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Author Topic: Do ICO's have any legal obligations?  (Read 61 times)
hatshepsut93
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January 12, 2018, 04:50:11 AM
 #1

With so many ICO's going on and traditional companies like Kodak and Telegram  launching their own ICO's, I wonder how are they actually viewed by the law? I know very little about regulations of investing in general, but I've heard that some forms of traditional crowdfunding are treated as donations so some scammers are just not delivering the product and face no consequences. And this is very similar to what we are seeing with ICO's - they publish whitepapers, which are promising to create some platform, but then never deliver and just keep promising that they will finish the project at some point in the future. Is this the case with ICO's, or they are already committing a fraud even though ICO's specifically are not yet fully regulated?  

Edit: please, back your comments with some links if it's possible, don't just post your wild guesses!

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January 12, 2018, 04:51:42 AM
 #2

USA, China and other countries banned ICO's as these were tagged as fraud, furthermore there is no legal agreement nor contracts as per what these are compliant with cryptocurrencies decentralization. ICO's still have legal agreements, but their strength lies on community's confidence
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January 13, 2018, 05:52:42 PM
 #3

Definitely there are! ICO is a very controversial method of raising funds and I am sure Kodak has not announced any ICO. Instead they are going to sell mining rigs and introduce their own digital currency. Even a big Indian corporate known as Reliance is planning to launch a new coin in the name of Jio Coin in India. But I am sure they are not going to take the ICO route. Instead they will try to fuse their currencies through some different methods.

USA and China already banned ICOs. Canadian government has started cracking down suspicious ICOs. So definitely there are legal obligations. But when a big corporate like Kodak and Reliance coming in to this market, they will definitely take precautions and all possible legal help to make their projects successful. 

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ahmad21
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January 13, 2018, 06:06:07 PM
 #4

With so many ICO's going on and traditional companies like Kodak and Telegram  launching their own ICO's, I wonder how are they actually viewed by the law? I know very little about regulations of investing in general, but I've heard that some forms of traditional crowdfunding are treated as donations so some scammers are just not delivering the product and face no consequences. And this is very similar to what we are seeing with ICO's - they publish whitepapers, which are promising to create some platform, but then never deliver and just keep promising that they will finish the project at some point in the future. Is this the case with ICO's, or they are already committing a fraud even though ICO's specifically are not yet fully regulated? 
ICO aren't written in any law until now except about some countries which say that ICO investments are absolutely illegal. However there is no such law pertaining to obligations for any ICO reason is simple its all P2P so its just between you and the company raising funds. So let's see if there is any law in future but until now they don't have any legal obligations.

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jseverson
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January 14, 2018, 07:56:50 AM
 #5

If they're unregulated, then they have no legal obligations. The law can't ask anything of something that doesn't exist in its terms. I can't really comment on their legitimacy, because you have to view each individual case separately, but they've definitely been used, and are still being used to orchestrate scams and pump and dump schemes.

Countries have already started to crack down on the practice, with the United States indicating it can apply federal security laws to ICOs on a case-to-case basis, as indicated here:

https://www.coindesk.com/securities-exchange-commission-us-securities-laws-may-apply-token-sales/

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January 14, 2018, 02:11:14 PM
 #6

If they're unregulated, then they have no legal obligations. The law can't ask anything of something that doesn't exist in its terms. I can't really comment on their legitimacy, because you have to view each individual case separately, but they've definitely been used, and are still being used to orchestrate scams and pump and dump schemes.

Countries have already started to crack down on the practice, with the United States indicating it can apply federal security laws to ICOs on a case-to-case basis, as indicated here:

https://www.coindesk.com/securities-exchange-commission-us-securities-laws-may-apply-token-sales/

All system especially those who are new have been used by scammers many times to lure people and their money into their arms. ICOs are not exemption to the rule and it is even more attractive and this can be the main reason why scam artists are not having a field day introducing their own ICOs anywhere. Because of the immense interest by many people (well, including me as I am also an ICO buyer from time to time) the market is now being used at the same time by unscrupulous people whose main intention is to grab money from unsuspecting public.

However, rather than banning the whole thing there should be regulatory framework that must be established aiming to protect ICO participants. Countries that are banning outright are countries that are so LAZY to do their regulatory job and they just choose to dismiss the whole thing. ICO is nothing more than the crowdfunding which have been with us for years.

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January 15, 2018, 07:24:29 AM
 #7

If they're unregulated, then they have no legal obligations. The law can't ask anything of something that doesn't exist in its terms. I can't really comment on their legitimacy, because you have to view each individual case separately, but they've definitely been used, and are still being used to orchestrate scams and pump and dump schemes.

Countries have already started to crack down on the practice, with the United States indicating it can apply federal security laws to ICOs on a case-to-case basis, as indicated here:

https://www.coindesk.com/securities-exchange-commission-us-securities-laws-may-apply-token-sales/

All system especially those who are new have been used by scammers many times to lure people and their money into their arms. ICOs are not exemption to the rule and it is even more attractive and this can be the main reason why scam artists are not having a field day introducing their own ICOs anywhere. Because of the immense interest by many people (well, including me as I am also an ICO buyer from time to time) the market is now being used at the same time by unscrupulous people whose main intention is to grab money from unsuspecting public.

However, rather than banning the whole thing there should be regulatory framework that must be established aiming to protect ICO participants. Countries that are banning outright are countries that are so LAZY to do their regulatory job and they just choose to dismiss the whole thing. ICO is nothing more than the crowdfunding which have been with us for years.

I would agree under normal circumstances. ICOs aren't inherently bad and could even evolve into something greater if allowed to grow. That's not always the case though.

China's ban for example, is said to be temporary as they craft sufficient regulations. This way, no one else gets scammed until the government is actually able to make sure ICOs are safe for its citizens. I'm sure there are other, better ways of going about it, but China isn't known for its progressive stances, so I'll take that over a complete ban. I don't know the situation in other countries, but I do hope ICOs get legitimized in the future.

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