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> All of this SEC action may sound like very bad news for ICOs, but many in the industry have a more optimistic take: regulatory clarity will bring growth It w

by CPLX 8y ago

> All of this SEC action may sound like very bad news for ICOs, but many in the industry have a more optimistic take: regulatory clarity will bring growth It will be an interesting test I suppose. If ICO’s are in fact a novel technology that offers some kind of advantage, then this statement will be correct. If the entire and total value of ICO as a concept was that it was a means to sidestep existing regulations by pretending they didn’t exist, then this statement will prove laughable. Personally, I lol’d

wmf 8y ago
I was really pessimistic about security tokens because no exchange could legally trade them, but now a few exchanges are getting certified so it may be possible to dump these tokens. How many buyers there will be is still in question.
- olivermarks 8y ago
  Malta have very well defined laws about ICO's on the books from November 1st, the UK and USA have been disasterously vague about guidance for what constitutes a security so far, which doesn't help anyone except the bankers.
  - will_brown 8y ago
    I think the issue of what constitutes a security is very well defined in the US...it’s just no one has framed their token in such a way it’s not a security (despite all the claims to the contrary) and otherwise the ICOs have not complied with securities laws because...well move fast break things. I’m not sure why a company doesn’t just come out and do an ICO: a) with a token that’s not a security or b) a token that is a security and comply with securities laws.
    - thinkmassive 8y ago
      They have, see https://coinlist.co/ https://coinlist.co/
      - hndamien 8y ago
        If your innovation requires a new monetary system, it is probably a Ponzi.
    - vkou 8y ago
      > a token that is a security and comply with securities laws Because if you do that, there's no point having an ICO. Just do an IPO - the token is an expensive, pointless distraction from their mission to democratize the world's dogsitters, or whatever they want to do.
      - A2017U1 8y ago
        > Just do an IPO A token is virtually frictionless and costs nothing to setup or trade globally, dividends can be paid out directly to token owners. An IPO is an incredibly lengthy, arduous process requiring a small army of lawyers and accountants simply to offer shares to a restricted subset of sophisticated investors in one country.
        hndamien 8y ago
        You are referring to an STO and not an ICO.
    - CPLX 8y ago
      Because the only reason for tokens is to create a little confusion that allows people to think they'll be allowed to violate securities laws.
  - browsercoin 8y ago
    again, the only place ICO would be safe is those under the rule of Russia or China, otherwise all other countries face extradition to the US. US has proven again and again they will touch anyone anywhere (except china and russia), and its a losing battle to go up against an organization that has unlimited resources with capabilities that grow constantly.
  - s73v3r_ 8y ago
    No they haven't. They've said from the beginning that if it looks like a security, smells like a security, walks like a security and talks like a security, then it's a security. It's people trying to play the, "Well, it's different cause it's on a computer!" game that are muddying the waters.
    - wpietri 8y ago
      That's my impression too. Emily Post had this great rant on how people act like every new technology is exempt from the rules. Her examples at the time was the cellphone in movie theaters. Everybody knew not to talk loudly in the movie theater before the arrival of cellphones, but suddenly plenty of people thought it was ok to a) have a ringing phone, and b) answer it. Eventually everybody got it together again and nobody does that anymore. People figured out how to generalize politeness for the new technology. It seems like the same deal here. Investment regulation applies when you're selling a piece of your operation. It still will.
      - CryptoPunk 8y ago
        The scale of filesharing was irreversibly expanded by the internet, and in particular, by BitTorrent. Some technologies fundamentally change the difficulty of enforcing prohibitions against particular types of activity.
        wpietri 8y ago
        If the analogy you're drawing is mp3s to money, it's not a good one. Money has been digital much longer than music; SWIFT was formed in 1973. [1] The MICR E13B font, the machine-readable numbers seen at the bottom of every check, was adopted as a standard in 1958. [2] Further, since cryptocurrency's use in actual commerce is a rounding error, I don't think cryptocurrencies are even at the mp3 level yet. To be useful to most people, cryptocurrencies need to be turned into real money, which makes enforcement easy enough. It's especially easy here, in that ICOs are big public launches. Really, anything taking significant amounts of money from non-accredited investors needs to be quite public, because individually they don't have much money. Which again, makes enforcement easy. And also makes it clearly under the domain of the SEC unless they are careful to exclude American investors. [1] https://en.wikipedia.org/wiki/Society_for_Worldwide_Interbank_Financial_Telecommunication https://en.wikipedia.org/wiki/Society_for_Worldwide_Interban... [2] https://en.wikipedia.org/wiki/Magnetic_ink_character_recognition#History https://en.wikipedia.org/wiki/Magnetic_ink_character_recogni...
zjaffee 8y ago
As someone whose generally bearish on crypto currencies, I do see one clear benefit to ICOs over traditional exchanges. Namely the fact that you can trade them 24 hours a day, 7 days a week, from anywhere in the world with an internet connection, in any currency (theoretically) and on no fixed exchange (although it's likely that the number of exchanges will be limited to reduce price instability).
- JumpCrisscross 8y ago
  > you can trade them 24 hours a day, 7 days a week, from anywhere in the world with an internet connection, in any currency (theoretically) and on no fixed exchange This describes securities, generally. You and I can transact to trade shares of Uber in renminbi on a Saturday. We can transact, over the counter and using a broker, to trade shares of Apple in Canadian dollars the following day. The Apple trade would need to be reported to the national ticker, for transparency purposes, but that’s about it. We concentrate public equity trading into fixed windows and currencies to increase liquidity. It’s a convenience. Privately-negotiated trading is still common for large blocks of public securities.
  - lawn 8y ago
    The obvious difference is transactions without a third party. You can also verify ICO token integrity on the blockchain yourself (via open source apps).
    - notahacker 8y ago
      The obvious question is whether that actually matters all that much for securities, since the broker/exchange adds negligible risk and overhead for the buyer relative to the trust in the public company needed to buy a stake in it and the costs of meeting regulatory requirements for public companies. Anybody who's more worried by the potential complications of T+2 settlement when purchasing blue chip stocks than the Wild West world of ICOs shouldn't be investing.
      - 8y ago
anotheramala 8y ago
Recently congress members have written to the SEC asking for clarity on crypto: https://www.chepicap.com/en/news/4016/15-members-of-congress-write-a-letter-to-sec-urging-crypto-clarity.html https://www.chepicap.com/en/news/4016/15-members-of-congress... They want to draft legislation for regulatory clarity. So we can be sure ICO's will be addressed in that.

by CPLX 8y ago

wmf 8y ago

I was really pessimistic about security tokens because no exchange could legally trade them, but now a few exchanges are getting certified so it may be possible to dump these tokens. How many buyers there will be is still in question.

olivermarks 8y ago
Malta have very well defined laws about ICO's on the books from November 1st, the UK and USA have been disasterously vague about guidance for what constitutes a security so far, which doesn't help anyone except the bankers.
- will_brown 8y ago
  I think the issue of what constitutes a security is very well defined in the US...it’s just no one has framed their token in such a way it’s not a security (despite all the claims to the contrary) and otherwise the ICOs have not complied with securities laws because...well move fast break things. I’m not sure why a company doesn’t just come out and do an ICO: a) with a token that’s not a security or b) a token that is a security and comply with securities laws.
  - thinkmassive 8y ago
    They have, see https://coinlist.co/ https://coinlist.co/
    - hndamien 8y ago
      If your innovation requires a new monetary system, it is probably a Ponzi.
  - vkou 8y ago
    > a token that is a security and comply with securities laws Because if you do that, there's no point having an ICO. Just do an IPO - the token is an expensive, pointless distraction from their mission to democratize the world's dogsitters, or whatever they want to do.
    - A2017U1 8y ago
      > Just do an IPO A token is virtually frictionless and costs nothing to setup or trade globally, dividends can be paid out directly to token owners. An IPO is an incredibly lengthy, arduous process requiring a small army of lawyers and accountants simply to offer shares to a restricted subset of sophisticated investors in one country.
      - hndamien 8y ago
        You are referring to an STO and not an ICO.
  - CPLX 8y ago
    Because the only reason for tokens is to create a little confusion that allows people to think they'll be allowed to violate securities laws.
- browsercoin 8y ago
  again, the only place ICO would be safe is those under the rule of Russia or China, otherwise all other countries face extradition to the US. US has proven again and again they will touch anyone anywhere (except china and russia), and its a losing battle to go up against an organization that has unlimited resources with capabilities that grow constantly.
- s73v3r_ 8y ago
  No they haven't. They've said from the beginning that if it looks like a security, smells like a security, walks like a security and talks like a security, then it's a security. It's people trying to play the, "Well, it's different cause it's on a computer!" game that are muddying the waters.
  - wpietri 8y ago
    That's my impression too. Emily Post had this great rant on how people act like every new technology is exempt from the rules. Her examples at the time was the cellphone in movie theaters. Everybody knew not to talk loudly in the movie theater before the arrival of cellphones, but suddenly plenty of people thought it was ok to a) have a ringing phone, and b) answer it. Eventually everybody got it together again and nobody does that anymore. People figured out how to generalize politeness for the new technology. It seems like the same deal here. Investment regulation applies when you're selling a piece of your operation. It still will.
    - CryptoPunk 8y ago
      The scale of filesharing was irreversibly expanded by the internet, and in particular, by BitTorrent. Some technologies fundamentally change the difficulty of enforcing prohibitions against particular types of activity.
      - wpietri 8y ago
        If the analogy you're drawing is mp3s to money, it's not a good one. Money has been digital much longer than music; SWIFT was formed in 1973. [1] The MICR E13B font, the machine-readable numbers seen at the bottom of every check, was adopted as a standard in 1958. [2] Further, since cryptocurrency's use in actual commerce is a rounding error, I don't think cryptocurrencies are even at the mp3 level yet. To be useful to most people, cryptocurrencies need to be turned into real money, which makes enforcement easy enough. It's especially easy here, in that ICOs are big public launches. Really, anything taking significant amounts of money from non-accredited investors needs to be quite public, because individually they don't have much money. Which again, makes enforcement easy. And also makes it clearly under the domain of the SEC unless they are careful to exclude American investors. [1] https://en.wikipedia.org/wiki/Society_for_Worldwide_Interbank_Financial_Telecommunication https://en.wikipedia.org/wiki/Society_for_Worldwide_Interban... [2] https://en.wikipedia.org/wiki/Magnetic_ink_character_recognition#History https://en.wikipedia.org/wiki/Magnetic_ink_character_recogni...

zjaffee 8y ago

As someone whose generally bearish on crypto currencies, I do see one clear benefit to ICOs over traditional exchanges. Namely the fact that you can trade them 24 hours a day, 7 days a week, from anywhere in the world with an internet connection, in any currency (theoretically) and on no fixed exchange (although it's likely that the number of exchanges will be limited to reduce price instability).

JumpCrisscross 8y ago
> you can trade them 24 hours a day, 7 days a week, from anywhere in the world with an internet connection, in any currency (theoretically) and on no fixed exchange This describes securities, generally. You and I can transact to trade shares of Uber in renminbi on a Saturday. We can transact, over the counter and using a broker, to trade shares of Apple in Canadian dollars the following day. The Apple trade would need to be reported to the national ticker, for transparency purposes, but that’s about it. We concentrate public equity trading into fixed windows and currencies to increase liquidity. It’s a convenience. Privately-negotiated trading is still common for large blocks of public securities.
- lawn 8y ago
  The obvious difference is transactions without a third party. You can also verify ICO token integrity on the blockchain yourself (via open source apps).
  - notahacker 8y ago
    The obvious question is whether that actually matters all that much for securities, since the broker/exchange adds negligible risk and overhead for the buyer relative to the trust in the public company needed to buy a stake in it and the costs of meeting regulatory requirements for public companies. Anybody who's more worried by the potential complications of T+2 settlement when purchasing blue chip stocks than the Wild West world of ICOs shouldn't be investing.
    - 8y ago

anotheramala 8y ago

Recently congress members have written to the SEC asking for clarity on crypto: https://www.chepicap.com/en/news/4016/15-members-of-congress-write-a-letter-to-sec-urging-crypto-clarity.html https://www.chepicap.com/en/news/4016/15-members-of-congress... They want to draft legislation for regulatory clarity. So we can be sure ICO's will be addressed in that.