For example: Free enterprise has been against the law in many nations in the past, and those nations lost opportunities because of this. Most of them now allow free enterprise.
Your statement is 1-dimensional and makes the assumption that every law is good.
It doesn’t follow the law. And it doesn’t attempt to challenge it. It hand-waves it away with an unprovable hypothesis. It’s lazy in a way that encourages unthinking and stupid behaviour.
Interstate legal competition exists, but it’s slow and complicated. It’s especially unusual in finance. Furthermore, cryptocurrencies are, in many jurisdictions, starting from a hands-off position. Deregulation is less likely than further regulation.
> Your statement is 1-dimensional and makes the assumption that every law is good
I don’t assume that. If there is a law one finds unjust (a) work to change it or (b) break it in an act of civil disobedience. Don’t tell other people to break it with false assurances around why they won’t get in trouble because regulators are competing or whatever.
In this case, I think the floodgates are open. The SEC and CFTC can't go after everyone, so by that reasoning, some people will be able to (maybe illegally) sell unlicensed securities through these ICOs. Some of those will do well and some of these investors will make bank. Others will lose their shirt.
What this whole ICO thing shows is that perhaps fundraising should be more deregulated in certain areas. Artificially limiting investment opportunities to HNWIs, while a sane approach, isn't working. You can keep enforcing and going after hundreds of ICOs, but it's not likely they have the resources for that. That's the equivalent of putting your head in the sand while not realising an uprising is happening.
For example: why not make it possible for companies to raise at most $25K per person, from people who do not classify as a HNWI? The law should be shaped as the world develops. And that's what I think will eventually happen. The world shouldn't be shaped around the law.
That’s one hell of a bet to encourage others to take. (You aren’t encouraging anyone. But the original article is.)
> limiting investment opportunities to HNWIs, while a sane approach, isn't working
I used to believe this. Cryptocurrencies have shown me the existing rules are closer to being correct. Given the chance to discern fraud from fact, investors without teams of lawyers bought into every single form of elementary fraud the Securities Act of 1933 successfully, to a broad degree, stomped out.
Cryptocurrencies’ buyers aren’t investing. They are gambling.
The fundamental problem is diligence costs money. In the public markets, reporting requirements shift that burden on companies. Many companies don’t want that burden. They stay private. To diligence them, investors must be able to bear the cost of diligence and risk of their investment.
Given VC investors, on average, fail to systematically outperform public markets, I fail to see the merits of the case “investors who invested in stupid things A (cryptos), despite having access to sensible thing B (registered securities), should be given access to marginally-less stupid thing C (unregistered securities).”
Any high risk investment is a gamble. Most cryptocurrencies are garbage, useless and will eventually disappear. But several of them (in my view) are interesting and will be around. Investing in cryptocurrencies isn't riskier than angel investing in a startup. if you love losing money, invest in 10 startups. You'll most likely lose money on all 10 deals. Your chances of making a massive return by investing in crypto are probably significantly higher.
At the end of the day, if you can risk $1 to potentially make $10 or 20, with an 80% chance of you doubling your money, a 50% chance that you 10x and a 25% chance you 20x your money -- honestly, why wouldn't you do that? Not with your entire net worth, but those odds are just too good not to put some money in.
In fact, I'd say more, anyone who hasn't at least invested some money in cryptocurrencies.. just doesn't like making money. What if Bitcoin actually ends up becoming digital gold? You'll have lost out on the best possible investment in our lifetime. What if Ethereum ends up powering most dApps? etc
One, you mucked up your arithmetic (80% + 50% + 25% > 1). (I’ll assume you were expressing cumulative probabilities.) Two, you left off the tail of the distribution where one loses money.
Put together, I’d say no to your pitch—schemes promising a greater than 100% chance of making lots of money and 0% chance of losing any are 100% scams.
It must be extremely easy to fleece these people, because how many do you think report these crimes to the same government they distrust so much?
Looking forward to an endless stream of slightly tweaked and renamed reworks of the same concept in the decades to come.
Uber deliberately broke rules in an effort to change them and went into their fights willing to pay the penalties. That’s civil disobedience. They didn’t argue the rules wouldn’t be enforced because of regulatory competition or whatever.
Furthermore, when Uber broke the rules it was their asses on the line. They had a terrific record of reimbursing drivers who got fined for taxi violations. With ILPs, in the other hand, we have some rando encouraging others to take stupid bets.
Night and day.
Care to show me where Uber lobbied for changing of the taxi laws? Last I saw, they were just fine with those still existing, so long as they were exempt.
no. To me it looks more like RICO as Uber leadership never risked to be subjected to any punishment. The rank-and-file were actually violating the local laws and were caught/cited/fined.
>They had a terrific record of reimbursing drivers who got fined for taxi violations.
"your family will be well taken care of" :)
Please refrain from putting Travis K. in the same category as Rosa Parks.
Civil disobedience isn’t inherently good, momentous nor socially activistic. (See the story behind Homer Plessy [1], who was hired by railroad owners in a bid to cut costs related to a segregationist state law. It famously backfired when SCOTUS created “separate but equal”.)
It is simply “the active, professed refusal of a citizen to obey certain laws of the state, and/or demands, orders, and commands of a government” [2].
"This is a toxic attitude. “Don’t worry if you’re breaking the law; they’ll have to change to stay relevant!”"
Uber X enabled a cheaper form of public transport by adding some efficiencies, but also by actively skirting regulation that was in place for Hire Cars and Taxis (that also made them more expensive options) that was designed for public safety.
Following this, Governments changed laws to allow for this new class of driver with new regulations that lowered the cost of compliance.
This is exactly the same as a new financial instrument designed to allow some other form of innovative public good that breaches current regulations that were designed for safety. With the expectation that regulation will ave to change for them.
In both cases the regulations being breached were designed for some kind of public safety. The breakers believed they were delivering some kind of greater good. I'm not saying the method is right or wrong... it appears to get results.
I've never read anything about Plessy being "hired" by railroad owners - rather there was a civil rights group, the Citizens Committe, who were comprised of a variety of folks opposed to the seperste car act.
They asked Plessy to voulenteer to be test case, to which he agreed. (And yes, it did backfire).
The railroad company was an ally to the cause due to costs of adding more cars, so they agreed to help.
Also, while that sentence does come from Wikipedia definition, I've never heard it used outside the scope of activism / civil rights work in 35+ years of activist work.
This is a toxic attitude. “Don’t worry if you’re breaking the law; they’ll have to change to stay relevant!”