Ask HN: Current legality of running an ICO for a startup?

1 pointshowtowin7y ago1 comments

This discussion may very well have already occurred, but I'm curious as to how legal it is to fund a startup via an ICO (i.e., create a fancy lander with a lofty stated mission, draft out a whitepaper with a few nice graphics inserted to demonstrate to the public how your loft mission will be built out) these days? I know the SEC has implemented new rules but I don't know how they apply to a startup taking money from the public in the form of a currency which cannot be used to purchase anything.

I began pondering if this is the "new" method of fundraising for today's "leading-edge" tech entrepreneurs. I see many sites like https://sparkster.me/ advertising a sale of tokens and it makes me wonder if I've missed an opportunity to fund the growth of a startup (potentially to a large scale) without outside interest.

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1 comments · 1 top-level

dangus7y ago

A few thoughts.

1. You'll probably need a lawyer with the proper background to do this successfully.

2. Did you Google anything or do any sort of independent research before asking this? http://www.google.com/search?How+to+ico+startup

3. ...create a fancy lander with a lofty stated mission, draft out a whitepaper with a few nice graphics inserted to demonstrate to the public how your loft mission will be built out

...a startup taking money from the public in the form of a currency which cannot be used to purchase anything.

Read this aloud to yourself and tell me how this doesn't qualify as a scam.

4. Have you tried coming up with a traditionally viable product idea or business plan or are you just looking for a get rich quick scheme? How much of your own blood and sweat have you put into your ideas? Or are you just looking to have engineers paid by others' money do all the work for you?

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