A Lawyer's Perspective on IEO - page 2.

magneto

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Conducting an IEO in the United States, or selling to “U.S. Persons”[6] by way of an IEO, is almost certainly a violation of the Securities Act of 1933. Punishable by a host of draconian penalties.[7]

The fact that there are still a lot of uncertain regulation that surround these funding sources mean that most exchanges simply wouldn't risk offering this sort of service/product to countries like the US, as squatter stated. However, I wonder how exchanges plan on ensuring that US based customers have no way of accessing this? Mandatory KYC?

Fundamentally speaking though, IEOs are really not that different from the traditional token crowdfunds that we've seen. Apart from the fact that the token is almost guaranteed to have instant liquidity on a big exchange.

I certainly would not view it as 'safer', especially when you consider the fact that you may see more manipulation given that vapourware can be easily sold, essentially.

Kemarit

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I wouldn't say it's the solution, but at least a good option for now. But clearly, IEO could also be easily manipulated, how many times have we heard that the sales was totally completed in matter of minutes? How is that possible? Unless you are a insider and has a deep pocket to go first in the line and uses trading bots to purchase as much as you want. I think exchanges should also tackle this issues. So for now it's the lesser of two evil but we will see.

freedomgo

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It was clearly the solution, IEO help the market to grow again, it's just beginning and most probably we will see more growth this year.
Exchange would not allow IEO if they see big risk on it, as they will loss their business if they found violating a serious law.
Overall, this is a small move for the exchanges.

Harlot

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I couldn't say that this is a disadvantage for U.S. citizens even though they aren't allowed to participate in IEOs they are still legally allowed to buy it once it becomes available in exchanges in the buy and sell side. I do think that this is a better approach for any trader who wants to know the first movements after a token is launch via IEO, you see having been able to purchase it through initial offering is always a risk and there is no assurances that it will only go up once it is in the market.

carlfebz2

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Quote from: illyiller on June 05, 2019, 08:51:52 PM

Quote from: CryptoBry on June 05, 2019, 08:40:13 PM

Quote from: jlawlercal on June 05, 2019, 03:05:04 PM

Are IEO's the best present solution for all parties? Or simply the lesser of evils?

I would say that it is the latter -- the lesser evil -- compared to the usual ICOs which we experienced in 2017 and 2018. We have to acknowledge that indeed IEO is an improvement in fact a big jump ahead from the ICO days.

Only in some ways. In other ways, there are major drawbacks for smaller investors.

The earliest ICOs were completely accessible. Today, IEOs are run with various barriers to entry. They also seem heavily slated towards algorithms/bot and likely institutional traders who immediately buy up the offering before little guys get a chance.

There would always be a drawback which you had already mentioned.I do see that IEO is really much better than ICO's generally but the thing here is that it isnt really that easy for you to participate if you are just a small guy but if youre in luck then you might able to get through.This IEO might not be the same on giving out 1000x-5000x possible profits like
ICO's in the past but the profits given by IEO's are considerable.

illyiller

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Quote from: CryptoBry on June 05, 2019, 08:40:13 PM

Quote from: jlawlercal on June 05, 2019, 03:05:04 PM

Are IEO's the best present solution for all parties? Or simply the lesser of evils?

I would say that it is the latter -- the lesser evil -- compared to the usual ICOs which we experienced in 2017 and 2018. We have to acknowledge that indeed IEO is an improvement in fact a big jump ahead from the ICO days.

Only in some ways. In other ways, there are major drawbacks for smaller investors.

The earliest ICOs were completely accessible. Today, IEOs are run with various barriers to entry. They also seem heavily slated towards algorithms/bot and likely institutional traders who immediately buy up the offering before little guys get a chance.

CryptoBry

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Quote from: jlawlercal on June 05, 2019, 03:05:04 PM

Are IEO's the best present solution for all parties? Or simply the lesser of evils?

I would say that it is the latter -- the lesser evil -- compared to the usual ICOs which we experienced in 2017 and 2018. We have to acknowledge that indeed IEO is an improvement in fact a big jump ahead from the ICO days. However, nothing is perfect all because a project can still be accused of selling securities in USA. So the best solution is to make sure that one is not conducting business within USA and not to any USA citizen inside and outside of the said country and then make sure that no one also get into the secondary market within the 1-year provision period. But does IEO means it is safer for the investors who had seen so many scams and failed projects in the past? I think that is the harder part...and let's see in the coming years how the whole thing behaves.

squatter

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STOP SNITCHIN'

How can exchanges and token issuers comply with Regulation S without physically locking the coins up? If these are blockchain tokens that can be withdrawn from exchanges, they will end up on secondary markets.

Bittrex launched IEOs on its international -- not US-facing -- site, presumably to block US residents from the offerings. I don't think those restrictions applied with offerings on Binance. Would that open Binance up to legal problems under US securities laws?

jlawlercal

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Are IEO's the best present solution for all parties? Or simply the lesser of evils?

https://www.linkedin.com/pulse/initial-exchange-offerings-lawyers-dilemma-1-josh-lawler

Topic: A Lawyer's Perspective on IEO - page 2. (Read 485 times)