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Its a good question to ask if the regulation is more expensive than the scamming.

For the victims, it certainly wasn't.

And what follows to that assertion?

What I mean is that while it may be worse for optimizing the global output of the system than simply letting the scamming happen (which is what you seem to be asking about), it's important to remember that it's not all about optimizing the global number, but also preventing individuals from experiencing financial ruin.

I dont think prevention of financial ruin is the goal. Any proper investment has that risk as well. I think its just very ill-perceived by the population to have a pit of snakes and scammers and people flailing accusations. But is the bank really any better?

It's the stated goal, there are solid historical reasons for it, and it's a reasonable way to tackle it. It's very disingenuous to equate other investments with ICOs or startups in terms of risk, especially the risk of going to 0. If you invest in 3 random S&P 500 companies, it's very unlikely that you'll end up with $0 from that after 10 years. If you invest in 3 random startups, there's a pretty good chance that you'll have $0 from that after 10 years. If you invest in 3 random ICOs, you're almost certain to have no value from that in 3 years.

If the SEC made it incredibly easy for the general public to invest in startups, scammers would come out of the woodwork to fleece the public, as they have in the ICO world, and as they have in the past for more traditional stock investments. Making a fake company or bullshit ICO and hyping it to the public would be one of the easiest ways to make $10M, and the prospect of that is going to draw a lot of scammers.

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