ICO ban for the US citizens

[freedomno1]

The USA possesses very restrictive rules regarding the funding of projects in order to make sure that the common man does not get pulled into some sort of pyramid scheme. Of course in practice this is just the result of looking towards private rich venture capital as the only people that should be funding projects, it really does create issues for crowdfunding though in practice it basically says not US no good.
https://www.sec.gov/news/pressrelease/2015-249.html

[1713457533]

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[CryptoBry]

US regulators act from an excess of caution, primarily as a result of the anti-money laundering regime that was instituted after 9/11. Of course, there are some legitimate concerns that anonymous money can be used for destructive purposes -- there is no debate about that. However, blockchain and programmable money are a fundamentally new technology, in which the states may fall behind. During the internet bubble, USA was quick to embrace the change. For blockchain, it seems that the American adoption of this new technology is somewhat impeded by a legal system that is designed for security above all else, which is regrettable, but also an opportunity for non-US startups to assume leadership.

It is not just the regulators who are extra cautious. It is the fund raisers who don't want to get entangled with the US regulators and incur high compliance costs. I don't blame them - there are enough people in other countries who are ready to subscribe to ICOs.

You are right. Rather than face legal challenge later on, why not just concentrate on markets aside from USA. There are indeed enough investors outside of USA, who can launch and fund a project. Unless of course, SEC would soon issue a legal framework to work with, then it is not worth including USA in any ICO issuance. The government of USA is very much protective of its own citizens and that is something we all understand, anyway.

[olushakes]

Many European ICOs recently that I saw, they all state in their ToS that the US citizens can't participate. Why?

If there is any country that is very complicated and can go to any length to get convictions even to the extent of another country, its the United States and even if I happen to create a service in the crypto world, I am sure to exclude USA citizens because I don't have money to pay lawyers and then being offered a deal to plead guilty over something you probably don't know exist in the first place but that's definitely no excuse to the judicial system for whatever reason.

[CryptoBry]

Even India has been been banned from few of those ICOs due to strict laws and regulations (Monaco campaign). Mostly all ICOs have banned US though but I can still see many US residents who invest in those ICOs where you don't need to prove your identity before investing. Some ICOs do collect personal information to avoid any risk of a legal action but mostly comply by their laws.

There are many countries that express some concerns on the continuing proliferation and popularity of issuing ICOs. The market for ICOs has exploded these past few months and there are those who were successfully getting more than $100M in funding.

I am expecting that soon there can be strict regulations in place for ICOs and this can be done to, of course, protect the investors but I am hoping it will not also be restrictive as to kill ICO itslef.

[fisheater]

I did notice a few US-based ICOs going on (WTT is one example), so it may not ban for it, just possibly need for agreements.

[ecnalubma]

They learned from the past Silkroad, Mt. Gox etc. Now they are handling cryptos clean to avoid future scams. No wonder ICO'S formed and planned in different countries but some investors might be Americans.

[GreenBits]

US regulators act from an excess of caution, primarily as a result of the anti-money laundering regime that was instituted after 9/11. Of course, there are some legitimate concerns that anonymous money can be used for destructive purposes -- there is no debate about that. However, blockchain and programmable money are a fundamentally new technology, in which the states may fall behind. During the internet bubble, USA was quick to embrace the change. For blockchain, it seems that the American adoption of this new technology is somewhat impeded by a legal system that is designed for security above all else, which is regrettable, but also an opportunity for non-US startups to assume leadership.

It is not just the regulators who are extra cautious. It is the fund raisers who don't want to get entangled with the US regulators and incur high compliance costs. I don't blame them - there are enough people in other countries who are ready to subscribe to ICOs.

You are right. Rather than face legal challenge later on, why not just concentrate on markets aside from USA. There are indeed enough investors outside of USA, who can launch and fund a project. Unless of course, SEC would soon issue a legal framework to work with, then it is not worth including USA in any ICO issuance. The government of USA is very much protective of its own citizens and that is something we all understand, anyway.

well, that was fun while it lasted

If you thought a lot of ICOs were limiting US participation due to zealous regulators already, wait until you read the following: SEC has concluded that DAO tokens are a “security,” which should be regulated. The report spends a lot of time establishing that the DAO was in fact a centralized organization, describing actions that run parallel to those of any struggling start-up which has actual control over its resources.

The issue of whether the DAO had sole discretion or full control is important because it then implies responsibility for investor losses as a result of security malfunctions. Legally, it opened up a can of worms, which is why the SEC commissioned the report in the first place. The authors appear to be intimately familiar with blockchain technology, which is refreshing and scary at the same time.

"Whether or not a particular transaction involves the offer and sale of a security—regardless of the terminology used—will depend on the facts and circumstances, including the economic realities of the transaction. Those who offer and sell securities in the United States must comply with the federal securities laws, including the requirement to register with the Commission or to qualify for an exemption from the registration requirements of the federal securities laws. The registration requirements are designed to provide investors with procedural protections and material information necessary to make informed investment decisions."

This is why some ICOs are more selective than others, and this should have a chilling effect on yet to drop US-based ICOs. They arent charging the Slock.it DAO with securities fraud in this instance, as this is groundbreaking legal territory, but this is a clear message: Token that offer security-like benefits are securities, and you must be regulated and compliant, or we will arrest you

Be careful with the tokens from now on. this also means:

ICOs will need to register with the SEC as securities, and;

Exchanges will need to register as stock exchanges to trade securities.

[pearlmen]

With what I read not too long ago where I commented on a similar thread, I must say things is about to go more intense for us citizens as more and more ICOs will start stopping US citizens and those who have been silent will not only come out publicly to stop US citizens but will equally frustrate every effort such as the use of VPNs because the fear of US regulators is the beginning of wisdom for all developers raising ICOs.

[grinmoure]

US regulators act from an excess of caution, primarily as a result of the anti-money laundering regime that was instituted after 9/11. Of course, there are some legitimate concerns that anonymous money can be used for destructive purposes -- there is no debate about that. However, blockchain and programmable money are a fundamentally new technology, in which the states may fall behind. During the internet bubble, USA was quick to embrace the change. For blockchain, it seems that the American adoption of this new technology is somewhat impeded by a legal system that is designed for security above all else, which is regrettable, but also an opportunity for non-US startups to assume leadership.

It is not just the regulators who are extra cautious. It is the fund raisers who don't want to get entangled with the US regulators and incur high compliance costs. I don't blame them - there are enough people in other countries who are ready to subscribe to ICOs.

You are right. Rather than face legal challenge later on, why not just concentrate on markets aside from USA. There are indeed enough investors outside of USA, who can launch and fund a project. Unless of course, SEC would soon issue a legal framework to work with, then it is not worth including USA in any ICO issuance. The government of USA is very much protective of its own citizens and that is something we all understand, anyway.

well, that was fun while it lasted

If you thought a lot of ICOs were limiting US participation due to zealous regulators already, wait until you read the following: SEC has concluded that DAO tokens are a “security,” which should be regulated. The report spends a lot of time establishing that the DAO was in fact a centralized organization, describing actions that run parallel to those of any struggling start-up which has actual control over its resources.

The issue of whether the DAO had sole discretion or full control is important because it then implies responsibility for investor losses as a result of security malfunctions. Legally, it opened up a can of worms, which is why the SEC commissioned the report in the first place. The authors appear to be intimately familiar with blockchain technology, which is refreshing and scary at the same time.

"Whether or not a particular transaction involves the offer and sale of a security—regardless of the terminology used—will depend on the facts and circumstances, including the economic realities of the transaction. Those who offer and sell securities in the United States must comply with the federal securities laws, including the requirement to register with the Commission or to qualify for an exemption from the registration requirements of the federal securities laws. The registration requirements are designed to provide investors with procedural protections and material information necessary to make informed investment decisions."

This is why some ICOs are more selective than others, and this should have a chilling effect on yet to drop US-based ICOs. They arent charging the Slock.it DAO with securities fraud in this instance, as this is groundbreaking legal territory, but this is a clear message: Token that offer security-like benefits are securities, and you must be regulated and compliant, or we will arrest you

Be careful with the tokens from now on. this also means:

ICOs will need to register with the SEC as securities, and;

Exchanges will need to register as stock exchanges to trade securities.

The Howey test is rather simple.  The ICO issuer should not refer to an ROI or that the Dev team will generate a profit for the token holder or risk having the tokens deemed securities.  The DAO case served as a reminder and some rudimentary framework of what not to do when holding an ICO.  Frankly I do not believe the SEC will have the resources to begin to regulate the crypto world but rather react when violations or encroachments.

Full disclosure:
I am a licensed attorney practicing securities arbitration.  The foregoing is not intended to be legal advice and no attorney-client relationship is implied.

[seattletu]

American budgetary arrangements have surrounded the world through tax and consistence settlements that are upheld to shifting degrees by signatory countries. Americans are required to unveil pay earned and riches held abroad to the IRS. To augment the expense snatch, the approaches additionally force cumbersome announcing prerequisites on money related establishments with hardened punishments for rebelliousness.

Now, avoiding an ICO's prohibition on Americans can be a unimportant issue. For instance, financial specialists can basically abstain from unwelcoming ICOs. Or, on the other hand they can manage ICOs that don't overwhelmingly authorize their own boycott; I expect a few bans are set up just as an approach to give lawful cover. With such guarantors, the wrong box can be ticked. Area impartial installments are anything but difficult to organize and non-U.S. assets to utilize. American IP locations can experience Tor. Obviously, if the American financial specialist is unmasked, at that point he may lose tokens or have accounts shut.

[Cryptoland]

I understand that most ICO's are banned if they are considered securities but how many are not considered securities.  I think I have found one so far Gaze coin which is VR and ads which is claiming not to be a security and will be open to all US citizens can that be right?

[Cryptoland]

I  think i will have to check on their telegram https://t.me/joinchat/GI5pXkP2ge4L6F3CxCWOEw

[soothaa]

I love how people think this is our government "protecting" us. Notice how only "accredited investors" can participate. IE - people who already have money are allowed by their friends they paid to put into office to make even MORE money on the initial investment and turn a 1,000% profit, then allow us AFTER the fact to fight over a 20-50% slow rise after the fact and they can dump out when they like. I am sooo happy to be "protected" by this.

[suppersz]

because their governemt protects them from scam

what is stopping someone from mining big amount of coin and dump it for bitcoin to buy this ico scam? how can the government enforce rules on something so out of hands?

if investors really want to be protected they just need to avoid being scammed by ignore all the ico, i don't think they need a law for the common sense...

If enough people complain to sec, there will be something done about it. They are a public service and the more complaints, the more pressure.

[DanetonBit]

can somebody tell me why the US bans its citizens from ICO. I have done some research but can fathom it!

[gaming-stars]

is there any date or general time frame that was communicated by the SEC when there will be clear rules and regulations for US citizens?

I mean it can't be forever like it is now....I understand that the SEC wants to protect their citizens but they have more than enough staff to issue and declare new laws for it.

Without that people will simply find other ways to participate in ICOs.

I do not understand why the governments have so many difficulties to simply make new laws and rules.

I suspect they do not understand the market or simply do not work :-)

The current situation is not satisfying for the investors nor for honest companies that try to have an ICO. Furthermore, it makes the hype around cryptocurreny and the potential risks much bigger....

[darylalban]

The government is still trying to find ways to regulate ICO's. The IRS is scrambling to find a quick solution, but of course at the government's pace, I give it a couple of years. That's why our government needs to partner or hire good talent to develop this aspect that they're lacking.

[grinmoure]

can somebody tell me why the US bans its citizens from ICO. I have done some research but can fathom it!

It is not my understanding that the SEC has banned US citizens from investing in ICOs rather the SEC has warned issuers against selling unregistered securities.  Many issuers having taken heed and apply the Howey test to determine whether or not the coin offering is a sale of a security.  The SEC has also cautioned investors about ICOs in general.  See the link below.

https://investor.gov/additional-resources/news-alerts/alerts-bulletins/investor-bulletin-initial-coin-offerings


Full disclosure, I am an attorney practicing securities arbitration.  The foregoing is not intended to be legal advice and no attorney-client relationship is implied.

[alexcopper]

It's so annoying that these bans are happening. I'm missing out on so many great ICO's being launched. So irritating.

[alexcopper]

Something to be careful of is to read up on the ICO's you're investing in. Always do your due diligence of reading their white paper before committing. I found the one I was planning on investing in excluded the US.