That's one way of looking at it. Another is that you should not be able to sell arbitrary securities to the general public.

If you assume that everyone is an informed, rational actor, then the rules are silly. I would argue that this is an incorrect assumption.

Of course you are correct. Almost nobody is an informed, rational actor in the fullest sense. However, it's my view that the state ought to view people as such, because to do otherwise is a fundamental violation of human rights (my view of human rights, that is).

The issue, of course, is that when people inevitably start losing the entirety of their savings in a fraudulent "investment", either the state is left picking up the tab or we wind up with a starving, homeless elderly population. Neither are acceptable outcomes, in my opinion.

Where is your evidence that the lack of this regulation would lead to that outcome? Plenty of countries don't have these regulations. Most, in fact. Europeans and Canadians have no legal problems participating in these ICOs. Perhaps I simply haven't heard about the massive elderly starvation problem it's causing over there.

Most people have no idea that ICOs exist, so no, ICOs right now are unlikely to cause a problem. Also, the EU has plenty of securities regulations, just because nobody's decided whether they apply to an ICO yet doens't mean they don't exist. At least some subset of ICOs likely are securities under EU regulation.

ICOs, penny stocks, and other scams being advertised in the cash4gold shops with a pushy salesperson? Yes, that'd be a problem, and the obvious result of no regulation.

Cash 4 gold stores exist now (and are everywhere in cities). Penny stocks exist now. Where is the deluge of poverty stricken elders? This idea that the government needs to protect people from these things just isn't borne out by evidence. If there are no regulations, will there be scams? Yes, absolutely. And that's ok. Sometimes people will get scammed. Culture will adapt to educate people about it.

You're entirely misreading my comment. Yes, cash4gold stores exist now, no, they don't push penny stocks or ICOs on people, as much as they (and CEX, BrightHouse, etc) would no doubt like to. There's nowhere on the high street you can go to be told that you should be buying penny stocks - and there would be without regulation restricting them from doing so. And it'd all work wonderfully until it didn't. Gambling establishments are properly labelled and regulated as such for a reason.

In the EU, there are a lot of regulations around marketing securities to inexperienced investors, and if you screw up, you are liable.

I basically agree. It's unjust that anyone can go broke in Vegas but only rich or connected people can get a chance at pre-IPO returns. I'd support the accredited-investor thing more if it were more like you had to pass a financial rationality test and wait through a cooling-off period. It'd be undignified, but how about an official SEC qualifying poker league?

Ya, I think a financial literacy test could be appropriate, although that's not my preferred solution. I'd prefer it all be mediated by civil law. That is, everyone is free to do what they will: create financial products, purchase financial products. But the court system would intervene in cases of clear deceit, or manipulation of naivete (obviously there's some subjectivity here, but I think that's ok).

I lean the same way, though the critics do have a point and I could see compromising on it.

Still easy to argue that no rational person would do x, therefore x should not be allowed.

Really I think it's just too hard to scale the protections and legal mechanisms. ICO solves some (not all) of the scalability problems.

Since when do individuals know what's good for them? That's why we have regulation.

I don't think that's the main reason we have regulation. Preventing individuals from externalizing costs to others, against their will, is more common and much more justifiable.

The some obvious examples are environmental and food safety. Another is financial regulations to prevent "too big to fail" institutions from taking wild risks that result in bailouts with taxpayer funds.

Food safety regulation has nothing to do with unpriced externality and everything to do with people not knowing what's good for them.

Food safety regulation isn't about making me to eat my vegetables. It's about making sure my vegetables aren't contaminated in ways that I can't reasonably detect.

A producer who skimps on food safety can save costs, and the externality is people getting sick, through no fault of their own.

That is not what "unpriced externality" means.

And if your vegetables being "contaminated in ways that you can't reasonably detect" isn't a case of you not knowing what is good for you, I don't know what is.

They don't. But they ought to have the right to decide what's good for them, even if they're wrong.

But it's government's job to make sure its citizens don't get conned. People have the right to decide to join a suicide cult, but also the government needs to stop the cult because otherwise all these innocent yet naive people will die.

Why is it the government's job to ensure people don't get conned?

because thats we as a society agreed was the governments job.

You are arguing what is. I'm arguing what ought be. I believe it is a violation of fundamental human rights to prevent people from doing with their own property what they like, provided that so doing does not impinge upon the rights of others. My right to be taken in by any scam I choose ought to be absolute. If, ex-post, I can show that I was conned, I ought to receive compensation for that, and maybe the perpetrators ought to go to jail. But the government shouldn't stop me from doing it.

That's your opinion. I'm not saying there's anything wrong about it, but it's just that a modern capitalist government's priority is to make sure its society stays stable (unless you think its priority should be to seek chaos) because that's what governments were built to do--to provide stability.

What you're not taking into account is macroeconomics. When you let anyone do whatever they want, it is very likely that the rich will get richer (because they are more informed) and the poor will get poorer. And with that comes corruption. That's why the government steps in to break off organizations that become too large and make sure things like antitrust don't happen.

If you think the society is unjust, first try to learn WHY things work that way, that way you may either come up with a solution that can solve it, or go build your own nation, or at the least understand what's going on.

thats not at all why we have regulation?!?

we have regulation to prevent people from being misled.