[elnygren]

Well it was about the damn time! A lot of ICOs are borderline (or just straight) scams. There have been even cases where the ICO funds have been "stolen" but rumours say the founders just took the money and ran.

A lot of the so called "products" and "businesses" pitched by these ICO companies are just well known already working models somehow forced into the blockchain with the only reason being the ability to do an ICO (and generate an absurd amount of money for the founders).

Another common feature of ICOs: there's never any equity on the table. The founders are gonna cash in on the ICO and then later do an exit (sell the company, IPO, whatever). ICO "investors" are not gonna get much for their money here.

At least during the dotcom bubble some companies made it and the investors then got real equity for their money.

[KGIII]

The whole thing is just a ball of insanity. I'm not sure what it is about cryptocurrency and ICOs, but it seems the representation is heavily populated with insane people.

I will recommend reading this sub-thread:

https://news.ycombinator.com/item?id=15369840

Now, there is someone bragging that they are intentionally and willfully going to break multiple laws. They are already breaking laws, so they are also going to break some SEC regulations.

They think that being nice is going to keep them from going to prison. On top of this, they are posting about it in an open forum. They quite happily admit their criminal acts and intent to commit more.

If you're curious, their profile has more information.

I'm no psychiatrist and a few Internet posts aren't enough to diagnose someone, but I'm pretty sure they are crazy. Not 'so crazy they might just get away with it' crazy, but 'should seek professional care' crazy. Also, a lawyer... They should also seek legal council.

I'm not sure if it is the ICO and cryptocurrency that attracts crazy people, but it seems to have strong correlation. It may just be the cryptocurrency?

[sillysaurus3]

Ah yes, that guy.

I've been following him for a little while. Lurk his slack channel. If you think he's going to jail, you may be underestimating him: https://medium.com/@PinkApp/pink-app-trading-latency-for-ano...

Do I think he is in it for the money? Oh yes. There's no doubt. But he clearly has the energy and drive to be creating something new. It's either a new kind of scam or a fundamentally-new type of enterprise, but either way, it's new.

Very few people have used tor to forge a public persona that they use to influence a ton of people and spark debate about a central issue. Satoshi and maybe gwern.

I am holding out hope that he's genuine, because as far as I know he's already received a ~crapton of money with his ICO and yet he's still here, still risking his neck.

And at the end of it, maybe sex workers will end up with protection. Maybe the system will become regulated. I don't know whether it's a good thing or bad thing, but my point is that it could change things. And that, I think, is worth watching for.

If he's genuine, his business model is the first public execution of the cyberpunk dreams presented in Snowcrash. Hopefully he doesn't get himself publicly executed, ha.

On the other hand, yes, there is a high probability he's outright scamming everybody. If so, then I'll be a bit sad, but scams have existed since the beginning of time. The interesting thing here is that there's nothing fundamentally preventing this idea from being real the next time. It's theoretically possible! It wasn't possible before, and ICOs are the reason.

If you think any of this is a defense of either ICOs in general or his actions in particular, you're misreading me. It's important to look objectively about what's going on and notice any new trends in the world. Especially when they're due to shifts in technology.

EDIT: Interesting that no one is addressing the argument. Quite a radioactive idea.

[KGIII]

I make no comment about the morality. If you read the linked thread, you will see that I make absolutely no judgment about the morality of the business in question.

In fact, morality hasn't anything to do with my statement. It's not an argument that I need to make, nor is it one I'm interested in making. In fact, it dilutes the conversation at hand.

I believe that's colloquially known as a 'red herring.'

No, my comment is that he is going to go to prison. My comment is that he has already opted to violate the law AND that he intends to break additional laws. My comment is that he not only is going to go to prison, he openly discusses his plans in public, completely ruining every possible legal defense he might have.

My comment is that he is openly conspiring and mocking the legal system. My comment is that he is going to have his comments submitted in a court of law, or that there is a good probability that those comments will be read aloud and submitted into evidence at his trial. My comment is that he is very likely to find out how angry a judge gets when one mocks the legal system and announces intent to violate the law - and then carries through with it.

My comment is that it isn't a very sane position to hold and that he should hire a lawyer.

Your reply completely chooses to ignore this and, for some reason, tries to change the topic to a morality conversation. I am not sure why you'd do such a thing? I'm not sure why you think it matters. I'm not sure why you think it needs to be addressed when it is, quite pointedly, not the topic.

I don't care who is having sex with whom, nor do I care if it is paid for - so long as there is consent. Even if I did care, it is not relevant to the topic at hand. The topic at hand is that they are going to go to prison and that they do not appear to be sane.

I don't know you but, if you think his actions are reasonable, then I'd suggest you consider seeking council from a qualified mental health professional. That's not pejorative. Mental health issues are real and should be addressed before harm occurs. If you think they are reasonable, look at their replies where they insist they will commit more crimes and where they believe they are impervious to the law.

Seriously, this is not meant to be derogatory. If you think they are reasonable and exhibiting rational behavior, you may wish to see a mental health professional. There is nothing good that can come from you ending up in prison beside them.

You will not like prison. My last years as a Marine were spent working at a detention facility. Prison is not a nice place. That's kind of by design. Buying sex and intentionally defying the SEC are not good reasons to go to prison.

[sillysaurus3]

Hmm? I think we're just talking past each other. I didn't mean to imply it was about morals -- it seems inherently amoral.

His motive is clearly money. He wants to get rich. That's a fine motive and he's not killing anyone or defrauding anybody (yet).

Why is it only ok to tap into a market when the legal system says it's ok? He's not even a drug dealer; drug dealers really do ruin lives.

Your argument here appears to boil down to "If you think it's sane to climb Mt. Everest, I suggest you rethink your actions. You'll probably die."

Except it's more along the lines of climbing a mountain no one has ever climbed before. Yes, you certainly have a point. He'll probably get caught and probably go to prison. But... So? It's his life to risk.

In the meantime, you've got to respect the raw determination. We'll see if he delivers. If not, then it's just a bunch of hot air. But he's onto something. The legal system is going to have to adapt to something it has never had to deal with before outside of cartels: the ability to operate a full business completely anonymously.

Even if he fails, someone else will come along and do the same thing. You want ten million dollars? Heck yeah you do. Tap into that feeling and amplify it by 100x, and that's the drive that pushes people to do this kind of thing.

Really though, as long as he's not hurting anybody I don't understand why we have a right to trash on him. He hasn't stolen anyone's money yet, and he's trying to build something new. I'd like to interview him, to be honest.

(I agree you weren't really trashing on him, just pointing out how crazy his plan is. That's true, but he's not a run-of-the-mill lunatic, which is sort of what your comments imply.)

[KGIII]

No, my argument boils down to he is willfully breaking the law while openly stating his plans and that the judges aren't going to appreciate that, the SEC isn't going to find it funny, and the prosecuting attorney is going to submit it as evidence. He is doing this while he is fully aware that prison is the likely outcome.

That's not rational. That is irrational thinking that is likely to result in harm coming to the actor.

That's pretty much the definition of mental illness.

They aren't even alone. They are just one example. Watch the comments about ICOs and cryptocurrency. You'll see comments that are saying the government can't stop them, them the individual.

No, the government can't necessarily stop an idea. They can't even really prevent cryptocurrency. What they can do, and do very efficiently, is stop the individual.

That is irrational thinking. It is how people end up in prison. I'd like it if, you know, HN visitors didn't end up in prison. I'm kind of fond of some of you. Prison is not a nice place, I've worked at one.

When you start mucking about with things with real-world implications, it's no longer a game. It's no longer something you can talk your way out of. It has real-world penalties. There are negative consequences.

The government can, and will, stop those who draw negative attention. They really, really hate it when you negatively impact the economy, as a general rule.

However, you're right. It is their life to risk. That doesn't actually make it sane.

It's not like they are going to go to prison rich. No, the government is going to issue fines to go along with their prison sentences. Do not taunt the men with guns. Taunting men with guns only works in video games and movies.

[neuro_imager]

Please stop talking about mental health in this context.

You may or may not be correct in your prediction about the legal ramifications of this person's actions actions but making comments about their mental health is completely erroneous.

[the_stc]

KGill if you have a specific criticism that we're being irrational, please contact us. Info in profile.

This country was founded on taunting men with guns and winning. Every bit of social progress does too. I am a small actor in comparison but the ideas are what matters.

[sillysaurus3]

It's not like they are going to go to prison rich.

Well, this is the most interesting part: They will. If they go to prison at all, they'll go to prison rich, and no one will be able to take their money. Once they're out, if their opsec is half-decent, they'll still have it.

[cavisne]

I think its because they have unique beliefs, and a lot of positive reinforcement for these beliefs. Along the lines of what Naval Ravikant said recently, even the craziest ideas in crypto which failed completely would still be a net win for people at this point if they got paid in bitcoin/had enough of an interest in it to buy some a few years ago. Unlike the tech crash where the shares employees got in dud companies become worthless.

The crypto community has a lot of people with (at least on paper) f*ck you money, and in a form where they arent really tied the legal system of any country.

[beager]

I suppose that if cryptocurrency/ICOs have democratized investing, they have also democratized morally (and legally) ambivalent greed.

[KGIII]

Greed I can understand, the seeming insanity I can't. I'm not sure how many times I've seen stuff like, "They can't stop me!" That's pretty crazy, because it's well known that they can, and will, stop someone who gets their negative attention. They may not be able to fully prevent an activity, but they sure as hell can stop a person.

Maybe the greed makes them insane? I dunno, psychiatry is not really my domain. I find it curious behavior.

[beager]

I can't speak to the psychology of it, but I imagine the same sort of invincibility complex exists for big movers in traditional business/finance/politics. We're just being made aware of it here now because of the democratization of the entire system.

[sillysaurus3]

For what it's worth, KGIII is mischaracterizing their position. In no way do they feel invincible. They're keenly aware of how vulnerable they are and are hyper-vigilant about their opsec. I'm pretty sure their #1 fear is to make a dumb mistake that gives away their identity.

The idea that they think they're untouchable or that "They think that being nice is going to keep them from going to prison" is just flat-out a blatant misrepresentation of their words and persona.

Also, this is amusing: https://news.ycombinator.com/item?id=15371053

>> It may sound crazy ...

> I don't offer an opinion on your business methods, recovery methods, or even the morality.

Followed by

I'm no psychiatrist and a few Internet posts aren't enough to diagnose someone, but I'm pretty sure they are crazy. Not 'so crazy they might just get away with it' crazy, but 'should seek professional care' crazy.

I suspect people are simply bothered by the idea that his venture could actually succeed, which manifests itself as "He's crazy." Yes, obviously you have to be a little nuts to go up against the full weight of the law. But there is method underpinning the madness, and he seems to be holding up his end of the bargain so far. He could've disappeared with the money and no one could trace him.

We'll see if that happens, but until then it's worth keeping an open mind. It all depends whether he can execute and actually deliver the app.

[KGIII]

Their comment about how they won't get complaints and will be ignored by the SEC says they do believe they are invincible with regards to the SEC. They, themselves said it. That's not my mischaracterization, that's was in their reply.

The SEC isn't going to care that people were happy with their sex purchases. No, they aren't even going to care a little bit. If he follows through on this, he's almost certainly going to prison.

It's not sane. That's not rational thinking that causes harm to the individual. I may not know their diagnosis, but I can tell you that's not sane.

[grey-area]

They’ve already made multiple dumb mistakes, and it’s very very unlikely their identity has not leaked already, there just isn’t sufficient motivation to go after them yet.

Within a few months we plan to move nearly exclusively to high-latency communication methods.

[the_stc]

There is no invincibility complex. We are acutely aware of the risks. I just believe I am good enough to get the project working and stay ahead of LE until we can take a more hidden approach and reduce our opsec surface area.

[csomar]

It'll be an entertaining thing to watch, though. Natural Selection! The Feds/Sec will hammer the guys they can hammer. But with Natural Selection, is it possible that some guy out there escapes all the Feds?

[the_stc]

We are not doing an ICO. We are offering shares like any well-meaning enterprise should do. Anything less is disrespectful to investors.

We are using blockchain fundraising because tech is good enough to give us enough privacy to operate. That's all. We are not some guys in a basement thinking blockchain & Javascript will fix sex worker problems.

[LrnByTeach]

The best definition ICO - by KEVIN ROOSE NYTimes https://www.nytimes.com/2017/09/15/business/cryptocurrency-b...

Imagine that a friend is building a casino and asks you to invest. In exchange, you get chips that can be used at the casino’s tables once it’s finished.

Now imagine that the value of the chips isn’t fixed, and will instead fluctuate depending on the popularity of the casino, the number of other gamblers and the regulatory environment for casinos.

Oh, and instead of a friend, imagine it’s a stranger on the internet who might be using a fake name, who might not actually know how to build a casino, and whom you probably can’t sue for fraud if he steals your money and uses it to buy a Porsche instead.

That’s an I.C.O.

[vkou]

Yeah, but I'll still invest with the hopes that I'll resell the chips to a bigger fool tomorrow.

[jboles]

It’s e-gold all over again. Was going to be the dream libertarian non-fiat currency of the future but ended up being used mostly by scams. At least e-gold was (theoretically) redeemable for real gold delivered, whereas crypto currencies are ‘backed’ by a whole lot of sunk costs in the form of big electrical bills.

[mbrumlow]

I feel vindicated

https://news.ycombinator.com/item?id=13886125

People were pushing this a while back and the only thing I could see is easy exit for founders and everybody else left holding the bag.

Founders should have no early exit and ICOs make it so they can.

[testman]

Why do people just throw their money at random ICO's? It makes no sense. All they read is a whitepaper, and badabing badaboo...there goes your money. There is literally a site that lists coins deemed safe. That is sad that people in crypto need that. However their forecasts are spot on: https://www.cryptonaire.com

I think they are also working with regulators to help with this ICO stuff.

[yuhong]

>Another common feature of ICOs: there's never any equity on the table. The founders are gonna cash in on the ICO and then later do an exit (sell the company, IPO, whatever). ICO "investors" are not gonna get much for their money here.

Which interestingly makes escaping regulation easier.

[kenbaylor]

That's by design. If there's equity or promise of profits, it automatically trigger the 'it's a security' lever. The SEC DAO paper (linked below) acknowledges the same.

Your point that many are 'forced into the blockchain' to get an ICO is 100% correct.

[CryptoPunk]

>>That's by design. If there's equity or promise of profits, it automatically trigger the 'it's a security' lever.

That is not true. There are other components to the Howey Test besides expectation of profit. The DAO was one of the most security-like token issued so far, and the DAO investigative report went over how the SEC believed it met all the conditions for classification as a security. Securities laws might not apply to a great many other tokens.