China's Central Bank Bans ICOs

https://techcrunch.com/2017/09/04/chinas-central-bank-has-banned-icos/amp/

by hgdsraj • 9 years ago

326 367 9 years ago

jcrei• 9 years ago

meanwhile in Estonia... they are considering issuing their very own ICO https://thenextweb.com/eu/2017/08/23/estonia-could-be-the-fi...

casualwasher2• 9 years ago

Estonia's gov is famous for adapting new things. I still remember their initiative on e-visa. Actually China is trying to do that too. But crypto coins are made to decentralize things, I wonder how these gov-lead coins will play any parts.

the_mitsuhiko• 9 years ago

e-visa

You got a link to that how? How does that work with Schengen?

DaiPlusPlus• 9 years ago

The PRC leadership could "own" a cryptocurrency by securing a majority of nodes in the graph under their control, either physically or by mandating the use of their software, and disallowing the exchange of user-forks off their own coin-base.

While users would always be able to use their own forks, the gov would only allow taxes and retail trade to happen with their branch, thus de-legitimizing user forks and reducing their utility (and hence value).

Also given that most cryptocurrencies are only pseudonymous, means they could "follow the money" and quite easily charge someone for handling a disallowed cryptocurrency. This is why I feel Monero is undervalued compared to BTC - as Monero has greater utility for Bitcoin's original mainstream activity: online black-market purchasing.

encryptThrow32• 9 years ago

About time. 'the big crash of 2017'. Some stability and sanity will return to this space.

_pmf_• 9 years ago

Shaking my magic eightball: "DON'T COUNT ON IT"

bhaak4• 9 years ago

The dip in July was bigger. Percentage-wise and in absolute numbers.

And if you think "stability and sanity will return" to a still mostly unregulated market, you are pretty naive.

I'd even say for stability and sanity to return, they had to be there at some point in the first place which they didn't. :-)

blunte• 9 years ago

Wishful thinking. This will probably not, in the short term, add sanity. It will, however, provide a buying opportunity for a week/month perhaps.

China will make some announcement in the future that softens or reverses this one, and we'll see a spike in crypto prices.

Hopefully there will be some sane regulation (or at least guidance) on ICOs to make it more difficult for scammy types to use ICOs as tools to bilk unsaavy "investors" (which includes most humans).

casualwasher2• 9 years ago

It's an necessary move to take, given there are just so many scams under the cover of ICO. So few innovations, so many ponzi schemes.

chinathrow3• 9 years ago

Other countries must follow. If you see what kind of ICO scams are running out there, you can't look away any longer.

A lot of folks will lose their investment/money.

https://twitter.com/search?q=peak%20ico&src=typd

samsonradu3• 9 years ago

Wow, is this satire? The amount of buzzwords on that Twitter account [1] is staggering.

[1] https://twitter.com/LydianCoinLtd

richardknop10• 9 years ago

I agree. Finally I hope this breaks the ice and west steps in to regulate this ICO scam casino.

tankenmate• 9 years ago

I think it is safe to say that this is because it is something the party can't control (in the somewhat more overt sense rather than the regulatory sense).

bertil• 9 years ago

It probably has a lot more to do with the country regulating its own fiat currency, foreign change and savings quite aggressively. That made any previously unregulated (because new) alternative the _de facto_ change mechanism.

Jedi72• 9 years ago

This is one of the things about bitcoin nobody has ever explained to me adequately. Governments use monetary policy & other economic tools to regulate the economy. Assuming we're all Keynsians here, this is a pretty important feature that govts will not give up, so how is Bitcoin ever supposed to supplant fiat currency?

crypt1d4• 9 years ago

The idea of Bitcoin replacing fiat is a vision, not a plan.

People assume, or just like to believe, that as Bitcoin adoption grows, the advantages of Bitcoin will far surpass fiat and people will gradually start moving to it as a de facto currency. This will/would be an organic process, likely to last a few decades at least.

davidiach• 9 years ago

Bitcoin is a threat to the Keynesian model. That said, it still has a long way to go in order to take over fiat currency.

simias2• 9 years ago

I think many of the Bitcoin fans[1] are also in favor of the gold standard. They don't want the government to be able to "print money".

Actually I just noticed that the Wikipedia page on the gold standard has a section about bitcoin: https://en.wikipedia.org/wiki/Gold_standard#Gold_standard_an...

[1] At those who bother to think about the long term economic consequences of Bitcoin instead of just trying to Get Rich Quick.

PaulMest• 9 years ago

I hold many assets in this space including ETH and NEO. There are tons of scams and money grabs with ICOs. While this announcement has been pretty brutal for me, I think it is ultimately a good thing for the industry as a whole.

I think ICOs can be extremely beneficial for teams to raise money. But a lot of people buying these tokens do not understand what they're getting in return. I'd like to see it become easier to actually own equity or a % of a company's revenue by holding tokens. Hopefully these future regulations will build trust in the ecosystem by minimizing scams and providing clarity. More trust yields more people converting fiat -> crypto... which should yield a healthier less volatile ecosystem.

doktrin2• 9 years ago

I hold many assets in this space including ETH and NEO. There are tons of scams and money grabs with ICOs.

Case in point, NEO is probably one of the scammiest so-called "crypto" offerings out there

robotmay• 9 years ago

How so? It has a lot of ties to industry already, good development, and plenty of evidence of delivering on their roadmap. That's already better than most crypto-currencies.

billpg• 9 years ago

Yes! We should use PNG files for icons rather than Microsoft's proprietary format.

What?

chvid• 9 years ago

As far as I understand financial regulation ICOs are illegal in most countries. It is just a matter of enforcing the existing rules.

MrBlue• 9 years ago

Buy the dip! :)

halicando• 9 years ago

It's a greate decision!

cryptoperative• 9 years ago

What effect will this have on ETH price?

bhaak4• 9 years ago

Buy the dip. Cheap coinz. HODL.

decentralised3• 9 years ago

Authoritarian governments will always act to protect their own monopoly of the economy. That's why we need cryptos in the first place!

nannal• 9 years ago

There's a large difference between banning ICOs and banning crypto currencies entirely

that being said this does feel a lot like a throw back to 2014 and earlier with "China bans bitcoin"

decentralised3• 9 years ago

With ICOs, there is a risk that people outside of the party circles actually making enough money to question and ask for some change.

nickserv• 9 years ago

Had to dig around 3 sites before finding a definition for ICO:

ICO (Initial Crypto-Token Offering) refers to financing through the issuance of encrypted tokens (Crypto-Token).

jpatokal2• 9 years ago

Originally Initial Coin Offering, but that's been retrofitted to a less securities-y definition.

vortico2• 9 years ago

https://en.wikipedia.org/wiki/Initial_Coin_Offering

People should really learn to define acronyms before using them in all writing mediums. I don't care if the author has used the term 10,000 with colleagues, he should still define them upon their first use in the article body.

FLUX-YOU• 9 years ago

Where's your mouse-hover tooltip dictionary lookups now, internet?

vortico2• 9 years ago

10,000 times, I mean.

alex_duf• 9 years ago

Thanks.

I read the whole article wondering what on earth it meant. Then I went on Wikipedia which is usually pretty good with TLAs (Three Letters Acronyms).

So I made a point in reading the whole article just to figure out if they were at least defining it loosly...

there's that:

ICOs involve raising funding by creating and selling new crypto tokens — commonly based on Ethereum — to investors

Which is not really in depth. It got me wondering if the person writing it understood what it meant.

Please don't do that when you write, always assume the person you're writing for doesn't know what you're talking about.

ig12• 9 years ago

It's important to note that ICOs are a mechanism rather than a financial instrument and it's the nature of the underlying financial instrument that generally influences the legality.

For example if it's used as pre-sale (i.e. currency that will be used in product for a future product) then that's likely legal in most places, if it's used as a proxy for equity then it's likely illegal in most countries (most countries prohibit unregulated share offerings to non-sophisticated consumers).

Although in some cases ICOs might get considered as gambling if the purpose is primarily considered to be for speculation rather than whatever the underlying product is.

rficcaglia3• 9 years ago

not a lawyer but be careful, some "products" like a club membership for example, have been ruled as actually securities

in short, any "product" can be a security if there is even a hint of speculative investment activity (and a motivated prosecutor)

really it is less about logic and definitions...this audience wants to parse things and recompile. in law and moreso in regulatory affairs, it is far more about guiding behavior by carrots or sticks to a particular philosophical/moral/politial/economic subjective end goal

vit05• 9 years ago

A lot of people already knew about that and was able to profit in the weekend. Some coins just jumped nowhere and now will crash. Hshare has passed 1 billion market cap and will be probably be evaluated less than 10 million at the end of the day. Walton, Loopring, NAV...

Laforet• 9 years ago

BTCChina's ICOCoin ($insert yo dawg joke here) stopped trading since saturday, I think most sane investors saw this coming from a mile away.

richardknop10• 9 years ago

Finally somebody in position of power stepped in to stop this mad online casino. I was not expecting this sensible move from China, was hoping EU or US would lead the way on regulating this crypto fraud. I hope Fed/ECB follow the Chinese Central Bank and ban ICOs too and start regulating crypto and enforcing some basic rules.

bhaak4• 9 years ago

Did you not get the SEC memo?

The US doesn't have to ban ICOs as most of them are securities and unregistered selling of securities is already illegal.

richardknop10• 9 years ago

That SEC memo was weak. They should have made much more forceful statement. Thousands (likely tens of thousands) of US citizens are still investing in ICOs, there needs to be much stronger action taken to stop their gambling.

hasenj2• 9 years ago

Actually I think such bold decisions can only be made by a government that is not encumbered with lobbies and business interests.

baq4• 9 years ago

what makes you think china's institutions aren't?

toinetoine• 9 years ago

Yes because business interest lobbyists are so pro-ICO...

Venture Capitalists are all on board with a technology that forces them to compete with the masses during seed rounds...

and existing companies are all about upstart competitors having an easier way to get capital early on...

ElectronShak• 9 years ago

Exactly, I agree

SZJX4• 9 years ago

That's just naive and wishful thinking. The brand of capitalism in China is more reckless than that in the US and the business interests are really interwined with the government policies. It's just that the government still has a bit more of a final say but that doesn't mean the rich politicians and businessmen aren't in the same boat.

CryptoPunk29• 9 years ago

It's not sensible at all. It's none of anyone's business what two consenting adults do with their money. The idea of a third party dictating the range of acceptable contractual engagements is absolutely terrible and has profound negative unintended consequences, with the worst of them being licensing barriers to create rent-seeking opportunities (only one new bank created in the UK over the last 100 years).

pmlnr2• 9 years ago

"only one new bank created in the UK over the last 100 years"?

You are quite mistaken here, from the top of my head, Tesco (late 90s) and Monzo (very recent) are 2 examples, and I'm not even into finance.

hohenheim2• 9 years ago

"Two consenting adults". That is a misrepresentation of reality. You could say the same about Pyramid schemes. No one forced others to buy into it.

The point is ICOs are akin to scams. And there should be a regulations around it.

patrickaljord8• 9 years ago

Yeah, what's with consenting adults freely and willingly contracting with each others. I'm glad the powers that be put an end to that madness.

skummetmaelk5• 9 years ago

I'm not saying ICO's are scams, but do you think scamming should be legal?

joncrocks• 9 years ago

There's all sorts of things that consenting adults aren't allowed to do, even if 'free and willing'.

emperorcezar2• 9 years ago

Heh. This guy here thinks people are rational actors. Even in groups.

Loic• 9 years ago

I had a discussion about crypto currencies with a pretty high level EU diplomat from the trade commission. His point was simple, as soon as they will consider the crypto currencies as a medium to escape taxes and general "rules" (whatever it means) they will simply ban or regulate them to put them back into the control of a central authority.

AndrewKemendo4• 9 years ago

Seriously, I had this conversation with someone on Twitter and it was like they had no clue this was an option.

A state power isn't going to let some random currency come in and compete with their sovereign currency rules.

binocarlos• 9 years ago

I read a comment only yesterday: "I don't know any half decent Ethereum developers who are not currently millionaires". I felt poor and excluded.

Then I remembered how it felt in 2000 where all you needed was a website for pet food and folks would throw money at you.

lsd5you2• 9 years ago

People will see the authoritarian aspect of this, but in my view the Chinese are particularly vulnerable to financial scams for cultural reasons.

  - They have recent communist history/lack experience of crashes/associated fraud.

  - Traditionally they actually worship money - By burning fake money.

  - MLM scams are popular (at least in Taiwan).

  - When I watched a video by Andreas - that Bitcoin guy - the audience (in US) was disproportionately east Asian.

the-dude• 9 years ago

Chinese seem to love gambling too?

shubb• 9 years ago

> They have ... lack experience of crashes/associated fraud.

The Asian financial crisis was all these things.

PakG1• 9 years ago

The average Chinese person did not experience this. In 1997, China was nowhere near where it is now in terms of the average Chinese citizen's exposure to global markets, bubbles, and crashes. Even now, their ability to invest is supremely limited such that real estate is one of the only real investment options, fueling a nasty bubble. One of the people I manage in Shenzhen asked for a raise last year because they lost all their savings in a local stock market crash. Person is about 50 years old. Scams are common. China is not ready.

sanxiyn• 9 years ago

Asian financial crisis of 1997 didn't affect China much.

jpatokal2• 9 years ago

Traditionally they actually worship money - By burning fake money.

Burning hell money is a symbolic offering to the deceased, not an act of worshipping money itself. Or do Westerners "actually worship flowers" because we place them on graves?

https://en.wikipedia.org/wiki/Hell_money

lsd5you2• 9 years ago

Good point and saying they 'worship money' was an unintended pejorative.

Still it is a bit more than that. Flowers are merely a gesture/ritual whereas burning money is an attempt to send money to the afterlife (if my understanding is correct), which inevitably does elevate it somewhat in the minds of believers. I feel the original point is partially intact, in that they definitely do have superstitions surrounding money e.g. red packets ... etc.

lawless1232• 9 years ago

Necessary.

drcross• 9 years ago

Just because you dont like something doesn't mean it should be illegal, what ever happened to Caveat Emptor?

Nursie24• 9 years ago

Interesting.

To a relative outsider, a lot of the current movement in the crypto-currency space seems to be about amplifying the holdings of those who already hold. The BCC fork, for instance, effectively gave current bitcoin holders an overnight boost in the 15-20% range.

ICOs appear to be a way to finance things in a kickstartetr type way, only with instantly trade-able coins in the form of a new crypto-currency, with buy-in conducted in ether. These provide a new speculation vehicle, often/usually totally divorced from the underlying activity of the company.

Both of these things neatly skip any sort of bootstrapping phase that might be inherent to a new crypto-currency, and serve insiders and the already crypto-wealthy rather than newcomers or those outside the existing bubble. The whole thing seems very tenuous, and speaks very much of an "in-crowd".

chinathrow3• 9 years ago

Both of these things neatly skip any sort of bootstrapping phase

So true. That bootstrapping phase has been reduced to dream up a whitepaper and that's basically it. All what comes afterwards to pump the launch is clever marketing (I've seen Google ads, FB ads, celebs on Twitter etc etc). I cannot understand why it is legal to behave like that.

cinquemb• 9 years ago

Unless fiscal policy of global CB's includes halting of QE-like initiatives and/or raising historically low interest rates, we're only going to see more of the same, regardless of legalities.

TomK32• 9 years ago

And every coin (except for 5) is in the red on coinmarketcap.

richardknop10• 9 years ago

Does this spell trouble for Ethereum? Without ICOs (one of it's major features if not the most important one) what else will drive the price speculation?

I believe prices are inflated because of ICOs. People are buying tokens counting on ICO hype to increase their value so they can flip their initial invested principal with 2x/3x/4x return.

Without ICOs this speculative technique will not be possible so we will see how many people are actually interested in buying these worthless tokens because they believe in their "features", rather than speculate on their price.

I wonder though if the speculation will just move from China to other countries though and the bubble will continue until there is more action by regulators around the world against this.

Tepix4• 9 years ago

It will slow the crazy growth if ICOs are regulated in some countries, but it may also prevents a total collapse of the whole unhealthy ICO bubble that we've seen this year. You're also right with regards to speculation - it seems to me like most buyers of ICO tokens don't care about the project at all, they merely want to make a quick buck by selling the tokens after the crowdsale at a higher price.

proofofstake• 9 years ago

Maybe in the short term, longer term it is no trouble. ICOs are far from the main use case for Ethereum. Speculation is driven by the price not close to matching the price if/when the technology matures. If anything, most ICOs pull money from Ethereum, they don't make the price go up.

Being interested in tokens for their "features" not the price is very archaic. This also does not happen with stocks anymore: People hold for a few months/days/minutes, then sell, they don't sit on stock for many years like we used to.

My guess: China will allow ICOs after drafting up proper legislation and regulation. It would not benefit China's economy to blanket ban a new emerging technology. They just want to prevent crypto as a way to move money out of China, take a cut of the profit.

Another guess: Regulation will be good for established players (like Ethereum and 2016/2017 ICOs), but bad for speculators and newcomers. It will thus shoot past its intended goal of protecting investors: Those who like to gamble with money they can't afford to lose will find other get-rich-quick schemes unrelated to crypto. In Las Vegas you are actually sure to eventually lose all your money.

rficcaglia3• 9 years ago

it would benefit China's economy if a bubble were to pop and wipe out huge amounts of savings

my guess: China will not allow ICOs but maybe after 10 years or so, blockchains and smart contracts will quietly infiltrate boring business use cases and financial services. especially if they can turn it into a centralized tool for control.

what better authoritarian tool could there be than a centralized ledger of all economic transactions, run by the government. in the name of reducing fraud/laundering/crime you could have absolute visibility and regulatory control on all economic activity.

EDIT: spelling

prostoalex5• 9 years ago

You are a Chinese miner with a rather large BTC or ETH balance. There's no retail acceptance of either for you to spend your cryptocurrency, and the closest you can get to converting it to cash is through Bitfinex in Taiwan and even that can be filed under "maybe" https://crushthestreet.com/articles/breaking-news/bitfinex-h...

ICOs are among the few remaining opportunities to achieve liquidity for large BTC/ETH account balances.

oskarth• 9 years ago

Lots of people dislike ICOs, some for good reasons. But ICOs is a general mechanism and the specifics differ. Are some ICOs ponzi schemes? Sure. But this move is about capital controls, little else. I am surprised so many people are defending this as a good thing. Do you want to outlaw all VC money too?

Tepix4• 9 years ago

Is this truly a ban on all ICOs, i.e. the technology? Is there a decent translation of the report at http://www.pbc.gov.cn/goutongjiaoliu/113456/113469/3374222/ ?

I don't see why projects such as "useless etherum token" https://uetoken.com/ should be banned.

You may want to ban trading the token to prevent money laundering but that would apply to all crypto coins.

unkown-unknowns2• 9 years ago

https://uetoken.com/

Did they actually do an "ICO" or was it showing as "finished" from the get-go?

Let's find out!

30 seconds later.

https://web.archive.org/web/20170627123240/https://uetoken.c...

https://etherchain.org/account/0xbe5c1c298d0088886146a906cdf...

So they did but apparently nobody sent them any money, unless they also used some other addresses.

Another 60 seconds after that.

Actually they have a link on the current https://uetoken.com leading to https://etherchain.org/account/0xbe5c1c298d0088886146a906cdf... with 23562 txns total at the moment. Wonder if any of it was legit and if he got any money out of it.

Tepix4• 9 years ago

I think he got around $90,000 USD out of it.

igorgue4• 9 years ago

https://coinmarketcap.com/assets/useless-ethereum-token/

250USD as in yesterday.

rsynnott• 9 years ago

I'm amazed it's even a case of banning them; I'd just automatically assumed they were illegal basically everywhere. It's an unregulated securities market, surely?

pja• 9 years ago

Some of them are just pre-sales of whatever product the token is supposed to be about. This sort of ICO is (probably) legal: it's just a re-invention of the Green Stamps of the C20th.

And about as useful.

crypt1d4• 9 years ago

A lot of people seem to suggest that some kind of regulation, or even outright ban, of ICOs is necessary. Apparently in order to prevent people from loosing their money on risky investments?

I don't really understand why it is appropriate for someone else to tell me how to spend my hard earned money? Isn't that what freedom of choice is about? Even if I'm being manipulated into a scam, it is still MY choice.

Let people spend their ICO money the way they spend their votes. Its basically the same form of manipulation anyway.

omarchowdhury6• 9 years ago

If you're being manipulated into a scam, it's not your really your choice, you are not consenting to being scammed, you are consenting to whatever proposition made sense to you on the surface, but was not going to hold up due to withheld information from the recipient of your money. Nobody volunteers or makes a choice to be scammed.

crypt1d4• 9 years ago

I am making a choice to believe them that it is not a scam. You can only know if their statement was true or not after the fact.

We all make choices like this daily on regular basis. However, its apparently appropriate to be scammed into various political promises, product descriptions, etc. But its not okay to be part of this 'ICO lottery' because one can easily be scammed? Give me a break.

patrickaljord8• 9 years ago

Not all ICOs are scams. Isn't freedom also the freedom to make you own mistakes? I mean, if we were to use your logic for any decisions that may lead to bad outcomes, we would live in a totalitarian state.

patrickaljord8• 9 years ago

Many believe common people do not know what's good for them and that it's ok for special groups of people (governments) to impose their choices by force on the common people for their own good.

tinco• 9 years ago

They don't ban you from spending your money. They ban companies from receiving your money. Companies that are malignant and consumers should be protected from.

This is not a new concept. The same regulations apply if you start telling your friends that you're smart and that they should let you manage their money for them.

crypt1d4• 9 years ago

This is not a new concept. The same regulations apply if you start telling your friends that you're smart and that they should let you manage their money for them.

u mean like a 'friends and family' investment round? ;)

igorgue4• 9 years ago

You don't understand why this community is butthurt over the way ICOs work, they're getting a very bad deal with the traditional investing route, so they're furious over other people getting great deals, calling all the projects a scam and celebrating government influence...

Very good HN very good.

mrep2• 9 years ago

Because lots of them look like outright scams and are fueling a bubble which is bad for everyone because they cause negative externalities [1] such as systematic risk [2].

[1] https://en.wikipedia.org/wiki/Externality#Negative

[2] https://en.wikipedia.org/wiki/Systemic_risk

tudorconstantin• 9 years ago

I assume most of the HN readers are from USA and I can't believe my eyes what I'm reading here. People cheering a government's ban on what its citizens can do with their lawfully earned money.

I worked for my money, I paid huge amounts of taxes on them. Why is it ok for somebody to come and tell me what I can and can't do with them, and then telling me it's in my best interest to not be allowed to invest them.

ezVoodoo• 9 years ago

Interesting! Why the US government punishes trading drugs with my own money? I mean that is my lawfully earned money! Why? Why? Why?

sametmax• 9 years ago

Precisely. The fact something is yours is irrelevant. If it's your gun, i still want the state to make it illegal to shoot your kids with it.

drcode• 9 years ago

Oh yeah, the war on drugs and minority encarceration that has resulted is totally the sort of successful government approach we want to emulate and apply to other sectors. (sarcasm)

felipeko3• 9 years ago

I'm also curious about that. If you ever find the answer, please, come back to tell me.

beejiu• 9 years ago

The clue is in the name government.

subsidd• 9 years ago

I partly agree with you. Banning ICOs will affect lots of potential disruptive and genuine initiatives. Albeit, it also safeguards the people's hard earned money, which majority of them are going to lose out on. IMO, education and liable regulations for the benefit of both the parties is a much better option, but to speak in favour of a governing body, is a lot more tedious.

CryptoPunk29• 9 years ago

You're intelligent and thus should be free. But the law can't create multiple classes of people with different sets of rights, so to protect the stupid, who can't handle that amount of freedom, your rights need to be limited as well.

^ I assume this is how supporters of such laws think about the issue.

Nursie24• 9 years ago

Would you dispute that a lot of people are idiots?

Would you dispute that even (otherwise) smart people can and do get taken in by dodgy financial schemes?

Regulations are there for good reasons...

lettergram2• 9 years ago

Ugh what? If you're not directly hurting someone there shouldn't be a law against it.

For instance, a law against DUIs make sense, it's so you don't kill people. A law requiring seat belt wearing - not so much.

samsonradu3• 9 years ago

Because when the whole system collapses due to gigantic bubbles explodind (caused by the lesser financially educated masses) the government will likely use your tax money to keeps thing afloat and you won't like that either. Your money only has value in an economically stable context.

rothbardrand11• 9 years ago

First off, bubbles are a side effect of the money cycle which is created by central banking -- both the Dotcom and 2008 bubbles were created by the Fed selling money below cost, building a massive carry trade in, for instance, houses.

Secondly, if there is a crash, the best thing to do is nothing. Let the people who invested poorly get wiped out-- it's better for the economy. (There are examples of this too- crashes that happened before the federal reserve which were much worse than the 1929 crash, but which are forgotten to history because they didn't create Great Depressions because there was no Federal Reserve to "bail out the system")

The bailouts of 2008 were the worst thing that came out of that. Government shouldn't be bailing out these businesses, especially after those businesses made billions getting below cost money from that same government.

IT's not really economics you're talking about here but the corruption in the system.

Bailouts are part of the game-- thats how they scam us. Bailouts don't protect us (that's the con.)

For an excellent history of money and the last 100 years of bailouts and how this exact same thing has been done dozens of times already-- check out G Edward Griffens "The Creature from Jekyll Island" -- it's a history book about money, but it's anything but dry.

adbachman• 9 years ago

Because the first dozen ICOs that turn out to be scams can break consumer confidence across the whole market. When people stop trusting, the system collapses.

This isn't hardship, just put your money somewhere else.

rothbardrand11• 9 years ago

The reason ICOs were such a boon is that there has been no other path for the middle class to invest in startups.

ICOs gave a level playing field and produced a resulting boom.

Most people don't even know what a cryptocurrency is.

justonepost2• 9 years ago

Anarchy is not a lot of fun. it usually ends up in pure might makes right. North Korea is a timely example of what the philosophy of might makes right leads us to.

cloakandswagger4• 9 years ago

Are you saying that North Korea is an example of what happens when individualism runs amok?

On the contrary, North Korea seems like a collectivist's paradise. Total state control with omnipresent regulation. I wonder what the punishment for trading cryptocurrencies looks like there.

igorgue4• 9 years ago

I'm from the US and I'm not a Neocon... I don't cheer any bans.

Not all of us are like that... What's happening here is people are butthurt cause ICOs are more successful and friendly to funders, so they took a very bad deal with the traditional investment route so everything negative against ICOs they are happy.

The HN community just like Reddit is just a bunch of children.

omarchowdhury6• 9 years ago

Yeah, you'd think the HN crowd would be the ones to welcome ICO with open arms.

negamax2• 9 years ago

This is much welcome ruling and US should follow suit. Current modus operandi is of pump and dump to lure unsuspecting people. Some ICOs are borderline scams. Using Facebook ads to promise the riches. It's almost disgusting

slowmotiony• 9 years ago

Yeah well there's also shitty companies which are publicly traded, I'm supposed to make my own choice here aren't I? Isn't that the point of investing?

croon• 9 years ago

I'm always torn in these debates.

I'm all for shutting down assholes tricking people, but at what point does it begin/end?

Short incomplete list off the top of my head of organisations tricking people out of money with scams:

* Most (if not all?) nootropics

* Prosperity gospel

* Nutritional cereal

* Other low fat/diet food stuffs

* Fashion

* Art

* Diamond industry

* etc etc

heymijo• 9 years ago

What I'm seeing is the classic regulation vs. non debate.

What's missing is recognition of the historical precedent of regulating what people can/cannot do with their money in the USA and China's proposed plans to follow suit.

Before the JOBS Act, for 70+ years the American Securities and Exchange Commission was very specific about what non-accredited investors could do with their money. [0]

While China does not have an "accredited investor" status, its version of the SEC put forth a proposal in 2014 that would create accredited investor regulations almost exactly in line with the American SEC's regulations. [1]

Intent may be worth looking at here.

China sites terrorist financing and money laundering as problems with ICO's. I don't know the veracity of that concern, but I do know that citing terrorism, child pornography, prostitution/human trafficking, etc. are nearly impossible to argue against and thus can be used as a means to pass regulations/legislation that is rife for abuse (see the USA Patriot Act).

On the other hand, China banned exchanges allowing people to buy bitcoin in Yuan back in 2013, but today support for buying bitcoin has returned (from the article).

It seems both China and America (via the SEC) are trying to figure out what to do with ICOs. Regulation seems inevitable, but each country has thus far taken a different tact.

Does any of this make regulating/banning ICOs right or wrong? I don't know, but that seems like a different debate.

[0] https://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=8edfd12967...

[1] https://www.crowdfundinsider.com/2015/10/75384-crowdfunding-... (See "Challenges: Policy and Regulatory Challenges) section)

thefosk• 9 years ago

China sites terrorist financing and money laundering as problems with ICO'e

You can maliciously use your paper money right there in your leather wallet to do all sort of criminal activity, should we ban regular money too?

dsacco5• 9 years ago

People cheering a government's ban on what its citizens can do with their lawfully earned money.

Are you okay with laws about how money is earned? Why? If yes, why are you not okay with laws about how money is spent?

There are a vast number of regulations imposed on how you spend your money is spent in any government. Do you categorically disagree with them or are you okay with some of them?

EDIT: Every time a thread pops up like this, Hacker News seems to decide it's time to reinvent socioeconomic policy from first principles. Often libertarian principles. I'm trying to inject basic questions in here because much of the comment-response activity in the thread seems to be reactionary debating without substantive proof or rebuttal.

Outrage is fine! Your opinions are (probably) fine! But please try not to use personal opinions as axioms. Deconstruct your reasoning just a bit folks.

felipeko3• 9 years ago

The principle is pretty simple, if it's two consenting adults doing something that does not impact a third person rights, they should be allowed to do it.

So I would be okay with laws about how money is earned, if there's a third person being impacted (pollution, for example), and i am okay with laws about how money is spent if there's a third person being impacted (idk, hiring a assassin)

Of course when one of the two consenting parties does something outside of the contract (false advertising, fraud, etc.), it should also be unlawful.

Everything else someone does to limit my choices/actions I do disagree.

wav-part3• 9 years ago

LOL its like asking victim to prove why attacker should not attack him. The onus is NOT on victim but the attacker. Its the attacker who made the first contact. Its the attacker who has to prove from the mutually agreed upon set of axioms.

paulsutter• 9 years ago

Wait, so you're in China?

davidgerard4• 9 years ago

The SEC hasn’t made a firm move in the U.S. yet — despite making announcements

What they've done is very gentle soft-touch stuff. They've been calling ICO promoters and strongly suggesting they get their legal ducks in a row.

https://davidgerard.co.uk/blockchain/2017/09/01/the-sec-told...

Protostarr - who hadn't consulted a lawyer at all - shut down and returned the money; BenjaCoin went "actually we're good" and has argued such to the SEC.

The SEC's approach is considerably softer-touch than most people expected - but despite the rantings of crypto paranoiacs, the government is not in fact there to harsh your mellow. Point 3 of the SEC’s mission statement is "facilitate capital formation" - they explicitly see their job as helping you get rich! But of course, point 2 is "maintain fair, orderly, and efficient markets," and point 1 is "protect investors".

rothbardrand11• 9 years ago

Why don't rich people need protection? Here's the answer: this is their protection. It reduces their competition.

Seriously, these securities rules keep people like me from investing in AirBnB and Uber (two that I caught very early and wanted into)... but we can all go to Vegas and lose $100k in a single weekend. But putting $10k into Uber's seed round is somehow a crime I need to be protected from? Truth of the matter is this is the essence of capitalism-- it is my right to invest in Uber's seed round and Uber's right to have me as an investor (if they consent), whether I am "accredited" or not. This is basic "Freedom of association" which underpins everything from gay marriage to the right to refuse service to barefoot people.

Also, of course, I've lost my own $10k on more than one occasions starting companies. (And I've made much more as well.) Why do I need protection from myself? Especially when the terms of that protection are written by people who don't know what SHA256 is.

No, these regulations mainly keep the middle class and the not-quite-wealthy-enough from investing in the highest upside opportunities. I know it's better to put $10k into 10 different seed rounds than $100k into one seed round. I don't need to be accredited to know that.

And I've certainly lost a lot more than that (and made even more) in the stock market using complicated options strategies involving multiple legs and expirations-- I'm the very definition of a sophisticated investor....

.... but I can't be trusted to give a startup $10k?

This is what regulation tends to do, which people don't seem to get -- it raises the bar keeping the little guy out.

Once again, the rich get richer and the poor and middle class have less opportunity.

PS-- To those responding: Yes, I have heard "but what about the grandmas? won't anyone think of the grandmas???" before. I'm acutely aware of the history of this type of regulation in the USA. Ultimately this stuff keeps grandmas poor.

You should all read G. Edward Griffens "The Creature from Jekyll Island". It's a history book about money, but it's not in the least dry.

Government always has an excuse, usually a claim to be helping or protecting people, when it violates our rights.

Keeping me out of Uber's seed round is a violation of my rights.

octaveguin• 9 years ago

The law you're referring to is more about marketing investments.

You're still free to give your friend 10k for a startup.

It's to prevent boiler room style organizations that quite effectively convince people without much information that an investment is sound when it's not.

igorgue4• 9 years ago

    You're still free to give your friend 10k for a startup.

Uh? As a gift but not an investment on his company, that's illegal if you're not accredited.

justonepost2• 9 years ago

The thing is these are a huge haven for money laundering which is probably the best explanation for the amounts raised.

airza• 9 years ago

Remember when you could do kickstarters with simulated renders of your product and everyone got scammed constantly?

It's because of that

rothbardrand11• 9 years ago

Never happened. Some kick starters didn't deliver, but you're factually wrong-- these laws have existed for decades before Kickstarter started-- and you ignore my point. You can lose your life savings in a weekend in Las Vegas and nobody bats an eye.

cyphar3• 9 years ago

It ultimately comes down to what flavour of politics you subscribe to. The key question is whether you think that the public should be protected against the abuses of the free market, or if the free market should be a complete free-for-all. For example, Dodd-Frank solved a concrete problem, and there have been countless studies that show it it responsible for stabilizing the US economy.

But ultimately, wanting to die on the ICO hill is a bit odd. I thought it was fairly clear (at least, it was fairly clear to me) that the whole "industry" is mostly powered by hype -- which leads to people being swindled out of their money. Wanting to protect a completely unregulated industry's ability to fool people into wasting their money doesn't seem like a sane or sustainable position (that's how economic crashes happen).

Keeping me out of Uber's seed round is a violation of my rights.

First of all, this is a story about China. Second of all, it's a story about ICOs and not non-ICO startups. Third of all, is it also a violation of your rights to not be able to fund companies in countries that are at war with your country (which I assume is the US)? Is it a violation of your rights to not be able to fund illegal activity? I'm just trying to gauge at which point does your view on "the inalienable right to invest in anything" stop short? I would expect that China is trying to come to a decision about whether ICOs should be made illegal or more regulated.

Zarath2• 9 years ago

It isn't the public, it's the public not in the 1%.

rothbardrand11• 9 years ago

Those "studies" are self serving. That is the political propaganda keeping you feeling safe in having your rights violated. This isn't a question of flavor of politics- but fundamental rights. Do you have freedom of association or not?

Secondly, you think its "fairly clear to [you]" that these ICOs are scams. I am sure some are, but I know for a fact that many are not. I am quite capable of telling the difference (as a blockchain engineer.)

The presumption that every startup failing is "people being swindled out of their money" is very odd one for a discussion forum run by y-combinator.

Is y-combinator being swindled when an investment fails?

And you're still sidestepping the point:

It's my right to apply my own discernment to what are good and what are bad investments. Not people who don't know the difference between SHA1 and SHA2.

smokeyj• 9 years ago

It ultimately comes down to what flavour of politics you subscribe to

If you were to tell any of your progressive friends about Reg-D, but framed it as written by "the 1%" - they'll naturally think the law is unjust and shouldn't exist.

I think this has less to do with political flavor and more to do with critical thinking skills. Unless Reg-D also bans gambling at Vegas and throwing your money down a well - then it comes up short of it's protectionist goals. But it definitely succeeds in protecting qualified investors from "unqualified" investors.

kabbalf2• 9 years ago

Time will tell whether the system is more or less robust with Dodd Frank. Also the previous system seemed robust until the crash happened. An argument could be made that more legislation and onerous regulation pushes smaller actors out of the game. Then you end up with a bunch of too-big-to-fail corporations that take the whole system down if they fail. Regulatory capture is also a major issue with too big entities.

Reading tip: Antifragile by Nassim Nicholas Taleb

TrevorAustin• 9 years ago

It ... sounds like you wouldn't have any trouble getting accredited?

rothbardrand11• 9 years ago

Lets assume I am accredited.

This isn't about me getting mine.

This is about the fact that the regulations deny you a chance to join me.

craigsmansion• 9 years ago

Very good point.

It sounds like "Why are there laws that prevent fools from giving their money to me?"

The more replies I read, the more I'm convinced these regulations are working exactly as intended: to protect the innocent from free-for-all sociopaths.

anilshanbhag• 9 years ago

The problem is that companies doing ICOs aren't Uber.

Peek your head into /r/ethtrader. You will find people putting their retirement savings, mortgaging houses, etc and these people aren't technically savvy and can be easily taken for a ride. While you might have good apples, there are going to be tons of bad apples, people just coming with a white paper and asking for millions of dollars. Coming back to your question, the rich don't need protection as its ok to lose money when you are rich. The 'not rich' need protection as if they lose all their savings, it will seriously harm their lives.

rothbardrand11• 9 years ago

That's your presumption. You think they aren't technically savvy. Hell, I think some of them aren't myself, but it's not my right, and it's not your right, to say what they can or cannot do with their property.

And a lot of those non-"savvy" people have outperformed me, for instance by buying ETH at the ICO.

You guys keep presuming that the only choice is "people losing all their money" and that these regulations stop that.

The reality is, these regulations keep the poor people poor, not keep them from losing all their money.

As I have pointed out, you can go to Las Vegas and lose all your savings in a weekend.

That dog don't hunt.

vocatus_gate• 9 years ago

Maybe I'm cold-hearted but I believe in something called "personal responsibility." They chose to throw their money into something they don't understand, now they get the consequences of that decision. You can be sure they'd be all about accepting the consequences of their decision if it panned out the other way and they made a fortune. I feel zero sympathy.

lettergram2• 9 years ago

Although I read what you wrote and to a large extent agree, I have to say, love the name: RothbardRand (Murry Rothbard was a major figure in Austrian School of economics and modern libertarianism. Ayn Rand a philosopher, and developer of the philosophical framework of Objectivism)

Makes sense why you feel this way.

What I will say, is no one stopped you from investing in Uber, besides Uber. Tomorrow I can go out and sell half my C-Corp to a friend. Legally, no one is stopping me, besides me and my contract(s). My company isn't publically traded, and as such, I haven't released shares to be bought and sold.

That being said, if you're talking about "accredition" - that shouldn't stop you from being able to invest in a friend's or aquantences company. At least until you have 35 of said people..

Which I agree is B.S., at the same time - it's just a way to ensure you don't get massive companies like Uber getting billions of funding and providing no services. It's an attempt at curbing a dot-com-esqu bubble. Overall, I do think this is government over reach, but I do see the point.

There are ways around that FYI, for example there isn't a reason a financial advisor couldn't invest on your behalf.

Taek• 9 years ago

If Uber had made shares available to unaccredited investors, they would have gotten in trouble. I'm quite certain that the grandparent was not in the list of Travis's top 35 people to raise $10k from, and as such he had no legal opportunity to buy shares, even if Uber had wanted to sell them.

3pt141592• 9 years ago

We tried libertarianism. It doesn't work. I realize the futility of trying to explain this to someone with the username "rothbardrand" but I used to be a libertarian and I finally broke out of it, so maybe this will give someone else teetering on the edge some things to think about.

1. Libertarianism sweeps negative externalities under the rug. Air quality, noise pollution, the costs to society when an elderly person goes bankrupt. The counter arguments are thin. If you don't ban building in a flood plain, people will build in the flood plain. Then the flood will happen and we'll all be worse off.

2. Libertarianism is inefficient because it demands that people become experts in a wide, wide array of topics in order to be healthy and financially secure. Sometimes becoming an expert in a topic is to experience it. For example, I used to be addicted to nicotine. It's one thing to explain with words how addictive it is, it's another to actually be addicted. By introducing a bit of a nanny state we can use laws and taxes as a kind of cross generational memory and save people from having to learn some of the lessons we had to learn.

3. Libertarianism doesn't address the concept of power. It pits the whole world through the lens of rights when there are other concerns like foreign citizens owning portions of companies critical to our national security or owning large portions of our media.

4. Libertarianism underestimates how much work the state puts towards fighting international crime. We use the financial system to track where mafias hide money and how they organize their money laundering schemes.

The problem with leaving libertarianism is that after years of thinking about everything through the lens of rights and the individual one is left with the question "well, what matters then?" and the answer is difficult, but here is my best shot:

The world is one of consequence. So when think about policies we should be concerned with our ends, but we should choose our ends as if we didn't know who we were in the world beforehand.

So my answer is roughly "consequentialism tempered by individual / human rights".

You don't get to buy into Uber's round because they aren't a public company. If they become a public company they have to open their books. Why? Because widespread fraud happened before this and it wasn't just to little old grandma. Sorry about the violation of your rights, but if I didn't know who I would be beforehand, this is what I think would lead to the best average outcome.

As for the middle class not being able to invest in the best companies, I agree with you that we should change some of our regulations. I agree that the rich are getting richer because not enough companies are going public. Let's fix the regulations that empower investment banks at the expense of the entrepreneurs and potential investors, and while we're at it let's raise taxes on the super rich and close their loopholes.

But at the same time let's acknowledge something else: The middle class and the poor have it best in countries like Sweden or Switzerland or Canada where we have more government not less. Where we have more international cooperation not less. Where we have more "collectivism", more education, more consumer protections, more environmental regulation, more investment into research.

And yes we also have rights too, but they're not these absolute mathematical truths and it doesn't mean we should let a bunch of people skirt fiscal regulation by raising a bunch of money anonymously with ICOs.

kabbalf2• 9 years ago

It's interesting that you give Switzerland as an example since many would regard it as the most libertarian country today. Could you imagine this [2] happening in the US?

Public spending to GDP ratio [1]:

  Sweden      51
  US          42
  Canada      42
  Switzerland 34

When the Swedish welfare state has collapsed (I'm Swedish, and it's not looking good) you are welcome back to the small government camp :).

No 1 is a good argument against libertarianism. A counter-argument is that more libertarian-style decentralized decision-making would mitigate negative externalities and the "common good tragedy". Research suggests [3] that negative externalities can be managed in smaller communities; smaller government also makes it harder for parasitic organisations to suck out money. Pollution can also be taken care of in the court system rather than regulation.

Before advancing an "how would X work?" argument, you should consider whether X really works better in other systems. Last time I checked, there was a ton of flooded houses in Houston, plenty of people smoke, and there is quite a bit of organized crime (a popular one in Sweden is "assistance compensation" paid out by the government to people who take care of sick relatives at home. Who would ever think about abusing it?? Surely not the mafia and IS). No-one is claiming that liberty will produce a perfect world, but that it's the morally right thing. As a bonus it would also likely produce better outcomes (on average) than what we have today.

[1] https://en.wikipedia.org/wiki/Government_spending#As_a_perce...

[2] https://www.theguardian.com/world/2017/jul/18/switzerland-pu...

[3] https://en.wikipedia.org/wiki/Elinor_Ostrom

tuna-piano• 9 years ago

The US recently started allowing startups to raise money from non-accredited investors. It's just that most legitimate startups still prefer raising from legitimate investors.

This has left "startups" like this "company" YayYo, which raise money from TV commercials stating that they'll become the next Uber.

http://www.businessinsider.com/yayyo-ipo-ads-tv-ramy-el-batr...

seanmcdirmid• 9 years ago

Gambling is also very illegal in china.

mcguire7• 9 years ago

Most seed rounds are not Uber.

What about Quirky, Homejoy, Zirtual, Secret, Grooveshark, Rdio, Leap, Theranos, Sprig, Beepi, ...

flylib• 9 years ago

Knowing about Uber isn't enough, you need access to their seed round which is on a selective basis

matz1• 9 years ago

Nobody care of your rights, if you think you deserve it you have to fight for it. What concrete action have you take to fight it ?

vasilipupkin8• 9 years ago

I don't understand. To invest in Uber seed round you had to be an accredited investor. That's a pretty low bar in the US. But now, crowdfunding rules have removed this requirement for those raising less than 5 million.

empath75• 9 years ago

Name one ICO that is a legitimate business.

vasilipupkin8• 9 years ago

most ICOs are done by startups that haven't built their businesses yet - that's why they are raising money. Many of them seem like legitimate businesses that could fail but also could succeed.

krzkaczor• 9 years ago

I need to say that you have some great points ;) It's really exciting to read opinion so close to my heart.

Currently, I work at Neufund where we want to do exactly what you described: open access to broad range of investment opportunities for everyone by using cryptocurrencies. Check it out! https://neufund.org/

Mendenhall• 9 years ago

Did they do this to "protect" people, or for more control?

Almost any ban can be said to be done to protect people.

Cant have them reading some books for their own good!

devwastaken• 9 years ago

I don't understand why you're talking about Uber and regulations, when this is China we're talking about. You seem to be on a completely different subject, because the article says nothing about law, and says its a decision by China's Central Bank.

"Ultimately this stuff keeps grandmas poor."

Again, completely off topic to the post. But, when you talk about 'regulations', you should be making yourself clear, because you're covering massive territory and calling it all 'bad' with that statement, which is certainly not true.

PKop• 9 years ago

In addition to that book you mentioned, check out “Scandal of Money” by George Gilder (quick read) covering the concept of these sort of regulations as well as the nature of sound money vs extreme “financialism” that has replaced it over the last few decades in developed economies... along with increased regulation essentially separating main street from Wall Street / Silicon Valley.

He describes how a return to sound money through Bitcoin and perhaps a new gold standard, as well as reducing these sorts of regulations you describe would enable a renewed prosperity of the middle class.. for a whole host of reasons worth reading in the book.

JamesBarney• 9 years ago

When did you have the opportunity to invest in Uber or AirBnB? I really don't think at any point of time were random accredited investors with 10k able to invest in Uber...

prostoalex5• 9 years ago

1) In the alternate reality where you did invest in AirBnb and Uber, how did you manage to concentrate your investments in those two companies, and reject thousands of contenders who eventually folded down? If you also invested in 10,000 photo-sharing apps and "Yo" clones, what are the total portfolio returns?

2) In that alternate reality, what advantage did your money have over YC, Andreessen Horowitz or Benchmark money? Were you able to connect founders to top government decision makers, or bulk up their growing management team with hard-to-get candidates? If the answer is "yes", you could've been awarded advisory shares in Uber and AirBnb without being a qualified investor (a gift is a gift, after all). But since more likely the answer is "no, my money is no different than money from a joe schmoe down the street", you will likely be required to overpay for a ridiculous valuation at seed stage. What effect would that have on your portfolio as a whole?

xHopen• 9 years ago

Keep trying and trying, It wont work. By that's none of my business

DigitalSea2• 9 years ago

This was a needed move. Too many scamcoins are appearing and selling their overpriced offerings. It's like Kickstarter, but for larger sums of money and less accountability if things don't materialise. We are heading for a pretty serious ICO bubble if ICO's can continue to operate like they are and I can only hope that the USA follows suit next.

The crypto markets right now are in a free fall as a result of the panic. This is a ban on ICO's, not a ban on cryptocurrency. People don't realise how instrumental China is in the crypto world, quite crazy. I am taking this opportunity to buy up promising alt coins like TenX ($pay) which are all incredibly unvervalued right now as a result of the drop.

As we learned with Bitcoin, panic is temporary and eventually things will bounce back. We are entering a brave new world with cryptocoins as they reach the mainstream.

return02• 9 years ago

This was a needed move.
We are entering a brave new world with cryptocoins as they reach the mainstream.

You can't have both. decide

DigitalSea2• 9 years ago

I'm confused. They both relate to each other, don't they? For crypto to reach and be accepted by the mainstream, people need to know that everything is being done to prevent people from being scammed. It's surprisingly easy to fork an existing cryptocurrency and create your own. Anyone could create a new coin in a couple of hours, most of the time spent on the marketing site. For crypto to be accepted beyond speculators and Twitter investors, there needs to be protections in place, just like investing in the stock market is regulated somewhat.

rothbardrand11• 9 years ago

Here's the thing though, I did not invest in the Ethereum ICO because I considered it a scam coin.

It's really easy to just say all these ICOs are scams but we have not seen many outright scams.

I have seen a lot of very young enthusiastic teams promising things that it would be very hard for them to deliver on.

And I imagine every Silicon Valley VC can see the same thing about their pitches.

How do you know which are scams and which aren't? There's no objective measure.

So basically this is banning the middle class from investing in the next massive technology cycle.

Reserving it once again only for VCs and accredited investors. Keeping the little guy out and making the rich richer.

logicallee2• 9 years ago

What about all those legitimate startups that raised money from ICO's???

Here on Hacker News we had a staunch defender of ICO's, who was saying "ICO's of some form are unquestionably the future of raising capital for most tech companies up to a certain size".

In response to that wide claim, I asked the following question which I'll quote part of: https://news.ycombinator.com/item?id=15121111

May I ask what the largest/most successful "traditional" tech company that used an ICO is? By "traditional" I mean that their tech has nothing to do with blockchains and they could have also just raised money on angellist, and today are just a normal tech company shipping some kind of a product, like a hoverboard.

Here was their response which I'll quote: https://news.ycombinator.com/item?id=15121451

This is early days, very early days. Give it a few years, and people won't bat an eye at raising capital via the blockchain. It's just more efficient and easier. I mean, if you like having to travel around, having tons of meetings and discussions, hoping your lead investor doesn't pull out and fuck up the whole round, by all means keep supporting the current system. It just is going to change, massively, in the coming years. There will be some sort of place for traditional capital but blockchain capital raising will hit every industry.

If you think about it, that response to my question really says it all.

(Upon my folowup, they did name two software companies.)

omarchowdhury6• 9 years ago

https://science.tokenhub.com/

logicallee2• 9 years ago

I looked at that webpage. About halfway down the page there is a "Latest Media Coverage" section: http://imgur.com/a/pCXCm

I tried to click on the Forbes, TechCrunch, recode, and Adweek links, but actually they're not links; that section is empty. The empty section is included to imply that there has been media coverage by these sources (or any other ones), but it is just an inactive placeholder that uses their greyed-out logos without permission to imply some kind of coverage. Clicking anywhere in that empty section does nothing.

Why does the page include an empty "latest media coverage" section that is completely empty (but includes famous news brand logos)? You and I both know why - it's obvious.

That might be fine for companies that are bootstrapping their own future: "imagine if we had something here." But this is why I didn't ask about such companies, but instead about companies that already have done that bootstrapping.

A lot of money has traded hands in ICO's. Has a single traditional tech startup that is shipping some kind of real product (hoverboard, whatever) totally unrelated to blockchain, been built as a result?

BlueZeniX• 9 years ago

But wait, central banking is itself a scam! It's the only entity that doesn't have to balance its books.

Focalise• 9 years ago

Clearly a very bad move for China.

mehh• 9 years ago

I'm not surprised, even some basic analysis on the ICOs such as Civic raise a lot of alarm bells.

Will be very interested to see in the next couple of years how many of these projects still exist.

KasianFranks• 9 years ago

Time to buy.

grizzles• 9 years ago

This will probably slow down the ICOs. Smuggling money out of China is one of the main functions of crypto currencies these days. Edit: Bloomberg just reported Bitcoin has dropped 11% on the news, so far.

frrp• 9 years ago

"ICOs need regulation, sure, but banning ICOs altogether is a huge gift to Silicon Valley and its resident financiers." -Naval Ravikant

China's Central Bank Bans ICOs

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