[ExI] Initial Coin Offerings Horrify a Former S.E.C. Regulator

[Jeff Davis]

A quick response.

The SEC guy is a cop. That's what the SEC does, looks around for someone to
slap the cuffs on and "Book 'em, Dano." The ICO phenomenon confronts him
with activity that he -- actually  the SEC --  would under normal
circumstances, be responsible for policing. But these are anything but
normal circumstances. The fact is, that the ICO phenomenon is unhackable,
uncrashable, and uncontrollable. When I say uncontrollable I mean that the
SEC is jurisdictionally constrained. It is the SEC of the United States,
not the SEC of the world. Consequently any jurisdiction that decides to
allow the unregulated, wild west ICO activity  is free to do so. And it
only takes one. Among the two hundred Sovereign Nations there are bound to
be plenty that will want the profits that will come to them by their
sponsorship of an ICO "sanctuary". Switzerland, Malta, and Singapore are
already halfway there.

Stathis is right when he says, "There are no rules at all."   And the SEC
cop mentality can't handle that kind of freedom. The single greatest
sin/crime to the authoritarian mindset is a challenge to their power. And
the ICO phenomena is a great big "f*** you" to the authoritarian mindset.
No surprise therefor, that the "ex-cop" hates it and that the New York
Times publishes his point of view.

Stathis is also correct when he says that a very substantial fraction of
the ICOs are well, let's just say, not serious. That said, nobody is
holding a gun to anybody's head to get them to fork over their money. It's
all voluntary. It's freedom. It's a Libertarian ideal. It's caveat emptor.
It's "Be a big boy now, grow up, and look out for yourself, smartly". Which
is why I find it a bit puzzling that more folks on the list aren't
supportive of this global, free market entrepreneurialism.

Okay, moving right along.

Napster got shut down because it was centralized. BitTorrent took over, and
has not been shut down because it's not centralized.

The network that supports cryptocurrencies is also decentralized.  It's a
***distributed*** Network, and can't be shut down. Certainly, it can be
shut down locally. but since it's global, that means that -- absent a total
crash of the internet, it can't be shut down. And that means that anyone
with the price of a cup of coffee can issue their own money on the Ethereum
network, and sell that money, and that they can't be shut down.

Print your own currency, generate a "wallet"(ie account) specifically for
your currency, mount it on an exchange, schedule a sale, advertise your
project, and become your own internet entrepreneur.  All for the price of a
cup of coffee.

Check out proof.com, they've made the process turn-key.

That's what the ICO phenomenon makes possible. As an example of the radical
nature of this development, I give you Elon Musk. He had to code PayPal,
build a company worth billions of dollars, and then sell his stake for
hundreds of millions of dollars, in order to have the resources to begin to
work on the things he really wanted to do: electric cars, Mars colony,
Etc.   Now, all you need is the price of a cup of coffee.

My venture, Pathfinder Capital, from the start, took the approach that
established companies would be unwilling to accept the risk associated with
the unregulated wild west form of ICO. They would wait for regulatory
safety before taking advantage of the ICO funding opportunity. Pathfinder
is putting together a program to provide them with that safety. That will
unlock the funding needs of 1.2 trillion dollars worth of small and
medium-sized tech companies with equity currently trapped in VC portfolios.
Come December, I will be heading to Washington with my investment banker
partner to lobby the House Financial Services Committee to create a
licensing protocol for investment banking in the cryptocurrency space.
 The creation of a certification process for ICOs -- legalizing them --
will free-up billions of dollars of currently-trapped equity, turning it
into liquid investment capital, and -- aspirationally -- fostering an
economic boom.  Then Pathfinder -- the premier investment bank in the
crypto space -- yeehah! -- will escort an abundance of clients to
regululatory safety with SEC-certified, fully compliant ICO funding.
That's the plan.

As a licensed investment bank, Pathfinder will evaluate individual ICO
candidates, processing only those that are legitimate, thus aiding the SEC
and the greater ICO community in policing the ICO space and protecting the
vulnerable public -- widows and orphans -- from bad actors.

The crypto space is going through a rapid evolutionary process.  To much,
too dynamic to describe here, even if I knew it all, which i do not.

Interesting times indeed.

And by the way, yes, it's a bubble.  But like the tech bubble which, on
bursting, left behind the digital world we now live in.  When the crypto
bubble bursts, it too will leave behind an "upgraded" world economic model.

See you there.

Best, Jeff Davis

          "Everything's hard till you know how to do it."
                                                    Ray Charles
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