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So this is like buying food vouchers that I can redeem at a store that hasn't yet been built, if indeed it has been given planning permission and even if it does eventually get built, I have no idea how the service and product will taste. And I can't then report any irregularities.

Ponzi? No. Unregulated gambling? Of course.

Sign me up!




It's worse than that. In some cases, the coins literally serve no purpose. To use your metaphor, it's like buying StoreBucks for a store that hasn't been built yet, with no promise that you'll be able to redeem your StoreBucks for anything at all.

For example, a project called Status (http://status.im/) recently held an ICO in which people were tripping over themselves to buy Status's coins. It actually backed up the Ethereum network for several hours with pending transactions and they raised over $100 million USD worth of Ethereum (at the time). See if you can find on their website a description of what the coins are actually used for. I can't!


The explanation of the token's use is right here:

https://status.im/whitepaper.pdf


Yes I mean that is just insane. There is no reason for Status.im to have their own token. It's just a money grab. Basically a 50 million funding round without having to give up any equity in your startup! Way better than VC.


What do you use Ethereum for? I bought some but realized I couldn't easily use it as buying an Amazon gift card with Bitcoin.

Something about permanent storage and security (regarding Ethereum usage).


They might be interpreted gift cards in that sense.


How do you know it's unregulated?

What if it turns out te SEC issues a statement saying that all these ICOs were illegal because they were selling unregistered securities?

Does ex post facto apply here?

Can any lawyers chime in for those of us who are thinking about ICOs?


If it's a matter where the definition is a matter of regulatory authority then a redefinition cannot apply retroactively for purpose of criminal action. Ex post facto does apply.

OTOH, if it's just an existing statutory definition that the SEC looks at and says that this new thing fits into it, then there is no change in definition. Prosecutions might proceed based on the exosting definition based on acts before the SEC applied that definition to the acts in question, though it would be a question for the court whether the existing definition was being applied correctly.

I am not going to express an opinion, at this time, on whether any securities laws apply to ICOs in either way (either clear inclusion one existing statutory definitions or areas that are, under statute, open to regulatory action.)




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