It has similar vibes as the US law which only allows accredited investors to invest in fast growing startups... 'To protect mom and pop investors' yeah right. Is there even a single person in the entire country who actually believes that?
For some reason, people seem to think an ITO should change all the rules, and that first you sell to the general public, and then you figure everything else out (assuming you don’t just take the money and run). This is IMO nonsense.
It's the legal advice and accounting specialists required to produce an adequate prospectus that's the big cost. But again: if you're raising millions, it seems not unreasonable to front some of that, even as personal debt, in order to prove "skin in the game" and that it's not a scam.
EOS raised $4.2 billion dollars. You're telling me they can't front 60k?
Keep in mind certain crowd-funding is legal in US.
Uber seems to be successful despite clearly (IIUC) breaking laws that regulate taxi services.
If it worked for Uber, I can see why other businesses might have similar hopes.
If it's the speed of it, I can agree that the government is slow, but it's generally accepted as the cost of doing business in a regulated sector that you wait for regulatory approval before processing. There's work to be done making things more efficient, but in the meantime everyone still needs to play by the rules.
If it's missing information that the SEC is demanding, that information is required for a reason. If it doesn't apply to your token, maybe your token is broken by design?
Everything about this screams "system working as designed to protect the public".
Would you kindly point out a company that tried and failed to register an ICO? I have done a little research and been unable to find any that even went through the motions. Perhaps the specifics matter.
This is, quite simply, zeitgeisty prejudice. Most well-funded cryptocurrency companies have passed audits. I've worked for or with four crypto companies and three of them were audited (also all of them still exist).
You aren't allowed to count "fraud cryptobros from miami creating an ICO" if you don't count "fraud fratbros from harvard/yale creating a hedge fund". And if you do count both, then you'll notice that the proportion of fraud is roughly the same everywhere, we just allow ourselves to notice it in some places more than others.
> Why should the SEC bend over backwards to create new rules
Because you don't apply old rules to new contexts if you're a responsible government, especially if you're claiming jurisdiction over those new contexts. Registration and filing processes created for the paper era simply don't cut it for regulating self-executing financial instruments. Why doesn't the SEC have a registration smart contract? It is the SEC's responsibility to adapt to the times.
> Would you kindly point out a company that tried and failed to register an ICO
What do you not understand about "there is not process"? I've been a part of two companies who have tried. We have had "conversations", aka we try to reach out and a different attorney occasionally gets back in touch with us and rehashes the same conversation every six months. The longest effort went nowhere in four years. There is no registration, there is no process, there are no boxes we can check on the existing forms which govern what we do.
This is true in practice but untrue in spirit. Any nonsense project can pass an audit by hiring an equally nonsense auditor.
> You aren't allowed to count "fraud cryptobros from miami creating an ICO" if you don't count "fraud fratbros from harvard/yale creating a hedge fund". And if you do count both, then you'll notice that the proportion of fraud is roughly the same everywhere, we just allow ourselves to notice it in some places more than others.
This is blatantly untrue. Yes, there are plenty of forms of fraud which occur in hedge funds, but the public is shielded from many of these, because the most obvious forms of fraud were recognized and regulated decades ago. There's practically no such protections around crypto, and as a result, a whole host of obvious scams have flourished.
If you talk to almost any crypto investor, most of them have been scammed at some point. The same is not true of investors in traditional markets.
You can absolutely legally register your cryptocurrency as a security. The requirements just make it a non-starter.
There's is nothing inherently different between cryptocurrencies and securities. The accounting is irrelevant. If you promise people that their money will increase in value if they invest, then you need to register as a security if you want to sell to retail customers. You can continue selling the unregistered securities all you want to professional traders.
Disclaimer: I work on STX and its blockchain
There is mountains upon mountains of evidence that show that the SEC is biased towards crypto and that killing it will be done by way of confusion and corruption through dumb lawsuits.
Is there a blog somewhere put out by one of these companies with their back-and-forth? It would be informative reasoning.
Disclaimer: I work on STX and its blockchain
[1] https://www.sec.gov/Archives/edgar/data/1693656/000110465919...
So they did make token sales, and complied with the "accredited investor" rule.
Yes there is. You register them as securities. STX[1] did this. Other projects need to suck it up and do it legally.
[1] disclaimer: I work on the Stacks blockchain (STX)
It exists, in theory. Many people have tried, nothing has progressed even an inch. It's not even a matter of the SEC putting out a list of clear conditions that people deem unacceptable. Instead, the applications just seem to be mired in bureaucracy.
As I understand, there is deliberate gaslighting from the SEC and Gary Gensler.
Gary keeps telling the media "the law is clear" and "companies should come and register", but then never answer's even congress' own questions on what constitutes a security, and makes it impossible for crypto projects to register.