Bitcoin: Buy Now or RUN LIKE HELL? Let's talk About Crypto CRAZINESS!!!
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Given the crazy run cryptocurrencies like bitcoin, ether and litecoin have been on in the last week, it was only a matter of time before the Securities and Exchange Commission weighed in.
Clayton addresses his comments to both Main Street investors and financial services and market professionals that are selling the new financial products — and he has choice words for both.
A tl;dr of the statement yields three main principles. And for market makers: For market professionals, Clayton underscored the opportunity for entrepreneurs that cryptocurrencies represent, but also emphasized that an offering is an offering is an offering.
A change in the structure of a securities offering does not change the fundamental point that when a security is being offered, our securities laws must be followed.
Said another way, replacing a traditional corporate interest recorded in a central ledger with an enterprise interest recorded through a blockchain entry on a distributed ledger may change the form of the transaction, but it does not change the substance. The effect of this statement on the market should be profound.
He ends with a warning to the shills, hucksters, con-men, snake oil salesman and celebrities that have been pitching coin offerings as way to get rich. Who is issuing and sponsoring the product, what are their backgrounds, and have they provided a full and complete description of the product?
Do bitcoin buy now or run like hell lets talk about crypto craziness have a clear written business plan that I understand? Who is promoting or marketing the product, what are their backgrounds, and are they licensed to sell the product? Have they been paid to promote the product? Where is the enterprise located? Where is my money going and what will be it be used for? What specific rights come with my investment? Are there financial statements?
If so, are they audited, and by whom? Is there trading data? If so, is there some way to verify it? How, when, and at what cost can I sell my investment? For example, do I have a right to give the token or coin back to the company or to receive a refund? Can I resell the coin or token, and if so, are there any limitations on my ability to resell?
Bitcoin buy now or run like hell lets talk about crypto craziness a digital wallet is involved, what happens if I lose the key? Will I still have access to my investment? If a blockchain is used, is the blockchain open and public? Has the code been published, and has there been an independent cybersecurity audit? Has the offering been structured to comply with the securities laws and, if not, what implications will that have for the stability of the enterprise and the value of my investment?
What legal protections may or may not be available in the event of fraud, a hack, malware, or a downturn in business prospects? Who will be responsible for refunding my investment if something goes wrong? If I do have legal rights, can I effectively enforce them and will there be adequate funds to compensate me if my rights are violated?
