[davidgerard]

yes, that's the way the scam works.

* all the laws are to protect investors from issuers

* splash around money to incentivise securities fraud

* buy a pile of tokens

* if the SEC doesn't bust the issuer, the VC wins big

* if the SEC does bust the issuer, the VC gets their money back and doesn't lose

it also realises liquidity much quicker than the long and tedious process of backing a tech company that does things

So did YC buy the tokens, or buy equity in the company? If the latter, then they're part-owners and may claim to have been completely hands-off, but might need to show it.