ICOs are not for US Citizens? Should ICOs reject self proclaimed US Citizens as a way to reduce legal and regulatory risk?
Recently a well written Economist article detailed the crypto space as a bubble. In addition, there are many complaining about the ICOs, the ICO model, and there is talk about an SEC over-reaction aka crackdown coming. I consider most of this to be FUD as I do not think the SEC in particular can stop or slow the ICO trend. But developers need to protect themselves from the risks as much as possible and one easy way to do it is to take the path that Monaco VISA took and simply ask all investors one question:
Are you a citizen of the United States?
And they checkbox: Y or N. If they choose anything other than N then they get redirected to a page which says "sorry, your citizenship excludes you from participation in this ICO due to excessive regulatory risk from your SEC".
Of course determined individuals can lie, but the point is they would have to lie to participate and it would provide strong legal positioning that the people doing the ICO did not want to take money from US investors. This is not a perfect situation or solution, and in fact it's a very prejudiced nationalistic solution, but it is better than the BS caps, the FUD, the over excessive hiring of lawyers. Simply reject US citizens and you reject the regulation of the SEC directly.
At the same time it means if something like Monaco VISA is a scam then there is literally nothing anyone can do about it. It wasn't meant for US citizens, so if you lied and gave your money anyway? Then you may have lost your money.
U.S. citizens are being shut out of so many investing and banking opportunities under the guise of protection. It will be a good day when people are allowed to make their own decisions, whether they be wise ones of foolish.
How can an ICO even verify if a person is in the US or not? Anyway hey @dana-edwads i found ur posts and reallly like them! i also posts crypto related stuff i thik youd liek! i just upvoted liek whole page of your posts onyour blog feed!
And yeah this us laws keeping us out of crypo oppprrtunities will cost is so much!
eventually peopel will just ignore the law when they find ot how mch money its cost us!
i know that our current administration is trying its best to fightthe deep state anthen we can get regulations ccut and I Know in my heart trump sees crypto currency and bitcoins pheere as a great new iindustry that we should bee SUPPORRTING its like a RARE BABY that is born that NEVER happens like Ganondorf in thee gerudu desert! hs like the only male born in a hundred years ! (Oh thats why ganon was so arrogant in zelda! he got to fuck any gerudu woman he wanted! ) anyway yeah a thriving new market is a HUGE boon a RARE ting that u cant make happee! a new opportunity like crypto currenciees only come around ince in a few decades an like thee internet u have to support it!
the us government almost fucked up the creattion of the internet inthe 990s with crazy regulations that were evventually ignored but still the democrats and reublicans in DC and their banker masters are out to destroy bitcoin and crypto as much as they can so THEY CAN BUy it ALL up for tTHEMSLVES
its SO sad
these people are SCUM and they are making it HARd for AVERAGE NORMAL people to buy bitcoin but they encourage bitcoin and ethereum's use by big multinational monopoly tax exempt diplomatically immune Combine corporations .....for large money transactions and remittances etc...HAH so THEY will use bitcoin but WE CANT
the bg BUSINESSES will use bitcoin to AVOID TAXEs but WE cant use bitcoin cuz they cnt have US avoiding taxes! The poor and middle class are the only ones paying the majority of the taxes!
we need to get lawyers for steemit and bitcoin and a steemit tax law fund going to help as MANY Steemit users legally AVOID as MUCH tax as possible !!!
Monaco Visa is doing it wrong. As well as people who assume or insist that all US citizen are barred from ICO participation. It's actually not true that ALL US citizens are barred. Wealthy people are not. You can apply to he an accredited securities investor if you have money. One of the requirements is that you have an annual income of $200,000USD or more. That's it.
Basically in its barebones, just like the rest of Americans financial system, it limits the options of poor people (or not wealthy people in this case to be more accurate).
Just like having a minimum deposit on checking accounts to prevent fees is bizzaringly anti poor. (Most national banks require $5000USD or more in single or combined accounts to not receive a fee, or have direct deposits from an employer, which itself has to be above a certain amount to not incur fees). Banks are horrible. They are the one institution that relies on consumer accounts to be able to have money to invest/divest to grow their own wealth. Basically they charge you to lend them money. I wish I could do that. Give me $10 bucks and because it's only $10, you owe me $1 a month because I took it.
Anyway, back to the original comment. The SEC only bars non accredited people from investing in securities (which it sees ICOs as, and in many ways they are). If you have money, you can just file to be accredited and you can invest in ICOs till your eyes bleed. Anyone can get accredited, you just need to have money.
The problem is not the SEC, which has no jurisdiction over Mona.co or any other EU-based ICO. The problem is the IRS and FATCA, which requires US taxpayers AND financial institutions in tax-treaty countries to report all assets held abroad by said taxpayers. Many banks and other financial institutions abroad simply don't want to do business with Americans, because of the regulatory burden FATCA requires of them, and because the information demanded might in fact violate their own "house rules" about client confidentiality.
So, Mona.co asked the question to screen out Americans. Otherwise, Mona.co might find it hard to get the EU licensing they need to carry out their plans. They also might be obligated to return the American investors' funds, which is problem a hassle they don't want to have.
The Polybius Bank people also warned US taxpayers not to join in their ICO for the same reasons.
We need to convince Washington to rescind FATCA, as it has not proved to be effective in eliminating money laundering or tax evasion. The fat cats can evade the law by creating shell companies and other clever machinery to hide their money. It's honest citizens who are being unduly discriminated against by FATCA, not the crooks.
Incidentally, I wrote about this same subject a couple of days ago.
Very broadly, There are two plays to be made right now:
Short term, "fast thinking" plays that pretend that the existing U.S. government can recover from having been destroyed. (These plays pretend that paper currency doesn't return to its intrinsic value, that the law is not corrupted, and that taxes should be paid and mala prohibita is likely to be, and should be, followed.) Of course, this is all simply extending the superficial lies used to rob us all blind.
Long-term "deep but slower thinking" plays that extend up until the "Singularity"(Vernor Vinge, Ray Kurzweil; John von Neumann) or "Intelligence Explosion"(I.J. Good), and perhaps help cause it. These plays must be 100% private, anonymous, and untraceable, and never-mappable to any police-cam, or knowable MAC address, anywhere. This means: If you've ever previously signed on to the internet with your computer, in any capacity, and interacted with any software, you can't use it for any crypto-currency trade. Morris's three rules apply. However, if all the opsec is followed carefully, these types of systems are vastly more useful and robust than the former. In fact, the former all take the form of a fast-moving scam, because the existing governments of the world are all "vastly superhuman parasites." ...If you think any of them are "the good guys" and you enter into the former type of arrangement, then you are at best an idiot, and at worst an evil idiot who is willing to lose all his investors' money.
well, we can't fully rule out future regulatory bans on crypto but i believe there is a very small chance of that happening since so many companies/gov'ts are starting to look into it.
What might shadow the regulatory ban is corporations taking over the blockchain tech and offering better, more trusted solutions in terms of technology compared to the community driven ones. Corporations are fierce when it comes to engulfing markets that produce revenue.
I think the Y/N thing for US citizens is more to motivate some people to add pressure on SEC.
A friend of mine sent this to me this morning an i find it as a good balanced view over investing in crypto and ICOs etc.: https://www.reddit.com/r/ethtrader/comments/6eo5fb/on_risk_and_valuation/
Interesting idea. Could a US citizen sue the ICO founders claiming discrimination based on incorrect facts (define "excessive")? There is always the ubiquitous "void where prohibited by law" disclaimer on every advertisement, but prohibition by law is vastly different than excessively regulated by law. Also, isn't the compliance with the excessive regulation the onus of the investor, not those offering the investment?
This definitely gets the brain thinking!
Excellent post Dana - used it on Fakebook as reference with this prelude and then linking to this post ;-)
The crypto world has already elements of self-regulation which include measures to protect themselves from the monsters that the federal reserve system has created and/or is leveraging (like pentagon, SEC, IRS and the corrupt congress and elite in the District of Columbia)
I'm for self regulation and self defense from a perspective of a developer and user. In terms of developers protecting themselves from regulatory risks coming from the SEC? The easy way is to exclude US citizens and suddenly the SEC loses all moral and legal jurisdiction. In terms of the IRS that is not really the business of developers, but developers can help users report their earnings so that users can lower their risks from the IRS. The IRS owes us some clarity though.
The best way to reduce the risk of external regulators is to make their services unnecessary by regulating yourself.
IMO, there is not much they can do. The legality is such a grey area. The whole point is with crypto, you are anonymous (can be anonymous) in your utilization of otherwise illegal investment opportunities.
Good morning, I've followed you and I see you make a good post congratulations, follow me and we help each other
Well what happens if they choose to participate anyway? They risk loosing their money or legal action?
rue enough but have you considered this:
with all the money in ICO and the US potentially cracking down...
https://steemit.com/sec/@felander/sec-to-persue-ico-and-token-sales-as-securities-will-this-lead-to-companies-relocating
i live in Switzerland, we welcome them in the crypto valley