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> Many of the companies are suffering because they kept a portion of their funds in digital assets Lol that makes it sound like they had a choice. Because esse

> Many of the companies are suffering because they kept a portion of their funds in digital assets Lol that makes it sound like they had a choice. Because essentially none of the ICOs did KYC/AML, none of them were allowed to create bank accounts anywhere worldwide so they had to keep their money in ETH. That’s why they’re just starting to go bankrupt and will mostly all go bankrupt in 2019. If you think it’s a bear market now, the real crash hasn’t even started yet. If you want to see something typical, here is what Jez, the founder of FunFair, wrote one year ago on Reddit: "in the august company announcement we said we were holding more than a year's running cost in cash and thats still the case. our holdings are approx $6m in cash (dollars), and several million in bitcoin (which keeps going up in value!) and a lot more in eth. in short, we have capital of more than $30m, at current valuations. we're not going to starve in 2019, unless bitcoin and eth values plummet which seems unlikely. bitcoin is more than double the price of the time of our token sale in june."

seibelj 8y ago
My previous company (AirFox) did an ico, we had a bank account, and we sold everything. We also did KYC/AML for all purchasers. Most of the USA firms did. However, the SEC also just settled with AirFox for selling unregistered securities, so that didn’t exactly go as planned!
- dopamean 8y ago
  If the settlement was for less than you got from the ico it may have been worth it.
  - homakov 8y ago
    250k fine, 15m raised... https://decryptmedia.com/2018/11/29/exclusive-airfox-ceo-says-ico-regulations-still-unclear-after-sec-settlement/ https://decryptmedia.com/2018/11/29/exclusive-airfox-ceo-say...
    - dopamean 8y ago
      lol
    - fspeech 8y ago
      They have to return investors' funds. Fine is on top of that. https://www.sec.gov/news/press-release/2018-264 https://www.sec.gov/news/press-release/2018-264
      - homakov 8y ago
        Well if one or two investors died due to a heart attack from the bear market... that's net win anyway.
        DonHopkins 8y ago
        That sounds like as good a business plan as any in the cryptocurrency field.
- nradov 8y ago
  Why would you go along with a scam like that?
wpietri 8y ago
Definitely. When prices are going up up up and the money is flowing freely, few really question what economic value is being created. But now that it's obvious to even the fools that they can lose money, they're going to have to figure out what valuable service these companies can provide to regular folks. When I contrast this with the end of Bubble 1.0, the biggest difference I see is the lack of actual use. 2000 was an incredible bear market, especially in tech. Even good startups died, and the ones who weren't creating value died quickly. The Internet, though, still had hundreds of millions of daily users. Things like email and the web browser and downloadable MP3s made people's lives better, and they weren't giving them up. But who uses Bitcoin for anything but speculation and maybe some light financial crime? As best I can tell, approximately nobody. The NYT tried using it for daily life back in April and it was a bust. [1] The few major online retailers who offered to sell you things in it have removed it again. Even major Bitcoin proponents admitted it was terrible as a currency.[2] And as far as I can tell, none of the zillion other coins have significant real-world use either. I think there's truly nothing to sustain an "industry" here. Valuations are going to drop to (and probably below) whatever can be justified by cash flows, which in turn is based on economic utility to people outside the bubble. If that number isn't zero, it's at least very, very small. So as you say, this is only the beginning of the end. [1] https://www.nytimes.com/2018/04/16/nyregion/new-york-today-living-on-bitcoin.html https://www.nytimes.com/2018/04/16/nyregion/new-york-today-l... [2] e.g., https://avc.com/2017/08/store-of-value-vs-payment-system/ https://avc.com/2017/08/store-of-value-vs-payment-system/
- DanHulton 8y ago
  You're forgetting one major use: actual crime. Black-market drug sales probably won't be too affected by the crash, they already had a network before Bitcoin. But ransomware! Oh man, that's nowhere near as easy nor as profitable without a high-value cruptocurrency. If the crypto crash ALSO took out ransomware developers, that's two birds with one stone, as far as I'm concerned.
  - talltimtom 8y ago
    Randomware doesn’t care about the exchange rate. They just funnel cash through crypto’s because it’s a simple way for them to take digital payment. In the down market they can’t cash out as many dollars per bitcoins, but the victims also get way more bitcoin for the same amount of dollars. A low valuation might affect coinminer malware though.
philfrasty 8y ago
TenX converted a large portion of their ICO proceedings into USD, see under "Finance" https://blog.tenx.tech/tenx-transparency-report-q2-2018-98bb05dd98b8 https://blog.tenx.tech/tenx-transparency-report-q2-2018-98bb...
tim333 8y ago
I'm not sure that's quite true. All the ones I'm familiar with had bank accounts to pay wages, rent etc. And they also seem to have been able to change crypto to fiat. I opened some fiat-crypto accounts and it wasn't that hard - you have to scan your passport etc.
- Alex3917 8y ago
  Yeah any business can create a bank account, but no bank is going to let you just dump $30M in the account without accounting for where it came from. You’d need a relationship with both the bank and the regulators before doing the ICO, which almost none of them had, especially early on.
  - nikanj 8y ago
    Reading the news about Danske Bank, the reality seems to somewhat disagree with you. Some banks a very happy to deal with shady money, as long as there’s _a_lot_ of it.
gammateam 8y ago
Except the next iteration of these things will use stablecoins
- DonHopkins 8y ago
  Do you burn cleancoal to mine stablecoins? Like militaryintelligence is fightingforpeace? Yeaaaaah.
  - gammateam 8y ago
    No, nobody does that. There is no mining involved None of your crypto comments are coherent, I can tell they are intended to be cynical but they also dont make sense
    - DonHopkins 8y ago
      Let me coherently explain it for you so you're not so confused: "stablecoins" is a oxymoron. Like "military intelligence" or "fighting for peace" or "clean coal". Get it now? http://tmbw.net/wiki/Oxymorons,_Paradoxes,_And_Contradictory_Statements http://tmbw.net/wiki/Oxymorons,_Paradoxes,_And_Contradictory...
  - pmarreck 8y ago
    Actually, when 2 opposing militaries are more or less equal, the most likely outcome is peace. When they are drastically unequal is when war becomes likely.
    - DonHopkins 8y ago
      Unless you're talking about some board game like "Risk", I believe the causes of international war and peace are a little more complicated and nuanced than the "more or less equality" of their militaries, if that could be even objectively measured or absolutely known. Do you really think "military inequality" was the root cause of WWI and the Civil War?
- DonHopkins 8y ago
darawk 8y ago
> Lol that makes it sound like they had a choice. They could have simply kept their assets in stable coins, like Dai, Tether, etc..They could also sell into USD on exchanges that allow you to trade USD (e.g. Kraken). Another option would have been to open a hedging short position on say, Bitmex. There's lots of ways they could have cashed out, effectively.
- homakov 8y ago
  >They could have simply kept their assets in stable coins, like Dai, Tether, etc.. To turn into dust? >They could also sell into USD on exchanges that allow you to trade USD (e.g. Kraken). And trust Kraken then. >Another option would have been to open a hedging short position on say, Bitmex. and trust bitmex then. There are no scalable options to cash out $10m to a bank and sleep well. You could cash out into some "stable coin" only to wake up to it costing $0.04 (hello nubits). Tether is no safer in that matter.
  - darawk 8y ago
    > To turn into dust? Oh, you mean the 'dust' that is worth exactly $1 at this moment, where Ethereum has lost 90% of its value? That dust? > And trust Kraken then. Yep, the exchange that's been trustworthy and operated seamlessly since its inception, sure. And still does. > There are no scalable options to cash out $10m to a bank and sleep well. You could cash out into some "stable coin" only to wake up to it costing $0.04 (hello nubits). Tether is no safer in that matter. You may not sleep perfectly, but you'll sleep a lot better than if you're holding it in crypto. And that is my point. And if you wanted to use Dai, you could actually sleep perfectly. Dai has held up perfectly well, and you can hold it off-exchange.
    - manigandham 8y ago
      Past performance does not indicate future results. The most common disclaimer in finance, but equally applicable to all things in life.
      - 8y ago
DonHopkins 8y ago
Also in the news: Many drug dealers are suffering because they used all their drugs. And many liars are suffering because the believed their own lies.

seibelj 8y ago

My previous company (AirFox) did an ico, we had a bank account, and we sold everything. We also did KYC/AML for all purchasers. Most of the USA firms did. However, the SEC also just settled with AirFox for selling unregistered securities, so that didn’t exactly go as planned!

dopamean 8y ago
If the settlement was for less than you got from the ico it may have been worth it.
- homakov 8y ago
  250k fine, 15m raised... https://decryptmedia.com/2018/11/29/exclusive-airfox-ceo-says-ico-regulations-still-unclear-after-sec-settlement/ https://decryptmedia.com/2018/11/29/exclusive-airfox-ceo-say...
  - dopamean 8y ago
    lol
  - fspeech 8y ago
    They have to return investors' funds. Fine is on top of that. https://www.sec.gov/news/press-release/2018-264 https://www.sec.gov/news/press-release/2018-264
    - homakov 8y ago
      Well if one or two investors died due to a heart attack from the bear market... that's net win anyway.
      - DonHopkins 8y ago
        That sounds like as good a business plan as any in the cryptocurrency field.
nradov 8y ago
Why would you go along with a scam like that?

wpietri 8y ago

Definitely. When prices are going up up up and the money is flowing freely, few really question what economic value is being created. But now that it's obvious to even the fools that they can lose money, they're going to have to figure out what valuable service these companies can provide to regular folks. When I contrast this with the end of Bubble 1.0, the biggest difference I see is the lack of actual use. 2000 was an incredible bear market, especially in tech. Even good startups died, and the ones who weren't creating value died quickly. The Internet, though, still had hundreds of millions of daily users. Things like email and the web browser and downloadable MP3s made people's lives better, and they weren't giving them up. But who uses Bitcoin for anything but speculation and maybe some light financial crime? As best I can tell, approximately nobody. The NYT tried using it for daily life back in April and it was a bust. [1] The few major online retailers who offered to sell you things in it have removed it again. Even major Bitcoin proponents admitted it was terrible as a currency.[2] And as far as I can tell, none of the zillion other coins have significant real-world use either. I think there's truly nothing to sustain an "industry" here. Valuations are going to drop to (and probably below) whatever can be justified by cash flows, which in turn is based on economic utility to people outside the bubble. If that number isn't zero, it's at least very, very small. So as you say, this is only the beginning of the end. [1] https://www.nytimes.com/2018/04/16/nyregion/new-york-today-living-on-bitcoin.html https://www.nytimes.com/2018/04/16/nyregion/new-york-today-l... [2] e.g., https://avc.com/2017/08/store-of-value-vs-payment-system/ https://avc.com/2017/08/store-of-value-vs-payment-system/

DanHulton 8y ago
You're forgetting one major use: actual crime. Black-market drug sales probably won't be too affected by the crash, they already had a network before Bitcoin. But ransomware! Oh man, that's nowhere near as easy nor as profitable without a high-value cruptocurrency. If the crypto crash ALSO took out ransomware developers, that's two birds with one stone, as far as I'm concerned.
- talltimtom 8y ago
  Randomware doesn’t care about the exchange rate. They just funnel cash through crypto’s because it’s a simple way for them to take digital payment. In the down market they can’t cash out as many dollars per bitcoins, but the victims also get way more bitcoin for the same amount of dollars. A low valuation might affect coinminer malware though.

philfrasty 8y ago

TenX converted a large portion of their ICO proceedings into USD, see under "Finance" https://blog.tenx.tech/tenx-transparency-report-q2-2018-98bb05dd98b8 https://blog.tenx.tech/tenx-transparency-report-q2-2018-98bb...

tim333 8y ago

I'm not sure that's quite true. All the ones I'm familiar with had bank accounts to pay wages, rent etc. And they also seem to have been able to change crypto to fiat. I opened some fiat-crypto accounts and it wasn't that hard - you have to scan your passport etc.

Alex3917 8y ago
Yeah any business can create a bank account, but no bank is going to let you just dump $30M in the account without accounting for where it came from. You’d need a relationship with both the bank and the regulators before doing the ICO, which almost none of them had, especially early on.
- nikanj 8y ago
  Reading the news about Danske Bank, the reality seems to somewhat disagree with you. Some banks a very happy to deal with shady money, as long as there’s _a_lot_ of it.

gammateam 8y ago

Except the next iteration of these things will use stablecoins

DonHopkins 8y ago
Do you burn cleancoal to mine stablecoins? Like militaryintelligence is fightingforpeace? Yeaaaaah.
- gammateam 8y ago
  No, nobody does that. There is no mining involved None of your crypto comments are coherent, I can tell they are intended to be cynical but they also dont make sense
  - DonHopkins 8y ago
    Let me coherently explain it for you so you're not so confused: "stablecoins" is a oxymoron. Like "military intelligence" or "fighting for peace" or "clean coal". Get it now? http://tmbw.net/wiki/Oxymorons,_Paradoxes,_And_Contradictory_Statements http://tmbw.net/wiki/Oxymorons,_Paradoxes,_And_Contradictory...
- pmarreck 8y ago
  Actually, when 2 opposing militaries are more or less equal, the most likely outcome is peace. When they are drastically unequal is when war becomes likely.
  - DonHopkins 8y ago
    Unless you're talking about some board game like "Risk", I believe the causes of international war and peace are a little more complicated and nuanced than the "more or less equality" of their militaries, if that could be even objectively measured or absolutely known. Do you really think "military inequality" was the root cause of WWI and the Civil War?
DonHopkins 8y ago

darawk 8y ago

> Lol that makes it sound like they had a choice. They could have simply kept their assets in stable coins, like Dai, Tether, etc..They could also sell into USD on exchanges that allow you to trade USD (e.g. Kraken). Another option would have been to open a hedging short position on say, Bitmex. There's lots of ways they could have cashed out, effectively.

homakov 8y ago
>They could have simply kept their assets in stable coins, like Dai, Tether, etc.. To turn into dust? >They could also sell into USD on exchanges that allow you to trade USD (e.g. Kraken). And trust Kraken then. >Another option would have been to open a hedging short position on say, Bitmex. and trust bitmex then. There are no scalable options to cash out $10m to a bank and sleep well. You could cash out into some "stable coin" only to wake up to it costing $0.04 (hello nubits). Tether is no safer in that matter.
- darawk 8y ago
  > To turn into dust? Oh, you mean the 'dust' that is worth exactly $1 at this moment, where Ethereum has lost 90% of its value? That dust? > And trust Kraken then. Yep, the exchange that's been trustworthy and operated seamlessly since its inception, sure. And still does. > There are no scalable options to cash out $10m to a bank and sleep well. You could cash out into some "stable coin" only to wake up to it costing $0.04 (hello nubits). Tether is no safer in that matter. You may not sleep perfectly, but you'll sleep a lot better than if you're holding it in crypto. And that is my point. And if you wanted to use Dai, you could actually sleep perfectly. Dai has held up perfectly well, and you can hold it off-exchange.
  - manigandham 8y ago
    Past performance does not indicate future results. The most common disclaimer in finance, but equally applicable to all things in life.
    - 8y ago

DonHopkins 8y ago

Also in the news: Many drug dealers are suffering because they used all their drugs. And many liars are suffering because the believed their own lies.