| Look the ICO space is way too young for all the judgment people are passing on here. The SEC clearly wants to let this play out. No one has gone to jail yet. The government has already started to relax the ability for non accredited investors to invest in startups and that was under the last administration. These rules are recent but they are there, they are very limited though and ICOs blow the top off of those rules. ICOs are forcing the SECs hand and I think it show cases the interest that exist in the public to get into these early stage startups. I won't be surprised if the rules are relaxed even further to legalize these types of coins even if they are considered securities, especially under this administration. Everyone is saying that you are limiting yourself by offering an ICO. You are giving away zero equity for the promise that your product and service will offer these people something in most cases, that is just like a kickstarter. Furthermore, nothing stops you from raising money after the ICO. Anyway, this is a fantastic new vehicle for startups and I believe it will absolutely change the game. The VCs are a little mad because they are being shut out of the best rounds, where they would normally get the most equity. At the end of the day what matters most is if startups can start get funding and hire people and add value to the economy. That is what the SEC has to balance with the public interest on the other end. |
ICOs are not like a kickstarter for the same reason the SEC cares about them: as a buyer of tokens your capital can arguably be seen as an investment which is expected to generate a capital return based on a market clearing price determined by the value attributed to a going concern. Also if we are being honest here, the high dollar amounts and high volatility we are seeing also matter greatly in terms of guessing if the SEC is going to expend resources on this. Once a few of these crater and hundreds of millions of dollars are lost I'd expect regulatory intervention to happen rapidly.
And 2008, 1999, and 1929 called and take issue with your claim that the most important thing for the SEC (and all of us) to consider is startup funding and not the public interest. The exposure of individual investor capital to undisclosed risk, due to a lack of prospectus, legally required accounting practices, financial statements, etc, can cause major negative effects on all of us if and when capital is mis-allocated, particularly if it is tied to derivatives, is overleveraged, or there are other potential market contagions due to price correlations to similar assets, etc.
When you consider the role of the SEC and the history of speculative bubbles, run an ICO without strong legal protections, based on precedent, at your own peril, I say.