Bitcoin Forum

Is he correct in his analysis (https://steemit.com/cryptocurrency/@anonymint/are-most-cryptocurrencies-doomed-to-collapse-because-they-re-ico-issued)?

Advertising..... All cryptocurrency released by the ICO is very easy to "make friends" with the law - you just need to make a legitimate Ethereum, waves and other major platforms to forks.

Crypto could be illegalized everywhere and we would still be able to use it, they could have stopped it in 2009 but now it's too late. No matter what we will be able to use and trade crypto.

I would not worry about this.

You apparently haven't read the linked blog.

Cryptocurrencies issued such that they aren't investment securities (such as issued with non-sneaky, fully competitive proof-of-work) are exempt from SEC and FinCEN regulations.
All "ICO-issued" (and that includes obfuscating sneaky mine/burn scams such as Dash, Bytecoin, Byteball, etc) tokens will not function as cryptocurrencies for the reasons stated in the blog.

If you're going to attempt to refute the blog, then please actually refute the points in the blog.

I hate to burst your bubble but Dash is not an ICO-issued cryptocurrency. It is a proof of work cryptocurrency, that has been around since 2014.
Any attempt to put Dash under the ICO-issued label, is a doomed attempt at trolling.   

You're lying or don't comprehend.
Your argument was already refuted in the blog you were reading (if you even read it?).

Dash was sneaky or instamined thus constituting the economic reality of a pre-mine to the insiders.
Thus all the logic that was explained about (https://steemit.com/cryptocurrency/@ats-david/re-anonymint-are-most-cryptocurrencies-doomed-to-collapse-because-they-re-ico-issued-20170903t003957939z) why Steem is equivalent to (an obfuscation of) "ICO-issued" applies also to Dash.

Make sure you read the explanation of the how the Howey Test was specifically crafted by the Supreme Court to make obfuscations of the economic reality irrelevant to the classification of an investment security.

I have not read this blog as yet (im out training) but I consider all ico's highly dangerous (perhaps for an entirely different reason from the OP)

Even widely advertised open ended ones.

Narrow initial distribution leads to collusion and market making. Once the whales exit (usually the devs and insiders) there is more in it for them to start a new project than continue with the old one.  The ever inflating prices you may see for periods are those whales buying and selling to each other sucking noobs in through fomo. It can take months or years for them to unload their bags but once they do..... good bye old ...hello new ico.


Very Old ico's that are stable and working through their road maps at steady rate with lowish caps are perhaps worth a look. But I would do a lot of research personally for going in hard.

I don't think that has much to do with it. They've actually only made themselves Treadway popular in the past year-and-a-half. There have been brand new coins and brand new projects in cryptocurrency released since 2011. I think it's the same basic criteria that gets both of those.

I Think they hit the internet too quick with their first announcement, even though they call it a pre-announcement, sometimes. It takes a lot more than a half-formed idea to make a business plan, and beyond that it takes a lot more than a business plan to make a successful business. I think a lot of people come sites like this forum, have a nice idea, put it out there but they don't actually have planned or the resources to make this happen.

there are still other problems with ICOs. they just promise something and i think that many of the so called devs that start an ICO don't have the knowledge to reach the promised goal. and these people don't care about SEC or other authorities. they just want the money.

thats the main reason whs most of the ICO-coins are doomed.

Yes I agree Icos without a product or a team should just be banned! Look at the pillar project. The Ceo just keep on talking and talking and does nothing! He said that he doesn’t care about the price of his tokens and people can dump, so they did... The worst marketing ever!! I will never trust an ico that has no product and decent team.

That is why the community has to work together to help the coin stay alive after the ico is finished.

It was relate to the asset, But i can say not for the real thing like POW token. The latest news from sec already told us investors to stay away from the ico, but remember it's about money and SEC don't want the more money will be flying to the cryptocurrency. It's obviously true.

I think the ecosystem itself with fizzle out the bad ICOs over time. People are gonna get smarter with their money and stop throwing millions at something with a lousy whitepaper and not even a product or roadmap to show for it.

If people would have been smart we wouldnt have been at this juncture with lot of shit ICO's and tokens. People are stupid enough to invest in any other shitcoin out there waiting to launch project so that their dream of becoming millionaire be true! Nobody give a shit to project or product or anything, its all about MONEY.

I read his analysis and I don't really care. He is talking all about US laws which aren't global. In my country bitcoin or other crypto aren't even recognized. They are in grey area.

I disagree with that.
Surely there are some coins who can go along even after the iCO.
It is just funds for the service that they will make. More of like a donation but instead they created a coin so investors will get back what they invested and maybe more if successful.

that they are ico issued can't be only reason for most cryptocurrencies to collapse but I agree with that article there are many warnings around about ICOs but most people don't care about them they will lose their all money.

Well he predicted this 2 days before it happened.

And specifically warned at the top of his blog that NEO was vulnerable.


All countries are being forced to enforce securities regulation same as was the case for FATCA. All this information is covered in detail at the following blog:

Are Most Cryptocurrencies Doomed to Collapse — because they’re “ICO-issued”? (https://steemit.com/cryptocurrency/@anonymint/are-most-cryptocurrencies-doomed-to-collapse-because-they-re-ico-issued)


Incorrect. Read the linked blog to learn about investment securities and more details. Follows is a summary.

There will be a banning of trading on the exchanges for the tokens which were issued by ICO (or any obfuscation of an ICO which is equivalent).

Tokens will be frozen on exchanges. Money will be recovered from issuers and some will be jailed. Some who promoted and/or traded large quantities of ICO-issued tokens will be fined and possibly jailed.

Use of ICO-issued tokens will be illegal (https://youtu.be/LNS8ucQj-rM?t=115) because it is illegal to trade investment securities on an unregulated exchange.

So that means avoid IOTA, NEO, Qtum, EOS, ETH, Stratis, Decreed, NEM, List, Waves, Tezos, PIVX, etc.

Legal tokens include Bitcoin, Bitcoin Cash, Litecoin, and Monero.


Only tokens which were issued with proof-of-work are going to remain legal for use. So Ethereum would be another one to avoid.

And as the blog explains, coins which were issued with instamines and stealth mines are also investment securities and thus will be illegal to trade and spend. Therefor, Dash, Steem and Bytecoin should be avoided.

Continuing to use ICO-issued coins could create a situation where you as a user pay huge fines and potentially jail time.

(Note the market can remain irrational, so that is not a prediction about which will experience dead-cat bounce rebounds).


Incorrect. Singapore is planning to crackdown also (http://www.mas.gov.sg/News-and-Publications/Media-Releases/2017/MAS-clarifies-regulatory-position-on-the-offer-of-digital-tokens-in-Singapore.aspx).


Chinese don’t speculate on illegitimate things. They speculated on ICOs because they could pitch a greater fool message that these were something that would be the future. How can they have that sales pitch when most of the major nations will eventually be making ICOs illegal (https://bitcointalk.org/index.php?topic=2145300.msg21521472#msg21521472)?

China, Russia, Singapore, and South Korea have already made announcements. The SEC also warned and will likely make enforcement announcement soon, which will cause another massive crash to lower levels.

Speculators still haven’t digested that this affects all the ICO-issued tokens, not just the China affiliated ones.

More and more crashing to come for ICO-issued tokens. (May get a dead-cat bounce which would be a good time to sell)

The other nations’ security regulators are not going to stand by and do nothing and let their citizens be subjected to scams, while the Asian countries protect their citizens. That would be very embarrassing to Western nations and abrogation of their responsibility and duty. There is already a contagion of a critical mass of nations now. This is unstoppable and ICOs are dead.


Existing ICO-issued tokens will become illegal, because investment securities are illegal to exchange if not on a registered exchange. And illegally issued investment securities are never legal to trade.

Thus ICO-issued tokens can not be spent decentralized. They are useless because can’t function as a cryptocurrency. At least not legally.


Click here for a longer explanation (https://bitcointalk.org/index.php?topic=1558366.msg21515894#msg21515894) of why proof-of-work mined tokens are not investment securities and thus not afflicted by recent events.

My most troublesome wallet, Lisk, was ICO based. They are still somewhat lagging behind a fully functional product, but their team is decent and still growing. Value reflects that, at least last month up today.
And I doubt that Chinese Government has any saying into all things regarding Lisk, since it is a mostly european located project!
Things would be worse if the United States start to act in a similar restrictive way.

The difference between the older new coin' process without the Ico was that left those with some of their coin out there , no Exchange , and maybe half a dozen other processes in the works, pretty much just a general mess, and still no resources. The only difference with the Ico is that the coin is listed at at least one Exchange, The Exchange forced him to do a little bit of work as far as and announcements, placement of the wallet files, and a few other things, and lastly the teams at least now have some starting capital.

I think the blog author is overblowing it. Surely these are potential problems, but the view is one-sided. Cryptocurrencies may be pushed to shadow, but it won't be the apocalypse that author promises.

That's mostly nonsense, a coin will stand on its own merit regardless if it what ico issued or mined. But both methods still have their pros and cons.

I just don't like ICO , I don't feel it serves the vision of cryptocurrency on fair distribution , it is just like a pay to win game, you got more money you get more

Okay, as iamnotback reasonably states, NEO is really getting its price from icos and  thus is now doomed. Then there's a point about the coins having to be legally issued and traded. Even btc is not that legal, is it? But yeah, this point was rather about the icos that have to be launched legally. The article is mostly about security problems with illegal coins and to which punishments from the law system it may lead and thus how it will affect the market. I guess iamnotback is usually right. I agree especially that icos are really dangerous and it's better to stay away from them. Yet I don't think byteball and dash is a scam.

I think this article is too pathetic. Yes, cryptocurrencies become more and more active as transaction services, but it's not all-around. I agree that maybe it would be right to choose the stablest ones which are backed with the real world assets and close all others in order to prevent scam or bankruptcy cases and save our funds  ::)

I consider there is a share of truth in the article.
There are possible risks of the ICO-issued cryptocurrencies as,
(i) some ICOs are scams developed to raise funds and could not be trusted because of the lawfully unregulated nature;
(ii) without the investment potential and customers engagement into ICO-issued cryptocurrency community, the cryptocurrency itself would have no value, and
(iii) even if a part of ICO-issued cryptocurrencies collapses, let's remember that it's a personal choice of everyone, including all risks that may be.

Any token which is a security, is illegal to trade on public markets (i.e. including non-accredited investors) which are not registered with the securities regulator in the applicable jurisdiction.

This means that tokens which were issued via ICO are not legal for spending as a cryptocurrency, nor for trading on the unregistered exchanges that exist now.

Eventually numerous major countries will ban the trading of these tokens per the requirements stated above. When that happens, there will be no more mainstream speculation market for these tokens.

Additionally ICO issued tokens which were not registered (with the securities regulators in each jurisdiction where the people who will trade them reside) nor issued only to accredited investors (which is the case for every ICO issued token project thus far), can't even be traded on regulated exchanges nor in private transactions between accredited investors.

Additionally those who are trading and/or promoting ICO issued tokens are potentially incriminating themselves, for future action by authorities at some later time. Remember the national securities agencies of at least the G5 are saving everything you do on the Internet for future analysis. And remember VPNs and Tor are honeypots and do not protect your anonymity.

If that is "pathetic" or "overblown", then do not cry to me later when you suffer major losses, fines, or jail time. I tried to warn you.


As @cryptohunter first pointed out many months ago and admitted by Byteball’s creator @tonych (https://bitcointalk.org/index.php?topic=1608859.msg16322689#msg16322689), Byteball was distributed to those who had access to BTC. Thus the exchanges and other ICOs enterprises received (as for example ICONOMI admitting on a Medium blog that they received 8.8% of first round) a huge chunk of the distribution, since they were holding BTC for those who are trading on the exchanges. Thus I presume there’s a possibility some kickback deals were made (https://bitcointalk.org/index.php?topic=1839699.msg18354632#msg18354632) between the Byteball dev and the major exchanges and other groups that held a lot of BTC, which would thus be an obfuscation of the economics of an ICO issued token (which makes the tokens securities) in that the developer would obtain tokens nearly for free and sell those to speculators to raise funds. Or at best, the distribution was highly skewed non-meritoriously to undeserved whales.

As for Dash, anyone who still doesn't understand that Dash is not only a scam but derelict technology, is willfully ignorant and should be allowed to remain so in purgatory. Meaning I am not going to bother linking you to the information that you have been linked to 100 times already and continue to ignore.


And obfuscated instamines such as Dash and Steem also have such non-meritorious distribution regardless of whether they are also illegal securities due to the fraudulent way they were issued.

http://trilema.com/2014/interacting-with-fiat-institutions-a-guide/

As you may know, I was in the BCT thread in 2014 where he defending his stance towards the SEC inquiry.

But the linked Trilemma blog post above is inapplicable to this issues raised in this thread, other than the point that the SEC has no legal jurisdiction in Romania.

That blog post is correct that Bitcoin was issued (via proof-of-work that was not an obfuscated instamine like Dash or Steem) such that it is not a security and thus the SEC has no jurisdiction over BTC tokens. But the analysis of the OP's linked blog concludes that ICO issued tokens are securities. Obfuscated instamines (such as Dash and Steem) are economically the same as ICO issued tokens (i.e. the insiders end up with nearly free tokens which they sell to speculators to raise funds), thus are likely to be also judged to be securities.

Also the author of that quoted linked blog post is entirely unconcerned about whether BTC would become delisted from every exchange in major nations. Whereas, those who are speculating on ICO issued tokens, do very much need the liquidity of the the exchanges and need for those tokens to be legally tradeable in major nations, so they have a steady supply of greater fools to buy these ICO issued (scam) tokens.

EDIT (after the reply that follows from @Last of the V8s): Additionally the exchange and securities issuance practiced by the author of that blog (unrelated to the issuance of the Bitcoin tokens), was limited to offerings to high net worth individuals who were sophisticated investors, thus even if he was selling such securities to USA persons, he was likely under a Regulation D, 506 Rule exemption. And afaik, never did such blog author's securities trade to on unregulated exchanges to non-accredited investors.


Bitcoin is not a security because it was issued by competitive proof-of-work ongoing over decades. Meaning there is no issuer who was able to obtain the tokens for nearly free and sell them to raise funding for the developing Bitcoin.

Also be aware that the IMF is proposing to eventually make the global currency using blockchain technology:

https://www.armstrongeconomics.com/markets-by-sector/foreign-exchange/the-coming-one-world-currency/

https://steemit.com/money/@anonymint/get-ready-for-a-world-currency

Yes you're right. I forgot what my point was. :-[

I do not agree with the statement that if a coin was released through the ICO, then it is doomed and is not promising. Of course, a significant part of it since the release was already lifeless, because the purpose of ICO was to raise funds, and not the reputation of the coin. However, some of them have existed for a long time and quite successfully, especially if they are actively used in narrow areas - gambling, medicine, banking, security, etc.

So many readers conflate the legal issue with the judgement of whether the project has any merits or is a scam or not.

The merits of an "ICO issued token" is entirely irrelevant to the legal issue. The problem is that securities will be illegal to trade and will be delisted, thus destroying their market price. Regardless of whether the project has any merit.

Please read again more carefully:


So what exactly do you disagree with in the above factual statements?

Are you claiming that most major countries of the world won't end up banning trading of ICO issued tokens? Or are you claiming that it won't crash the price of these tokens because they will still be tradeable in some obscure countries in the world (yet illegal for people from affluent countries to use those illicit exchanges)?

One can claim or argue that securities regulation in many countries of the world will not be harmonized with the common sense regulation in the USA, China, Canada, UK, etc..., and thus that the exchange markets (and legal use of those exchanges by most affluent people in the world) for ICO issued tokens will not be significantly destroyed, but we already have an example where the USA was able to force it's FATCA regulation to be enforced on USA persons in every country of the world. And for securities regulation, we already have several major countries warning of possible regulation of ICO issued tokens coming, including (as the linked blog in the OP states) USA, UK, Canada, Russia, China, Singapore, South Korea, and Hong Kong.

IMO, the G20 is getting organized on harmonizing their enforcements against financial crimes and tax evasion, per their agreement at a prior G20 summit to begin this coordination as of January 2017. Thus it is just a matter of time until all those who in the past were trading and/or promoting ICO issued tokens will retroactively have their fingertips burned up to their armpits by the authorities via a combination of delisting of tokens crashing their prices irrevocably and also fines, clawbacks, and potential jail time against some individuals.

The public are never going to touch these ICO issued tokens after the authorities start to declare them illegal for trading. Thus their prices will collapse because those tokens have no future.

Those who are netting gains from trading in ICO issued tokens may be feeling happy and smug, but will they regret it later when the clawbacks, fines, and other punishment is greater than the gains they netted. Potentially ruined lives because of illegal activity. IMO, it is not worth it unless you are desperate.

Of course they are doomed to collapse. The SEC vs Howie clearly outlines that any product/security being issued to investors solely on the promise of profits via future investors from the efforts of a 3rd party promotor (centralized entity) are securities.

This isn't rocket science. These ICO idiots aren't doing anything new, they just think they're being 'sneaky'; Forming a corporation then selling an interest in your product/coin/company is the fucking definition of a security. These 'offerings' have nothing to do with being a 'currency'.

I agree, the cookie will crumble once the governments start going after these centralized exchanges trading these illegal coins.

Let's see how long Ethereum lasts once Poloniex, etc are under court order from the DOJ to freeze all assets without possibility of retrieval.

Ethereum itself is the biggest offender, and the sooner that scamcoin dies the sounder the overall bitcoin/crypto markets will become.

ICOs' are nothing but a thorn in the side of legitimate crypto like bitcoin, and deserve to burn.

How in the hell does an 'Initial Public Offering' and 'currency' even remotely belong in the same sentence? Hint: It doesn't.

Good work Iamnotback.

Oh, it gets even better....once the DOJ goes after the real American founders (US citizens) of Ethereum (see my sig) for creating a for-profit foreign entity to illegally bypass US & Swiss securities & tax regulations it's going to be like the 4th of July.

Truly rapacious scumbags issue and participate in the majority of these ICO launches, they are nothing but a modern ponzi scheme; the only ones defending them are the idiots temporarily profiting in the ponzi; they deserve to burn, and they surely will.

I am trying to create an alternative to an ICO. Details will be forthcoming. I also have a consensus algorithm which fixes all the problems with proof-of-work and proof-of-stake and which (in theory) scales to on the order of millions of real-time transactions per second (actually unlimited) and remains decentralized. It is named Proof-of-the-Transacting-Majority.

I am very busy trying to bring this to fruition (and trying to rehabilitate my messed up liver). There might be an opportunity to invest, but it will not be an ICO. Instead investors would receive dividends from the income of apps in the system, which return non-securitized tokens as dividends. The investment in the company will be legally issued securities (i.e. shares in the company). The tokens will not be encumbered as securities because they will not be issued by (any of obfuscation) which sells them to investors in order to raise funding for development. There will also be a meritorious and fair distribution of the tokens (which is orthogonal to the investment in the company), that does not just end up in the hands of nerds who mine. This will be a novel plan. I have so many paradigm shifts I am trying to bring to market.

Having some difficulty at the moment getting organized but trying to overcome the challenges. Really need to partner with some top quality people. Trying to find these people. Unfortunately, I approached Charles Hoskinson at IOHK.io but apparently he ignored me. I suppose they'd rather me compete with them than work with them.

More details and discussion was here:

https://bitcointalk.org/index.php?topic=1558366.msg21773902#msg21773902

It's depend on fund flow.

If fund flow move out, the value of all cryptocurrency is droped too

I'm disappointed to see proof-of-work issued tokens declining along with ICO issued tokens, because I think Bitcoin, Litecoin, Bitcoin Cash will not ever be encumbered as securities. But I think this might be a short-term aberration as China has apparently threatened to close all exchanges even for Bitcoin. Eventually I think the ICO issued coins will be recognized to be the losers and investment will shift to the bona fide proof-of-work tokens I named (Dash not being one them because of it's fraudulent instamine arguably making it a security in some future regulatory environment).

But I think it is impossible that China will remove themselves from the cryptocurrency markets. They will shoot themselves and their high tech economy in the foot if they do so. Japan and South Korea have fast growing exchanges. Let China leave and let the door hit them in the ass on the way out. Yet I think China will not. Just rumors that will end up being not true.

But afaics ICO issued tokens are eventually doomed. Not sure how many months or years until they are clearly doomed though. It's also not 100% clear how all the various jurisdiction issues will play out and the timing thereof, but it's such a jumbled jurisdictional mess, I really do not understand why anyone who is not desperate would be touching ICO issued tokens. What is the use of greed if in the end one's life is destroyed by the lack of caution. We are headed into a tempest of sovereign debt crisis and global monetary and governance upheaval. I do not think it is wise to incriminate ourselves with a very uncertain regulatory mess of a future ahead. Some others are defiant, and I am pondering they must be desperate or not very wise investors. In order to preserve investment gains over decades and generations, one must not walk on hot coals and unnecessarily incur the wrath of the authorities.

I consider myself to be a high risk taker, yet I think miring myself in legal culpability that could come back to haunt me even 10 and 20 years from now, seems unwise. Especially when I can restructure my activities to avoid the unnecessary risk. And the tokens which are not securities, should eventually outperform over the long run because they are not encumbered and afflicted by the issues discussed in this thread.

China just want to make a bluff of it.. I dont think peoples in china will stop buying and selling crypto. Who cares about china. Not like china own this crypto market. With this strong community. i believe with or not china in crypto doesnt make crypto world destroy. For me it just more a rumor then a true fact. who can stop peoples from buying crypto? Just think.

Even we can survive without China trader but this will be hard time for us. Everything will need long time for recover

One thing that has not been mentioned is that regulators like the sec can grandfather existing instruments when a new regulation comes out.

This situation reminds me a lot of crowdfunding. People did crowdfunding even though it was not permitted by securities law. In the us, the sec got involved and issued regulation. The existing crowdfunding arrangements were grandfathered, afaik. Even thoug they were securities.

I do not admonish you with an intent to be disrespectful or unappreciative. I guess I am glad you raised this point although it has been raised numerous times all over the forums and refuting and correcting it every time will become tiring and impossible for an expert. Thus the community will become highly misinformed and idiotic as a result. It behooves all of you to be more astute and stop spreading incorrect information. And to try to help spread correct information.

Unfortunately readers here such as yourself make comments while being inadequately informed about the details, thus your statements are most often highly incorrect because "the devil is always in the details". This is why statements by people who have not studied an issue carefully, are worse than worthless. Statements from uninformed people, can be misleading and contain the opposite of the truth.

In this case, you are not emphasizing a very important detail which can mislead readers of your comment, which is that equity crowdfunding (https://en.wikipedia.org/wiki/Equity_crowdfunding) (as opposed to preselling production or other forms of non-securities crowdfunding a la Kickstarter (https://www.google.com/search?q=equity+crowdfunding+versus+crowdfunding)) afaik has not been grandfathered in any way that allows them to be not classified as securities.

Thus all equity crowdfunding has remained subject to securities regulations, and thus all the pitfalls I detailed about not being able to trade the securities (i.e. shares or tokens) applies to all equity crowdfunding that occurred prior to the Regulation CF and Regulation A+ legislation. Essentially the main change in those new equity crowdfunding rules is that it is easier to sell equity to up to 1000 non-accredited investors subject to certain stipulations and regulatory compliance requirements (but only for a USA corporation!).

But they are all still securities. And as I explained already, a token being a security is a kiss of death, because it can not be legally traded P2P nor on unregulated exchanges (and afaik no crypto exchanges are registered with the SEC yet and no tokens are registered with the SEC).

Even if ICO issued tokens are properly registered and compliant in the future (in every fucking jurisdiction! which is an implausible clusterfucked mess of unresolved legal crap!), still they will be delisted from unregistered exchanges and illegal for use as a currency or utility token, because P2P trading of even registered securities is illegal.

Bottom line is that raising equity is entirely incompatible with creating an unencumbered token.

And there is no way currently to legally raise equity with a global sale to non-accredited investors all over the globe. For legal reaons, equity must be raised separately in each jurisdiction, e.g. USA, Canada, UK, Singapore, etc..

Also I do not think any equity crowdfunding was grandfathered. Rather the equity crowdfunding sites were working with the SEC on the new Regulation A+ and CF rules. And any equity crowdfunding that was sneakily done on non-equity crowdfunding sites (such as Rimbit's scam on Indiegogo which was linked in the linked blog of the OP of this thread) is still culpable (and will eventually haunt the participants unless it is just too small for the regulators to bother going after).

Readers are apparently very slow minded and/or just uninformed (and not well read) and thus having much difficulty in grasping these facts.

Ponder the many days and dozens of hours or more I have expended to become somewhat knowledgeable on this issue. And every issue I am involved in, ranging from deeply technological issues to these organizational and political economic issues requires deep study. That is why I am often on the computer 16 hours a day, which is a very unhealthy level of exposure to blue light and lack of exposure to the sunshine and exercise.

The soundbite Twitter tl;dr generation expects everything to be easy. But then they do not give appreciation and respect to those who do the hard work to explain for them. How do they expect that to end up then?

I wish someone even more expert than myself on this issue would enter this thread and help analyze. Unfortunately that does not seem to happen on BCT.

I have to think about the dev's long term plans.
If it involves getting a currency adopted by the large world public of average people then yeah.. ICO's are a problem.
It's one thing to make a currency like Bitcoin then an ICO.

Most of earth will not want to participate in a crooked shady scheme coin system.
They are all doomed not to collapse but by being choked by a glass ceiling.
Sure they can play with them for profits on centralized exchanges but that amounts to nothing accomplished.

Doesn't matter though because none of the scammy assholes here are interested in looking at these issues.
They see dollar signs and want to cash out... BITCOIN.
They see the ICO as a way to get their hands on the NON-ICO coins.  :D

I tthink China recent ICO ban is a good thing for the space long term, because there is no way you can totally ban all the crypto community, and that means those that are now interested will be buying at premium prices

Sounds interesting, if you've found a salvable, decentralized method of investing from an anastomosis, keep us updated.

Btw, you're doing a fine job elucidating what you've found (I'd chime in more on securities law, I've been studying commercial law for 5 years, yet these days I'm extremely busy) and have clearly done extensive research into the subject of ICO securities; I do feel bad for the newer investors in these ponzis', unfortunately the coming pogrom will in majority effect the later investors, unless of course the government ends up initially pursuing the original issuers to mitigate the damage (which they well may).

Regardless, people have been warned countless times over these pestiferous ICO launches; yet greed, being greed alone, keeps them coming back for more.

A quick resource that may be of use to your research: The Public Library of Law (http://www.plol.org/Pages/Search.aspx)
Here you can search for actual case law (Similar to the $200 a month WestLaw, but free) to add more resources to recapitulate your position with rulings from judges; I'd bet there are even more cases to add to your position than Howie).

Agreed. The cat is out of the bag, nothing can stop cryptos now.

Just do your research before investing in any ico's.  Even the ones you believe in can still crash.  The team might just be professional scammers

Hyperme, thanks for your posts. It's good to get a reality check on what could be coming. I wonder what kind of timescale it would be before the SEC & others come after crypto?

Thinking about it, all it would take is an official announcement that ICO issued cryptos are illegal and SEC are investigating exchanges for the prices to crash through the floor. They wouldn't even have to issue shutdown orders or go after anyone.

Is there a list of ico cryptos anywhere? I think it might soon be time to move my investments.

Sheesh man, chill. I was just asking a question. Regulators can and do grandfather stuff all the time. I'm not an expert so I posted a theory. Thanks for explaining why it was wrong but you don't have to get all condescending about it. Maybe you should put the computer away and get some sleep

Big No!

Finally someone gets it.

Yeah we do not know the timing (especially harmonization with nations which have underdeveloped securities law), but I had the same thought that if the SEC announces a crackdown, it will crater ICO market prices we'll see a stampede for the exits.

If crackdowns continue to accrue from major nations ongoing, the ICOs will get repeatedly slapped down.

I just can't fathom how ICOs would not be doomed unless securities regulation is abandoned by major nations.

And I can't fathom how illegal trading in minor nations could sustain them. They may end up more unappreciated than Pink Sheets stocks in the USA. However, if the mania in ICOs is too strong we may get the opposite where the masses are fighting to get in and commit illegal trading to not miss out on the gains. We could be headed for some Tulip or South Seas Bubble situation, wherein the destruction and punishments come much later after a much larger bubble that is beyond the control of authorities.

Also if another vehicle for speculation which replaces ICOs comes along, that could be another significant factor in the outcome. I outlined one such idea (https://steemit.com/blockchain/@anonymint/re-spykemajeska-re-anonymint-2017823t83758729z-20170824t032839631z) w.r.t. to gaming.

---

I thought I made it very clear that I was not being disrespectful or unappreciative, and that my frustration is only that I do not have time to run around every place on the forum where incorrect information is promulgated. And I asked for others to take on that responsibility of correcting misinformation based on what they read.

I do not think regulators will grandfather illegal issuance of securities, because it would embolden future non-compliance with new twists such as the obfuscation of an ICO with instamining. I also think that in order to punish non-compliance with illegal trading, they will be forced to punish some traders as well. Otherwise, they will appear to be impotent and non-compliance will proliferate.

Btw, I did edit the sentences about "tl;dr" to replace 'you' with 'they' which was my intention when I wrote it.

(I'm not lacking sleep nor overworking recently)

most cryptocurrencies are doomed because there is no use for them.  ico or not.

Sure some cryptocurrencies are doomed but that's not because they are ICO-issued. Ethereum itself was ICO-issued - the reason some of these cryptocurrencies are doomed is because the teams isn't driven or the solution isn't workable. A good project is going to be good regardless how it's issued.

Many people do not see the big picture, because we have lived our whole lives under the current economic system, where the US dollar is the reserve currency. That system is coming to an end, I could point to many events which prove my case. People NEED to get into the burgeoning crypto and ICO space because it is literally going to save humanity, and WILL NOT BE STOPPED, no matter what China does. This movement is THAT big of a deal, it will fundamentally change the world.

With the  CHinese exchanges ban confirmed I expect a new air to be breathe into the space, the uncertainties from CHina has presented a very good buy opportunities for good traders to make money

I agree with all you wrote except the last sentence seems dubious. Are you not familiar with what happened to the proprietors of the Liberty Dollar in the USA, egold in Panama, and the Tencent QQ game currency in China? Afaik the former two are still in jail, defunct, and afaik QQ currency (and other game currencies) can not be converted to fiat any more (https://www.reddit.com/r/BitcoinMarkets/comments/21viy3/china_banned_virtual_mmorpg_currency_before_too/).

Apparently in the case of QQ coin, China was able to stop it because it was centralized (https://www.nextbigfuture.com/2013/11/chinas-government-stopped-qq-virtual.html). And that is the problem with ICO issued tokens, they are centralized. So to kill those systems, the authorities can go after the developers and issuers, as well as delisting on centralized exchanges within their jurisdictions. However, I agree with you in that if those systems have any merit as decentralized systems, perhaps they can be continued as decentralized systems, yet I'm thinking they would have to be reissued as non-ICO, else trading them would be illegal. So then you do think that the masses are going to be willing to use an illegal token system?

Do you really think an illegally issued blockchain token will be above the reach of the law?

(again I presume Bitcoin, Litecoin, and other decentralized issued tokens employing proof-of-work are exempt from securities regulation)

(Again I am thinking not only China will attack the ICO issued tokens, and I presume all the major nations will uphold their responsibility to regulate securities, but if I am mistaken, then the analysis will change significantly)

Decentralization changes the equation if the masses are wiling to do "illegal" activity. With online music downloads, many of the affluent masses preferred hassle free low priced alternatives (e.g. iTunes) than pirating.

Stupid laws should be broken and destroyed. Are securities regulations stupid?

The masses gain (selfishly?) from pirating music, games, and videos. But do the masses benefit from being greater fools in ICO pump & dumps? I think the masses will remain in support of securities regulation to minimize the scams (but I might be wrong and the world has reached some insanity, bubble mania, and ultimately collapse).

The masses want a safe environment that allows them to steal from the system in a politically correct way which makes them feel smug about stealing. The power vacuum has always been that TPTB use the masses to attack their competitors and take control of the system, while feeding the masses the debt collectivist lie. Everyone is always trying to find a way to best game the system. Civilization is a crab bucket clusterfuck of defection.

Decentralization is long-term viable when it benefits the masses, not when it suckers them into scams and financial abuse. Primarily because the harm to the masses empowers TPTB to regulate and steal it all.

We might be headed into a tragedy-of-the-commons bubble mania if the authorities are unable to get control of this.

Taking all of this into account, I realize it is very important for me to leverage this bubble/mania for the additional resources it can provide, without incriminating myself nor encumbering the token I want to create. I have an idea of how to do this (will explain in my next post).

I agree..
There will be 10,000 more shit coins and another 1 million accounts here.
And ?
Clap for your success now ?

We need to improve the culture of cryptocurrencies RIGHT NOW. As crypto gets big, we are spreading out this culture to the wider world

Although some have expressed defiance and disregard the potential legal issues of encumbering a token with potential future securities regulation, I think it's best to structure fundraising so that it will not encumber the token of the decentralized ledger. Why add potential legal problems for the token if it's not necessary? Why risk future delisting from exchanges and legal hassles for users/traders/promoters of the token?


Agreed we should create something for the world which is not encumbered with legal issues that we can avoid.

Specifically my idea is that fundraising should be for a corporation which creates apps for the decentralized ledger. The tokens are not issued to investors, and instead either with proof-of-work or alternative onboarding idea I have, such that the tokens are not securities and are not encumbered with securities regulation. The investors instead receive shares in a corporation which earns tokens by making apps which provide services to users (holders) of the tokens. The corporation can then pay dividends in tokens. The tokens are thus not securities and any securities regulations apply to the shares of the corporation, not to the tokens.

The downside of this idea is that the tokens are taxed as dividends when distributed to the shareholders, and not as capital gains. But this may not be a significant disadvantage because the tokens are distributed as they are earned, potentially when they have a very low value early on (when that probably single corporation formed at inception has a near exclusive on apps since others did not jump into the app ecosystem yet). Also it compares favorable from a tax standpoint compared to ICOs which try (I think unsuccessfully) to escape securities regulation by selling utility tokens as goods and paying sales and income taxes:


An additional facet of my idea is the tokens issued for onboarding users would be locked up for a period of time so they can't be traded immediately. Thus the supply of tokens available on exchanges early on (when the market cap is still low) would be limited in supply, so for investors to get a significant supply of tokens, the investment in corporations that produce apps and earn tokens may be the most viable way for them to obtain their desired investment share of tokens.

Compare my idea to the following linked idea of taking funding by having a foundation and/or stake-based vote mint tokens and award those to developers:

https://medium.com/@FEhrsam/funding-the-evolution-of-blockchains-87d160988481

My idea also employs debasement (aka inflation) to raise funding, but in my idea the debasement is issued to onboard users, which solves the problem that Open Money has (https://bitcointalk.org/index.php?topic=2183804.msg21923265#msg21923265) and provides a pool of tokens for apps to compete to earn.

My criticisms of the above linked idea:

• it's a power vacuum because there will be a fight for who can control that resource (e.g. whales forming an oligarchy of state and/or taking control of any foundation or other democratic process)
• the tokens are at risk of being securities if it can be argued that investors who obtain the tokens were relying on the managerial or development efforts of the foundation or oligarchy of stake in control
• decentralized awarding of bounties and managing development, is a clusterfuck that doesn't work

I agree with this though:


My idea is that many corporations are eventually formed to work on apps for the decentralized ledger.

And since they all have an incentive for the decentralized ledger to be improved, they each voluntarily contribute some (perhaps small) fraction of their development resources to the decentralized ledger development, not just only to their own apps. They do this for the same reason that corporations fund open source projects, because it's the way to cooperate on the shared portion of their businesses. Corporations tend to act rationally with a longer-term perspective, unlike most individuals. Also it would help if the core protocol of the decentralized ledger is stable and doesn't need further changes going forward after initial development, which can be facilitated if improvements can be added on top of the core protocol (think of the analogy of the layering of network protocols).

In that way, we would in theory attain an open competition, decentralized, permissionless, independent, open sourced solution, which avoids the securities regulation issue on the tokens of the decentralized ledger and attain greater myriad of decentralized participation instead of just one centralized set of developers.

I think this is much superior to Ethereum's model. I'm trying to get this organized (https://steemit.com/blockchain/@anonymint/re-domob-re-anonymint-re-spykemajeska-re-anonymint-2017823t83758729z-20170917t172825757z).

I was asked via private message if I could refute the above quote.

The power vacuum is simply a scaled up version of a prisoners dilemma. It is a situation where rational actors will make choices that improve their own short term position that result in an inferior overall outcome for society as a whole.

The only solution to a prisoners dilemma type problem is change the character of the masses over time. You must transform the masses into superrational actors as this is the only way to escape a rational defect-defect equilibrium.



Religion is a the only functional superrationality protocol. It maximizes superrationality and thus positive societal outcomes. It is the only force that enables suspension of defect-defect equilibrium like the power vacuum. When a superrationality protocol is abandoned (widespread rejection of religion) the gradual vice of ever increasing defection sets in and the countdown towards destruction of the society commences.


It is moral degradation that leads to bondage for it is moral strengthening that allows free and strong societies to be built in the first place.

This is why Ethical Monotheism (http://www.jewishvirtuallibrary.org/jsource/Judaism/mono.html) is so important and the reason why so much that is good in the world came from the west.

Without it we are reduced to merely rational actors. We become the prisoners who cannot escape the Nash equilibrium of defection and betrayal.

See: Health and Religion (https://bitcointalk.org/index.php?topic=1373864.0) for more.

It's been five years and I haven't yet witnessed this aggregate market become largely fragmented. What kind of message would be sent if icos could be successfully targeted, regulated and stopped?

Even with the last decline from 2014 to now the market and it's induced segmentations remained quite unified overall with regards to overall price movements.

Even those cryptocurrencies totally devoid of any unique programming have managed to be dragged along with the rest of the tide.

I am first and foremost all for the prevention of icos becoming hypernormalized but with the sec and other financial regulations bearing down on the market, being put up against a new bound in technology, exactly what could they do currently and what ways would they take in which to get it done?

I mean, specifically, where does the sec derive its power from? If its basically policing the entrances, exits and houses under which regulated trade is conducted then they will necessarily be in for a coming adaption.

This technology has the proven ability to entirely displace existing company share distribution (securities as we know them) and exchange methods currently exercised and its medium isn't necessarily secured by a lawful third party designate or human-tended balance sheets. It's secured by a ledger that isn't exactly under their thumbs as nearly as much as a physical construct in which sheets are exchanged.

While I agree that playing nice with existing financial constructs will enhance diffusion into the psychological and physical norms, there is an even gnarlier gap in existing legislation for this market. Effectively - I'm expecting that it really will be 10-20 years before some even begin to catch up wrt to legislation.

What type of statutes limit them past decades? Does it go as far as social security in basically wrecking intergenerational wealth paradigms? Can they demand reparations from a likely well off progeny if there's nobody else to go after?

Also exactly how does any of this fit in with the debt crisis vs hyperinflating dollar if both crypto legislation and hyperinflation occur in 15-20 years?

Personally I don't think the SEC will be able to keep up, but whatever is formed to regulate the likely coming one world currency will. So how would that play out?

@CoinCube and I were discussing the issue (https://steemit.com/freedom/@anonymint/re-anonymint-re-anonymint-re-anonymint-re-anonymint-re-anonymint-marissa-mayer-is-the-poster-child-for-bitches-in-tech-20170906t062435963z) of cooperation and defection, with my stance being that perhaps decentralization technology supersedes religion because I argue the fundamental driver is economics, not ideology.

I will argue that religion was merely a way that societies were able to organize given the contention between labor and the capitalist as described at the above link. Civilization needed docile compliant fungible (replaceable) laborers (https://bitcointalk.org/index.php?topic=355212.0) and solid marriages to produce more such docile laborers. The superrationality emerged economically from the fact that those who didn't adopt it, were destroyed in failed civilizations. (we may have an analogous outcome coming to those who do not stop adopting ICOs)

However, the maximum division-of-labor and the Knowledge Age (https://steemit.com/science/@anonymint/the-golden-knowledge-age-is-rising) is ameliorating that mind programming (i.e. religion) paradigm. IOW, I claim humanity no longer needs to rely on close community, because we have the Internet to coordinate with similarly capable individuals. This highly rewards R strategy reproduction (https://en.wikipedia.org/wiki/R/K_selection_theory) and discourages K strategy, because the offspring will find their randomized place in the soup of Knowledge Age production. Even if one tried to produce K strategy offspring highly trained for Knowledge Age skills, the technology is changing so rapidly that isn't possible to predict what training and skill set they will need. Math may not even be important any more in the future, if A.I. is able to do the math for us.

In terms of a shared set of values, I'm the dinosaur for wishing Indians shared my ancestors' values (https://bitcointalk.org/index.php?topic=1558366.msg21773902#msg21773902). The Knowledge Age is a multi-cultural world. Sorry to say, I think @CoinCube is trying to hang on to dying paradigms (both religion and the upper middle class American licensed-by-the-state bourgeoisie ... the future bourgeoisie will be independent of any State, religion, or culture).

The moral decay is a fact of thermodynamics (entropy). Decentralization paradigms are the only way to get sustainable cooperation (and avoid the tragedy-of-the-commons) in the Knowledge Age.

CoinCube, I want you to watch this and pay attention closely:

https://www.youtube.com/watch?v=2kwF1MXavYs

Duterte warned George Soros that there is a bounty on his head:

https://www.youtube.com/watch?v=2aoStEmNR0Y

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@CoinCube continued to discuss in PMs:




Transparency of subjective trust (e.g. in terms personal identity exposure in order to force trust relationships) solves nothing, because it's the political economics power vacuum of democracy clusterfuck (http://esr.ibiblio.org/?p=984), the same damn Dunbar limit tribalism trust relationship scaling problem of politics, and the formation of trust relationships which are inherently flawed (e.g. if I need people to trust me then I need to cowtail to people politically in defiance of my ideological principles and limits degrees-of-freedom and the fundamental universal physics trend to maximum entropy).

Objectivity transparency in terms of an objectively provable adherence to a decentralized protocol is what decentralized ledgers enable.

It's immutable decentralized protocols that offer us the potential of rational win-win coordination without a power vacuum nor "rational actor" defection problem, regardless of transparency. And yes, we need those protocols to be immutable and not "upgradeable" by centralized human control nor political power vacuums.

What the heck do you think I am working on in terms of decentralized ledger technology? You (and some others) dismiss my technological work and in your case because apparently you think so highly of Bitcoin because you don't realize you're incorrect about personal transparency being important. It seems to me you lean towards being a collectivist, leftist leaning, religion idolizing, archaic thinker despite claiming you're a Libertarian. I want to move the world forward. The Internet gave us decentralized immutable protocols for decentralized sharing of data. Now we need to perfect the same for decentralized consensus. Just because I have been so ill, doesn't mean I will necessarily not achieve my goals. I am very determined in spite of having a messed up liver (or what ever the fuck is still wrong with the inside of my gut after apparently curing the gut TB), I do not give up and keep fighting for my body to cure itself (https://www.youtube.com/channel/UCzqn0xsxe-_Zf_B-q-YgZVQ).

Note that in the case of for example the Internet upgrade from IPv4 to IPv6, this is a somewhat decentralized adoption process. Btw, IPv6 is an important technology for my decentralized ledger technology because it makes the cost of having 10,000 IP addresses per node plausible.

EDIT: decentralized ledgers are Western civilization’s only hope (http://blog.jim.com/culture/the-natural-limits-of-monarchy/) of avoiding a Dark Age.

Because the main use case of cryptocurrency thus far is speculation. Yet another example of useless hype from Open Money without any realistic onboarding paradigm (https://bitcointalk.org/index.php?topic=2183804.msg21943715#msg21943715).

Ethereum's entire raison d'être is ICO speculation selling bags to greater fools. There's no adoption for any other use case.

The other use case for cryptocurrency (mostly only BTC) is to move money internationally (legally?) without a bank account, money laundering, and other currently "criminal" activities. Afaik, these are minor compared to the speculation markets.

So when ICO speculation is attacked, Bitcoin's pricing also suffers.

The entire cryptocurrency arena has become a copy of Dogecoin (https://bitcointalk.org/index.php?topic=2186717.msg21945570#msg21945570).


The authorities can go after the issuers, promoters, exchanges, and even large traders of the unregistered tokens. The weakness of ICOs is that they're centralized, thus existing securities and financial regulation can be applied (not just securities law but also MLM laws, money laundering laws, etc).

So basically it will become illegal to trade these in G20 nations.

Trading could proceed on decentralized exchanges and issuers could flee to rogue nations or employ anonymity, but will the greater fools buy such illicit tokens?

I think I disagree with you. The truly decentralized, legally issued tokens such as Bitcoin will require a world government and new global legislation to regulate.

But the existing securities regulation in the USA, UK, Canada, China, etc.. will be sufficient to destroy those who are issuing ICOs now. Because there is no way to issue a token such that it's not acquired by citizens/residents of G5 (or G8 or G20) nations; thus, there isn't any need for global harmonization, because issuing/promoting/trading an ICO subjects those fools to multiple jurisdictional jeopardy. Once ICOs are declared illicit by the major nations, they are toast.

If I am wrong, then okay I will eat my words. But I really can't fathom how the authorities can't crack down. I believe the (elite which pull the strings behind the curtain of the) authorities have purposely allowed the ICOs so that those who comprise the "resistance movement" (or otherwise disrespect the authority of the G20) can have their "fingertips burned up to their armpits" (which was a comment from a US Treasury official about the future of goldbugs). Remember what they did to the creator of the Liberty Dollar.

The speculation on ICOs depends on the belief of the greater fools that more greater fools will be coming in to buy.

The authorities will collapse this bubble soon. Mark my words.

Please read this also:

https://bitcointalk.org/index.php?topic=2183804.msg21943715#msg21943715

Regardless of the outcome, I think getting organized asap on what I'm proposing (see the above link and other posts in this thread) would be prudent. So we can capture fundraising while this bubble is still hot (before the potential coming bubble crash) and help investors move into a paradigm that is likely to remain legal and also to genuinely succeed in onboarding and moving crypto out of speculation and into mainstream. I'm very serious. But I need help to get some momentum. One 52 year old person (trying to rehabilitate a messed up liver (https://www.youtube.com/channel/UCzqn0xsxe-_Zf_B-q-YgZVQ)) can't do all of that by themselves. I will be making some phone calls to sites like SeedInvest. It would easier to issue tokens without any compliance, but I think that would be foolish. I should endeavor to offer investors another choice which is not an ICO. So that investors have options to choose from given the uncertainty about the future of ICOs.

And if y'all think China isn't becoming extremely important and powerful:

Yes I agree. They are a powerful tool for limiting defection and promoting cooperation.

There are two ways to limit the fallout from a prisoners dilemma. The first and best way is to make the actors superrational instead of rational. This is very hard as it requires one to fundamentally elevate the nature of the participants as well as introduce verifiable mechanisms for the superrational to identify themselves to each other.

A simpler stopgap solution is to lock rational players into a metagame which alters short term decision making. In the case of the standard prisoners dilemma for example you could introduce the crime lord on the outside who punishes those who squeak.

The stopgap measures work for a time (sometimes a long time) but are vulnerable to being undermined as the fundamental problem (flawed participants) remains. In the case of the prisoners dilemma the crime lord may die or be arrested or a protection program may be offered.

Decentralized ledgers are the second stopgap type of solution. Self interest and greed are leveraged into support for an algorithm that introduces decentralized computational enforced transparency and verification. This limits the ability defect via abuse of seigniorage or debasement or forgery.

Stopgap measures can work but are vulnerable. In the case of a decentralized ledger the weakness is at the developer level where attempts can be made to seize control of the protocol via controlling future changes and updates. This is exactly where the attacks on bitcoin will and are occurring.

The world is not going to become superrational in the timeframe needed to deal with our imploding financial system. Thus stopgap measures are necessary. Fortunately it looks like decentralized ledgers are arriving just in time to provide the needed emergency relief.

The author of the linked article is on the right track this time. He seems to understand at some level the importance of moral progress. He also acknowledges some of the flaws of monarchy. With time and further consideration he may come to realize that monarchy is inferior overall to rule by republic it is moral progress that allows the progression from the former to the latter.

Rule by genuine consensus is superior still but we have not progressed enough to implement this.

Bitcoin is the first true rule by consensus system that has ever existed. It's a new and superior type of governance in addition to everything else it is.

WARNING: those who are trading and promoting ICO issued tokens to non-accredited investors in G20 nations (even via an exchange) may be incriminating themselves. Even the European Union has a criteria for accredited investors (and even Ethereum didn’t restrict its ICO accordingly):

https://en.wikipedia.org/wiki/Accredited_investor#European_Union

These guys could possibly end up in a pickle (they’re in Hong Kong and Cayman Islands):

https://bnktothefuture.com/icos

Every major nation has securities regulation law which applies to ICOs (including even Japan and India (https://bitcointalk.org/index.php?topic=2196590.msg22107115#msg22107115)), and eventually the authorities will crackdown and enforce the laws:

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Unless they identify and verify accredited investor status (https://en.wikipedia.org/wiki/Accredited_investor) and file the appropriate paperwork in every jurisdiction where those accredited investors reside, then they’re still illegally issued securities, e.g. EOS’ checkbox for “I’m an accredited investor” is not legal issuance. Anyone promoting or trading these (including the owners of the exchanges!) may be incriminating themselves.


Tokens issued under an accredited investor exemption must only be traded to other verified accredited investors. If the issuers/promoters/investors reasonably expect these tokens to be listed on public exchanges then they are probably committing a crime. An attorney pointed this out (https://bitcointalk.org/index.php?topic=2183804.msg21943715#msg21943715).

Fundraising via tokens is a giant mess that should be entirely avoided by everyone (at least until the authorities provide some new legal framework which might be many years from now, especially since it will require globalized harmonization of law in order to allow trading across nation-state borders). ICO issued tokens are doomed and will likely become illegal to trade and thus worthless (https://bitcointalk.org/index.php?topic=2145300.0). Expect exchanges to start voluntarily delisting ICO issued tokens once they realize the deep shit they are in. You’re investing in empty bags that have never produced any real world use (https://bitcointalk.org/index.php?topic=2181199.msg22057402#msg22057402) or than facilitating selling empty bags to greater fools.