4 ms·

Interesting that there is no mention that he has been charged of being involved in a Ponzi scheme in the headline - just "Cryptocurrency Scheme".

space_rock 5y ago
Is there a cryptocurrency token sale that's not designed to defraud the buyers?
- capableweb 5y ago
  There are a couple of "token sales" (they don't call them that) that only allowed accredited investors to invest, and had their "token sales" registered with the SEC before they went live with them. If those were designed to defraud the investors, I'm pretty sure SEC would go after those first.
  - space_rock 5y ago
    Yep. It comes down to information asymmetry. Harder to trick and scam accredited investors Most token sales make good money with very low effort scams
    - xiphias2 5y ago
      Sadly a lot of token sales were pump and dumps through VCs, so even this is not true. SEC registering looks like a better filter for now.
      - space_rock 5y ago
        But here the VCs are the criminals and the predators not the victim of the scam. VCs are more sophisticated to avoid being the victim
        xiphias2 5y ago
        Yes, I just wrote this to express that even sophisticated investors take part of worthless projects.
    - rosndo 5y ago
      > Harder to trick and scam accredited investors Not necessarily, accredited investors are dentists and successful pool-installers. https://www.bloomberg.com/opinion/articles/2018-09-24/earning-the-right-to-get-swindled https://www.bloomberg.com/opinion/articles/2018-09-24/earnin...
  - wmf 5y ago
    Of course, any SEC-registered token probably won't be allowed to do anything interesting so there's no point in investing.
    - space_rock 5y ago
      By interesting I assume you mean a scam since I've never seen anything technically interesting from a token sale
- xiphias2 5y ago
  Yes, Blockstream has a token that represents Bitcoin miner shares. The most important thing is to wait until the token is registered by SEC, so far all scam tokens skipped that step.
mikeyouse 5y ago
It’d be tricky to define criminal criteria based solely on running a Ponzi scheme so there isn’t a “USC Section #” crime called “Ponzi Scheming”. They just charge the various illegal parts of the scheme separately. His charges: Conspiracy to Commit Wire Fraud—Title 18, U.S.C., Section 1349 Maximum penalty: Twenty years in prison, forfeiture, restitution, and $250,000 fine Wire Fraud—Title 18, U.S.C., Section 1343 Maximum penalty: Twenty years in prison, forfeiture, restitution, and $250,000 fine Conspiracy—Title 18, U.S.C., Section 371 Maximum penalty: Five years in prison, and $250,000 fine Operation of Unlicensed Money Transmitting Business—Title 18, U.S.C., Section 1960 Maximum penalty: Five years in prison, forfeiture, and $250,000 fine Money Laundering Conspiracy—Title 18, U.S.C., Section 1956(h) Maximum penalty: Twenty years in prison, forfeiture, and $250,000 fine https://www.justice.gov/usao-sdca/pr/founder-fraudulent-cryptocurrency-charged-2-billion-bitconnect-ponzi-scheme https://www.justice.gov/usao-sdca/pr/founder-fraudulent-cryp...
- parineum 5y ago
  I'm not sure what you expected. If operating a Ponzi scheme didn't involve doing anything illegal, it'd be legal.

space_rock 5y ago

Is there a cryptocurrency token sale that's not designed to defraud the buyers?

capableweb 5y ago
There are a couple of "token sales" (they don't call them that) that only allowed accredited investors to invest, and had their "token sales" registered with the SEC before they went live with them. If those were designed to defraud the investors, I'm pretty sure SEC would go after those first.
- space_rock 5y ago
  Yep. It comes down to information asymmetry. Harder to trick and scam accredited investors Most token sales make good money with very low effort scams
  - xiphias2 5y ago
    Sadly a lot of token sales were pump and dumps through VCs, so even this is not true. SEC registering looks like a better filter for now.
    - space_rock 5y ago
      But here the VCs are the criminals and the predators not the victim of the scam. VCs are more sophisticated to avoid being the victim
      - xiphias2 5y ago
        Yes, I just wrote this to express that even sophisticated investors take part of worthless projects.
  - rosndo 5y ago
    > Harder to trick and scam accredited investors Not necessarily, accredited investors are dentists and successful pool-installers. https://www.bloomberg.com/opinion/articles/2018-09-24/earning-the-right-to-get-swindled https://www.bloomberg.com/opinion/articles/2018-09-24/earnin...
- wmf 5y ago
  Of course, any SEC-registered token probably won't be allowed to do anything interesting so there's no point in investing.
  - space_rock 5y ago
    By interesting I assume you mean a scam since I've never seen anything technically interesting from a token sale
xiphias2 5y ago
Yes, Blockstream has a token that represents Bitcoin miner shares. The most important thing is to wait until the token is registered by SEC, so far all scam tokens skipped that step.

mikeyouse 5y ago

It’d be tricky to define criminal criteria based solely on running a Ponzi scheme so there isn’t a “USC Section #” crime called “Ponzi Scheming”. They just charge the various illegal parts of the scheme separately. His charges: Conspiracy to Commit Wire Fraud—Title 18, U.S.C., Section 1349 Maximum penalty: Twenty years in prison, forfeiture, restitution, and $250,000 fine Wire Fraud—Title 18, U.S.C., Section 1343 Maximum penalty: Twenty years in prison, forfeiture, restitution, and $250,000 fine Conspiracy—Title 18, U.S.C., Section 371 Maximum penalty: Five years in prison, and $250,000 fine Operation of Unlicensed Money Transmitting Business—Title 18, U.S.C., Section 1960 Maximum penalty: Five years in prison, forfeiture, and $250,000 fine Money Laundering Conspiracy—Title 18, U.S.C., Section 1956(h) Maximum penalty: Twenty years in prison, forfeiture, and $250,000 fine https://www.justice.gov/usao-sdca/pr/founder-fraudulent-cryptocurrency-charged-2-billion-bitconnect-ponzi-scheme https://www.justice.gov/usao-sdca/pr/founder-fraudulent-cryp...

parineum 5y ago
I'm not sure what you expected. If operating a Ponzi scheme didn't involve doing anything illegal, it'd be legal.