Feds Shut Down Allegedly Fraudulent Cryptocurrency Offering (arstechnica.com) 47
An anonymous reader quotes a report from Ars Technica: The Securities and Exchange Commission on Monday announced that it was taking action against an initial coin offering (ICO) that the SEC alleges is fraudulent. The announcement represents the first enforcement action by the SEC's recently created cyber fraud unit. In July, the agency fired a warning shot. It announced that a 2016 fundraising campaign had run afoul of securities law, but that the SEC would decline to prosecute those responsible. The hope was to get the cryptocurrency world to take securities laws more seriously without doing anything drastic. Now the SEC is taking the next step by prosecuting what it considers to be one of the most egregious scams in the ICO world. The SEC's complaint, filed in federal court in New York, is against Dominic Lacroix, whom the SEC describes as a "recidivist securities law violator." The SEC considers Lacroix's cryptocurrency project, PlexCoin, to be a "fast-moving Initial Coin Offering (ICO) fraud that raised up to $15 million from thousands of investors since August by falsely promising a 13-fold profit in less than a month." The PlexCoin website has a hilariously vague description of this supposedly revolutionary cryptocurrency. "The PlexCoin's new revolutionary operating structure is safer and much easier to use than any other current cryptocurrency," the site proclaims. "One of the many features of PlexBank will be to secure your cryptocurrency from market variation, which is highly volatile, and invest your money in a place where you can get interesting guaranteed returns." According to Ars, "The SEC isn't impressed and is arguing that PlexCoin has 'all of the characteristics of a full-fledged cyber scam.' The agency is seeking to freeze the assets of the PlexCoin project in hopes of getting investors' funds back to them."
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I mean cripes do they have to pretend something is 'new' and 'cyber' when it is literally the same old crap just slapped on a new platform or technology?
it's also quantum maker blockchain AI nanotech disruptive AND egregious, which is the word of the moment. EGREGIOUS!
I'm into crypto-currencies (Score:2)
I have some BTC, LTC, Doge, XMR, etc.
But almost all of those "initial coin offerings"? Stay away from those!
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So you bought into fake money, where the originators ground out something like fifty percent of the available coins, what, to make them rich? Watch out for the bitcoin bomb, it is bitcoin holders who are at the moment being set up to be mined for the real currency.
Re: Bitcoin? No. Tulip bulbs for big profit! (Score:1)
I guarantee that a year from now tulip bulbs will be up,to 20,000 and can only go higher from there!
Get your bulb orders in now before it's too late and you miss out on the investment of a lifetime!
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You didn't need to buy anything a few years ago, faucets gave a few thousand satoshis per request. Those days are long gone, though.
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Your point appears to be that things don't increase in value forever.
Pretty fucking facile, obvious point. It appears to have risen higher than you ever thought possible.
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Well, it has risen higher than I thought possible. But as it has no underpinnings so it can collapse totally. It probably won't, there are still people who buy tulips. But it wouldn't surprise me if it did. And it's already at the point where it's extravagantly expensive to operate.
It's pretty in two ways (Score:2)
It's pretty in two ways: pretty stupid, and pretty likely to stay that way.
Here's what you need to know about ICOs (Score:3)
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Horse shit. The US is a significant country, and ICOs are totally legal here.
What was illegal and fraudulent about this one was that they advertised returns that had no objective basis. If you want to promise return on investment, you have to have some sort of history to show, or at least some reasonable assumptions. If you just make up a crazy number and say people will earn that much you're gonna get the smackdown.
The SEC is being very clear here; this case is about false promises.
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I watched this one from the beginning...
They talked it up left right and center. Can't imagine what they paid for advertising but it was significant as well.
Their site promised all kinds of things besides the crazy return rates - the primary one being the ability to move money in and out via a 'plex card' which basically let you spend your plex coins as cash. Mind you, that's a great feature but not the easiest to implement (to say the least). Currently they're 'asking for beta testers' for 20ish of those
1 down lots more to go. (Score:5, Interesting)
They are all some hybrid of a ponzi/pyramid/mlm scam.
Certainly someone will come along and say how 'you dont know how they work, so you dont know what you are talking about'.
And thats fine, but it appears that the scarcity feature isn't. When an infinite number of 'coins' can be made on a whim, anyone can make Super Bitcoin tomorrow then the day after the next brainiac can make Super Duper Bitcoin, then we'll get Super Ultra Duper Bitcoin(the bestest ever), and so on.
So there is no overarching scarcity, yes there may be scarcity within a particular set but any set can be forked or duplicated with no restrictions, and new sets made to infinity. Any perceived value appears to have more to do with marketing, speculation and wishful thinking than anything 'real'.
Not really (Score:4, Insightful)
Plenty of coin are scams or 'get rich quick' schemes that sponsor the developers of a crypto project. But scarcity is still assured because while there can be infinite coins, most of them are coins that people don't want, or want badly enough.
Bitcoin will always be scarce. Having some schmuck mint another billion Doge coins on a whim is not going to affect scarcity at all because those are pretty much the equivalent of monopoly money compared to Euros or Dollars.
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Someone really needs to launch TulipCoin.
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If you're bored about hearing about tulips, here are some other famous bubbles, all of which lead to people who went all in losing all their money
https://www.investopedia.com/a... [investopedia.com]
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*yawn* More posts about this than useful things said about crypto currency in these threads i think (well, tulips and trump).
We get the point. Many of us remember the 90s tech bubble and almost all know the late 2000s mortgage bubble/financial crisis.
Nowadays, tech stocks are major market players and many of the biggest today were founded in the 90s among all the others which went poof (you may have heard of google, amazon, paypal, ebay, etc). My point being that not everything goes poof with a bubble.
Mo
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Some people need protection from themselves, and it is good to see SEC is trying to do just that.
Cryptocurrencies in their current form is a hopeless project. It is completely unsuited for regular payment transactions, because you cannot hold bitcoin without also speculating. I want to be able to pay for goods and getting paid for work without having the value of my wallet fluctuating plus minus tens of percent points on a daily basis.
As a financial investment instruments, it is completely hopeless as its
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You can make a case that the subprime mortgage crisis was caused by the government forcing banks to lend money to people who were likely to default
https://en.wikipedia.org/wiki/... [wikipedia.org]
Several administrations, both Democratic and Republican, advocated affordable housing policies in the years leading up to the crisis. The Housing and Community Development Act of 1992 established, for the first time, an affordable housing loan purchase mandate for Fannie Mae and Freddie Mac, a mandate to be regulated by the Department of Housing and Urban Development (HUD). Initially, the 1992 legislation required that 30 percent or more of Fannie's and Freddie's loan purchases be related to affordable housing. However, HUD was given the power to set future requirements. During the later part of the Clinton Administration, HUD Secretary Andrew Cuomo announced "new regulations to provide $2.4 trillion in mortgages for affordable housing for 28.1 million families, which increased the required percentage of mortgage loans for low- and moderate-income families that finance companies Fannie Mae and Freddie Mac must buy annually from the then current 42 percent of their total purchases to a new high of 50 percent. Eventually (under the Bush Administration) a 56 percent minimum was established. Additionally, in 2003, "The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago."
Fanny and Freddy were encouraged to underwrite loans to people who shouldn't have got them. Banks knew the FDIC would bail them out and that they were 'too big to fail' so if the FDIC ran out of cash the government could either print money and fix things or see the whole economy disappear.
They also knew if they made profits they
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Yeah, I saw that too. However look at the WIki for the FCIC
https://en.wikipedia.org/wiki/... [wikipedia.org]
Set its composition of 10 members, appointed on a bipartisan and bicameral basis in consultation with relevant Committees. Six members are to be chosen by the congressional majority, the Democrats (three of these by the Speaker of the House and three by the Senate Majority Leader) and four by the congressional minority, the Republicans (two from the House Minority Leader and two from the Senate Minority Leader).
So it was 6:4 Democrat to Republican. So the majority report will obviously reflect Democrat talking points. What about the minority? Well they all disagreed
https://en.wikipedia.org/wiki/... [wikipedia.org]
Look at the Wallison statement
https://en.wikipedia.org/wiki/... [wikipedia.org]
American Enterprise Institute senior fellow Peter Wallison authored a 93-page dissent in which he disagreed with both the majority report and the three other Republican appointees. Wallison argued that the US government's housing policies-implemented primarily through the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac-caused the financial crisis. In specific, Wallison named the GSEs' Affordable Housing goals, heightened enforcement of the Community Reinvestment Act, and the Department of Housing and Urban Development's Best Practices Initiative as the primary culprits. According to Wallison, these programs, which were intended to give low- and moderate-income borrowers better access to mortgage credit, ultimately required Fannie Mae and Freddie Mac to reduce the mortgage underwriting standards they used when acquiring loans from originators. Because the GSEs dominated the mortgage market, they set the underwriting standards for the entire industry and pushed private institutions into riskier loans. Wallison concludes that these policies fueled a massive housing bubble full of non-traditional, risky loans that ultimately led to a financial crisis.[15] Regarding the AEI paper, Phil Angelides, chairman of the FCIC, has stated: "The source for this newfound wisdom [is] shopworn data, produced by a consultant to the corporate-funded American Enterprise Institute, which was analyzed and debunked by the FCIC Report."
I.e. the AEI guy criticized both the Democrat majority and the Republicans for ignoring things like the effect the CRA had, not just on Fanny and Freddy loans but to
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I logged on when they made it 'free' out of curiosity having not been on for years and years.
Couldn't fly any of my ships. Logged off again.