
The SEC has charged two initial coin offerings with defrauding investors - iloveluce
https://techcrunch.com/2017/09/29/the-sec-has-charged-two-initial-coin-offerings-with-defrauding-investors/?ref=t
======
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](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...](https://medium.com/@PinkApp/pink-app-trading-latency-for-anonymity-
and-other-techniques-815ee21c6da4)

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.

~~~
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.

~~~
jaekwon
Aye,

When there's nothing left to believe in,

It's time to make believe something better.

------
everdev
I spent 30min on the phone with Mark Vilardo, special counsel at the SEC and
the guy who will call you if you all questions about ICOs.

Basically, ICOs are 99% of the time classified as securities in the US. The
main exception is if the token is non-transferrable or can be returned for
what you paid for it. So, if you can't make money selling our trading it, it's
not a security, which defeats the purpose of an ICO.

It sounds like who the SEC goes after is subjective, but at any point in time
they could bring a suit against an ICO, even gimmick coins.

~~~
colechristensen
My followup question is, if exchanging World of Warcraft gold for currency was
supported or facilitated by Blizzard, would the SEC classify it as a security?

Could Blizzard have an ICO for WoW gold that could only be used as it is now
with no attached ideas of selling equity?

~~~
everdev
The SEC uses the Howey Test:

1\. Was there an investment of money? (money is actually broadly defined to
mean anything of value)

2\. Was there an expectation of profits from the investment? (this is easy to
prove because it's the opinion of the investor)

3\. Was the investment of money in a common enterprise? (this means are the
interests of the investor and company aligned, or does the investment go into
running a business)

4\. Does profit come from the efforts of a promoter or third party? (This
means is the investor mostly powerless in having their investment go up our
down in value)

In your WoW example:

1\. Yes

2\. Probably for someone

3\. Yes, the money is used to develop the platform

4\. Yes, if Blizzard hypes their coin or if you can trade it on an exchange

I think the biggest difference between an ICO and a digital good is that ICOs
are traded on exchanges. If you buy a digital good and can only
use/redeem/trade on the company's platform then it is not a security.

~~~
regulation_d
I'm not sure you can hand wave the "expectation of profits" factor as easily
as you did. Seems like it would have to be a reasonable expectation of profits
and would probably have to be true of the majority of the purchasers.

Imagine that I bought $10k worth of Chuck E. Cheese tokens and I could
convince the SEC that I sincerely expected the value of those tokens to go up
substantially. I doubt that would be enough to meet the Howey requirements,
even if my expectation was sincere.

~~~
everdev
From my conversation, I understood "an expectation of profits" to mean from a
reasonable investor. In fact no one even has to complain if the SEC thinks
someone could have expected profits then it satisfies that bullet in the test.

------
ve55
It's nice to see action like this being taken in cases so blatantly
fraudulent. One thing to take note of here is that the reason why the SEC is
taking action is not simply because of reasons related to tokens or
securities, but instead due to defrauding and lying to investors.

Hopefully we'll see more cases like this happening to the actors that deserve
them the most. I need not mention names since I think others will do that for
me.

~~~
wpietri
Agreed. I heard an ocean of hype about how freedom from regulation would
unlock untold innovation. It's been fascinating to watch this space rediscover
the reasons that the regulations were created in the first place.

One of the interesting questions for me is the extent to which the space will
start to self-regulate. Once an investment type develops a bad reputation, it
can be very hard to recover. That's why major stock and commodities exchanges
are serious about regulating participants, and can be much more stringent than
governmental regulators. Contrast, for example, the way investors feel about
NYSE or NASDAQ stocks, versus the penny stock market, which is rife with
scams. [1]

Based on the history so far I'm not optimistic. But maybe they'll turn it
around.

[1]
[https://en.wikipedia.org/wiki/Microcap_stock_fraud](https://en.wikipedia.org/wiki/Microcap_stock_fraud)

~~~
nikcub
> It's been fascinating to watch this space rediscover the reasons that the
> regulations were created in the first place.

I've found that ICO's are almost identical to OTC pump and dumps - they're
much less sophisticated versions of the same thing

Opportunities that are marketed as investments first, products second. Website
homepages that resemble the "investors" section of ordinary website with no
actual "product" presence. Vague products in markets that are easy to
obfuscate or fake. Affiliations that can be purchased. High profile board
members or investors who can be purchased. Social media footprint where people
talking about the stock outnumber customers, etc.

If you've spent any time in Yahoo! message boards or Seeking Alpha looking at
the hundreds of reverse-IPO's and pink sheet startups you'll recognize all of
the same scams (and some of the same names! _cough_ McAfee _cough-cough_ )

~~~
beager
This is why the hype typhoon of ICOs makes no sense on HN. If you did a "Show
HN" with a site that was all pedigree and vagaries, no product, it would get
torn to shreds. But by and large, ICO coverage seems breathless and overblown.

It's nice to see the SEC take a more active role though. Maybe they can be a
decent enough filter where the ICO world can grow enough trust to be a
legitimate vehicle for investing.

------
thisisit
Here's the site for: ReCoin -
[https://101recoin.com/en](https://101recoin.com/en) DRC -
[https://drc.world/en](https://drc.world/en)

Couple of things which are noticeable first up are: a. ReCoin at least
attempts to appear legit by having a "team". DRC doesn't even do that.

b. While some (most?) ICOs do not have a convincing reason for using ethereum
or blockchain, this one takes the cake. The only reason for using blockchain
is..well because "blockchain".

c. The sidechain is called "Altcoin" for Recoin. DRC doesn't even get that
mention. On looking through the whitepaper for DRC, there is a mention of the
sidechain but nothing on site. So DRC site looks like a rush job when compared
to Recoin ;)

d. Quite a lot of coins avoid SEC by kinda of ensuring they are not shares in
something but paying for an unreleased product. They also try and mention that
coins don't have an explicit real world value. But DRC and RECoin do neither
of these.

e. These guys are based out of US, so quite easy for SEC to take action too.

Devil is in the details. It will be interesting to know how the complain
landed on SEC's desk.

~~~
vecinu
That video on DRC's website is absolutely ridiculous. It almost seems a parody
of itself.

They also spelled their name as "Diamond Reserved Club" but on the website
it's "Diamond Reserve Club" (noticed the extra d).

~~~
code_duck
There are at least a few typos on the site, such as 'memebers'.

~~~
rapind
Intentional or ironic?

------
howwwe
This one sounds bad, but the problem with the Howey test is that it's overly
broad. Anything from presales in a Kickstarter to ICANN selling those new
domain names (like .attorney) to selling tickets to a yet-to-be-arranged event
could all be considered a security under the Howey test. It's just too broad
and nobody knows where the SEC will draw the line. It would be good for
everyone if the SEC would simply explain on what would make a ICO legit,
because currently their guidance is still too unclear. It's like they want the
ability to selectively prosecute anyone, not caring that the regulatory
uncertainty is keeping legitimate, risk-adverse teams away, which doesn't
help.

~~~
omarchowdhury
They did say what would make an ICO legit: proper registration with the SEC.

~~~
KGIII
Has any company tried to do proper registration with the SEC? If so, we're
they successful?

I just hit up the mighty Google and it was interesting, but not helpful.

Search terms 'ICO proper registration SEC' yields some interesting results,
including some stuff that I'm not sure made HN, but doesn't reveal any
companies that have done so or tried to do so.

I'm not suggesting this, but I bet the first one that properly registers with
the SEC (even if it fails horribly and was bordering in scammy) would make a
mint. The tag line of 'Officially sanctioned by the SEC' would go a long ways,
even if it was doomed (intentional or otherwise) from the start.

Again, that's not a suggestion to make something meet the bare minimal
requirements, register, and then make a killing.

~~~
CyrusL
Filecoin did their ICO by the book. The biggest constraint is that the
purchasers need to be accredited investors.

~~~
KGIII
Thanks! I will see if I can find some stuff to read about them later. I want
to see how hard it was, the process, etc...

I believe they changed some VC funding rules, not that long ago. I'm not sure
if the apply in these types of cases, but I think 'regular' people are now
allowed to invest, but only a small amount. I seem to recall it was
$2000/year.

It's not much, but it is a start? I didn't pay much attention to it, so I
don't remember all the details. Sorry, I don't even remember the name of it so
that I can dig out some info. I noticed it in passing. I'm not into the VC
game and prefer investing elsewhere. So, I didn't pay much attention to it.

Edited to add:

[https://www.theverge.com/2016/5/16/11685832/sec-
crowdfunding...](https://www.theverge.com/2016/5/16/11685832/sec-crowdfunding-
rule-update-startups-investors)

Chances are you know more about it than I do, but there's a link if you don't.

------
mgalka
1\. The amounts raised so far are small, a few $100k. That's tiny compared to
what ICO lose in hacks.

2\. These are not high tech crypto startups, as most ICOs are. This is some
guy selling diamonds. The text from the website sounds ridiculous and makes no
sense.

> "By acquiring at least 1 DRC you will claim the membership in the exclusive
> Diamond Reserve Club (DRC) with privileges such as access to the blockchain
> transactional databases"

A non-event for ICOs

~~~
austenallred
The SEC deciding that coins fall within its jurisdiction is anything but a
non-event. They’re picking lowest hanging fruit, but it shows they’re willing
to regulate the space.

~~~
cma
[https://www.sec.gov/oiea/investor-alerts-and-
bulletins/ib_co...](https://www.sec.gov/oiea/investor-alerts-and-
bulletins/ib_coinofferings)

------
Animats
It looks like the SEC is starting with the worst scammers. They've also been
phoning up ICO promoters, and having a little talk about what's a security.

CoinMarketCap lists values for 265 known tokens.[1] The biggest market cap is
OmiseGo, for which a market cap of over $1 million is claimed. As far as I can
tell, owning an OmiseGo token lets you do absolutely nothing.

As a joke. someone did an ICO of the Useless Etherium Token. It's totally
worthless. They tell you that up front. They raised $95K.[2]

[1] [https://coinmarketcap.com/tokens/](https://coinmarketcap.com/tokens/) [2]
[https://uetoken.com/](https://uetoken.com/)

~~~
CryptoPunk
>>As far as I can tell, owning an OmiseGo token lets you do absolutely
nothing.

You know very well that the value of OmiseGo tokens is based on the token-
compatible platform they have said they are developing, and not what can
currently be done with the tokens. Leaving out this point is disingenuous.

~~~
Animats
It's not clear that their own platform gives value to their own tokens. They
talk about wallets on their platform holding BTC or ETH.[1] Their own token
mostly funds them.

[1]
[https://cdn.omise.co/omg/whitepaper.pdf](https://cdn.omise.co/omg/whitepaper.pdf)

~~~
CryptoPunk
It's absolutely clear, given the plan is to make OMG the staking token used
for securing the OmiseGo sub-chain. It's right there in the abstract of the
white paper:

>>It uses the mechanism of a protocol token to create a proof-of-stake
blockchain to enable enforcement of market activity amongst participants.

It's no crime to be ignorant of a subject. It's intellectually dishonest to
criticize projects while in such a state.

------
noddy1
In addition to these blatantly fraudulent ICO's, I contend that even the
"legitimate" ICO's are a total shitshow.

It's not that they raise far too much money for their projects (although they
do), its just that without equity in the company performing the ICO you simply
don't get alignment of incentives.

Guys like Juan Benet talk about this utopian fantasy of coins funding open-
source protocols, but think about the reality. A legitimate project raises
15-45million dollars with a stated intention. Even being well funded, it is
still highly speculative, and most startups "fail". So the team raising money
has 2 options. Spend the entire amount trying to get the protocol going -
which will probably fail (as most projects do), or have a half-hearted go at
getting the protocol going, and keep the rest of the money - a 100% chance of
getting comfortably rich, but further decreasing the already small odds of the
project succeeding.

If the protocol/token model is so good, then companies can launch a token and
use that to feed profits back to equity-holders. There is no reason why
investors should have to take their chances on some made-up instrument that
puts an extra barrier between their interests and those of the founding
company.

~~~
Taek
Same is true for startups, except that startup funding carries fiduciary
responsibility. If you are not spending money in the best interests of the
investors, they can sue you.

Current token sales waive this responsibility, but investors should demand
that it is there.

~~~
vkou
They would, if any of them were interested in going long. That they don't
leads me to believe that most of them are just doing short-term speculation.

------
josh2600
These are really bad ICOs (even calling them that is weird because of how bad
they are). I think other ICOs aren't likely to succeed for other reasons, but
I could say the same thing about most startups. I think it's obvious that an
ICO is a more-entrepreneur friendly financing path when compared to really
almost any other capitalization method. That doesn't mean it's the right
answer, but it is obviously the path that an entrepreneur should choose right
now if they can. This is because ICOs are the cheapest cost of capital of any
funding source available today.

I am not good at predicting how the SEC will act, but I expect this action is
a good thing over all. If people think twice before doing an ICO it feels like
a step in the right direction. I do think there are some company narratives
that make sense as an ICO, but maybe that's just survivorship bias. It's
really too early to tell in the lifecycle of crypto.

In short, I think ICOs are the cheapest cost of capital so doing one makes
sense right now. That might not always be true, which may or may not be a good
thing depending upon your perspective. I think it's nice to see some action
from the SEC that's clearly aligned with the interests of the public.

------
seibelj
All big ICO's are through Switzerland and only allow accredited US purchasers
if they allow US at all. SEC will kill the next decade of technology companies
and let the EU take it over unless they issue clear guidance like the Swiss.
You can apply to FINMA for $15k CHF and go through a standard process to be a
verified token. Would love that in USA. After Brexit, expect more ICO's in the
UK as well (Funfair is a good example) as they try to do anything possible to
boost their economy.

Fact: crypto currency will be a mechanism for fundraising startups. Either
deal with it or stick your fingers in your ears.

~~~
wmf
You make it sound like VCs and CoinList don't exist.

~~~
seibelj
I am well aware, but YC is extremely anti-ICO as is HN, so I am trying to
communicate reality to the general commenters here.

~~~
omarchowdhury
You'd think HN would be pro-ICO, but there's too many people here with sunk
costs in the VC paradigm.

~~~
seibelj
VC isn't against ICO, VC has a very important part to play in the ICO system
in terms of due diligence and "stamp of approval". I know many prominent VC's
who are serious about tokens, but usually they are spinning out new funds
without the LP agreements they currently have.

The scary thing to the current system is that entrepreneurs are getting more
power. The bullshit common in fundraising (i.e. last minute changes that
threaten to blow up the raise, unreasonable asks from capital, multi-month
full-time fundraising, I can go on...) will become abnormal as raising money
gets easier.

~~~
nikcub
People forget that VCs also raise money. Setting up a venture fund that is
backed by an ICO token would be a good way to give public accredited investors
access to the private market.

------
crsv
I mean I'm totally sure that the Paris Hilton coin and the Floyd Mayweather
endorsed ICO were 100% legitimate business models and that these two examples
were just a couple of outliers. /sarcasm

------
QAPereo
The Colony is looking pretty damned bright right about now.

[https://blog.colony.io/the-colony-token-
sale-7ac14c845bc0](https://blog.colony.io/the-colony-token-sale-7ac14c845bc0)

~~~
kenbaylor
Colony took a very conservative view of the way things may turn out. But even
if they went ahead, they would have been far far far away from the cross-hairs
of the SEC.

Colony are a legitimate business and honest. The SEC is only going after the
egregious ones, as they don't want to kill nascent crypto/ICOs in the USA.

------
hardwaresofton
Why is the SEC so fast to target initial coin offerings but terrible at
actually reining in the financial sector. To be fair I don't know a ton about
the inner workings of the street, so maybe I've just consumed one too many
movies/articles/whatever but it seems like the SEC is a just handing out slaps
on the wrist over there.

~~~
omarchowdhury
You don't know the inner workings of the street, so why do you think it's fair
for you to say the SEC is doing a terrible job reining in the financial
sector?

~~~
hardwaresofton
Because things like the financial crisis of 2008 happened? Because as far as I
know the SEC hasn't introduced any sort of uniform fiduciary standard for
financial advisors? While I don't know the inner workings of the street,
everything I see seems to point to the SEC not doing enough to penalized well-
established players, and is allowing a culture in which firms do their best to
not get cauhgt/apologize for transgressions rather than follow the law. Maybe
it's just that my news sources are biased, but I try and vary them and pick
generally considered good publications (when it's written form at least).

It seems objectively difficult to find anyone that's going to say the SEC is
doing a great job at reining in the financial sector -- so my question stands,
why are they doing such a good job at reining in ICOs, using tech that's
barely understood by the general populace (though it's probably easy to spot
how scummy they are), and in an absolutely new regulatory landscape?

~~~
omarchowdhury
Can you accurately and properly trace the blame for the financial crisis of
2008 onto the failings of the SEC?

~~~
hardwaresofton
Can you accurately and properly trace the blame for any large scale
malfunction of society on one small bureaucratic group?

Even if you pin the blame on bad actors that took control of ratings bodies
and propogated bad CDOs, are you suggesting that the SEC was blameless? Would
you not say it's within the purview of the SEC to manage/monitor/influence CDO
product selling/purchasing?

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thinkcomp
Docket: [https://www.plainsite.org/dockets/36kxb8b9n/new-york-
eastern...](https://www.plainsite.org/dockets/36kxb8b9n/new-york-eastern-
district-court/united-states-securities-and-exchange-commission-v-recoin-
group-foundation-llc-et-al/)

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kensai
I think they should get the list of ICOrating and start working on it from the
worst to the least worst.

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redm
This is very similar to the .com bubble in the late 90's. Everyone wanted to
get in, there was massive FOMO, and there were legit businesses along with
scams, and terrible ideas.

There will be a reckoning at some point, but the tech is here to stay. I
invest in ICO's that have the focus, vision, and team to build something
lasting.

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wav-part
Wrong Headline.

SEC has not charged with _fraud_ rather than with _violating anti-fraud and
registration provisions_. Since almost no ICO implement anti-$FCRIME
provisions, even honest ICO can be charged similarly.

~~~
paulie_a
If the ICO is US based and not complying with the law it is not honest.

~~~
komaromy
How far does that go? If an Uber driver goes over the speed limit on the
highway, are they not honest?

~~~
lovich
Legitimately yes they are being dishonest. When you get a license you are
telling the government you know the laws and will abide by them.

Whether a law that nearly 100% of the population ends up violating is a good
law is a different discussion.

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thinkinmachine
Bitcoin's a bubble and ICO's are a scam. I feel for those whose hard earned
IRAs are being invested in these.

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alexnewman
Obviously we don't know all the facts about these particular ICOs but
otherwise this is great news. By going after the least famous, it really shows
the SEC is trying to pro business. I expect some sell off in the market from
the panic but it's good news for the ETH

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Kyragem
These ICOs are bad for the value of ETH, often millions are raised and then
dumped the next day.

~~~
erikpukinskis
Volume is great for Ethereum. If you ignore speculative value, and long term
savings value, Ethereum's value is pegged to the float required for its pure
transactions. If they are transacting a billion dollars a week in ICOs, and
the typical ICO user holds for 6 months, then that puts a floor on ETH at
$24B. That's $24 billion of real value. As valuable as $24B of petroleum, so
long as there keep being ICOs... even if none of them are worth anything.

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amazingman
Good. This further legitimizes crypto currency as a legitimate environment for
creating fully-functional markets.

