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Comment by wmf | Hacker News Reader

This sounds great until people realize that only qualified investors will be allowed to trade security tokens.

Social network Gab is attempting to issue security tokens [1] under Regulation A+, which allows the general public to invest. The SEC hasn't approved it yet.

[1] https://www.startengine.com/gab-select

People here hate Gab and its founder. He's quite unpleasant. Expected to be downvoted into hell.

Gab and it's crowd are quite abhorrent, but I don't think most people here are going to care about the mention that they're trying to do a token.

He was kicked out of HN. You underestimate how petty the mods here can be.

I don't think kicking the guy behind "Twitter, but for White Supremacists" is petty. But I also don't think that the mere mention that they're doing a token in a comment is going to be that harshly dealt with.

I wonder if the internet will stop.

I dont expect them to regardless what the US government says.

Plenty of countries would need to all-align and send cops to stop nerds from programming.

Komodo and a few other decentralized exchanges break this issue pretty easily. Same reason privacy coins cannot be shut down.

That's incorrect. Tokens can prevent their transfer to parties that don't have the proper KYC. The smart contract decides that.

That's a cool point. I wonder what can be done to bypass such a restriction? Maybe if you had a contract like WETH that wrapped accredited-only tokens in a proxy token.

Pay someone from another country to do KYC for your address.

just buy them on other exchanges and hodl for the pump

It's super easy to fake KYC because the kind of KYC that players in the crypto space are doing is child's play.

Repeatedly blows me away how nonchalantly the cryptic trendy community treats wilful fraud.

What are you referring to as fraud?

Faking KYC is fraud. Doing it to open a securities account is securities fraud. E-mailing it is wire fraud. Et cetera.

And speeding is against the law as well. Is HN bible club now?

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Presumably the part where you fraudulently faked KYC stuff.

So a checkbox or screenshot for KYC is going to fly with the SEC?

They aren't going to go after retail investors.

> They aren't going to go after retail investors

I work in the securities business. We once had someone send in a suspected altered document. Their state AG was notified, the U.S. Treasury and Homeland Security were notified, the SEC and FINRA were notified, and then we got some questions from Interpol, in Europe, and the UK's financial crimes investigator (through federal law enforcement). Fraudulently opening a securities account rings red-hot alarm bells because the automatic suspicion is nobody would be that brazenly stupid unless their expected pay-off was huge, i.e. terrorism or large-scale money laundering.

Do you let customers open up an account without a social security number and a screenshot as proof of identity and KYC? You are uninformed about this industry.

If the crux of your plan is, "We're going to lie to the federal government about what we're doing, and hope that we're small enough that no one notices," you've got a pretty big flaw in your plan.

Who is talking about lying to the government? You are misrepresenting what I am saying.

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