Investor Bulletin, July 25: Initial Coin Offerings

I don&#x27;t have anything to add to this discussion, but I just wanna say that I&#x27;m impressed by the bulletin&#x27;s clarity. I&#x27;m used to reading government information that&#x27;s difficult to parse and dive into. It&#x27;s easy to fall into a belief that government agencies don&#x27;t really know what they&#x27;re doing, and it&#x27;s just a bunch of monkeys banging at typewriters, but seeing clearly written posts discussing current and relevant events helps to silence those beliefs.<p>I&#x27;m seriously wondering, though... Have there really been that many ICOs? As an outsider the general impression I get (which I recognize might be completely inaccurate) from most coins is that they&#x27;re &quot;get rich quick&quot; schemes.<p>A while back I was trying to read up on Ethereum, and despite their nice landing page and superficial info.... Once I tried digging in further into the actual code and actually running any stuff, it was a horribly confusing mess that made me hesitant to put my trust in them. All their docs and wikis seemed full of outdated links and information.

&gt; Ask whether the blockchain is open and public, whether the code has been published, and whether there has been an independent cybersecurity audit.<p>That&#x27;s an entirely prescient statement that suggests the SEC has done a serious bit of homework and has put careful thought into the subject.

The SEC uses quite a mild language here. Issuers often avoid mentioning even what they sell: revenue flow, profit, or just hashes. White papers has no traces of legal entities involved, dispute resolution jurisdiction, financial statements.<p>A proper prospectus:<p>- <a href="https:&#x2F;&#x2F;www.sec.gov&#x2F;Archives&#x2F;edgar&#x2F;data&#x2F;1447599&#x2F;000119312515222454&#x2F;d875679ds1a.htm" rel="nofollow">https:&#x2F;&#x2F;www.sec.gov&#x2F;Archives&#x2F;edgar&#x2F;data&#x2F;1447599&#x2F;000119312515...</a><p>And how ICO white papers look like:<p>- <a href="https:&#x2F;&#x2F;detectortoken.com&#x2F;docs&#x2F;DetectorToken_White_Paper.pdf" rel="nofollow">https:&#x2F;&#x2F;detectortoken.com&#x2F;docs&#x2F;DetectorToken_White_Paper.pdf</a><p>- <a href="https:&#x2F;&#x2F;magos.io&#x2F;bluepaper.pdf" rel="nofollow">https:&#x2F;&#x2F;magos.io&#x2F;bluepaper.pdf</a>

This seems pretty reasonable and is the same conclusion which the DAO investigation came to. I think both ICO creators and participants will benefit from this new information now that we have a clear line in the sand as to how these things can operate. The risk won&#x27;t decrease substantially in buying these tokens, these projects can go bust just like a kickstarter project can fail but at the very least people in the US will think twice about running outright scams.<p>It has been recently suggested that the SEC may go after exchanges which hold any ICO token regardless of how it was sold and advertised, I&#x27;m pretty sure they don&#x27;t want to go that far, this will only push exchanges into decentralized systems which are difficult to shutdown. There has to be some give and take on both sides here really.

I wrote an in-depth analysis of this bulletin and its associated report on The DAO:<p><a href="https:&#x2F;&#x2F;medium.com&#x2F;@andrew311&#x2F;thoughts-on-the-secs-initial-coin-offering-bulletin-and-investigative-report-3e3197d08878" rel="nofollow">https:&#x2F;&#x2F;medium.com&#x2F;@andrew311&#x2F;thoughts-on-the-secs-initial-c...</a><p>In the post, I explore what constitutes a security by examining case law and draw comparisons to other means of raising money for companies that are typically outside the purview of securities (gift cards, Kickstarter). Hopefully this helps provide perspective.

Related thread: <a href="https:&#x2F;&#x2F;www.sec.gov&#x2F;news&#x2F;press-release&#x2F;2017-131" rel="nofollow">https:&#x2F;&#x2F;www.sec.gov&#x2F;news&#x2F;press-release&#x2F;2017-131</a>

It seems like Golem compute tokens would not be considered securities, but what about obvious joke coins that are only a value store, like the FUCK token?

Has anybody actually gotten paid dividends on any icos yet?

Can a mod add &quot;July 25, 2017&quot; to the title? It&#x27;s not that long ago, but I thought this might be new.

Sincerely hope that people are paying attention. The SEC is as omnipotent as the IRS, in so much as they can make your life a living hell... in very short order. Recommend that people register their securities or currencies with them... besides, registration gives your product the scent of legitimacy, right?