Is your coin a friend to a government? Is legitimacy going to become mandatory?
Is legitimacy becoming mandatory?
It seems governments are now starting to screen token sales. Additionally the United States seems to have a bill in the works to segregate the tokens into tokens which are legitimate and illegitimate. If every nation does something similar then legitimacy might be one of the most important factors in long term growth potential of a project. Illegitimate projects might be okay for short term but the long term potential ultimately might rest on legitimacy.
It's starting with ICOs
The dividing line seems to start at the ICOs. ICOs are what is attracting new money into the ecosystem. It is true that a lot of ICOs are scams, but at the same time money laundering and other criminal activities might be a concern to law enforcement. ICOs present certain risks which if left unregulated may become a point of failure for the entire ecosystem. Regulation in my opinion is best if self regulation but realistically speaking self regulation isn't likely to happen due to the fact that a project can self regulate but still not be certified by the local government as a legitimate investment.
Conclusion
A quote from the SEC says:
"ICOs activities may provide fair and lawful investment opportunities"
Does this quote signal "may" or is it supposed to say "must"?
This is not all that different from the phrases from the Chinese authorities which effect the market over there. Evidence from the SEC, IRS and other agencies point to an upcoming crackdown in the United States. Evidence in from China points to a crackdown over there. The nature of the crackdown seems to point toward a segregation or dividing line between legitimate projects and illegitimate projects. I would highly recommend that anyone who would like to make and keep their earnings to focus their attention and valuable resources into legitimate projects under the assumption that these projects have lower regulatory risk. Being on the right side of authority doesn't mean you have to agree with what the authority is doing but merely means you don't want to have to deal with the unintended consequences and or risks associated with being on the wrong side.
I'm not a big fan of big government regulation. This is their foot in the door. They always start small and slowly work things in their favor. Let the free market do its thing. Regulation will lead to unnecessary bureaucracy and manipulate the free market. Cryptos are supposed to break the chains of big government and central planners/bankers.
We can't stop it. Part of going mainstream is increased regulatory exposure from all sorts of groups and governments. Just wait until the day when social justice warriors and astro truthers take over Steemit because it's guaranteed to happen once you reach critical mass.
Great article. My reading of the quote from the SEC is, while not all initial coin offerings are scams, they sure as hell will crack down on the ones that are scams. To me this is just like how pump and dump penny stocks eventually get de listed. I recall an incident a few years back with a wave of de listings / suspensions of marijuana stocks, now its crypto penny stocks like BITCF.
Is the SEC doing this to protect us from scams or to protect US national security? If it's about North Korea and ISIS I can understand it. I don't really see how the whole accredited investors thing protects us from scams, if anything it puts new risks.
I agree the accredited investor rule doesn't help average investors. In my view, the exemption from registering security when offering to accredited investors is not for the benefit of even the accredited investors, rather it is to the benefit of hedge funds or private equity funds to privately offer investment rounds to high net worth folks, without being subject to the SEC requirements. Accredited investors are high income/assets.
I think there is an assumption by the SEC that many of the people getting involved in initial coin offerings are not accredited investors and therefore the claims by initial coin offerings of being exempt from the SEC rules is at a minimum, questionable and warranting diligence. If the SEC is trying to make public outreach, perhaps they could've made that point a little more clear so that is not only readable by finance folks.
That doesn't make sense to me. What is the motivation of the SEC to put so much resources and effort toward that?
I beleive it allows SEC to allocate its limited resources mostly to the securities that are offered to the general public, such as stock exchange (and now, crypto ICOs).
The SEC is not there to protect you from scams. It is a control mechanism. The whole world investment system is based on organized fraud. It is only called a scam if it is done by a small time player. When the big boys and governments do it, then it is by definition legitimized.
The governments of the world will eventually want to recapture their former monopoly over money. Crypto is small potatoes at the moment, so most governments can't be bothered to do anything, yet. The time will come when the hammer will drop. I wish it were not so, but governments want control and they want monopoly. That is their nature.
As cryptos get bigger governements just want there piece of the pie. They just want there cut and that is all. If they really wanted to protect us they would let us have the free will to choose what icos to invest in.
I agree with the gist of what you say. Anyone should have the right to waive the legal protection of the SEC in the case of investing in ICOs while being unaccredited. These who waive protection should then be put on a whitelist of people who can take part in ICOs where the issuers don't have to worry about the SEC going after them.
There are ways to solve this legally but my guess is there is another motive behind this.
a very interesting post good luck @dana-edwards
True words put together in a Wonderful post.......I Wish You can Take My Country As A Case study Next TIME......
i wonder if EOS will make a good investment in the long term - i already bought mine and now they are much lower in value - hopefully they turn into a legitimate approved token- i gave you an upvote - best thoughts -David
I'm not sure on it myself and it's too expensive right now for me to touch.
i regret buying it