Topic: The altcoin topic everyone wants to sweep under the rug - page 2. (Read 24373 times)

Iconomi apparently understands ICOs are not legal if sold to USA citizens and residents:


See the discussion above this post between Come-from-Beyond and myself, which provides more details on the above red highlighted hypothesis.

Carrying on from that above quoted point I made upthread...


The bolded logic is what ICOs are using to justify selling software tokens:


Note the Howey test was discussed in great detail upthread, so I won't repeat that.

So I am not backtracking from the revelation that I had in the summer of 2016 wherein I sort of disowned this thread, because I still agree that if the users buy tokens without any prospectus and have access to the open source software, then they are each individually in control of their ownership of the token and the blockchain which runs it. They can fork whenever they want. No centralized entity has made any commitments to them.

But ICOs seem to entirely violate this concept and thus seem fall under the purview of the Howey test.

I noted (from one of his videos) that Charles Hoskinson apparently also tried to warn Ethereum about this and about not selling to unqualified USA investors because of this. But he was pushed out of Ethereum because he wanted to do issuance and governance correctly. Since that time, the EU has been getting more organized on federalizing their legal system and unifying on every kind of regulation including presumably securities law.

Ethereum might be a trap and one day it could be like another MtGox where all the ETH on the exchanges is confiscated or frozen. Ditto other ICO projects.

I wonder if the Bitcoin received in the ICO could also be frozen, but this wouldn't affect all Bitcoin investors thus probably wouldn't harm Bitcoin as much as it would devastate Ethereum.

I think it will come one day where ICO projects become locked and frozen on the Western exchanges. And with the global collapse of Europe accelerating after the French and German national elections this year, the EU may need to confiscate more funds. So they may cooperate on opportunities to do so. They will become desperate and look for every excuse to take funds.

ICO looks very risky to me. I am considering not doing one with my project. I welcome fair-minded discussion in response to this post. I would like to know of any strong counter-arguments.

Even if the SEC would not confiscate the tokens on Western exchanges, they could still send developers and promoters within their legal reach to jail and file for their extradition from cooperating Western countries.


Note I also think projects that are receiving funding under the guise of decentralized governance which is an obfuscation of actual insider whales centralized control (even if obscured by a sneaky scheme) may also fail the Howey test and/or FinCEN regulations. Examples of these might be Dash and Steem. Dash has the masternode obfuscation. And Steem has the witnesses and curation rewards which skew income to whales.

In short, if there is centralized control of the flow of money from investors to the activities that token investors base their investment expectations on, then the Howey test seems to be met.


Disclaimer: I am not a professional adviser on this topic. Consult your own professional adviser.

We have hit a deadend in this part of convo.



Bitcoin is the same as Monopoly money in Russia.

No the trading will move to tokens which aren't doing the illegal activity and which are thus compatible with all global jurisdictions. Your illegal shit can move to Russia and be ignored, after all the tokens on the Western exchanges have been confiscated or frozen.

You are trolling this thread now. Make a non-dumb point or please take a break, so I can finish the information I wanted to share.

(P.S. it might be instructive to you that all non-USA and China exchanges are being attacked/hacked, e.g. Bitfinex and MtGox. Think maybe the USG and Chinese covert agencies don't have anything to do with this  ).

I thought Bitcoin was illegal in Russia, or has that changed.

If the USA and Chine stop trading then trading will move to another jurisdiction. Economics laws are as strong as Physics ones.

They can't move the tokens:


And China is I bet very intent on regulating exchanges:


The global elite are all in the same club. And we ain't in that club.

I think people trade in China. If Poloniex and Kraken stop trading some tokens then trading will move to other exchanges.

Poloniex and Kraken are both in the USA.

Where do you think people trade these days?

Another big problem is the private keys for the tokens are held by these exchanges (note I have a solution to this which will be revealed in my white paper).

Since when Western markets are relevant? I can't recall even a single pump or dump starting on a Western exchange.

Your token's investors (owners) will care if the G20 crashes the price of your project's token on the exchanges in Western markets.

I don't know how likely that is to happen or not. But normally governments let new paradigms run amok, then crack down later as they catch up to the new paradigms.

But all the past history is not gone. They can go back and attack any history that was illegal.

My "backwater country" is a part of Russia-Kazakhstan-Belarus union. As long as ICOs are allowed in Russia, I don't care about SEC opinion on the matter. Also, in civilized countries the laws are not retrospective (which means that existing projects will be unaffected).

EDIT: If one day you change your mind and start an ICO, do it via a Russian company. It will be able to serve even customers from the USA.

China is also showing a willingness to regulate what it can and recently they stated this was to protect investors from excesses. Ditto Singapore, Japan, etc..

The G20 is becoming ever more coordinated on harmonizing regulation with each other. This year they start sharing information on financial crimes and illegal taxation shelters activity.

I hope you won't imply again that your backwater country is relevant to what the major axis powers of the world could do to the exchange price of an altcoin project if they ruled it was in violation of common sense investment securities regulation and investor protections.

So the more relevant question is what type funding and organizational arrangements are truly decentralized and which are just obfuscations of a company share structure with escrow agents, board of directors, and expectations from ICO investors reliant on the actions of those centralized parties.

The argument that the token holder is the owner of a software token and copy of the software blockchain which he is free to manage as he pleases (in the words of the Supreme court) must not fail the test of economic reality and common sense.

My post is still forthcoming...

Ok, I'll wait for it. I hope it won't imply again that Americans is the superrace and 90% of the world should care about the laws set by the remaining 10%...

I am talking about the impact on the market price (given most exchanges are within the G20's jurisdictional reach). Not whether the SEC can put you personally in jail since I heard you live in Belarus.

Please wait for my next post which will reiterate which types of projects I think are not subject to the Howey test. I will reiterate my revelation where I became less worried about regulation.

Last time I checked the political map of the world it had more than 1 jurisdiction. If you think that the USA is able to export democracy on global scale then google for North Korea, China and Russia.

The buyer of the token is apparently not legally culpable (or not greatly so). The SEC investment securities regulation seems to be most onerous for the developers and promoters of the ICO. I will explain this is more detail in my next post which is forthcoming.

It affects you as an investor only in that if for example the SEC decided to take action against ANY PROJECT which might cause all ICO projects' valuations to collapse on the markets.

In other words, all those who are currently invested in any project that had a history that could be suspect, might see their coins collapse in value if the SEC took any action against any project for the similar type of violation.

Note the SEC action against Ripple (which is covered in greater detail upthread) was related to Ripple being an exchanger, i.e. both selling and repurchasing its own tokens. So that is why it did not cause a selloff in projects which weren't acting as their own exchanger. But I posit that if the SEC attacked a coin for a violation of the Howey test of the investment securities law, we would see a collapse of the price of many ICO projects and other projects which had a centralized structure that violates the Howey test.

I will explain more in the next post.


Disclaimer: I am not a professional adviser on this topic. Consult your own professional adviser.

Which crypto-tokens are ILLEGAL, unregistered "investment securities" as defined by USA securities regulation law?

I don't think I need to bother about your question once I'm not a US citizen.

Crypto is a new type of asset that is even given the regulators problem to regulate. If you read some of the terms and conditions of some of these ICO, they classified ICO token as a software of the company or a license to use the application in future

And they are all scams too. I created miningstocks.com in 2007 and so I know something about this.

They trample innovation because only the scammers have the connections, resources, and time to waste getting listed. And they place onerous restrictions on the way a coin could be structured, distributed, etc.. It would absolutely kill the Steem concept, which I think is going to be critical (with significant tweaks, e.g. no voting) to attaining mass adoption.

I hope you also understand that the required underwriting for IPOs is a scam that enables the investment bankers such as Goldman Sachs to take all the early stage gains of an IPO.

Regulation is scam, because the regulated are in bed with the regulators. The regulations end up being a way to keep all the non-scammers out of the profits.


Yeah we grow tired of your hypocrisy.

Why don't you just admit human nature instead of lying to yourself?

Repeating the revelation I had upthread: