They will try whatever it took to prevent such a thing from happening.
Then again aren't these just precautions set by the particular ICO? If so the only people getting fulled would be the ICOs, and I'm sure they wouldn't care too much since they will be getting more investors.
From what I understand, and I am not an expert so this is really just what I've picked up, there is no specific law that prohibits U.S. citizens/entities from participating in what are foreign investments (at the time I write this post, if you're reading this 2 years from now I expect things have changed). I believe many ICO projects are precluding participation by U.S. citizens out of an abundance of caution because they could be "subject to the Securities Act" if they accept funds from U.S. persons and the SEC determines that their ICO was a security. Of course, that assumes that SEC has some sort of legal jurisdiction over the entity, which to me is questionable. But in my experience, U.S. based regulators will attempt to assert their authority very widely, often beyond their legal limits, hoping that is not tested or challenged in a court.
One caveat I should make clear about the above paragraph in reference to no specific law precluding U.S. participation is economic sanctions and countering the funding of terrorism laws. U.S. persons and entities are prohibited by law from certain financial transactions with entities that have been named subject to sanctions pursuant to numerous different economic sanctions laws and executive orders. Typically, these are specific parties (but in some cases these are widely defined by country) that you are precluded from transacting with, and here's the page where you can see the exclusions:
https://www.treasury.gov/resource-center/sanctions/Pages/default.aspxConsidering that the SEC has opined on ICOs that have gone badly for the most part, the fact that a given team chooses to preclude U.S. participants could be looked as their pre-emptive attempt to keep the SEC away,
should they fail as a business or otherwise defraud investors. On the other hand, if I was a non-U.S. based project I might also exclude U.S. participants just out of caution, as the hand of the U.S. government can be very long and effective. They can and do, for example, shut parties and even whole countries out of the SWIFT interbank payments system. I personally consider this wrong in all but the very gravest of circumstances, but it does occur.
For my organization, which is a non-profit (no shareholders, no equity, etc.) so it's a bit different, I was advised by counsel to not accept funds from any sanctioned party, to return any funds that are contributed by a sanctioned party, and to include terms and conditions that BTRIC reserves the right to reject and/or return any funds from anyone. (Also advised to let them know if we do receive funds from any of these so they can tell us what to do, lol.) We also include language that we reserve the right to refuse funds from any group that is a "hate-group" or that is contributed for purposes that are "encumbered" or earmarked by the contributor for something that is counter to our purpose. This language is required by GuideStar, which is a voluntary standard that we opt-in to regarding financial transparency. So that part is not legally required, but we have it in our terms. If you want to take a look at them, they're in our white paper and also on our website I believe.
Two other things come to mind. If the SEC discovers that a systemic loophole is being exploited, I expect that they'd take steps to close that loophole. The other thing, if an ICO terms/conditions says that they do not allow U.S. investors and/or you agree to terms that say "You are not a U.S. investor", and then the ICO finds out that you are, a
scumbag ICO could say, "well you lied to us, so no coins for you".
I do hope that clarity is brought to the regulatory atmosphere because there are some great projects that deserve to be funded, mixed in with all the "trash". Even among some of those projects that just aren't mature enough for an ICO, there are many that have potential which are the type of projects my organization wants to work with. They will come out of our incubator as a world-class, investment-ready business. But often these projects are missing some components for success, and just throwing money at them doesn't always fix the problem without the type of strategic and business planning that is really needed to make a great business.
Anyway, good luck wherever and however you invest. I hope you make great picks!
Best regards,
Ben
[not legal advice. not tax advise. not investment advise. not advise of any kind, etc.]
