ICO model as we know will go away because it's a scam. The only reason they happen is that SEC is slow to prosecute what's basically an unregulated securities selling. You can't sell securities on the basis of some pretty landing and a few blog posts.
I used to think that. By all accounts, it turns out i was wrong.
Personally i think these things are a technological response to the pervasive AML/KYC laws that have been developed over the past 15-20 years that have been put in place with little thought or oversight. They (and by they it is really the US war on drugs) went after the source of that money. So the money changed.
I really don't know how you put the toothpaste back in this tube.
"The money" didn't change, it's just an elaborate scam. Look:
- there are early ETH/BTC adopters who have a ton of ETH/BTC and not much of financial sense
- they bankroll recent ICOs (seriously, look at those "whales" at Status ICO) without due diligence or any financial sense (like, Signal ICO'ed to 1/4th of what FB paid for Whatsapp with what, a few hundred users? Built on unproven platform? That's freaking crazy)
- companies who did their ICO cash out to fiat. They can do that because a ton of people believe the story of "buy you a bitcoin and get rich fast", buy BTC/ETH and provide fiat on exchanges
- in the end the whole bubble bursts, early adopters loose their (now almost worthless) BTC/ETH and hundreds of thousands of people loose their "investments" in BTC/ETH.
So it makes perfect sense from the financial standpoint to do ICOs right now if you can get away with that. It doesn't mean that the process is somehow "better", it's just more profitable because of a ton of hapless people that can easily separated with their money.
> I really don't know how you put the toothpaste back in this tube.
Easily: just start jailing people for unregulated ICOs in the same way they jail for unregulated securities trading.
How? It is a torrent-level problem if you felt you had to address it. With 700-odd coins (last time i looked) who would you jail? America can prosecute people in America, but how would you address this problem I crypto? Freeze their assets? How?
I'm not being flippant. I really don't think that is going to be a successful strategy. I can't see how that would work. It would take a pretty coordinated effort in a time of very little trust.
I said it somewhere else in this thread. I remember reading about the introduction of aml/kyc legislation right across the world at the direction of the US. the Maldives tried to buck it and they got crushed. I couldn't think of a way in our connected world that you could get out of it. I think this is the logical progression of that restriction of freedom. For better or worse. Like the concept of freedom i guess.
Regarding the number of coins: just go for the bigger ones, it's not exactly new strategy (that's why you primarily go for drug lords instead of low-level resellers).
Regarding the prosecution: the US has extradition agreements with a lot of countries, so if ICO resulted in American citizens either buying coins (i.e. securities) or offering them, than it's a fair game for the SEC and (possibly) some real jail time in US prison. It's also pretty easy to freeze assets as soon as they are converted to fiat, and they will be, because you can't buy a Ferrari with BTC.
Even if it's a "logical progression", you got it backwards. We had an unregulated securities marked before 1933; it went really bad for various reasons. It turns out that peddling "securities" on the basis of rosy promises (or blog posts in the case of ICOs) is bad and some regulation forcing companies to open up is good.
Yes. By going after their assets. What happens when you can neither identify nor seize their assets? You can't even identify the alleged perpetrators.
> Regarding the prosecution: the US has extradition agreements with a lot of countries
And if you don't even know the names of the people who own a crypto, how much they own, let alone what country they live in? These things are stateless. There is no coordination between countries because there's no way to even identify where the coordination would occur.
> It's also pretty easy to freeze assets as soon as they are converted to fiat
And if you can transfer from any crypto to any crypto any time you like? That facility already exists with shapeshift, and when atomic swaps become available, that genie is never going to get put back in a bottle. You mean freeze ALL cryptos? How do you think you could even attempt that, let alone achieve it. You think that just because it's the US government they can make something like this 'just happen'? It's like stating "US Dollars are to no more be used for purchasing drugs!". Great statement. A little bit lacking in the enforcement category.
> and some regulation forcing companies to open up is good.
These aren't companies. You can't force them to do anything.
> Even if it's a "logical progression", you got it backwards.
I don't think you've actually thought this through. Every one of your suggestions is a non-answer that is trivial to circumvent even if it was possible to build something to circumvent in the first place. Your opinion seems be born out of a belief that just because it is the US government they can do anything. But there isn't even a suggestion as to how any of this 'control' could be asserted, let alone achieved.
