SEC Starts Cracking Down on ICOs

[Raevenlord]

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.



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[yotano211]

About time SEC, time to clean house, drain the swamp...ahaha..

 

[FordGT90Concept]

My concern is that cryptocurrencies are a distraction from something bigger like the subprime mortgages in 2007. Like most government institutions, SEC only has so many resources. They may be chasing fish when there's sharks in the ocean.

 

[R-T-B]

Before someone somehow attempts to link this to mining.

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.

 

[ppn]

Who is doing the offering. A group of people that first mined it or bought it from miners that created it out of thin air at ridiculous easy difficulty. So yes, miners.

 

[trog100]

Who is doing the offering. A group of people that first mined it or bought it from miners that created it out of thin air at ridiculous easy difficulty. So yes, miners.

i think they are created out of thin air with no mining involved.. but in truth i have to admit to not knowing exactly what is being sold or what makes people buy whatever it is that is being sold.. which is unusual for me.. he he

trog

 

[R-T-B]

Who is doing the offering. A group of people that first mined it or bought it from miners that created it out of thin air at ridiculous easy difficulty. So yes, miners.

No, not miners. A coded "premine", typically, which is a misleading term as no mining ever actually happens (the coins are released in the genesis block).

i think they are created out of thin air with no mining involved..

Bingo. That's what an ICO is in a nutshell. They take like 25% of the coins ever issued (made up number) and sell them. It has about as much to do with mining as apples to oranges.

And that's partially why most ICO's fail: This is a terrible model.

 

[mouacyk]

aka selling nothing for something... as usual

 

[rtwjunkie]

No, not miners. A coded "premine", typically, which is a misleading term as no mining ever actually happens (the coins are released in the genesis block).



Bingo. That's what an ICO is in a nutshell. They take like 25% of the coins ever issued (made up number) and sell them. It has about as much to do with mining as apples to oranges.

And that's partially why most ICO's fail: This is a terrible model.

I think there are very misguided anti-miners that think mining creates crypto-currency.

 

[R-T-B]

I think there are very misguided anti-miners that think mining creates crypto-currency.

Usually it does, but it doesn't have to. Proof of Work is but one (flawed, IMO) distribution model.

ICOs are even worse though, as they pretty much are blatant "rich get richer" pyramid schemes.

 

[lemkeant]

Usually it does, but it doesn't have to. Proof of Work is but one (flawed, IMO) distribution model.

ICOs are even worse though, as they pretty much are blatant "rich get richer" pyramid schemes.

Totally agree. Something needs to be done about the explosion of ICO's in 2017 (and 2018). Thats has been a big reason of the price of everything being driven up even though most will fail.

People need to buy Bitcoin and Ethereum to buy into the ICO's, which drives up demand, which drives up the price, etc.

 

[RollyPalloney]

Usually it does, but it doesn't have to. Proof of Work is but one (flawed, IMO) distribution model.

ICOs are even worse though, as they pretty much are blatant "rich get richer" pyramid schemes.

Saying Proof-of-Work is flawed is like saying burning fossil fuels or using nuclear power to create electricity is flawed. If having a store of value that can electronically be transferred from one person to the other without a bank having a say-so, is not subject to inflation, and resist censorship by despotic governments who use fiscal policy as a means of societal control, then yeah, using electricity to secure something you find useless is stupid, but there are a lot of people who do find great use in such a thing.

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.

 

[R-T-B]

You know, ASICS already obsoleted gpus for bitcoin and it's energy cost is still astronomical...

I guess saying I am against proof of work in general is wrong, but I'm certainly against the current model.

 

[RollyPalloney]

You know, ASICS already obsoleted gpus for bitcoin and it's energy cost is still astronomical...

I guess saying I am against proof of work in general is wrong, but I'm certainly against the current model.

For the same amount of hashrate that ASICS pump out, they are way more efficient than GPU's, it's that they pump our so much more hashrate though. And they should right!!?, i mean their sole purpose for being is to mine crypto.

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.

 

[yotano211]

For the same amount of hashrate that ASICS pump out, they are way more efficient than GPU's, it's that they pump our so much more hashrate though. And they should right!!?, i mean their sole purpose for being is to mine crypto.

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.

You really dont know how ASIC or mining work. Most coins can not be mined with ASIC mahines and some where even designed to be resisted to ASIC machines.

 

[R-T-B]

You really dont know how ASIC or mining work. Most coins can not be mined with ASIC mahines and some where even designed to be resisted to ASIC machines.

Our tangent was specifically on the subject of bitcoin. He was replying to me.

 

[yotano211]

Our tangent was specifically on the subject of bitcoin. He was replying to me.

ahhh, new member, i think he has another account on here

 

[Captain_Tom]

Why is there a picture of tokens that are in fact not ICO's?

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...

 

[R-T-B]

Why is there a picture of tokens that are in fact not ICO's?

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...

Raevenlord is actually pretty knowledgeable in crypto issues. If I had to guess, I'd just say it's stock art we had on hand.

 

[Captain_Tom]

Raevenlord is actually pretty knowledgeable in crypto issues. If I had to guess, I'd just say it's stock art we had on hand.

I may have been harsh, but I stand by my statement. Come on R-T-B, you have seen how little most around here understand.

There are a lot of people who use this website who now think "The SEC is cracking down on DOGE."

 

[FordGT90Concept]

 

[Raevenlord]

Why is there a picture of tokens that are in fact not ICO's?

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...

Thank you for being a respectable person there. I'm terribly sorry my "poor" choice of artwork - an image that is immediately associated with crypto for readers that may not know what ICOs are all about anyway, but helps get them grounded in the crypto plane of things - messed you up so much that you had to gratuitously start delivering that kind of remarks.

Besides that, your kneejerk, unfounded, erroneous judgment of other people just points towards a really small mind who thinks itself superior.

I may have been harsh, but I stand by my statement. Come on R-T-B, you have seen how little most around here understand.

There are a lot of people who use this website who now think "The SEC is cracking down on DOGE."

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".