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I found Nicholas Weaver's argument in [0] that a DAO governance token is conceptually indistinguishable from stock to be pretty compelling. Similarly, how is an

by giaour 4y ago

I found Nicholas Weaver's argument in [0] that a DAO governance token is conceptually indistinguishable from stock to be pretty compelling. Similarly, how is an "ICO" conceptually different from issuing a corporate bond? Legally speaking, of course, you are 100% correct that there are no corporate bonds or stocks traded in crypto. My firm belief is that this is not because crypto is unique or special, but simply because the crypto community normalized ignoring securities law, and enforcement agencies have not yet caught up. [0]: https://law.yale.edu/sites/default/files/area/center/isp/documents/weaver_death_of_cryptocurrency_final.pdf https://law.yale.edu/sites/default/files/area/center/isp/doc...

CPLX 4y ago
> Similarly, how is an "ICO" conceptually different from issuing a corporate bond? Because a corporate bond is a promise by a legally recognized entity with assets to pay you back and an ICO is an illegal confidence scam.
- giaour 4y ago
  Is the ICO is an illegal confidence scam because an ICO is a genuinely novel thing to do or just because the issuers were criminals? I would argue for the latter. Assume a non-criminal company filed the correct paperwork to issue a bond, set normal terms for when and for how much the matured bond could be redeemed, and then somehow legally allowed it to be traded on a blockchain instead of on a traditional exchange. That's just a corporate bond, right? The fact that it's on a blockchain doesn't make it special. Tone is hard to convey online, so let me clarify that I am arguing that all ICOs are illegal, with the absolute best case being that the issuer is "just" a scofflaw selling an unregistered security and flouting all relevant regulation.
  - CPLX 4y ago
    > Is the ICO is an illegal confidence scam because … the issuers were criminals? The causality works the other direction. > Assume a non-criminal company … Yes if you assume a normal and legal thing (a legal corporate bond) was in fact another thing (an ICO token) then it would be legal. Much in the way that if you took a Honda Civic and modified it sufficiently that it could fly it would be an aircraft. Until I see someone do that a Honda Civic is a compact car.
    - giaour 4y ago
      I don't think we're disagreeing so much as making unrelated points. I'm arguing that if someone modified a Honda Civic so that it could fly and then said, "this is an airplane now, so I don't need to register it as a car or obey the speed limit when I drive it on the highway," then they are either full of shit or lying to themselves. If you use it as a car, you need to comply with laws for cars.

by giaour 4y ago

CPLX 4y ago

> Similarly, how is an "ICO" conceptually different from issuing a corporate bond? Because a corporate bond is a promise by a legally recognized entity with assets to pay you back and an ICO is an illegal confidence scam.

giaour 4y ago
Is the ICO is an illegal confidence scam because an ICO is a genuinely novel thing to do or just because the issuers were criminals? I would argue for the latter. Assume a non-criminal company filed the correct paperwork to issue a bond, set normal terms for when and for how much the matured bond could be redeemed, and then somehow legally allowed it to be traded on a blockchain instead of on a traditional exchange. That's just a corporate bond, right? The fact that it's on a blockchain doesn't make it special. Tone is hard to convey online, so let me clarify that I am arguing that all ICOs are illegal, with the absolute best case being that the issuer is "just" a scofflaw selling an unregistered security and flouting all relevant regulation.
- CPLX 4y ago
  > Is the ICO is an illegal confidence scam because … the issuers were criminals? The causality works the other direction. > Assume a non-criminal company … Yes if you assume a normal and legal thing (a legal corporate bond) was in fact another thing (an ICO token) then it would be legal. Much in the way that if you took a Honda Civic and modified it sufficiently that it could fly it would be an aircraft. Until I see someone do that a Honda Civic is a compact car.
  - giaour 4y ago
    I don't think we're disagreeing so much as making unrelated points. I'm arguing that if someone modified a Honda Civic so that it could fly and then said, "this is an airplane now, so I don't need to register it as a car or obey the speed limit when I drive it on the highway," then they are either full of shit or lying to themselves. If you use it as a car, you need to comply with laws for cars.