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Comment by cr__ | Hacker News Reader

If there’s no way to register, why did they proceed?

Because in the US a lack of explicit laws against something is typically interpreted as legal support. See pretty much any disruptive business mired in legal controversy. It's a cultural difference to many other countries where just because there isn't a law against something doesn't mean people will jump at the chance to exploit it at scale.

I'm not sure if this is an appropriate parallel, but it reminds me of Uber.

Uber seems to be successful despite clearly (IIUC) breaking laws that regulate taxi services.

If it worked for Uber, I can see why other businesses might have similar hopes.

Uber is perfectly legal here in Spain, but they're regulated as regular VTC vehicles. Uber can't arbitrarily lower the price. It has to be within some percentage of regular taxis for same level of service. Taxis have an advantage though because they have exclusive access to certain areas.

Getting rich off of shit-coins in this wild west of digital currencies, that's why.

Not sure why this is downvoted, it's absolutely true.

Someone once told me it costs like $60K to register a crypto as a security... A chicken and egg problem. How will you get $60K without an ITO? Yet if you have an ITO in order to raise the $60K that you need to register your ITO legally, you're already in breach.

It has similar vibes as the US law which only allows accredited investors to invest in fast growing startups... 'To protect mom and pop investors' yeah right. Is there even a single person in the entire country who actually believes that?

Suppose you want to turn your business into a publicly traded company. If you don’t already have enough cash to pay for the process, you raise money from accredited investors (VC funds, angels, whatever). Then you do the paperwork. Then, when everything is approved, you get to sell shares to the general public. The overall process has been well established for a long time.

For some reason, people seem to think an ITO should change all the rules, and that first you sell to the general public, and then you figure everything else out (assuming you don’t just take the money and run). This is IMO nonsense.

The basic filing fee is extremely reasonable: https://www.sec.gov/ofm/filing-fee-rate : about 0.1% of the value of the IPO.

It's the legal advice and accounting specialists required to produce an adequate prospectus that's the big cost. But again: if you're raising millions, it seems not unreasonable to front some of that, even as personal debt, in order to prove "skin in the game" and that it's not a scam.

EOS raised $4.2 billion dollars. You're telling me they can't front 60k?

The issue is of course that most of the IPOs are pumps and dumps. If they register as securities, then they are liable for said scheme.

Given how the crypto market avoids regulations to scam mum and pop... it's not so hard to believe.

Keep in mind certain crowd-funding is legal in US.

Maybe they expected to still be profitable after paying the fines?

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