[howwwe]

This one sounds bad, but the problem with the Howey test is that it's overly broad. Anything from presales in a Kickstarter to ICANN selling those new domain names (like .attorney) to selling tickets to a yet-to-be-arranged event could all be considered a security under the Howey test. It's just too broad and nobody knows where the SEC will draw the line. It would be good for everyone if the SEC would simply explain on what would make a ICO legit, because currently their guidance is still too unclear. It's like they want the ability to selectively prosecute anyone, not caring that the regulatory uncertainty is keeping legitimate, risk-adverse teams away, which doesn't help.

[kelnos]

The SEC is more concerned with actual economic outcomes rather than ticking off boxes on a requirements checklist. If the ICO community is willing to do a good job self-regulating, then the SEC might decide to be more hands-off. If there's rampant fraudulent behavior going on then they're going to step in.

I honestly think this is a good thing. Most people's (understandable) knee-jerk reaction to big regulatory bodies is to roll their eyes and get pissed at the cost of government interference, but these two fraudulent ICOs is a fine reminder of why we have bodies like the SEC, and of how completely screwed over investors could be without them.

[Pyxl101]

Yes. The SEC's involvement in the cryptocurrency space has been very reasonable so far. They're really trying hard to understand the new technology developments and regulate them appropriately, and not just be curmudgeons.

Good job SEC.

[omarchowdhury]

They did say what would make an ICO legit: proper registration with the SEC.

[KGIII]

Has any company tried to do proper registration with the SEC? If so, we're they successful?

I just hit up the mighty Google and it was interesting, but not helpful.

Search terms 'ICO proper registration SEC' yields some interesting results, including some stuff that I'm not sure made HN, but doesn't reveal any companies that have done so or tried to do so.

I'm not suggesting this, but I bet the first one that properly registers with the SEC (even if it fails horribly and was bordering in scammy) would make a mint. The tag line of 'Officially sanctioned by the SEC' would go a long ways, even if it was doomed (intentional or otherwise) from the start.

Again, that's not a suggestion to make something meet the bare minimal requirements, register, and then make a killing.

[CyrusL]

Filecoin did their ICO by the book. The biggest constraint is that the purchasers need to be accredited investors.

[KGIII]

Thanks! I will see if I can find some stuff to read about them later. I want to see how hard it was, the process, etc...

I believe they changed some VC funding rules, not that long ago. I'm not sure if the apply in these types of cases, but I think 'regular' people are now allowed to invest, but only a small amount. I seem to recall it was $2000/year.

It's not much, but it is a start? I didn't pay much attention to it, so I don't remember all the details. Sorry, I don't even remember the name of it so that I can dig out some info. I noticed it in passing. I'm not into the VC game and prefer investing elsewhere. So, I didn't pay much attention to it.

Edited to add:

https://www.theverge.com/2016/5/16/11685832/sec-crowdfunding...

Chances are you know more about it than I do, but there's a link if you don't.

[ringaroundthetx]

Apparently there is a joke amongst securities lawyers about the Howey test.

Even if there was a lawyer at Howey's orange tree advising Howey on securities regulation, Howey might have asked "okay where do I go to register to trade the interests in my orange tree" and the lawyer would say "well you can't, because you are selling fucking oranges"