SEC halts Telegram's $1.7B token offering
sec.gov
sec.gov
What the SEC requires is a registration of the security with the form S-1/F-1. Nothing more, nothing less. If the paperwork is complete they will greenlight this offering.
I don't know why wouldn't they just register. Cut a very tiny percentage of the amount, pay someone to do the paperwork, you can go ahead. But do it with cards on the table, as the securities registration form requires (it's quite extensive and requires, for example, a clear statement of all risks involved in the offering).
The rules are made by the "deep state" to serve the establishment.
On a more serious note these rules/regulations/processes also deny access to capital to startups. It's not really that easy or cheap to go public on a stock exchange. People should do their due diligence before to invest in stocks anyway, right?
NASDAQ is a private, for-profit corporation, not a regulator. I doubt they frequently reject listings, at least in the short term it's in their interest to have as many listings as possible.
In addition - NASDAQ, like all other exchanges, is subject to its own regulatory oversight from the SEC.
With all of that please remember that playing by the rules is not a pure loss. It opens you up to professional/institutional investors. These guys know and trust what the SEC says, far more so than what any random company says.
Also, remember why was the SEC created in the first place - it was after the 1929 crash (which was far more severe than the 2008 crash, see for yourself on a log() chart) and after the great depression that followed.
Tradable product or commodity: no wash sale restriction
Entire trading strategies change with securities designation, so thats one example above.
Entire free speech restrictions are created with securities designation
Entire accounting restrictions are created with securities designation
And the list goes on
There is no such thing as “just register bro!” It is a designation that carries a lot more baggage than just disclosing some internal company financial statements
Well when the law gets changed that's exactly why and how it gets changed
Last year, Wyoming has recategorized crypto assets into their own asset classes that is exempts them from state level securities law and others. Because it was obvious to the legislature and governor there that debating commodities, currency or securities status was ignorant.
This year, Montana representatives have also reached the same conclusion.
This year, Colorado's representatives have also reached the same conclusion.
US Congress has a bill in committee mirroring these. It isn't a priority for the House as you might imagine. Holistic US re-imagining of these assets isn't relevant until the Federal legislature reaches consensus.
A week ago Liechtenstein's legislature unanimously reached the same conclusion, which inherits limited consensus amongst all European Union/EEA/EFTA member states.
So yes, people seem to think cryptocurrency is magically exempt from securities laws except the securities regulators that do not mirror the will of the people and are being steered by their legislatures, as designed. Courts lack latitude to lean any other way as well, until the legislature changes the law, which is happening.
The test is quite simple: * It's an investment of money * There is an expectation of profits from the investment * The investment is in a common enterprise * Any profit comes from the efforts of the one offering the investment or a third party
Cryptocurrency trading in general could be either but ICOs are clearly in the security category.
I would be curious to see Wyoming etc. try to overturn Supreme Court's decision on SEC vs. Howey. If they are successful it will be the end of SEC and the public markets in the US as we know them.
Re: Liechtenstein. They don't have a stock exchange so they don't have anything to lose.
The law in Congress will tell the SEC to stop wasting time on this and give a default status for digital asset issuers to exist in that isnt securities. Exactly as a handful of states have done.
Things that are actually securities in liechtenstein are passportable to other European countries that do have stock exchanges.
I think that was a very reductive and inaccurate comment on a multifaceted topic
Your response: "Digital asset exchanges and issuers already exist in Liechtenstein."
Why do you conflate the two? Is it intentional or due to lack of understanding? L. is trying to make money on ICOs because it does not have anything to lose with regular financial markets.
> I think that was a very reductive and inaccurate comment on a multifaceted topic
And I think that was an attempt to intentionally complicate a simple topic.
Crypto can be used as an investment in a form of an ICOs and that should be registered.
It can also be used as a currency instrument for (mostly illegal) transactions. When used as such it does not need to be registered.
You’re right in that they don't have one and have little to lose by creating digital securities and digital assets clarity.
Liechtenstein’s law isn't only about cashing in on ICOs. It covers digital securities as well, which Europe’s other securities exchanges are not equipped to handle.
There is only upside for them to provide a clear framework for digital securities and digital assets, making it easier for an issuer to choose and regulatory clarity for all participants
We speaking the same language yet?
L's population is around 35 thousand. It's like City Council of Menlo Park CA gaining a status of a sovereign state and then making venture capitalists from Sand Hill Road exempt from SEC rules. L is trying to make a buck by being more permissive because they have nothing to lose otherwise.
> We speaking the same language yet?
I suppose we do. English that is :)
Its nice to see people applying themselves very well
Yes its like if Menlo Park was sovereign but also had economic unions negotiated with DC and the rest of North America, you would find that very convenient
If you are in the business of offering furtive financial services it makes total sense to stay abreast with the times and add crypto to the portfolio. It's a great instrument for both money laundering and tax evasion.
some of the largest public companies and hedge funds are incorporated in cayman islands. the obvious rebuttal would be that they too are vehicles for money laundering and tax evasion, but also everything else because the point is that you can't distinguish when a state doesn't use its resources demonizing transactions
Cryptocurrencies exist to move money out of China by circumventing their currency controls (pay miners in RMB locally, get crypto, send it to Hong Kong, exchange into USD). ICOs are a byproduct of that process and exist merely for scam.
Again, i am not against scam. Scam is fine as long as you aren't getting caught - nearly everything in software in scam directly or indirectly. It's just trying to do scam in the open and getting surprising it's hard is what crosses my mental limits of acceptable chutzpah.
People want to use ICOs like they use Kickstarter: to fund a consumptive purchase. Digital assets have the capability of being consumptive. There isnt an obvious way to tell them apart, especially when there is a limited supply and exchange of money. People want there to be an easy way to distinguish business models and assets. So thats where experimenting with different legal theories helps.
Also I would classify ethereum as a security, because they created a token offering initially. After it was launched it was mined, but I understand majority was sold in the initial coin offering.
Pyramid scheme? Do you even know what does it mean? If Bitcoin is pyramid scheme, so are many others things like stocks, currencies etc.
Currency - a state-backed value in which government salaries and bills are paid and in which you pay your taxes
BTC - a somewhat decentralised ledger where most coins are held by a very low number of people and where some of the early folks made massive amounts of money. Not backed out exchangeable by/for anything, with value purely coming from someone else being there to buy it. Great for dissidents, tax evaders and anything illegal - but not really any other case for its existence except among those with a radical distrust in government.
Currency - you said "state-backed" - backed by what? Forcing it's use by demanding taxes and paying salaries/bills is not "backed".
BTC: "most coins are held by a very low number of people" - can you prove it? Consider that keys to many old account are probably lost.
"Not backed out exchangeable by/for anything" - neither are most/all currencies. Even commodities like gold sell by much higher price that is "backed" by usage of these in industry.
"value purely coming from someone else being there to buy it" - there is some value in being able to transmit/store value
"Great for dissidents, tax evaders and anything illegal" - I would actually say cryptocurrencies are awful for these applications: there are little places where you can pay with them and many will require verifications (and will report significant transfers). Bitcoin blockchain is public allowing tracking of transaction. On the other hand, cash? Accepted anywhere, non-trackable and people are already experienced in money laundering.
"but not really any other case for its existence except among those with a radical distrust in government" - distrust in government seems to be just healthy at the moment (for example, see civil forfeiture and Snowden).
IRS blanket accounting rules around a security aren’t useful for these digital consumptive assets which bear no ownership of an enterprise
FINRA and Broker dealer related trading restrictions arent useful in digital consumptive assets that are also securities
If the SEC wants some level of consumer/investor related protection, sure some level of financial disclosure can still be mandated
But that holistic approach’t being pursued here and thats why its being avoided by the whole industry because a securities designation wrecks the entire consumptive aspect of these assets.
https://www.sec.gov/Archives/edgar/data/1729650/000095017218...
What this action threatens is the SAFT model. It’s not clear what steps TG needs to take to disassociate themselves from the launch such that TON is decentralized and no longer a security. Or if they need to file a reg-a or s-1 before launch.
[edit for clarity]
If the title is misleading, the practice on HN is to replace it with a better (i.e. accurate and neutral) one, as described at https://news.ycombinator.com/newsguidelines.html.
The Securities Act defines “offer” to include any attempt to dispose of a security for value.
In order for anyone - Telegram or Joe Schmoe Gram investor - to “offer” a security it needs to be either (1) registered or (2) exempt from registration. Since Telegram filed Form D and the SEC has brought charges alleging an unregistered offering it would seem the SEC does not agree that the ICO was exempt and so Telegram was not in compliance with federal securities laws.
But even if the ICO were by some miracle exempt, without a registration statement the securities can’t be offered for sale to the public - regardless of whether they were new issues directly from Telegram or existing securities being offered for sale in Telegram’s new marketplace by Telegram users.
So IMHO this is somewhat of a big story in the sense that these events continue to push the discussion forward
Basically, there was a private offering previously where large amounts were sold to selected parties. What is being blocked is the public 'offering' where these tokens can be publicly traded.
The SEC is saying that Telegram Group is clearly offering a security, and thus is subject to regulation. Indeed, what Telegram is doing is significantly different from 'classic' crypto issuance a la Bitcoin. There was no company or legal entity responsible for Bitcoin, let alone one that could control the network while profiting off of it. They have similar opportunities for the sort of financial malfeasance that the SEC is designed to mitigate.
Personally, I find it extremely difficult to argue with the SEC's position.
I strongly support cryptocurrencies, namely Bitcoin, but also recognize that these pre-mine coins are entirely different on many levels. They are hilariously vulnerable to abuse, only just rising beyond the level of an outright scam.
All securities are regulated under American law. Some just qualify for specific exemptions from specific requirements.
When someone uses the term “unregulated security,” it’s a reliable red flag to go the other way.
[1] https://consumer.findlaw.com/securities-law/what-is-the-howe...
By this definition, Magic: the Gathering cards and beanie babies fall under SEC jurisdiction.
The most interesting thing is that at one time I carefully read the prospectus and noticed that everything was perfectly done there correctly: tokens are issued in addition to certain securities that are issued strictly according to the current legislation, that is, the tokens themselves were NOT sold ... And It was not some former Russian lawyer who wrote the deal, but DLA Piper, one of the top 5 of approximately US legal concerns.
Could you please provide a pointer to registration paperwork of those securities? It must exist if they are "issued strictly according to the current legislation". Thanks.
Well, to be fair, there is also this other minor bug about encryption being off by default and only available on a few clients and not synchronizing between different encryption-supporting clients...
Here we go again.
Encryption is not off by default.
It is just not E2E encrypted, i.e. it works just like any bank, Gmail etc etc etc.
(except, based on what I've heard Telegram, unlike any mainstream bank, put the extra effort in to keep encryption keys not only on separate servers but in a different jurisdiction than your messages.)
Edit:
Now if we could stop spreading misinformation we could discuss one thing that might be the real flaw in Telegrams model and which I would consider trying to move to a different messenger over - if they fixed it while delivering the same experience:
The one huge issue I have with Telegram is the funding model.
Whatsapp more or less nailed this early on:
- low, reasonable price that still made them plenty profit
- possibility to pay for others (kids, friends etc)
Give me the same offer as Whatsapp once gave me:
I pay them, they deliver my messages, provide quality clients on all platforms, doesn't snoop, doesn't spam etc, and I'll download the beta today.
Provide a legally binding agreement that makes their company worthless and publishes the code under Apache or another liberal[0] license somehow if they sell out or becomes sleazy and I'll be walking around pondering how to help them.
[0]: yep, I want it to be as simple as possible to make a good chunk of cash from transporting my messages securely and elegantly from my device to other peoples devices as well as the other way.
What I know however is that I can't recall anyone except you[0] claiming that, not even tptacek.
[0]: Thought I remembered your nick and had to look up: https://duckduckgo.com/?q=Ryanlol+Telegram+site%3Anews.ycomb...
Here you can see a couple of people with better CVs than mine discussing this.
But I agree, it’s incredible that I’m probably the only person in the world constantly bringing this up re:telegram
I think this is utterly irrelevant. Telegram deliberately shipped a backdoor, removing it after they got caught doesn't change anything at all.
>which the thread does not conclusively say, just "backdoor looking" which sounds like either Telegram invented some unknown crypto that allows them to create a backdoor without anyone else having access, or an unfortunate mistake
Look, I'm not going to speculate on what some individuals may or may not think about this in private. However, many people would not be comfortable making such direct accusations in public.
>though I would not put it as black and white as "they backdoored it" when that is not actually certain
This is as certain as it could ever be, I'll refer you to this comment that worded the explanation better than I would https://news.ycombinator.com/item?id=17621104
If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck.
What do you think would be sufficient evidence to call this a backdoor?
>If you want to put it like that, you could also say that every vulnerability in the world could have been placed there intentionally
That assumes this was anything like every other vulnerability, which isn't true.
That totally looks like a backdoor.
How is this not common knowledge? Like, if the reason is indeed against a bad RNG, then why not xor the server's "random" number into the private key instead? Since the server does not know the value of that (as opposed to the shared key it establishes with Bob) and (if my limited understanding of math is sufficient) the private key is what is protected by the discrete logarithm problem, there should (afaict) be no possibility of backdooring the resulting shared secret. You would be mixing the server's number into a random number, which with xor gives an equally unpredictable result. Or, y'know, solve the badly seeded RNG by adding a seed to the RNG (such as by xor'ing an output of the current state with the number from the server).
It looks like I started using Telegram about four months after this was posted on Habr, and I think I was relatively early in using it. Maybe Telegram just wasn't very well-known yet and therefore nobody cared enough to make a big issue about it? "Backdooring" is also quite a hype word, I noticed somewhere last year that every third vulnerability was being called a backdoor, so perhaps tech media wasn't as quick to use that word back then? Then again, the Snowden leaks were ongoing, so it's not as if mainstream tech media wasn't talking about backdoors already in December 2013. I don't know, it's weird, this totally looks like it could have been designed in a million different ways and this is quite likely to be intentional.
Thanks for the link to a post which links to the technical details (albeit in Russian) complete with an example of how it could be exploited, that is indeed what I "think would be sufficient evidence to call this a backdoor".
Anyway, I guess that's just semantics. We both understand what is the case, whether you like calling it a default setting or "just not encrypted". I do fully agree that Telegram is shady because it's just a money sink, and that WhatsApp had a great profit model (pre-Facebook of course). I did the math once (though that was just messages, not media) and a euro a year (times a few hundred million users, back then) was plenty to support a chat system with only a few developers as employees. If Telegram would adopt the same profit model, that would be great.
> encryption being off by default and only available on a few clients and not synchronizing between different encryption-supporting clients
This more than implies that Telegram sends messages in plaintext.
Which isn't true.
In your reply now you prove that you are aware of this with this little sentence at the start:
> E(nd to end)ncryption is off by default, that's not an opinion.
E2E encryption is of course better than other forms of encryption but writing in a way that makes people think that something sends data as plaintext instead of encrypted is not acceptable at all IMO.
Edit:
You are also misquoting me:
> Anyway, I guess that's just semantics. We both understand what is the case, whether you like calling it a default setting or "just not encrypted"
That's not what I call it.
I call it encrypted.
The secret chats option I call end-to-end encrypted.
I'm honest, my contact details is in also in my profile like you have in yours, and I'm not trying to trap you on technicalities of the language, but I think we should be very precise about what we mean.
Either communication is cleartext or it is encrypted.
If it is encrypted it is either end-to-end encrypted or it is not.
A number of people keeps repeating this idea that Telegram is not encrypted and while you obviously know the difference we shouldn't continue confusing those who don't.
It would be a shame if someone went with something even less secure because I keep trash-talking Whatsapp and others keep trash-talking Telegram. (I fortunately don't hear many trash-talking Signal, but it doesn't have enough marketshare here to matter yet.)
Wire is a decent alternative since it also syncs chats across devices, but its clients are slow. Any chat with images will usually crawl when you scroll. The company also doesn’t care about free users (not that it should) and so it probably makes sense only for people who’re willing to pay.
WhatsApp shares metadata with Facebook. So it’s a complete non-starter.
Much of picking a messaging system comes down to realistically assessing your threat model.
Signal is so much more inferior for the end user outside of privacy there’s no reason to discuss it.
EDIT: Though it will prompt more downvotes -- explain them when downvoting, thanks.
> Grams are securities because the Initial Purchasers and subsequent investors expect to profit from Telegram’s work: the development of a TON “ecosystem,” integration with Messenger, and implementation of the new TON Blockchain. Grams are not a currency because, among other things, there are not any products or services that can be purchased with Grams. Rather, there is an expectation on the part of investors that they will profit if Telegram builds out the functionalities it has promised.
It continues:
> The definition of a “security” includes a wide range of investment vehicles, including “investment contracts.” Investment contracts are instruments through which an individual invests money in a common enterprise and reasonably expects profits or returns derived from the entrepreneurial or managerial efforts of others. In a variety of circumstances, courts have found that novel or unique investment vehicles constitute investment contracts, including interests in orange groves, animal breeding programs, railroads, airplanes, mobile phones, and enterprises existing only on the Internet. As the U.S. Supreme Court has noted, Congress defined “security” broadly to embody a “flexible rather than a static principle, one that is capable of adaptation to meet the countless and variable schemes devised by those who seek the use of the money of others on the promise of profits.”
This is probably because when adding the second, you see there is a major theme of profit redistribution. In all of those cases profit is collected centrally and then redistributed. With a collectible or a token such as gram it is not -- the item may become more valuable, partially due to activities of the creator, but it is not a profit sharing scheme.
So... do Telegram's tokens grant you some definite share of their future profits? You're giving them money, but there is no legal recourse to claim a return from what I can see.
I keep getting downvoted -- I'm not arguing that Telegram has a workable business plan, just that this isn't really something the SEC can regulate.
People can buy things to enjoy, not just to resell.
Neither is crypto.
I use it to buy real things all the time.
Usually at a significant price discount, to boot!
[1] https://www.sec.gov/litigation/complaints/2009/comp20965.pdf
Effectively, yes. People who buy these contracts are funding the development of the TON Network. The promised reward is in the form of digital coins on that yet-to-be-developed network. The contract only pays off if Telegram's development succeeds. It's effectively an investment in Telegram.
It looks like they claim they are allowed to (https://www.sec.gov/smallbusiness/exemptofferings/regcrowdfu...) but at the same time in various businesses it is normal to take the money before a thing is built, that's just usually how it has to work.
This is a vehicle for investing in Telegram's business. If you buy this contract, you're giving Telegram money, which they promise to use to develop a new service. They promise to give you a cut of the value created by that new service. This is very much like a stock offering.
There is no reasonable expectation of profit for people funding via Kickstarter.
Because they ask for real money for merely handle you a digital certificate that, the main purpose of which is to wait it to shoot higher to sell for a profit?
Edit: Thanks for the downvote to validate this claim ;)
Also, the SEC is notorious for their intransigence even after multiple courts and even the Supreme Court have repeatedly rejected their legal interpretations. One example is their definition of insider trader--their definition of insider trading is far more expansive than courts will accept. When you take insider trading courses at a corporation, you're typically being taught the SEC definition, not the legal definition accepted by Federal courts.
Normally companies are risk adverse and aren't keen to piss off the SEC, so they play along. Nobody wants the SEC snooping around as there are invariably minor infractions to be found, especially at a large company. But sometimes, as with Telegram, companies will push back heavily when they want to aggressively pursue some profit opportunity. This doesn't mean these companies are willfully ignoring the law or aggressively pushing the envelope, as is often the case in other areas of regulatory law, e.g. Uber. Rather they're just not willing to placate the SEC. Their legal counsel might otherwise sincerely believe that the company's actions are well within the bounds of the actual law.
[1] https://www.bloomberg.com/opinion/articles/2019-06-26/everyt...]
If the SEC gives a small investor an inch, the big financial houses will extend that into a parsec. And those companies are constantly watching for those opportunities. So, yeah, the SEC isn't shy about picking a fight with the little guys because they only pick fights they think they can win, preferably outside court; the consequences of losing a fight are huge. This strategy isn't unique to the SEC, but it's uniquely consequential to their authority and effectiveness in general. It's an unfair situation all around, but at the end of the day responsibility falls on Congress.
In any event, my point was that if the situation seems confusing, it almost certainly is a confusing situation without any obvious answers.
For further reading see https://www.propublica.org/article/the-rise-of-corporate-imp... and https://www.theatlantic.com/magazine/archive/2015/09/how-wal...
These contracts are very similar to shares. They're an investment vehicle used to fund a company, which pays off if the company creates something of value. It's the SEC's job to regulate that sort of thing.
Though maybe it is a slam-dunk. I'm not a practicing lawyer, and certainly not an expert in securities law. I just have enough background knowledge and legal education to know that when it comes to SEC enforcements the legal landscape is often contentious, and that the SEC has a well-known M.O. It's just something to keep in mind as an outsider.
You've got that backwards. It's the crypto boosters who really, really, really want to avoid securities regulations who are misleading you with nonsensical, contorted non-arguments.
The SEC's characterization of tokens is absolutely correct, and the only people telling you otherwise are those who had hoped to make a buck off of avoiding regulatory scrutiny.
>This doesn't mean these companies are willfully ignoring the law or aggressively pushing the envelope
Yes, it does, without question. The companies doing this are trying to run exactly the sorts of scams and schemes that the laws were designed to protect against.
Love it.
"Guaranteed returns of the travel industry." No way this turns out to be a scam!
I agree.
Though like all of these private token sales, it's a great way for crypto whales to multiply their imaginary wealth without having to exit to fiat and pay taxes.
> without having to exit to fiat
Last time I checked one cannot buy yachts and private jets for crypto.
Are there any mechanics at play that could legitimately stop Telegram from launching the blockchain and distributing the tokens to users who aren't from the US?
> The test is whether the scheme involves an investment of money in a common enterprise with profits to come solely from the efforts of others. If that test be satisfied, it is immaterial whether the enterprise is speculative or non-speculative or whether there is a sale of property with or without intrinsic value. [0]
Thus if the ICO's are sold with the expectation that profiting from the purchase of those token depends entirely on Telegram completing work on their network and integrating that network with their app, then the Howey test seems to apply.
Telegram currently restricts the sale of the coin (via contracts) and heavily marketed the value coming from "200 millions of Telegram users will get a TON wallet making it the world’s most adopted cryptocurrency".
I don't really see how you could see this a not being a security under the Howey test.
https://arstechnica.com/tech-policy/2019/10/the-broken-recor...
And the idea that people are going to simply switch from an iOS app to a web app is pretty laughable. Mobile web apps are by and large terrible experiences.
And the idea of real people, having a real need for something in this very moment, is gonna care if they use a iOS app or a web app is pretty laughable too. Even with a worse user experience.
- 1) https://www.counterpointresearch.com/global-smartphone-share...
- 2) https://www.statista.com/statistics/271496/global-market-sha...
- 3) https://gs.statcounter.com/vendor-market-share/mobile
- 4) https://gs.statcounter.com/os-market-share/mobile/worldwide
- 5) https://gs.statcounter.com/os-market-share/mobile/china
There is more over at https://en.wikipedia.org/wiki/Usage_share_of_operating_syste... as well that shows around the same number above too.
There’s no way the vast majority of users would switch. This would be the case for any sort of app. But especially for a chat app.
Also, iOS users generally spend more money and I presume in cases like their China market share, are also higher net worth users. Losing iOS users would be more than just losing their small percent of the overall iOS/Android market share.
No, I'm saying if there is a application that solves a real-world problem (like keeping track of where to protest about the future of your home or communication with people are not reachable elsewhere), people don't care if you open Safari and click on a bookmark or if they open a native application. As long as it works, people will use it in the way they can access it with their current device.
"Losing iOS users would be more than just losing their small percent of the overall iOS/Android market share"
Not sure how much that would actually effect the global market share.
These aren’t honest people, on telegram.org they still continue to push lies about the “secure” and “encrypted” nature of telegram.
also keep in mind that telegram definitely can distribute their app on their website, like they do with desktop apps.
Except that the word blockchain is entirely unnecessary here. How would IPFS not suffice? Or Bittorrent? Or Telegram itself. Unless no country on earth is willing to host X, X can host somewhere. This "X" can be Telegram itself or the app store that it is on. You make blockchain sound like magic pixie dust, but what the word means is something like git (see the Wikipedia page about it for a definition), not "magic pixie dust that makes something unblockable".
It also does happen to be Blockchain based . . .
Sounds like you're expressing cynicism more than an alternative pathway for achieving censorship-resistant blockchain-based app stores
That’s called disgorgement of proceeds. There are also usually fines and agreements not to break the rules again.
In this case, however, it would be tough to ensure no future buyer of these securities is American. (To say nothing of Telegram having raised U.S. dollars and so falling under U.S. jurisdiction.)
They already spent a good chunk of it: by Jan 31 2019 they spent $218M (that's a LOT! 200 employees burn no more than $50M a year, hosting maybe another $20M; the rest is probably just taken out by insiders). At that burn rate they likely have spent half a billion by now. Who is going to cover that?
1. Cross border payments
2. Bank the unbanked 3rd world
3. Means to help for the hyperinflated currencies.
4. Store of value
All of them are completely delusional and only work for people who never had to make those payments, know 3rd world from the discovery channel and learn about hyperinflation on CNN.
It seems like the SEC is intentionally not being clear about what they find acceptable and what they find unacceptable. I don't know whether this is because they are just slow about things, or whether they want to keep their options open because why not, or what.
It would be nice to have crisp, clear rules about how to create a new token that is considered a commodity in the US.
It's not too hard to imagine that SEC staffers have an interest in some of the things they're not going after and don't have an interest in things that they are.
In particular, it sure seems to me that surprises in SEC enforcement seem oddly correlated with the offerings that I know were really liberal in handing out premined coins to 'advisors'.
Forbes is saying he’s worth $2.7B, but not saying how. Forbes has been wrong multiple times before on net worth. I’m guessing they are including his Telegram stake and the Telegram crypto value.
That is the real risk. That is why stopping them is an emergency action.
Pre-mines like this are entirely orthogonal to Bitcoin and other legitimately decentralized networks; it's pointless to discuss them as though they were anything alike.
Crypto will fail or succeed based entirely upon how useful people find it. That's how it always has been, and always will be.
It's not like the SEC hates Bitcoin/crypto on principle. Or Elon Musk (I'm referring to the 420 tweet). It just follows the securities law, a law that was established after the 1920s stock market crash and the Great Depression that ensued afterwards.
Again, it's not hard to follow the law. Fill the form, call it a day. Or don't fill the form and make sure you're only selling to accredited investors.
Also, filling form S-1 will help you getting professional investors on board. A whole lot of them trust the SEC data in Edgar.
Part of the strength of the dollar is the volume of trade that is done in it, including much of the world's energy. All that money moving around increases demand.
I've heard it said that in most revolutions, the middle class enlist the lower class to defeat the upper class for them, and then they insert themselves as the new upper class. This 'revolution' seems no different. A bunch of upwardly mobile people fantasizing about becoming feudal lords after they disrupt the entire system.
Things are not going so badly that chaos would be better.
I gotta say, technologists as a whole are reasonably nice people, but one of the reasons I have hobbies is that there are nicer people out there than us, and lots of them. We should not be in charge of the world. This is an area where we are wrong and I hope for everyone's sake that we fail.
An individual should decide for themselves whether they will invest in a venture, not have that decision made for them by politicians and opinionated busybodies.
The answer to that is to repeal all statutes not consistent with Common Law and moving forward, depend solely on Common Law, which has long-established principles limiting state overreach and establishing genuine consent.
https://www.eurekalert.org/pub_releases/2009-08/uoc--hps0819...
>>If my argument is tautological (I think not), yours is just factually wrong :)
At least you're admitting you were making a tautological argument.