Initial Soup Offering
Say I am a Glump dealer.[1] As you know, Glump is an illegal schedule 1 neologism. This is a problem, as I don’t want to go to prison! So I consult with lawyers and we come up with a clever idea: instead of selling people “Glump”, I label my product “oranges”. I insist that customers call my product oranges. When people ask me if I have any Glump, I remind them politely that I am not selling Glump, I am selling oranges. If people refuse to use the word “oranges”, I won’t sell them any. When arrested, I tell the police that it’s not a crime to sell people oranges. Naturally, they release me right away. After all, I have the law on my side!
Glump is so successful that I’ve decided to try my hand at blockchain. I’ve created blockchain technology that people can use for cool stuff — let’s call if SoupChain. I’ve put in several years of time to develop SoupChain, using my Glump profits, and there’s much more that I want to do. Among other things, I would like to create my own country on Mercury (I like hot weather).
I’ve been told that if I want to raise money I have to be careful about U.S. Securities laws, so I create a not-for-profit foundation in Zug, Switzerland. I transfer all of the assets of SoupChain to the foundation. I install good folk of complementary sensibilities to the foundation as trustees and tell them they’re going to sell Soupies to raise money in an ISO (initial soup offering).
Now here’s the genius part. To buttress my Zug protection, I decide that I’m going to call any payments people make to the foundation “contributions.” After all, this strat-er-gy worked for Glump. So anytime someone calls my token sale a token sale, I correct them and say they are making a contribution. I even create a script in my Slack to correct people when they use the wrong language. My terms expressly say that the buyer has no guarantee of ever receiving Soupies. It’s completely at the discretion of the Completely Independent SoupChain Foundation.
In addition to the quite real and very cool stuff soupchain permits one to do, I create a nice website, write blog posts and update technical whitepapers, land some credible advisors, and go about conditioning the market, I mean marketing, for several months. The token sale goes live and I raise $183.87 million in crypto-currency, in exchange for … nothing! After all, I never promised anyone anything. The Foundation immediately converts most of the crypto into fiat currency. A few months later, I get paid a pre-agreed percentage of the money, because that was the deal with the foundation I created.
After the guppies have settled, some know-it-alls tell me there’s a major flaw in my ointment. For one, while I am calling the money people are giving “contributions”, not a single one of the contributors would have paid money if they hadn’t believed that I was going to issue Soupies several months hence. Were my expensive lawyers wrong? Were these a series of sham transactions or are the payments gifts, free and clear? I’m not entirely sure, but I just made so much money I don’t really care. What’s more, there’s still no extradition treaty with Mercury.
[1]. If there are opinions in this blog post they are mine and mine alone. Any resemblence to any existing soupchain technology is mostly accidental. And I might change my mind, consistency being a hobgoblin, and all.
[2]. Glump — not a thing.
