A buddy of mine from my home town called me up and needed a developer to work on his "crypto-currency hedge fund." This guy has always been a bit dodgy on looking for the least amount of resistance to the most money.
I tried tell tell him all the reasons it was a bad idea. He claims he had done all the research (guy is not a programmer, couldn't pass Anatomy I the two times he took it in an attempt to start his career as a radiologist .. for the money -- sure as hell couldn't do the maths).
He told me investments would be a minimum of $250k and he was promising (yes promising) 120% returns. ... I told him he needed to be careful, because with that type of pitch, he would most likely end up in a ditch somewhere two to to the head .. or jail .. and he should hope for jail.
Besides telling him it was a bad idea, I told him he couldn't afford me. He told me he'd pay more than whatever I was making. I told him what I made .. and that I wouldn't take anything in crypto currency. That ended that.
He had several tens of thousands in different crypto currencies (before the BTC bubble broke in 2018). So in response to your question: this kind of person.
I'm no lawyer, but it certainly seems like Kik worked to circumvent these laws in order to raise a bunch of money to keep their business alive. I look forward to seeing where the SEC investigation/trial goes.
Which is counterproductive, really. Natural selection is the only effective cure for stupidity known to the mankind. Stupid people should be allowed to make stupid mistakes and suffer all the consequences.
What’s amazing is they raise nearly $100M selling the token, spent $5M in legal fees and then began raising additional legal fees (over $5M to date) from the public to continue to fight the SEC and anticipation of future litigation with the SEC.
They raised $100M and can’t be bothered to use that for their own legal fees...And the public is apparently happy giving them millions more, it’s insanity.
I believe it was Einstein who defined insanity as performing the same task over and over and expecting different results.
If you invested/bought Kik because you wanted a “position” to make money on it, then it fits the definition of a security, so by throwing more money to fight the SEC to claim it’s not a security is a losing battle by your own “position”.
The real irony is that the Kik token probably was structured as a non-security utility token, it’s only the CEO statements/marketing of the token as something that will become extremely valueable to investors that will come back and haunt them.
Not Einstein. It's a quote from a 1981 Narcotics Anonymous pamphlet.
Look at all the payment integrations that've been added to platforms like Facebook lately. It isn't cryptocurrency, but the idea seems to be pretty similar.
I think the SEC is interested in the conditions around their ICO, the misleading tactics, and the aftermath of it, more than the fact that they did an ICO
That is not to say, this is the only kik users, it's just the only instances I anecdotally saw people advertise their kik handles, and it didn't leave a good impression. This ICO stuff made me think of that.
Myself, for a long time I believed tech startups are micro-R&D for new technologies. Couple years of HN and in the local startup community later, I finally realized that a lot of Internet startups tend to turn investor money into business model R&D - i.e. ever more innovative ways to break an existing market and siphon off enough wealth to get flipped and net the founders FU money. Regular people don't know any of that; they don't understand how the game is played, or why - they only enjoy free web services and cheap pirate taxi rides.
They were from about 1970 to 1998. Then came the dot-com boom.
During that period, most VC firms made money. Now, VC funds as a a class are a net lose.
It seems like you might of repeated yourself...
This is the cryptocurrency roosters coming home to roost, no?
According to the SEC it was also an illegal offering of a security, and its receiving special treatment bc they considered it to have matured and no longer be considered a security, therefore grandfathered its grandfathered in unlike any other ICO.
No one else is going to have the good fortune of being able to offer an unregistered security then mature into a non-security with the SEC acting first.
Name a non-ICO-infrastructure ICO that isn’t a scam.
None of this stuff is ready for the mass market because scaling is so limited, but that's on track to get about 1000X better over the next two years.
Quick search of “ethereum escrow” returns no real implementations that avoid fees or human intermediaries. Every single blog post I’ve read that tries to sketch an alternative is incredibly poorly thought through and still vulnerable to fraud. That is why they are just blog posts and not real, not because it’s “still early days.” I think it’s fair to say trustless escrow is vaporware.
Programmable consensus and smart contracts are easy to learn concepts.
https://medium.com/coinmonks/escrow-service-as-a-smart-contr...
*Also one should know it is offensive to call another's work vaporware. Especially, when one is relying on anecdotes. Next I'm going to be told IBM and Google are wasting their time and shareholder money on blockchain.
So yes, fair to say it's vapor i.e. not a real thing. That may be harsh but it is a fair and supported criticism, whereas your prior comment merely engaged in unsupported mockery.
There are projects with a very high potential to provide those building blocks in development right now, like Matter Labs' use of zero-knowledge proofs to scale Ethereum:
But yea it's all very speculative right now. I speculate it will work, but it'll depend on what the various players in the industy actually accomplish.
Ethereum is the reason there have been so many ICOs in the past 3 years.
Are most ICO's scams? Yeah sadly. Are there lots of scams on Kickstarter/indiegogo/etc? Yes sadly.
But an ICO itself isn't necessarily a scam (although I concede 99% of them are)
The problem is that most of them are run by scammers, which do promise profit.
In an ICO, I get a... theoretical security? A kik kin coin that may or may not have value?
You don't back an ICO because its "value will go to the moon", you back an ICO because invents a new way for -- Creators to get paid instead of using advertisements, creative ways to organize some kind of distributed system.
The scam comes from them not completing their promises and leaving with the money and no "product". The coin's value is irrelevant (as long as it isn't 0)
A lot of 'investors' are firm believers in the Great Fool theory of investment. Basically they are completely aware that it is a scam, they're just banking on the fact that they can get in, take some profit, and get out before the rest of the world catches on that it is a scam.
Is that a good or bad thing?
There was a short period of time when there was immense profits to be had from buying and quickly flipping obvious scam ICOs.
Probably if they had invested in the right lobbyists and the right lawyers, they would have been able to engineer a level of indirection that this wouldn't have attracted attention.
Maybe they actually have, and will lose this case as millionaires.
My guess is that a lot of this money is dirty. There are also tax reasons, where money needs to be invested or is even expected to be lost.
I personally feel that rando cryptocurrency vs Uber post IPO has similar alpha, but obviously quite different beta.
North Korea probably.
> 167. [...] Kik declined to sell Kin to investors from certain countries, including Canada, China, Cuba, and North Korea.
AFAICT many/most ICOs operated like this. Not all, certainly but the "raise money through hype about future values, with products far off or non-existant" model appeared to be the dominant one in '17 and '18.
Who even bought this stuff? Doesn't this throw up all the red flags of a scam ICO?