3) Finally, this fund-raise is now of a size that it's going to attract SEC attention. If it were a $1m raise, it could be a great experiment, grow with network, and not attract undue legal attention this early. But it looks like it may flirt with $100m. Already at over $75m, this is something the SEC will care about. But what can they do, you might ask? Well, they can declare the project to be an illegal securities offering (Slock.it's language in their terms doesn't matter; only the SEC's interpretation matters), and then track the ETH payments that come out of the DAO and freeze them (by making it clear to exchanges that the funds represent illegal flows). Then holders would be forced to go through dubious (and largely trackable) channels in order to access their funds.
Maybe none of the above would happen; maybe the SEC won't care, etc, but with such large value already locked in the DAO, it's become a significant and increasing risk in my opinion.
tldr: this has gotten out of hand, both for the network/ecosystem in organic terms, and in terms of attracting SEC scrutiny.
The rise in price of DAO is inevitable, at the end of the month it will be the highest funded crowdfunding project to date.
R0ach. The reason is because the way the contract is setup before any proposals are voted on pre-investors can withdraw 100% of their originally invested Ethereum (assuming they purchased in the first 14 days). After the first 14 days the price goes up by 5% a day until it's at 150% (the additional price bumps can't be withdrawn).
I suspect it's people gambling on supply and demand - "If someone is willing to pay 150% on day 31 then I'll be able to sell it on open market for 150%. Also it will never be worth less than what I paid for it in Eth because I can just cash it out (until crowdfunding starts using the money to fund stuff).
SEC sent out a warning in January 2016. Hope the pumpers are preparing for their jail time:
We are concerned that the rising use of virtual currencies
in the global marketplace may entice fraudsters to lure
investors into Ponzi and other schemes in which these
currencies are used to facilitate fraudulent, or simply
fabricated, investments or transactions. the fraud may
also involve an unregistered offering or trading platform.
these schemes often promise high returns for getting in
on the ground floor of a growing Internet phenomenon.
Fraudsters may also be attracted to using virtual
currencies to perpetrate their frauds because transactions
in virtual currencies supposedly have
greater privacy
benefits and less regulatory oversight than transactions in
con
ventional currencies. Any investment in securities in
the United states remains subject to the jurisdiction
of the seC regardless of whether the investment is made
in U.s. dollars or a virtual currency.
In particular,
individuals selling investments are typically subject
to federal or state licensing requirements.
Over $100MM in marketcap. Led by a bunch of random cryptonauts with presumably Zero business experience.
After the initial ETH crash which will destroy all but the investors who obtained their ETH through the ETH ICO, how fast will funds be lost due to accepted scam proposals? Genuine proposals which will fail due to ZERO real world usage?
Hold on to your butts, ladies and gentlemen. The slide down is littered with sharp edges and blood.
Have a nice day
