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by Frogolocalypse
3166 days ago
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The danger is definitely the ICO's for investing. The O part of ICO implies that you're selling something on the promise of having access to it when it is live/released. That smacks of a security in everything but name, and that's a big no-no. They're selling unregulated securities and raking in hundreds of millions through the process. I imagine the SEC doesn't take kindly to unregulated capital raising, and naming it something else I wouldn't expect to dissuade them. Bitcoin doesn't have this, because no-one controls the issuance of the tokens. As a long-term bitcoin holder, I think I have a good handle on crypto. I'm actually quite surprised the the dinosaur hasn't started giving direction about how ICO's fall afoul of existing capital raising regulations. Maybe they think it's too small to care? Not sure. It's an issue though. |
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And again, you're right - the SEC doesn't take kindly to unregulated capital raising. (There's a reason why the designation of 'accredited investor[2]' had capital requirements to begin with-- to be legally invest in an ICO, or any block-chain based currency, you have to either have a net worth of >1MM or an earned income of >200k (>300k if filing with a spouse) for the last two years.) Investor safety isn't really what we're discussing here though, so much as which federal agency has regulatory control.
I was going to basically say what JumpCrisscross said, but he beat me to the punch[3]. Until we see some federal case law to set precedent, it's anyones game.
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[0] "On July 25, 2017, the SEC issued a Report of Investigation under Section 21(a) of the Securities Exchange Act of 1934... determining that DAO Tokens were securities."
[1] https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_co...
[2] https://investor.gov/additional-resources/news-alerts/alerts...
[3] After clicking on his profile, it was all made clear, haha