[cb18]

Notice driverdan uses the term, fraud. Which I think means he is implying that there are instances where the business plan doesn't go much if any beyond selling shares in their fledgling startup and then calling it a day. That is a different thing entirely from buying shares in a legitimate business that subsequently fails.

[gojomo]

And of course frauds should be prosecuted. But does all the up-front compliance and registration burden provide any actual protection against (a) dedicated fraudsters, and (b) credulous fools?

It looks to me that it just changes the expression slightly, and not for net social benefit. People gamble or day-trade-on-margin or over-leverage-in-real-estate or wire-their-money-toNigerian-419-scams, when some longshots (including occasional frauds) as cryptocoin/venture investments would be no worse. And, they'd be plausibly better, because the process of aiming for business success, but still failing through misestimation, misexecution, or even malfeasance serves as valuable training for future success.

If you lose at your lottery scratcher 10 times in a row, the 11th is still an awful bet for you and society. But if you lose your investment principal 10 times, even if most of those times were total or borderline fraud, you will make usefully better choices, for yourself and society, in the 11th try.

(Or you'll just stick to other areas where you're more competent, which is fine, too.)