Do you think all ICO are securities ?

[Ferdinand Thomas]

That is very dependent on the jurisdictions they are issued in. However, the old thinking a la "I will just add a useless functionality and then I have a utility token" won't please a regulator like the SEC, that's for sure. But also its important to see that not every regulator thinks like SEC.


Midas is an investment app for retail investors on top of the Melon protocol.

The Token Generation Event is planned for end of Q2 2018 and the launched token is an uncertified security under Swiss law. The founders of Midas actually think that tokenized securities are the use-case of the future.

Their view on the topic of tokenized seucrities and what exactly they are launching you can find in this MEDIUM POST

[balloon15w]

ICO is certainly not 100% secured and cannot be compared to shares in a company

[heycrypto]

Of course not.

[dteck]

No,not at all. I think that ICOs are building an innovative new market.

[BlackBarby]

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[EvilGeniusesForABetter]

Unlike traditional venture capital and stock markets, the ICO market allows everyone and anyone to be involved, noone should be allowed to say you cannot do an ICO or make a cryptocurrency, it is a lot like the pinks sheets market in the way that 90% of them will be bad, except it cannot be regulated ever because of the natural state of the ICO market being for everyone.  However, that doesn't meant now that all ICOs are bad just because it can be compared to the pink sheets market.  The truth is 90% of the ICO market is going to be fake, the point to see is not that ICO market is like pink sheets market and that means the ICO market is bad, the point is that there are still some gems to see in these markets where there is mostly a lot of bad, regulating it won't change that, just like a heavily government regulated pink sheets market does not even change the fact most of the pink sheet markets are scams.  There tons of scams in the stock markets, regulation cannot stop scamming, especially things like banks, which get around regulations and create what can be called legal scams.  Most in the crypto world will be scams but there will always still be some breakthroughs here, and those winners will pay for the losses.

Overall, there will be a higher success rate however by participating in the ICO market because the superior architecture of open source crypto networks and blockchain technology is involved.  Instead of me building some proprietary software in a closed room, when doing an ICO I am trying to build a project and at the same time share my views, beliefs, and insights with all the people out there because I'm trying to build a community around my idea and open source technology that is decentralized and has some incentive to hold the same beliefs as me.  This superior element that sets the ICO economy from securities and stock markets is the hands on community element over time, the fact that anyone and everyone who wants to can participate in the community and contribute to a project improves odds of success.  Yeah it seems anyone who goes out there saying "buy my thing, buy my thing" might just be a scammer, but that shouldn't be something that stops the ICO market from allowing anyone and everyone to get involved.  In every industry there is people who are scammers, regulation will only allow things that are legal scams to exist, that in turn will ultimately allow people to oppress other people more easily, just like what happens in the old and outdated financial world will happen in the crypto world, does stopping some obvious scams through more regulation out weight the benefits of allowing something for everything to exist in a more self-regulated manner?

There are people who have the knowledge and they are a number of individualized people who make big return from the ICO market, ANYONE can make big return from ICO market, unlike in a securities market or stock market where regulations favor the big players and those with the most connection discriminate outsiders, where the people who have the knowledge and make the big return are the ones working for proprietary entities and proprietary ends like banks and hedge funds, that is what will happen if ICO market will become heavily regulated, it will be the opposite of what crypto was built for.  Crypto was built to eliminate the middle men, but regulators will become the new middle men to innovation.  There is still less than 20 million people playing in the ICO market, in the end the market is only worth around $388 billion based on the coin market cap website.  For something that everyone and anyone can participate in this still appears to be very low still, once it becomes even easier to get involved, look at the $8.5 trillion dollars being the height of the dot com boom, there will soon be a compelling argument made that the crypto boom will bring a market cap of over $100 trillion dollars at its peak (with hyperinflation of the USD). After all, this is the new Internet, the unsecured data transport protocol of the old Internet will be replaced entirely by the secure data transport protocol of the blockchain.  Cryptocurrencies, crypto assets and tokens come with along with this to represent a unit of account in these new communities and commons that are being built around the new secure data transport protocol, and so do new business models and market opportunities exist now that interaction and transaction on the Internet will become totally secured. 

[SupplyBloc]

Not all ICO's are securities. 

[Craigjohnstone]

BTC is the original utility token, all ICOs should clearly tell you if they are a security or utility before pre-sale. We need a better transparent system of identitying this.

[onnz423]

I would say that some ICOs are bordering on securities. Particularly the ones that pay dividends, or giving you voting rights in how the ICO company proceeds in future. Maybe they should be called security tokens.

[The_White_RabbitBTC]

ICO is certainly not 100% secured and cannot be compared to shares in a company

Well not really there are some that are! check out this one, and tell me what you think
https://medium.com/@lympo.io/hold-on-to-your-helmets-we-are-distributing-company-shares-to-lym-token-holders-e0030d886e84

[gruad]

Only if you don't have the token on the exchanges and simply exchange it to developed software or tech, then it will be a utility. But still, there is more to that.

Take a look at this article, there is a lot of useful stuff:
https://medium.com/@argongroup/8-important-things-to-know-about-security-tokens-token-regulation-3d548a1a6367

Also, there was a form by SEC, can't find it now, but there was a questionnaire in it about the token purpose, so if you get more than 5 points you're a security, and it's quite hard to get less than 15.

Registering ICO with SEC is a long process that involves a lot of bureaucracy that requires not only all of the verifications and paperwork but also is quite expensive, if you're running a large ICO, you'll pay at least 10-20%

Best regards,
Dimitri

[chadtn]

Of course, not everyone can have a guarantee that your data is protected. It's only your responsibility.

[yuser_network]

IMO pretty much. Being a new and emerging technology it makes sense that there are different types of token offerings. But based on the behaviour of both the token and the token owner when you get down to it all tokens have a security value/property.

[al_a17]

Any ICO as a share or pays a dividend will be classed as a security, because technically crypto isn't regulated correctly it may go under the radar, but it may not, that's the risk. The only time an ICO is not a security, and there is still disagreement about this, is when it is a buyback. I know some people launching an ICO which are $10, $100, $1,000 coins but act as bonds paying a fixed return per week via coin buybacks, first in first out, that is not a security, if it were the bond markets around the world would freeze up.

[beleyeleazar]

No. Securities are basically classified as whether it is an equity or debt and one way or another, this pertains to the fact that there must be some representation of ownership of the financial instrument from one entity to another (i.e., stocks and bonds, options, futures and forwards, etc.) At the very least, that's what I understand about securities; a financial security with a promise of ownership or pay off for the utilization of liquid cash.

[nniecan001]

ICO are securities, I think not...for me the ICO is direct to the point of investment and your money already expose somehow or some way. Don't make it complicated to the other idea of security, cause ICO is sounds like gambling without any assurance that your asset will gonna make profit. Please don't misunderstood what I'm saying on it.

[2342q6tegw]

I understand Switzerland defines them as private money assets, like Amazon gift cards or gold coins not issued by a goverment mint.I can see how they fit into that category much easier, although recent annoiuncmenets form Bafin(Germany is similar is suggetsing that the two are not exclusive) They cna be tokens and securites.

[namson89]

I think that we need to chouse project for investing with with zealousness

[trader34]

https://www.coindesk.com/no-not-icos-securities/

This article brings to light that all ICO's are Not securities, I personally don't think any of them fit into the SEC square box nicely of how they define one. This is a completely new and different asset class and should be treated as one when it comes to regulation. I find it ironic that there is a Securities forum to chat on here, are we trying to support uncle Sam or take him down with this forum?

I think most of them are NOT securities, especially if they have a utility function in the project you are willing to invest (utility token). But some of them are recognized as securities (while others are masked by a utility token, while in reality are securities).

NEX, for example, is a new ICO that should start in short amount of time, which is a recognized security.

[Darerando]

In this Era of the digitalization of things, security is of utmost concerned.