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Shady ICO Issuers Are Taking 'Bags of Cash' To Border, US Says (bloomberg.com)
A top financial regulator gave a strong warning this week that U.S. scrutiny of initial coin offerings is just getting started. From a report: Securities and Exchange Commission Chairman Jay Clayton, speaking at a conference in New York, said companies raising money through digital-token sales shouldn't have any illusions that the government will treat them differently than firms participating in traditional stock offerings. He added that the market deserves close attention because the SEC has already seen examples of fraudsters fleeing the country after persuading U.S. investors to back their ICOs. "I am not going to change the way we approach the offering and trading of securities as a result of the fact that you put it in the form of a token," Clayton said at the Sandler O'Neill Global Exchange and Brokerage Conference. "I'm protecting the integrity of the market. The behavior we see in this is pretty bad. We've got guys with bags of cash headed to the border. That's not our securities market."
Ether was introduced with an ICO.
So was it a security? Or "gas" for a crypto-contract platform?
Was it a scam? Probably not.
How will government decide which tokens are securities vs some functional thing or (attempted) currency, e.g. what about stable coins?
Is it going to be arbitrary, with a few grandfathered lucky winners that got through before the regulations, or are the regulations going to be updated to handle the subtleties of the crypto-token economy? I mean bitcoins are tokens just as much as anything else is; that is, a unique and hard to forge bitstring with some external respresentational significance?
What should the principles and distinctions for regulation really be?
Where are we going and why are we in a handbasket?