Friday, March 2nd 2018
SEC Starts Cracking Down on ICOs
Even as we reported, earlier this week, that there's a veritable digital grave of failed ICOs (either through bad management or by design) that have taken millions of dollars with them, news is breaking that the SEC (Securities and Exchange Commission) has started cracking down on these blockchain-fueled practices. According to the Wall Street Journal, citing "people familiar with the matter", the outfit has issued a number of subpoenas and information requests to technology companies and advisers involved in the ICO practices.
The SEC's intention here is to see whether or not any of these ICOs have been designed and offered in ways that contravene the established securities trading practices and regulations (heads-up: many of them most likely have). More specifically, the SEC is demanding information regarding the structure of ICO sales and pre-sales - where many of these actually fall apart in their transparency. According to former SEC commissioner Dan Gallagher, "We're seeing the tip of the iceberg ... there is going to be a ton of enforcement activity". Naturally, the very nature of the blockchain and ICO startups can simply build themselves up in ways that prevent them from ever being identified - after all, fake websites, media accounts, and white papers are all relatively easy to forge, and considering the current state of the cryptocurrency and ICO market (which has improved compared to last year), some users are always bound to be caught in the net.
Sources:
The Wall Street Journal, via TechSpot
The SEC's intention here is to see whether or not any of these ICOs have been designed and offered in ways that contravene the established securities trading practices and regulations (heads-up: many of them most likely have). More specifically, the SEC is demanding information regarding the structure of ICO sales and pre-sales - where many of these actually fall apart in their transparency. According to former SEC commissioner Dan Gallagher, "We're seeing the tip of the iceberg ... there is going to be a ton of enforcement activity". Naturally, the very nature of the blockchain and ICO startups can simply build themselves up in ways that prevent them from ever being identified - after all, fake websites, media accounts, and white papers are all relatively easy to forge, and considering the current state of the cryptocurrency and ICO market (which has improved compared to last year), some users are always bound to be caught in the net.
21 Comments on SEC Starts Cracking Down on ICOs
Learn what ICO stands for: Initial Coin Offering.
They offer up coins with no mining involved in the initial transaction for a set amount of money, is the idea.
trog
And that's partially why most ICO's fail: This is a terrible model.
ICOs are even worse though, as they pretty much are blatant "rich get richer" pyramid schemes.
People need to buy Bitcoin and Ethereum to buy into the ICO's, which drives up demand, which drives up the price, etc.
In that regard, using electricity to secure such a network is as necessary as burning gas to get to work every morning or working to put food on the table. It's the fact that you have to pay for the electricity to solve the mathematical problem that gives it that censorship resistant quality, whether it be from miners (51 percent attack) or those outside of the system.
Now does that mean that you take electricity for granted. No more than you take filling up at the gas station for granted. It's the need to be more efficient that has driven the desire for renewable energy and Bitcoin will be no different. Already, there are companies producing more efficient mining hardware and investing in better ways to create the electricity used. It's that old adage of necessity being the mother of invention.
No worries though. When Bitcoin first started, you could mine using a laptop's CPU. Now no one does that unless they just like hearing the whir of the cooling fan spin up. Pretty soon, video cards will be the same way. It's just a matter of time.
I guess saying I am against proof of work in general is wrong, but I'm certainly against the current model.
Now, be it far from me to justify the centralized Chinese mining that is only possible because of cheap government subsidized energy production. As the block reward decreases along with the per transaction fees due to Segwit and various Lightning Network implementations, i think that model is totally unsustainable, but i don't blame proof of work for that. I would have preferred that more efficient energy production be farther along, but sometimes it takes the greed that seems to be inherent in all of us to get folks working on long term solutions.
But i get the point that you were trying to make and i think it's a worthy discussion to have concerning the energy that proof of work takes. But to me, if you want to talk about wasted energy, what about all the buildings, and people, and resources wasted by big banks just unnecessarily moving money around just so they can skim off the top on each leg of the journey. But we sort of accept that because that's all we think we have. Well, it's not all we have, but the new solutions are still very much in their growing pains and figuring stuff out.
Having said all that, I do love PC games, but i guess i just think that Bitcoin is a little bigger on the social scale than me being able to get a better price on a GPU so i can play Far Cry 5 maxed out. But then again, aren't the vid card companies just being good capitalists and following the money? Hopefully, they see the market for increasingly energy efficient miners and will seek to meet that need.
Man the "tech community" still has a long way to go towards understanding a revolution you would think they would understand before wall street lol. Just goes to show you most "Tech journalists" are hacks...
There are a lot of people who use this website who now think "The SEC is cracking down on DOGE."
Besides that, your kneejerk, unfounded, erroneous judgment of other people just points towards a really small mind who thinks itself superior.And that just goes to show how you are one of those people who just doesn't have the humility to recognize they may have been in the wrong and pivots the issue away with a commonality that really doesn't mean anything. You're likely never in the wrong, I wager.
If you really believe what you're saying, then say something constructive, contribute to the discussion, and help "educate" those you think are so limited. You might find they have a thing or two to teach you in return, "Captain".