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Author Topic: for US Citizens: if you use VPN to buy into ICO, can the Government penalize?  (Read 3319 times)
sephir0th
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September 01, 2017, 04:49:57 AM
 #21

I don't think it's illegal for citizens, more like it's illegal for icos to sell to US citizens who not accredited investors.

https://www.sec.gov/news/press-release/2017-131

"The Report confirms that issuers of distributed ledger or blockchain technology-based securities must register offers and sales of such securities unless a valid exemption applies. Those participating in unregistered offerings also may be liable for violations of the securities laws"
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September 01, 2017, 05:00:58 AM
 #22

The SEC-controlled projects will not allow USA investors to participate in their projects, and there are some Exchanges that have banned VPS from the USA. The government will not penalize you personally, but perhaps that project will have legal problems and the SEC will intervene

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September 01, 2017, 06:08:48 AM
 #23

You can't hide your ID, because the team will ask your KYC, and they will prevent you buying if they know you are  from US.


Still, this is mainly only relevent in the later stages and if they host their own platform.

If they are tradable on say the ethereum or waves chain, no ID verification is required.
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September 03, 2017, 02:03:42 AM
 #24

I don't think it's illegal for citizens, more like it's illegal for icos to sell to US citizens who not accredited investors.

https://www.sec.gov/news/press-release/2017-131

"The Report confirms that issuers of distributed ledger or blockchain technology-based securities must register offers and sales of such securities unless a valid exemption applies. Those participating in unregistered offerings also may be liable for violations of the securities laws"

Bloody hell.  Thanks for sharing that link.

Here's a quote from the full SEC text found at: https://www.sec.gov/litigation/investreport/34-81207.pdf
Quote
Moreover, those who participate in an unregistered offer and sale of securities not subject
to a valid exemption are liable for violating Section 5. See, e.g., Murphy, 626 F.2d at 650-51
(“[T]hose who ha[ve] a necessary role in the transaction are held liable as participants.”) (citing
SEC v. North Am. Research & Dev. Corp., 424 F.2d 63, 81 (2d Cir. 1970); SEC v. Culpepper,
270 F.2d 241, 247 (2d Cir. 1959); SEC v. International Chem. Dev. Corp., 469 F.2d 20, 28 (10th
Cir. 1972); Pennaluna & Co. v. SEC, 410 F.2d 861, 864 n.1, 868 (9th Cir. 1969)); SEC v.
Softpoint, Inc., 958 F. Supp 846, 859-60 (S.D.N.Y. 1997) (“The prohibitions of Section 5 …
sweep[] broadly to encompass ‘any person’ who participates in the offer or sale of an
unregistered, non-exempt security.”); SEC v. Chinese Consol. Benevolent Ass’n., 120 F.2d 738,
740-41 (2d Cir. 1941) (defendant violated Section 5(a) “because it engaged in selling
unregistered securities” issued by a third party “when it solicited offers to buy the securities ‘for
value’”).
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September 03, 2017, 08:00:47 AM
 #25

Anyone that is looking to still participate in upcoming ICO's like Kyber, Enigma, Red Pulse etc, but have problems regarding location restrictions, please consider using our investment service.
For more information, visit http://icobroker.trade/
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September 03, 2017, 08:14:31 AM
 #26

I don't think it's illegal for citizens, more like it's illegal for icos to sell to US citizens who not accredited investors.

https://www.sec.gov/news/press-release/2017-131

"The Report confirms that issuers of distributed ledger or blockchain technology-based securities must register offers and sales of such securities unless a valid exemption applies. Those participating in unregistered offerings also may be liable for violations of the securities laws"

Bloody hell.  Thanks for sharing that link.

Here's a quote from the full SEC text found at: https://www.sec.gov/litigation/investreport/34-81207.pdf
Quote
Moreover, those who participate in an unregistered offer and sale of securities not subject
to a valid exemption are liable for violating Section 5. See, e.g., Murphy, 626 F.2d at 650-51
(“[T]hose who ha[ve] a necessary role in the transaction are held liable as participants.”) (citing
SEC v. North Am. Research & Dev. Corp., 424 F.2d 63, 81 (2d Cir. 1970); SEC v. Culpepper,
270 F.2d 241, 247 (2d Cir. 1959); SEC v. International Chem. Dev. Corp., 469 F.2d 20, 28 (10th
Cir. 1972); Pennaluna & Co. v. SEC, 410 F.2d 861, 864 n.1, 868 (9th Cir. 1969)); SEC v.
Softpoint, Inc., 958 F. Supp 846, 859-60 (S.D.N.Y. 1997) (“The prohibitions of Section 5 …
sweep[] broadly to encompass ‘any person’ who participates in the offer or sale of an
unregistered, non-exempt security.”); SEC v. Chinese Consol. Benevolent Ass’n., 120 F.2d 738,
740-41 (2d Cir. 1941) (defendant violated Section 5(a) “because it engaged in selling
unregistered securities” issued by a third party “when it solicited offers to buy the securities ‘for
value’”).



It's even bloodier than that:

Are Most Cryptocurrencies Doomed to Collapse — because they’re “ICO-issued”?


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September 03, 2017, 08:19:12 AM
 #27

Questions like this one are a proof for me that there is a real need for anonymous ICOs. Also most of the coins should implement anonymous features like ring sig or zerocoin as default features to prevent government regulations.

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September 03, 2017, 09:41:12 AM
 #28

Maybe I am missing something, but everyone here seems to have this backwards. The US government isn't going to come after US citizens who buy coins in an ICO. Why would they? I don't even think there is a law against buying coins.

The law pertains to selling the coins to US citizens, not buying them. If an ICO sells to US citizens, the US government, in all its oppressive fury, can say that the ICO, by selling to US citizens, must comply with US law. Then, they can come down on the ICO founders, destroy them, and take all their money. In the name of justice, of course. It's the American way.

So, naturally, ICOs may not want to do business with US citizens, as they don't want to be subject to draconian US laws. That's why they won't sell to you. They would like your money, but it's just safer to avoid Americans altogether. European banks have been cutting loose their US customers for years now, for similar reasons, making life for US expats nearly impossible.

By lying about who you are, you are exposing an innocent start-up company to the risk of US law destroying them. I suppose that, if they found out, you might be guilty of some kind of breach of contract. It would depend on the laws of the country they are based in, and that would be civil matter anyway - not a criminal matter.

The US government, in fact, might be thrilled by you buying into such an ICO. It gives them an excuse to go after the start-up, squash them and take their money.

I live in a country that hates freedom in East Europe but when I turn on TV all I hear is America is land of the free, are you trying to say that is not true?

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September 03, 2017, 04:26:16 PM
 #29


It's even bloodier than that:

Are Most Cryptocurrencies Doomed to Collapse — because they’re “ICO-issued”?

Excellent reading.  It looks like this guy thinks the entire ICO industry could collapse.  Worthy of a few re-reads no doubt.
Still at a loss if any solution exists to the ICO

Maybe I am missing something, but everyone here seems to have this backwards. The US government isn't going to come after US citizens who buy coins in an ICO. Why would they? I don't even think there is a law against buying coins.

The law pertains to selling the coins to US citizens, not buying them. If an ICO sells to US citizens, the US government, in all its oppressive fury, can say that the ICO, by selling to US citizens, must comply with US law. Then, they can come down on the ICO founders, destroy them, and take all their money. In the name of justice, of course. It's the American way.

So, naturally, ICOs may not want to do business with US citizens, as they don't want to be subject to draconian US laws. That's why they won't sell to you. They would like your money, but it's just safer to avoid Americans altogether. European banks have been cutting loose their US customers for years now, for similar reasons, making life for US expats nearly impossible.

By lying about who you are, you are exposing an innocent start-up company to the risk of US law destroying them. I suppose that, if they found out, you might be guilty of some kind of breach of contract. It would depend on the laws of the country they are based in, and that would be civil matter anyway - not a criminal matter.

The US government, in fact, might be thrilled by you buying into such an ICO. It gives them an excuse to go after the start-up, squash them and take their money.

I live in a country that hates freedom in East Europe but when I turn on TV all I hear is America is land of the free, are you trying to say that is not true?

Freedom in the USA is over hyped, imho.
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September 03, 2017, 04:36:38 PM
 #30

everyone needs to ignore Traxo for spreading FUD on purpose... he posts his link in every thread... once was enough

he is trying to spread epic FEAR into people!

Very happy if you use my ref link:
Kuccoin: https://www.kucoin.com/#/?r=E3I9Ij
hanlieuiypm9832
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September 03, 2017, 04:44:54 PM
 #31

As far as I know, some ICO projects will refuse American citizens to join in by show a highlighted reminder on their ICO instructions, and the American IP will be banned to login in.


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ciceronyc
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September 03, 2017, 04:48:07 PM
 #32

everyone needs to ignore Traxo for spreading FUD on purpose... he posts his link in every thread... once was enough

he is trying to spread epic FEAR into people!

The article linked makes some solid rational points.   As an Early Adoptor, I still believe in doing Due Diligence regarding emerging investment opportunities.  The article provides level headed rational arguments worthy of consideration before putting one's hard earned money into ICO's.
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September 03, 2017, 05:05:56 PM
 #33

everyone needs to ignore Traxo for spreading FUD on purpose... he posts his link in every thread... once was enough

he is trying to spread epic FEAR into people!

The article linked makes some solid rational points.   As an Early Adoptor, I still believe in doing Due Diligence regarding emerging investment opportunities.  The article provides level headed rational arguments worthy of consideration before putting one's hard earned money into ICO's.

Yes, but he created his own thread about it, and now posted it in every semi relevant topic, which is too much energy input for not to gain something... his thread was enough, this is fear spreading on purpose!

Very happy if you use my ref link:
Kuccoin: https://www.kucoin.com/#/?r=E3I9Ij
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September 03, 2017, 09:15:02 PM
 #34

everyone needs to ignore Traxo for spreading FUD

You accuse me of spreading FUD, although you agree with his blog:

The article linked makes some solid rational points.
Yes



but he created his own thread about it

Of course I have.
And you are most welcome to refute the blog there (which I very much doubt you will, seeing that you actually agree with some of the points therein).

which is too much energy input for not to gain something...

And are you not wasting too much energy for not to gain something?
You are obviously against the full disclosure so you can profit of the uninformed, because you bought "ICO-issued" token, am I not correct?

his thread was enough

Not enough when profiteers are inviting others to ignore my posts.

Readers should be able to see the information I've linked to, and decide for themselves.


PS:
Thanks for dragging us in the crab bucket once again...





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September 03, 2017, 10:19:57 PM
 #35

So I live in the USA, New York State.

If I use a VPN to buy into an ICO, will the US Gov't or even New York state government punish me somehow?



No, but it will punish the issuers that sell to you.

Ho ho ho! Have you been good? Get ready for your SantaToken!
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September 11, 2017, 03:51:40 PM
 #36

If you are using anything for the purpose of hiding money from the IRS or the purpose of defrauding, then you are in a bad place. There is currently nothing wrong with buying into an ICO and there would be no good reason to use a VPS. The exchange or site that you use to buy the ICO tokens may have a policy against it and you likely agreed to it in the terms and conditions, which could mean that you spent money only to have your account banned, locked and the funds kept.

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September 11, 2017, 04:57:21 PM
 #37

The government is only going to go after people who don't pay taxes properly (if they can prove it). The SEC laws exist to protect investors. The reason most ICOs don't want US investors is because they don't want the SEC scrutinizing their project.
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September 12, 2017, 09:19:08 AM
 #38

Many ICOs nowadays like Kyber and Cindicator is using KYC, so it doesn't matter if you use VPN
or not as you have to provide your identity anway

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September 12, 2017, 09:41:33 AM
 #39

Many ICOs nowadays like Kyber and Cindicator is using KYC, so it doesn't matter if you use VPN
or not as you have to provide your identity anway
yeah, vpn won't solve this problem, KYC will refuse the US citizens, including Chinese Mainland now, only can you have other countries' indentification or ertrust others can you participate in

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September 12, 2017, 10:19:03 AM
 #40

Many ICOs nowadays like Kyber and Cindicator is using KYC, so it doesn't matter if you use VPN
or not as you have to provide your identity anway
yeah, vpn won't solve this problem, KYC will refuse the US citizens, including Chinese Mainland now, only can you have other countries' indentification or ertrust others can you participate in

Anyone looking to get in with Cindicator, have a look at our services offered here: http://icobroker.trade/
The investment cap is fairly low, so we might reach maximum soon.
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