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Exactly. The average ICO made buzzword promises much more insane and fraudulent than even Theranos. As someone who watched all this quite closely back in the

by jarsin 8y ago

Exactly. The average ICO made buzzword promises much more insane and fraudulent than even Theranos. As someone who watched all this quite closely back in the day I cannot believe the amount of money these hucksters pulled out of people and still are to this day.

CryptoPunk 8y ago
>>As someone who watched all this quite closely back in the day I cannot believe the amount of money these hucksters pulled out of people and still are to this day. I don't like people promising the moon to hype up speculative investments, but there are non-government solutions to this, like reputation markets. In fact we see these non-government solutions working already: token investors today are unrecognizable from those that were giving a website with a white paper $40 million worth of cryptocurrency in 2016. This transformation has occurred completely independently from any regulatory action. The collective intelligence of the market has increased from hard-won lessons in the need to do due diligence, and the emergence of numerous sites for rating token sales (mind you, there's still a lot of room improvement in the curation market). Regulations can obviously address some of these problems too, but any restriction on how consenting parties choose to interact is going to have massive unintended consequences, and in my estimation the unintended consequences do much more harm than what's alleviated by the regulations. Also worth mentioning is that the regulations that the SEC is trying to impose on token sales go far beyond prohibiting issuers from promising big gains. They try to micromanage how an offering is conducted with inflexible cookie cutter rules that inhibit innovation and make the entire market dependent on a centralized gatekeeper, which is a monopolistic and fragile situation prone to systemic failures. It's obvious to me that a free society should not tolerate this level of control being exerted on how people engage in voluntary interactions with other consenting adults. The problem is that the idea that we ought to be free to do with our money what we wish threatens many powerful special interests, so we get a never-ending stream of rationalizations and emotional appeals for restricting people's contracting rights, and for funnelling commerce through centralized gatekeepers.
- stale2002 8y ago
  I mean, ok. But you are basically arguing that fraud should be allowed, because it is between "consenting adults". If that's what you want, fine. But you should be open and honest about the fact that you believe that financial fraud should be legal. And I'd like to point out that fraud is not a new concept. It is something that has been explored in many aspects of society, and most people oppose fraud. Fraud on a Blockchain is still fraud.
  - CryptoPunk 8y ago
    Fraud by definition is non-consensual, since it means someone not consenting to a material fact that was withheld from them about the interaction. It's fundamentally theft through misrepresentation of facts and should always be illegal. Someone saying "We believe this token will go up 200% in two years" is probably not a misrepresentation of facts, and thus not fraud, and should probably be allowed, and they should suffer the reputational damage when their predictions don't pan out. But if we created laws that did prohibit people from hyping up the investment potential of a token they put for sale, or laws that require token sale organizers to disclose the general risks around investing in speculative assets, like requiring them to include a statement on their website like "this is a highly speculative asset that has not been registered with the SEC. Speculative investments have a high likelihood of losing all of their value. It is recommended that you get professional investment advice before making an investment into a speculative instrument like this, and that you avoid investing a large portion of your wealth in them", that would probably be fine. It wouldn't be a major impediment to voluntary exchange. Like I said though, what the SEC is seeking to do goes far beyond barring token sale organizers from hyping their project's profit potential, or requiring such warning messages on their websites. If that's all the SEC wanted to do, I wouldn't be nearly as opposed, if at all.

by jarsin 8y ago

CryptoPunk 8y ago

>>As someone who watched all this quite closely back in the day I cannot believe the amount of money these hucksters pulled out of people and still are to this day. I don't like people promising the moon to hype up speculative investments, but there are non-government solutions to this, like reputation markets. In fact we see these non-government solutions working already: token investors today are unrecognizable from those that were giving a website with a white paper $40 million worth of cryptocurrency in 2016. This transformation has occurred completely independently from any regulatory action. The collective intelligence of the market has increased from hard-won lessons in the need to do due diligence, and the emergence of numerous sites for rating token sales (mind you, there's still a lot of room improvement in the curation market). Regulations can obviously address some of these problems too, but any restriction on how consenting parties choose to interact is going to have massive unintended consequences, and in my estimation the unintended consequences do much more harm than what's alleviated by the regulations. Also worth mentioning is that the regulations that the SEC is trying to impose on token sales go far beyond prohibiting issuers from promising big gains. They try to micromanage how an offering is conducted with inflexible cookie cutter rules that inhibit innovation and make the entire market dependent on a centralized gatekeeper, which is a monopolistic and fragile situation prone to systemic failures. It's obvious to me that a free society should not tolerate this level of control being exerted on how people engage in voluntary interactions with other consenting adults. The problem is that the idea that we ought to be free to do with our money what we wish threatens many powerful special interests, so we get a never-ending stream of rationalizations and emotional appeals for restricting people's contracting rights, and for funnelling commerce through centralized gatekeepers.

stale2002 8y ago
I mean, ok. But you are basically arguing that fraud should be allowed, because it is between "consenting adults". If that's what you want, fine. But you should be open and honest about the fact that you believe that financial fraud should be legal. And I'd like to point out that fraud is not a new concept. It is something that has been explored in many aspects of society, and most people oppose fraud. Fraud on a Blockchain is still fraud.
- CryptoPunk 8y ago
  Fraud by definition is non-consensual, since it means someone not consenting to a material fact that was withheld from them about the interaction. It's fundamentally theft through misrepresentation of facts and should always be illegal. Someone saying "We believe this token will go up 200% in two years" is probably not a misrepresentation of facts, and thus not fraud, and should probably be allowed, and they should suffer the reputational damage when their predictions don't pan out. But if we created laws that did prohibit people from hyping up the investment potential of a token they put for sale, or laws that require token sale organizers to disclose the general risks around investing in speculative assets, like requiring them to include a statement on their website like "this is a highly speculative asset that has not been registered with the SEC. Speculative investments have a high likelihood of losing all of their value. It is recommended that you get professional investment advice before making an investment into a speculative instrument like this, and that you avoid investing a large portion of your wealth in them", that would probably be fine. It wouldn't be a major impediment to voluntary exchange. Like I said though, what the SEC is seeking to do goes far beyond barring token sale organizers from hyping their project's profit potential, or requiring such warning messages on their websites. If that's all the SEC wanted to do, I wouldn't be nearly as opposed, if at all.