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by cvaidya1986 3048 days ago
Are ICOs illegal in the USA?
2 comments

Is working for a crypto, ICO, or even DAICO launched in a different country legal? Is launching one legal?

I've skimmed the SEC documents Reg A, Reg S, Reg D, Reg CF they are all nonsensical when it comes to raising capital with crypto.

It is illegal to sell securities to non-accredited investors
This is not true without qualification.

Non accredited investors buy securities all the time through their brokers.

Advertising to general non accredited public for unregistered securities may get you in trouble with sec.

Selling unregistered securities to non accredited investors happens all the time through private placements.

I think a good argument can be made that a law restricting the sale of non-registered securities to wealthy ("accredited") investors and excluding poor people violates the Equal Protection clause of the 14th Amendment. (And, although the 14th Amendment applies only to the states, the Supreme Court has held in Bolling v. Sharpe (1954) that the same principle operates against the federal government via the Due Process clause of the 5th Amendment.)
I hope and think tokens will democratize access to investments
Do tokens fall under that category ?
I just recently saw the SEC secretary say that ico’s are not illegal if they were to be done roughly behind closed doors, so to speak.

Meaning, don’t spam to the world your ico address and be diligent as to who you’re talking to about potential investments.

The SEC secretary wants a fine line distinction between a “private” and “public” raising of money. He’s right to point that all icos (besides filecoin) are trying to be considered as “private” while publicly share their address and don’t discern who sends in funds.

Here’s a recent SEC release: https://www.sec.gov/news/public-statement/statement-clayton-...

It depends on how they are used, but frequently, yes. Even so, you can sell to accredited investors totally legally. A few ICOs have worked this way.
Is a cryptokitty illegal for non accredited investors to buy? Or is it just a “normal” good.
No it’s just as trivial as a Pokémon card
Cryotpkitty is under the current existing Ethereum network. Like how you can still buy bitcoin. ICO are initial coin offerings, so it's an investment before the actual coin is released and on the market.