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> My preference would be for the government to not intervene with regulatory regimentation of the token sale market, but that obvious frauds - where a team prom

> My preference would be for the government to not intervene with regulatory regimentation of the token sale market, but that obvious frauds - where a team promises the moon and then uses the money raised to buy themselves lamborghinis - be punished after the fact. In other words, that the government establish the rules of a free market - no prior restraint, but consequences if you are found to have committed fraud. Yes people would still lose money, but at least the fraudsters wouldn't learn that crime pays, and survive to defraud another day. > no prior restraint, but consequences if you are found to have committed fraud The problem is that --- how does the government catch crooks without a regulations or laws? Like what are the criteria that you would need proof that fraud --- not incompetenance --- lost all the money. I mean, if you can just get people to buy your useless algo stable coin, you can pay yourself millions to buy Lambo's and it would still be all legit. It was all from salaries and performance bonuses.

ETH_start 4y ago
What constitutes fraud, as opposed to just incompetence, is defined by case law. There will still be a gray area where unscrupulous actors stay technically within the law, while bilking investors with poorly planned projects that still profit them. The example you gave of algo stablecoins, made famous with Terra/LUNA, is a good one. To some extent, this would have to be dealt with via reputation markets. Assuming it's found that Do Kwon didn't break any laws and is free to create new tokens, one would hope that investors will stay away from those projects, and more generally, projects like Terra Luna that promise to algorithmically maintain a stable value. Perhaps the SEC can help investors without the risks associated with blanket restrictions by publishing guidelines for how to assess token sale offerings, along with red flags to watch out for, and even perhaps a voluntary/opt-in certification program for token sales.

ETH_start 4y ago

What constitutes fraud, as opposed to just incompetence, is defined by case law. There will still be a gray area where unscrupulous actors stay technically within the law, while bilking investors with poorly planned projects that still profit them. The example you gave of algo stablecoins, made famous with Terra/LUNA, is a good one. To some extent, this would have to be dealt with via reputation markets. Assuming it's found that Do Kwon didn't break any laws and is free to create new tokens, one would hope that investors will stay away from those projects, and more generally, projects like Terra Luna that promise to algorithmically maintain a stable value. Perhaps the SEC can help investors without the risks associated with blanket restrictions by publishing guidelines for how to assess token sale offerings, along with red flags to watch out for, and even perhaps a voluntary/opt-in certification program for token sales.