News: SEC on ICO tokens (they’re probably securities), Vanbex fraud, regulating crypto mining, crypto for care homes

The SEC has finally released its guidance on ICO tokens! The summary is … the law applies, and these things are probably securities. Commentary by Stephen Palley.

The crypto community has complained loudly about a “lack of certainty” and of “clarity.” This is utterly unsurprising, because they were going to whine at 110dB at anything that was less than the “clarity” and “certainty” to continue behaving like criminal incompetents — which was never going to happen.



Stephen Palley also spoke to Bloomberg about the SEC guidance on tokens. You can tell it’s the evil Palley by the beard.



One ICO token turns out not to be a security! The SEC has issued a no-action letter to TurnKey Jet, whose token is basically prepayment for on-demand charter flights, but on a blockchain — the network and app already existed in fully functional form, the tokens could be used immediately, they can’t be transferred outside TKJ wallets, the price is fixed at USD$1 per token, TurnKey Jet will only repurchase the tokens for less than the customer paid, and they were not at any stage marketed as an investment opportunity. It’s that easy!

The SEC’s December 2017 administrative order against the Munchee ICO has been used by a court as guidance in a civil case, where burnt investors are claiming ATBCoin was a security. Palley: “So this Article I consent order just became Article III case law. Which is more than a little interesting.” Administrative orders aren’t precedent … except when they turn out to be.



I’m shocked, shocked to hear of yet more crypto fraud in Canada! This one is Vanbex. What did they spend the money on? Gambling, condos, and … a Lamborghini! Vancouver police have frozen their assets and seized the cars. Vanbex have issued a statement denying everything. CEO Kevin Hobbs has past convictions for drug trafficking and money laundering, and founder Lisa Cheng was involved in the early days of Mastercoin (now Omni) and Realcoin (now Tether). Here’s a profile of Cheng in Blockleaders (archive), which ran just a few days before the news broke. “The disruptive power of Lisa Cheng,” indeed.

The standard scammy ICO with fake team photos is likely to be super-bad with user datae.g., just uploading the Know-Your-Customer data as publicly accessible WordPress image files.

Missoula County, Montana proposes to require that new crypto mining projects offset their energy use by funding or building new renewable projects. Trivially evadable, but may be worth setting as an expectation.

Grant County Public Utility District in Washington is allowed to charge crypto miners a 400% rate premium. This is necessary because it turns out in practice that crypto miners don’t in fact incentivise green energy, but swoop in, max out local hydro power capacity, then swoop out.

The most reprehensible idea I’ve heard in crypto in the past month — crypto for old age care homes. The Carlauren Coin “exchange” does no Know-Your-Customer. It claims you can sell your £70 coin on the market for £189 right there — but, of course, there are no buyers as yet. The founder admitted the wording could be “a bit clearer.” Of course, they haven’t changed it.



Financial Times on Ripple’s XRP — “The lingering question is whether XRP is necessary. If not, the market worth of $14bn quoted by Coinbase looks high. Particularly when global financial messaging service Swift reported revenue below $1bn in 2017.”

Crypto VC Fred Wilson is not so keen on the Bitcoin maximalists. It turns out acting like a cultist is bad for business.

FT Alphaville on how Colin Platt became a mark-to-market quadrillionaire with Pitchtoken.

Nicholas Weaver on burning crypto with fire, this time in Breaker.

Elon Musk declares he likes Dogecoin. The Huobi crypto exchange adds Dogecoin. The price goes up 55%.


Decrypt quotes me in articles on Everipedia, the bad clone of Wikipedia on the blockchain, and on GPS on the blockchain.

BBC World Service Business Daily’s  Thursday show, on the Bitcoin price going back up — which just looks to me like the start of the next Bart — has lots of comment from me. The recordings are actually from the recording of the special for File on 4, broadcast in March — but remain entirely apposite, because bitcoiners never learn. (My 2011 blog post on Bitcoin stands up remarkably well.)





whenever I fail to append “and everyone involved needs a personalised artisanal guillotine,” just assume I failed to hit the macro key, ok

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