[HN Gopher] US SEC sues Coinbase, one day after suing Binance
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US SEC sues Coinbase, one day after suing Binance
Author : jen20
Score : 493 points
Date : 2023-06-06 13:10 UTC (9 hours ago)
(HTM) web link (www.reuters.com)
(TXT) w3m dump (www.reuters.com)
| calny wrote:
| The actual complaint:
|
| https://storage.courtlistener.com/recap/gov.uscourts.nysd.59...
| CodeWriter23 wrote:
| Looks like the US Govt is going to eliminate the competition
| before replacing US Currency with its own crypto, likely
| developed and administered by a third party because the
| government sucks at building stuff.
| alphanullmeric wrote:
| Trust the government fiercely to defend their right to other
| people's wallets and prevent individuals from risking their money
| how they want.
| shrimpx wrote:
| Well, if it ends up in the Supreme Court, my bet is this
| particular scotus will rule against the "administrative state",
| "overreaching" SEC.
| mrkramer wrote:
| Grace period of unregulated crypto is over. Brace yourself, SEC
| is coming!
| detrites wrote:
| The SEC issues fines. To them it's taking a cut, to Binance
| etc, it's operating expenses.
|
| These "enforcements" are more like protection money paid to
| gangsters. The SEC could have created clarity a decade ago.
|
| It's not in their interest to do so, plain and simple. They are
| incentivised financially, to persist in creating a lack of
| clarity, and then randomly "enforcing" inconsistently to
| extract multi-millions off of effectively approved profits.
|
| If / when they refer cases to the DoJ, it's different. But,
| typically they don't, because typically most of the players
| they're going after are doing their best to comply with the
| "uncompliable" landscape they are facing. Or - they're FTX.
|
| And let's just remember that, always. The SEC, effectively,
| gave FTX a green light. Maybe the most damaging crypto fail in
| history likely an outright fraud, of massive proportions and
| where was the SEC? That's what we're dealing with here.
| [deleted]
| [deleted]
| foodjinn wrote:
| Also worth pointing out the SEC's involvement in the subprime
| mortgage collapse.
| menthe wrote:
| There is a well-documented public history of Coinbase taunting
| the SEC - they had it coming.
|
| - https://www.coinbase.com/blog/the-sec-has-told-us-it-wants-t...
|
| - https://www.coinbase.com/blog/coinbase-does-not-list-securit...
|
| - https://www.coinbase.com/blog/coinbases-staking-services-are...
|
| - https://www.coinbase.com/blog/we-asked-the-sec-for-reasonabl...
|
| - https://www.coinbase.com/blog/coinbase-takes-another-formal-...
|
| - https://www.coinbase.com/blog/coinbase-responds-to-the-secs-...
|
| Better yet: https://www.coinbase.com/blog/icymi-coinbase-and-the-
| sec
| ren_engineer wrote:
| of course, how dare private citizens not kiss the feet of
| unelected government officials. I love when government
| institutions take retribution for being "taunted"
| pawelduda wrote:
| The old good non-compliant taunting
| butlerm wrote:
| None of those posts except the last looks like taunting the SEC
| to me, but rather keeping the public and their customer base in
| particular up to date on a live regulatory issue that may
| present a risk to their business. That is the type of thing the
| SEC _requires_ (at least of publicly traded companies) not
| discourages.
| nancyhn wrote:
| Or that's a well-documented public history of the SEC taunting
| Coinbase.
| chroma wrote:
| If criticizing a regulatory body causes them to go after you,
| then that regulatory body is corrupt and should be dismantled
| and replaced with something else.
| dymk wrote:
| Taunt and criticize are two different verbs
| jjk166 wrote:
| And criticize is the correct one in this instance.
| foodjinn wrote:
| And neither is justifiable cause for regulatory action.
|
| I don't think this is the reason the SEC is going after
| Coinbase, but frankly I don't believe the SEC is doing any
| of this on the behalf of "protecting investors".
| jdminhbg wrote:
| Don't think "taunt" is the correct verb here, but it
| doesn't even matter. Taunting government officials is
| protected speech in the US.
| [deleted]
| jcranmer wrote:
| And given the number of cryptocurrency exchanges the SEC has
| been suing in the past several days, it is rather unlikely
| that the SEC is targeting Coinbase because of Coinbase's
| criticisms: had Coinbase said nothing, the SEC would _still_
| be suing Coinbase.
| [deleted]
| blondie9x wrote:
| It took them way to long to act on crypto. The damage was already
| done. Trillions of wealth has been destroyed by crypto.
| loeg wrote:
| Levine has talked about this a bit. It's much easier to be a
| harsh regulator after the crash than on the way up.
| datadeft wrote:
| The end of an era.
| seydor wrote:
| what era? playing monopoly with bitcoin? good riddance, time to
| use it for some real purpose.
| soco wrote:
| The era of the few crypto billionaires and the crowd of regular
| Joe money-losers. Ah, those times.
| koonsolo wrote:
| Go and take a look at the long term price of bitcoin. How
| anyone can lose money in that market is beyond me.
| samb1729 wrote:
| If everyone is supposed to have made money, where did that
| money come from?
| koonsolo wrote:
| Just because the market cap of Bitcoin is 520.50B,
| doesn't mean 520.50B has been invested into it.
|
| Basically, as long as the price of Bitcoin is >0, more
| was won than lost. It's now at 25k, so a lot has been
| won.
|
| So still in another way: if you bought bitcoin with fiat,
| your bitcoin now is still worth 25k
| soco wrote:
| Money is not created out of thin air. There's electricity
| to mine, there's funds investing in crypto, there's fiat
| used to pay ransoms... All this means real world money got
| spent.
| DJBunnies wrote:
| Unlikely.
| danielschonfeld wrote:
| [flagged]
| meesles wrote:
| Considering the EU is unable step up, I think you'll miss the
| enemy we knew after all is said and done (if there is a
| significant shift in the leading powers). I'm not wearing
| rose-tinted glasses about the past (I'm not American), but
| the up-and-coming alternatives seem real scary.
| WinstonSmith84 wrote:
| The EU is the same as the US: pretending to be the land of
| free but effectively controlled by interests, driven by
| hidden agendas. Some other countries don't try to pretend
| to be free nor pretend to work for the people, and maybe
| less hypocrisy is not worse (China or India). A healthy
| balance of competition between world powers is much
| welcomed.
| WinstonSmith84 wrote:
| logical assumption. There has never been a blockchain era
| yet.
| wellthisisgreat wrote:
| lol I am pretty sure the GP is talking about the era of
| crypto swindlers who rode the good ideas of liberty,
| financial diversification, and such into the ground and will
| all hopefully pay for it
| WinstonSmith84 wrote:
| Yes, the dollar has been dominating for quite a long time now
| and we see the world re-orienting their trade practices,
| balancing their reserves towards other currencies, while the US
| is left with 2 choices: embrace change or fight it. The
| democrats are clearly choosing the latter, curious to see what
| the republicans will do. Either way, the US dollar in a decade
| or two will become irrelevant beyond US borders. As for America
| itself, time will tell.
| mindslight wrote:
| I would have written this comment 15 years ago, on the heels
| of an unnecessarily large military being abused to wage two
| poorly thought out elective wars. Continued market arbitrage
| away from wasteful US dominance seemed inevitable, just as
| the break up of the Soviet Union was.
|
| Now, after economic integration with China has run its course
| and not produced democracy? After Russia's attack on Ukraine
| demonstrated that wildly irrational tin-pot dictators still
| exist, they had just been contained? It would seem that the
| USD empire is more valuable than I gave it credit for - it's
| the worst hegemon, except for all the others.
|
| I still do hold hope of reducing the power of centralized
| entities in the long term. But real change like that has to
| happen from the bottom up due to fundamental conditions
| changing (eg individual adoption of cryptocurrencies), which
| is excruciatingly slow. If this is to be the trend, it will
| happen over many decades.
|
| There is certainly the open question of whether China will
| surpass the US military and become a world reserve currency
| based on the draw of military might alone. But that doesn't
| have anything to do with decentralization, rather just a
| different centralizer.
|
| PS treating the diminishing of US power as a foregone
| conclusion and framing it as a political question of whether
| the Republicans might "embrace change" (ie overtly facilitate
| the US's decline) seems like a terribly self-destructive
| paradigm.
| WinstonSmith84 wrote:
| > There is certainly the open question of whether China
| will surpass the US military and become a world reserve
| currency based on the draw of military might alone. But
| that doesn't have anything to do with decentralization,
| rather just a different centralizer.
|
| You're right, but it does have something to do. The US
| dollar is the best weapon the USA have at the moment, far
| more efficient than all the nukes. When the US dollar will
| be treated equal to the Euro or the Yuan or the Yen, the
| USA won't have an edge anymore and... will have nothing to
| lose anymore.
|
| That's when possibly we will see a mass adoption of
| cryptocurrencies where powerful countries will search to
| dominate mining, innovation, etc. As long as we have a
| single country policing the world, adoption will be
| incredibly slow and mass adoption will not happen unless we
| have some visionary politicians ...
|
| > framing it as a political question of whether the
| Republicans might "embrace change" (ie overtly facilitate
| the US's decline) seems like a terribly self-destructive
| paradigm.
|
| US dollar is declining, and that will continue, it's not an
| "if". Suing every crypto company is not going to help
| either way on the long term. It's less about "facilitating
| US decline", than whether politicians can look forward, or
| will keep looking back. Republicans seem to have a more
| open minded approach
| moolcool wrote:
| I don't think any serious people in the world are considering
| the idea that the US would balance their reserves against
| cryptocurrency.
| WinstonSmith84 wrote:
| So 1- I was not referring to cryptocurrencies, crypto
| market is way too small anyway 2- I'm referring to every
| country _except_ the US, obviously...
|
| From Middle East to China or even Japan, every country is
| reducing their global reserves in dollars, and diversifying
| in other (national) currencies. Also, many countries are
| trying to conduct trades in other currencies than the US
| dollar.
|
| Basically, I'm just referring to the decline of the US
| dollar and that's welcome for everybody except maybe for
| the US government.
|
| https://wolfstreet.com/2023/04/02/status-of-us-dollar-as-
| glo...
| adamsmith143 wrote:
| Always interesting how crypto prices tank after legal action is
| announced against exchanges. Isn't the whole point to be
| decentralized in the first place? Hard to believe the whole dip
| is due to people wanting to get their tokens off the exchanges.
| awaythrow483 wrote:
| Price is up today
| nfRfqX5n wrote:
| looks like the price barely changed
| adamsmith143 wrote:
| ? Bitcoin is down 5% since Binance was sued...
| jrm4 wrote:
| Well, there is no "whole point," right? You could roughly
| divide the crypto world into "true believers" and "people who
| just want to get rich."
|
| The _latter_ overwhelmingly dominate price and volume, and
| moreover it 's the "whales," i.e. a relatively small number of
| parties.
|
| I suppose I'm something of a "true believer," but what I may
| want or think is best doesn't matter in the face of the working
| crypto technology. The incentives are in place and to an extent
| we just have to sit back and see what happens.
| dontupvoteme wrote:
| Curious how authoritarian hackernews is - is this just a knee
| jerk reaction to annoying cryptobros? Sounds like a board of
| police officers/retired army men right now commenting on how
| "that boy had it coming"
| timerol wrote:
| It's a long-simmering annoyance at the decline of the
| cryptocurrency ecosystem: from the really cool technology
| underlying Bitcoin, to exciting whitepapers with different
| solutions to hard problems on other coins, to intractable
| whitepapers designed to create hype for coins that do nothing,
| to the clear creation of exchanges as places to gamble, to the
| sidelining of anyone in the cryptocurrency world trying to
| solve any problem other than "get rich quick", to the collapse
| of FTX.
|
| All through it the definition of a security has been clear, but
| Coinbase et al has pretended that the issue is "regulatory
| clarity" and not "we are operating as a fking unlicensed
| securities exchange in the USA bro".
|
| Very rarely a cool use case for cryptocurrency will come up,
| but the marketing is now entirely "invest and make money!",
| which is some combination of tedious and scammy, depending on
| who it's coming from.
| jmyeet wrote:
| Here's my take on crypto:
|
| 1. Despite any theoretical applications, all applications of
| crypto thus far have been to bypass laws. Some of these might be
| moral (eg avoiding currency controls in some countries like
| Venezuela) but mostly it's just illegal stuff;
|
| 2. No one is really interested in applications. They're "hodling"
| [sic] because of Bitcoin FOMO. They want in on the next Bitcoin.
|
| 3. Scams and rug pulls are rife in crypto. Taken with (2), this
| implies that people who think they're getting rich in crypto are
| only going to do so by scamming or rug pulling other people who
| will be left holding the bag;
|
| 4. Despite all the claims about verifiability, somehow the crypto
| space still needs strong government intervention to deter and
| prosecute scammers, criminals and thieves. That's another big L
| for the libertarians and goldbugs-turned-crypto-bros out there;
|
| 5. NFTs are the next level scam about crypto and really only
| exist to sell more crypto;
|
| 6. A lot of otherwise smart people have fooled themselves into
| thinking that their knowledge, skills and experience with some
| other area somehow magically translates into finance;
|
| 7. A whole bunch more snake oil salesmen are happy to sell others
| this lie;
|
| 8. The desire and desperation to get rich by many "hodlers"
| causes them to fool themselves into thinking there's any value in
| crypto;
|
| 9. Reversability of transactions and the ability to change the
| money supply volume are features not bugs; and
|
| 10. What underpins the US dollar is, ultimately, the full might
| of the US government and military as well as trust. Crypto too is
| ultimately still built on trust but has nothing else behind it.
|
| It actually seemed to me that Coinbase was the one company
| operating legitimately. I haven't read the complaint so I'm not
| sure how much merit the charges have. We shall see.
| strbean wrote:
| > 1. Despite any theoretical applications, all applications of
| crypto thus far have been to bypass laws.
|
| Not so: https://en.wikipedia.org/wiki/Bitcoin_in_El_Salvador
| modeless wrote:
| The specific crypto tokens they are classifying as securities
| are: SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX,
| DASH, and NEXO.
|
| Of course they say "not limited to" to hedge their bets, but
| those are the ones they specifically mention. This is the exact
| "regulatory clarity" Coinbase has been asking for, but the SEC
| prefers to sit on their hands for years (while investors are
| "harmed") and then sue, rather than actually tell Coinbase what
| they think up front. Sure seems self-serving to me, rather than
| anything like a genuine interest in protecting investors.
| x86x87 wrote:
| Hah. Protecting investors. What a bunch of croc. This was never
| about protecting investors. If it was they would have issues
| the guidance 5 years ago. This is about blowing up crypto in
| general by removing the on/off ramps (ie the exchanges).
|
| Also: mandatory crypto is bad for the environment and it
| consumes more power than the whole country of Argentina! /s But
| nobody seems to care or talk about how much power crapGPT is
| consuming. The future they tell me
| mjburgess wrote:
| This is such a dangerous attitude.
|
| The reason regulators have waited years, despite the facts of
| the matter being legally obvious, is not wanting to be blamed
| for blowing up the whole ponzi house-of-cards. They've waited
| until enough such houses blew up on their own, that they feel
| "the facts have been demonstrated".
|
| If you want to know why they didnt "blow up crypto", "five
| years ago", its because of you -- and this attitude.
|
| Without it, vast swathes of online grifts that have ruined
| peoeple's lives wouldve been blown out the water by now.
| foodjinn wrote:
| The SEC had a hand in the subprime mortgage crisis, quite
| literally there is no reason to believe they are regulating
| on the behalf of anyone except the large banks. They
| absolutely are not regulating to help "investors" they are
| regulating to protect big banks like JPMC, just like they
| did in 08.
| mjburgess wrote:
| This is genuinely ridiculous. The "big banks" can buy up
| and own as much of the crytpo ecosystem as they desire,
| and all the "whales" are "institutional billionaires".
|
| Crypto has, for years, been held by "the elite" -- and
| Andreessen et al. are exactly using it as a system to
| commit securities fraud.
|
| The direction of wealth flow in crypto is from late
| retail entrants to billionaire major holders who cash out
| using late entrants.
|
| The idea that the SEC, post-collapse-after-collapse, is
| here to "protect JP Morgan"... i mean, this is a patent
| lie, misdirection, and act of desperation in trying to
| set up the SEC as the scapegaot for this exploitative
| system's failure.
| foodjinn wrote:
| I fail to see how that isn't the case when Gensler went
| to bat for FTX prior to their collapse in similar fashion
| to the way the SEC behaved in 08, refuses to clarify
| surrounding the second largest coin in the market, and
| then comes down on exchanges after years of refusing to
| clarify what is or is not illegal conduct.
|
| They created a situation in which they can choose winners
| and losers and people are surprised that they're viewed
| as corrupt?
|
| Asinine.
| mjburgess wrote:
| Gensler was taken in by the tech angle -- duped by the
| (false) claim that this was a world-changing technical
| innovation. He was, for years, convinced that
| "revolutionary" blockchain technology was a viable peer-
| to-peer accounting ledger for a wide variety of assets.
|
| This is the problem with this area: lots of finance guys
| with no csci experience; lots of csci guys dumb on
| finance.
|
| Anyone who has enough experience of both worlds runs a
| mile from all of this, and can see the toxic mixture of
| IT hype, finance "collectables mania", and grift.
|
| The SEC is just catching up to how much the finance
| industry has been duped by bros-in-shorts talking about
| "algorithms"
| foodjinn wrote:
| The SEC isn't catching up to it when they've explicitly
| refused to clarify to both the people they are trying to
| regulate and the lawmakers themselves on what they
| determine to be a security.
|
| The SEC created a situation by which any action could be
| deemed criminal and only decided to regulate when it was
| politically expedient to do so.
|
| There is no reason to believe they are doing this on
| behalf of protecting investors, because investors have
| consistently asked for clarity and the SEC refused to do
| so, and are only now going after the large exchanges
| after a rash of traditional finance banking failures.
|
| For all of the criticisms against crypto, there is zero
| reason to believe the SEC is operating in good faith
| because they have shown time and time again they are not.
| mjburgess wrote:
| Never have new "technologies" been regulated "on release"
| by any government agency, i believe credit cards took ~20
| years.
|
| The SEC here is acting perhaps _the fastest ever_ to the
| development of a new financial instrument.
|
| The howey test was always clear to everyone invovled. The
| whole "SEC hasnt said anything yet" is a line used by
| liars to cover-up and distract from their patent fraud --
| which takes place, not coincidently, off-shore. Every
| investigation so far has yielded plenty of internal chats
| to the effect of 'lol this is illegal lol lol'. No one
| here was in the dark, that's why everyone has redflags
| out-the-wazoo.
|
| The background historical context here is also that gov
| cannot been seen to stifle new tech, and has to "give it
| its fair shot" absent regulation. Or else be blamed for
| its failure.
|
| I think it's frankly obscene after the fraud-after-fraud-
| after-fraud that is the entire crypto system, that any
| body would pin anything on the SEC.
|
| This is yet another lie designed to distract form the
| last 13 years of failure -- all the crypto system has
| done is breed massive amounts of fraud, money laundering,
| ransomware and the most industrialised grift in human
| history.
|
| The SEC has not failed here one iota in comparison to
| this industrialised con.
| modeless wrote:
| The whole point of the regulation is to stop it from
| blowing up and harming investors. If they wait until after
| then they have failed at their job.
| rvz wrote:
| > Also: mandatory crypto is bad for the environment and it
| consumes more power than the whole country of Argentina! /s
| But nobody seems to care or talk about how much power crapGPT
| is consuming. The future they tell me
|
| He's right you know: [0] [1]. Cryptocurrencies like Ethereum
| moved from proof-of-work to proof-of-stake, eliminating 99%
| of their CO2 emissions. [2] There are alternatives to PoW and
| they exist today.
|
| AI (Deep Learning) on the other hand is going to continue to
| waste more energy, water, etc has no viable efficient
| alternatives in training their deep neural networks without
| building more data centers.
|
| [0] https://gizmodo.com/chatgpt-ai-water-185000-gallons-
| training...
|
| [1] https://www.standard.co.uk/tech/ai-chatgpt-water-usage-
| envir...
|
| [2] https://consensys.net/blog/press-release/ethereum-
| blockchain...
| thot_experiment wrote:
| Deep learning actually provides something of value now, and
| the training is in service of seeing if maybe it could do
| better in the future. Crypto provides a way to part fools
| from their money, and a way to circumvent financial laws.
|
| Yes, I get that there's "value" to circumventing sanctions
| and whatnot, but that's the same sort of value as making
| people phone you to cancel a subscription or optimizing CTR
| on an ad or whatever. It's not the kind of "value" that
| benefits society.
| tyre wrote:
| Nononononononononononono we don't get to play that game. The
| SEC has perfectly clearly communicated for years its regulatory
| clarity: most crypto-currencies are obviously securities.
|
| When Coinbase and others say "regulatory clarity", they _want_
| the answer to be some framework for how they can continue to
| sell crypto to everyone /anyone. But that's not the policy!
|
| Most of these coins are some combination of ponzi schemes,
| vaporware, pump-and-dumps, fraud, money laundering, rug pulls,
| etc. The SEC's position absolutely protects investors from
| getting involved with that crap.
| modeless wrote:
| That _is_ the policy. The SEC has said that some
| cryptocurrencies are OK, like Bitcoin and Ethereum. And
| though today they gave a list of some they don 't like, there
| are plenty of others that they still refuse to talk about
| despite explicit requests. What is the point of being opaque
| about it? It's not protecting investors, that's for sure.
| Seems more like they just want to be punitive.
| TylerE wrote:
| New tokens are being spawned faster than the SEC could
| possibly do even a cursory analysis of them.
| modeless wrote:
| Of course. But they could clearly have analyzed more
| than, say, two in the past decade before filing suit.
| droopyEyelids wrote:
| Here's a little thought experiment.
|
| Let's say a new government organization makes a rule
| "You'll get fined if you make a red ball for playing catch"
|
| You think about it for a while, and decide to make a red
| Hecatohedron for playing catch. You start playing catch
| with it and if it's ok. The new government org doesn't
| reply and eventually fines you.
|
| Is that government organization being opaque?
| transducers wrote:
| https://en.m.wikipedia.org/wiki/Brian_P._Brooks
|
| He is apparently BAM CEO (B) of the SEC's Binance lawsuit [0],
| and also worked at Coinbase (to setup compliance) [1]. I was
| reading up on his activities on his wiki page and rather
| impressed. Was a comptroller of the Currency for a while in 2020,
| too. He's still sitting on the board of another company that's in
| block chains (BitFury [2] does infrastructure) and apparently a
| lot of "vision" related stuff [3]
|
| [0]: https://news.ycombinator.com/item?id=36202663
|
| [1]: https://en.m.wikipedia.org/wiki/Brian_P._Brooks#Coinbase
|
| """ After working at Fannie Mae, Brooks was Chief Legal Officer
| of Coinbase from 2018 to 2020. Coinbase is an $8 billion Silicon
| Valley startup that is one of the largest digital currency
| platforms in the world. At Coinbase, he was responsible for the
| company's legal, compliance, internal audit, government
| relations, and global intelligence groups. """
|
| [2]: https://bitfury.com/
|
| [3[]: https://www.axelera.ai/
|
| I got a chuckle from the "democratizing edge AI" since they are
| selling surveillance AI for the edge. Reminded me of Washington
| Post's masthead. Are they being ironic? /g
| shp0ngle wrote:
| Well, there is your regulatory clarity, Coinbase.
| johndhi wrote:
| Question: is it even possible to register as a security? If you
| do, what follows?
|
| So if SOL for example were to register somewhere, what would they
| need to do, and what would I need to do to buy it?
| SpicyLemonZest wrote:
| There's no fundamental reason it would be impossible. Solana
| Labs would need to file a registration statement with the SEC (
| https://www.sec.gov/education/smallbusiness/goingpublic/regi...
| ) including among other things a description of its business
| practices and audited financial statements.
|
| Once they did that, you would be able to buy and sell it at any
| registered exchange who's willing to list it. Coinbase, maybe,
| if they're willing to accept the costs and regulations
| involved.
| arctek wrote:
| Except that it would exclude a raft of non-US citizens then,
| i.e. any sanctioned country, Coinbase would also need to
| become registered as an ATS and their current settlement and
| clearing processes would need to be re-engineered from the
| ground up. For all intents and purposes you cannot register a
| cryptocurrency with the SEC and then go on trading it
| anywhere publicly - it doesn't exist. There's only been a few
| projects that managed to avoid this: Enigma for example moved
| to a decentralized network and changed their coin over (so it
| was magically no longer a security according to the SEC) and
| the SEC just fined them and made them issue refunds for the
| project raise.
| JumpCrisscross wrote:
| > _it would exclude a raft of non-US citizens then, i.e.
| any sanctioned country_
|
| This lays bare the problem with the _status quo_. Wanting
| to profit off sanctions busting isn't a sympathetic pitch.
| dbmikus wrote:
| In some cases, I find it sympathetic. For example, I
| don't think it's a clear cut moral resolution that people
| should exclude Iran from buying US goods and services,
| but they are on the sanctioned list. I supported Obama
| dropping sanctions on Iran back when he was president.
|
| There's a difference between what is legal and what is
| moral. For what is moral, there are hardly any absolute
| answers.
| JumpCrisscross wrote:
| > _I don 't think it's a clear cut moral resolution that
| people should exclude Iran from buying US goods and
| services, but they are on the sanctioned list_
|
| Sure. But crypto is an inefficient way to express that
| policy preference. And it's difficult to comport claims
| of altruistic intent with crypto's financial incentives.
| marcell wrote:
| Registering a security means basically an IPO. The burden is
| very high and is out of reach for crypto startups that have
| little revenue and under $1 million in funding.
| cultureswitch wrote:
| And there we go. The promise of a form of cash outside of USA
| government control is terrifying to the USA government. And well,
| most other governments too.
|
| It is pretty obvious that when the USA government goes after
| crypto exchanges, what matters is to get the exchange shut down.
| The actual justification for doing so is an afterthought.
|
| I'm torn on the issue of whether dematerialized privacy-
| preserving cash (and yeah, I know crypto exchanges had very
| little to do with that) is even a good thing to begin with. To me
| the strongest argument for it is that the crimes that would be
| facilitated by that are already trivial, as long as you're rich
| enough. You don't need Monero when you can "sell" a Monet in
| exchange for services instead. It is incredibly hypocritical of
| governments to complain that privacy-preserving currencies enable
| criminals when they have done literally nothing to stop the
| numerous convenient ways to launder money that are accessible
| only to rich and powerful people.
| sealeck wrote:
| I think part of it might be that the only use case for which
| crypto really works is for drug dealers to safely conduct
| transactions.
|
| I believe in the right to privacy, but I believe in it as an
| extension of a personal right to self-expression. Freedom to
| practice your religion, to date whomever you want, etc
| (provided it doesn't hurt others), sure. Freedom to hold 10^9
| USD secretly so that you don't have to pay tax on it and can
| peddle drugs, not really.
| gitfan86 wrote:
| That is putting the cart before the horse. The USA is not a
| libertarian government. Why did anyone think that it was a good
| idea to invest in products that would only survive in a
| libertarian government?
| cultureswitch wrote:
| Invest?
|
| I think investing in crypto is purely based on greater fool
| theory.
|
| Doesn't mean there aren't any legitimate uses for
| cryptocurrency, let alone the blockchain technology.
|
| In this sense, why should Coinbase and a currency exchange
| booth in some airport be considered any different? Of course,
| Coinbase doesn't quite operate statelessly like that, and to
| me that's the issue here.
| x86x87 wrote:
| Lol. What is the US government?
| seydor wrote:
| I think it was always 100% clear that cryptocurrencies can't live
| within the confines of the laws of a sovereign state. Why people
| registered their exchanges along with the rest of the banking
| system ? it made zero sense from the start, as does the whole
| idea that cryptos can be traded in regulated capitalism. Bitcoin
| needs its own country (or planet) with nukes and all.
| duxup wrote:
| > Why people registered their exchanges along with the rest of
| the banking system ?
|
| Access to people and money?
|
| Personally I think the initial philosophy behind crypto and how
| it is actually used has long since disconnected.
| seydor wrote:
| i think it's not possible to be disconnected. it's like using
| laptops to cook pasta
| duxup wrote:
| I don't know what that means.
| jrm4 wrote:
| Not that I agree with the own planet thing; but yes -- it's
| odd. All of this was 100% predictable and should have been
| expected by everyone. The _stated purpose_ of crypto was to get
| around this; its weird to see crypto fans "get mad" at e.g.
| the SEC. It's like getting mad at a shark for going after
| bleeding prey; it's just what was always going to happen.
| hirako2000 wrote:
| Mad because some entrepreneurs makes the effort to build
| legitimate business entities, and what certain governments
| find to do is any scheme to keep them out of legitimity.
|
| Not that crypto fans would care all that much about these
| businesses, but there is a need to onramp and offramp given
| transactions are made in their vast majority in fiat. An
| exchange run as a business having at least a lot at stake in
| ensuring continuity is one of the decent ways to get on with
| crypto.
|
| If it was my call I would skip the perp and earn products to
| stay clear of regulators when operating in the US, but there
| must be stories behind closed doors that we don't easily get
| to know would be my guess.
| JohnFen wrote:
| > Mad because some entrepreneurs makes the effort to build
| legitimate business entities, and what certain governments
| find to do is any scheme to keep them out of legitimity.
|
| This isn't what it looks like to me. It looks to me like
| the entire point of cyptocurrency was to complete route
| around regulations that these people thought were too
| onerous. That's not building a "legitimate" business,
| that's taking a risk and building a business in the hopes
| that it will end up being legitimized.
|
| I think that if you're taking a big risk and lose, it's
| unseemly to be mad at anyone except yourself.
| jrm4 wrote:
| Exactly this! For whatever reason I have this image of
| guy in a wetsuit and surfboard looking at a big wave
| coming in and being like "whoa, what's this? how dare
| it!"
| hirako2000 wrote:
| Entrepreneur are risk takers, and they do move the
| needle. We easily forget to thank them.
|
| Would you say the same about music streaming, as
| companies were launching services without all the due
| dues, but knew they would finally have leverage once they
| have a significant user base to negociate deals for
| legitimate offerings?
|
| Anyhow those big risk takers are not losing because of
| the roulette factor here, they are hit by some political
| stance that wants to keep a statu quo, with crypto
| entering more mainstream at each cycle, legislators work
| hard at putting a stop to it.
|
| Just read what the head of the SEC said, verbatim "the US
| does not need other digital currencies". As if it was the
| SEC to tell what the US need and doesn't need. This whole
| war against crypto isn't about unregistered securities
| being sold by unlicensed businesses, it's about using
| whatever they have to tame what has become a threatening
| industry, a competition to the traditional financial
| system. It's about keeping the statu quo.
|
| Yesterday bitcoiners were drug dealers and terrorist,
| today they are illegitimate investors and exchanges are
| not following financial regulations, the law, abusing
| innocent uneducated investors. These laws are impossible
| to navigate, after countess demands from businesses and
| those competent in that tech along with the law: Provide
| clear direction and regulations for a legitimate crypto
| field. But no, let's sue businesses who insist to operate
| and keep the rules impossible to adhere to so that we can
| sue, shut down, after the demonising that stopped working
| so well after a while.
|
| I would like to be less one sided but the simplistic
| views on the crypto situation can only make me more
| radical in the view that the whole thing will be, or
| should be some may say, absolutely not regulated. Those
| who get into it don't want some imposed pseudo
| protection, they just demand the freedom of money. If its
| the SEC or the danger of being rug pulled, more and more
| will chose the second.
| seydor wrote:
| it's not like these onramps served the real purpose of
| digital currency. People don't buy bitcoin in order to pay
| for services, they buy it to speculate. Bitcoin could
| succeed even without onramps; digital workers can easily
| accept bitcoin if they care, which over time will be traded
| with goods in the physical world with other people who
| care. That's grass roots deployment, not VC-backed
| "legitimate" ponzi exchanges.
|
| I do however understand why people are mad. To me it seems
| that crypto is to GenZ what Real estate was to boomers.
| It's about building generational wealth in a time of
| extreme inequality where most other avenues have been
| closed. It may come back for that, but it has to be built
| outside the confines of state-regulated money systems
| hirako2000 wrote:
| The offramp / onramp is necessary so long as we have two
| systems, we need a gate between the two, even if crypto
| had 10 times its current level of trading transactions,
| as in trading of good or services for crypto, there would
| still be a large imbalance where more income would be
| taking fiat in. Adoption is happening, surely less so or
| far slower in the developed nations like in the US, but
| is not contracting globally. Unless all fiat currencies
| were to suddenly collapse, the bridge is needed. And,
| even if the wildest adoption was to take place, there
| will likely still be centralised issuers here and there,
| some countries sitting on paper money which would make
| off ramping a very long term need.
|
| Interesting comment, I like the parallel with the boomers
| era. Crypto may just take over once throw genX take over
| in far greater numbers, get elected, and the few old
| recalcitrant putting obstacle get cornered.
| seydor wrote:
| If bitcoin was valued, banks would create the onramps.
| The current, speculation -based exchanges are putting the
| cart before the horse
| jrm4 wrote:
| Yeah, but let's be real. I 100% believe in the big picture
| theory of crypto, but it's not at all _unreasonable_ for
| the parties in charge to see what 's actually happening to
| real people and to be like "this is NOTHING but scams."
|
| I don't have a lot of sympathy for whingeing about "the SEC
| is treating us unfairly." They're doing their job. If
| "crypto-at-large" wants to be an acceptable business thing,
| then it needs to better protect people from getting
| scammed; present regime of crypto things have nearly
| absolutely failed at this.
| TimPC wrote:
| Crypto companies think they don't trade securities which is
| clearly wrong and contradicted by their own advertising. People
| buy crypto without a real use for crypto because they think they
| can sell it for more later. Everyone under the sun knows this.
| It's obviously a security and failing to register should be met
| by SEC cases like this one.
| dcow wrote:
| There are two modalities to crypto and the law needs to treat
| them differently. Running a node on a crypto currency network
| does not generate securities. It generates commodities. We
| don't tax people on the FMV of gold when they dig it out of the
| ground. But, speculating on the price of gold by creating a
| virtual token/contract/etc. and selling that, well that's
| obviously a security. Just because people buy gold
| speculatively does make it a security. So buying bitcoin or
| chia (no longer eth) is still buying a commodity. Anything
| else, yeah, seems like it passes the sniff test for a security.
| Analemma_ wrote:
| > We don't tax people on the FMV of gold when they dig it out
| of the ground.
|
| Uh, yeah, we definitely do. I have relatives who sell the oil
| under their property, and that absolutely is taxable income.
| dcow wrote:
| The _sale_ is taxable obviously and of course. The same is
| true for gold and crypto.
|
| But your relatives didn't get a tax bill for 25% of the
| value of the oil the moment it was prospected, did they?
| Their land value went up but they weren't taxed on the
| value increase either (that happens when the land is sold).
| dgfitz wrote:
| Maybe I'm mistaken, but my property taxes increase as the
| value of the property increases. The sales tax is a tax
| on the sale itself when sold at price $X.
| vkou wrote:
| > We don't tax people on the FMV of gold when they dig it out
| of the ground.
|
| Why shouldn't we? We tax people on the FMV of something
| valuable created out of thin air, why should gold be an
| exception?
| paulddraper wrote:
| > We tax people on the FMV of something valuable created
| out of thin air,
|
| There are _income_ taxes which apply when goods or services
| are sold.
|
| There are _sales_ taxes when goods are purchased.
|
| There are _property_ taxes when goods are owned.
|
| Nothing gets taxed on creation.
| revbed wrote:
| And there are _excise_ taxes when goods are created.
| paulddraper wrote:
| Excise taxes are a product-specific sales tax.
|
| For example, on gasoline. The tax occurs at the pump, not
| at the refinery.
| lottin wrote:
| It isn't exempt. The miner will have to pay VAT when they
| try to sell the gold.
| stonogo wrote:
| In my youth it was illegal to own gold _at all_ unless it was
| jewelry. You 'd be surprised what "we" do when it comes to
| wealth.
| WoahNoun wrote:
| > We don't tax people on the FMV of gold when they dig it out
| of the ground.
|
| The IRS considers found gold to be gross income and taxes are
| owed on it.
| whimsicalism wrote:
| Dig out of the ground != found gold, look at the caselaw
| [deleted]
| zamfi wrote:
| > People buy crypto without a real use for crypto because they
| think they can sell it for more later.
|
| That's not what makes something a security -- many things fit
| into that template that aren't securities: collectibles,
| commodities, etc.
| isp wrote:
| > Crypto companies think they don't trade securities
|
| To quote the Binance Chief "Compliance" Officer: "we are
| operating as a fking unlicensed securities exchange in the USA
| bro"
|
| Source: Quoted in the filing yesterday where SEC sued Binance
|
| > 111. As Binance's CCO bluntly admitted to another Binance
| compliance officer in December 2018, "we are operating as a
| fking unlicensed securities exchange in the USA bro."
|
| https://www.sec.gov/files/litigation/complaints/2023/comp-pr...
| koonsolo wrote:
| > in the USA
|
| Important part of the conversation that some people here seem
| to forget.
| zymhan wrote:
| The title of this post is "US SEC sues Coinbase".
|
| No one is "forgetting".
| koonsolo wrote:
| Literally a parent comment:
|
| > Everyone under the sun knows this. It's obviously a
| security
|
| Is this US ignorance or what? "It's a security in US, so
| it's a security for everyone under the sun"
| asveikau wrote:
| I hear if you add "bro" to a statement it makes you immune
| from prosecution.
| EA-3167 wrote:
| It's almost unbelievable that someone would put something so
| monumentally incriminating in writing, but there it is.
|
| Those boys are doomed.
| Analemma_ wrote:
| A bunch of people have speculated that this was a CYA move.
| I mean, if you get hired as the Compliance Officer for a
| company which clearly has no interest in compliance and
| only hired you to give a facade of respectability, you
| probably want to have a paper trail indicating "I clearly
| communicated that this was against the law, and they
| ignored me" for when the cops inevitably come.
| jahewson wrote:
| Nothing says "innocent" like observing your criminality
| before getting right back to participating in the crime.
| ceejayoz wrote:
| It could, if you're a whistleblower/informant. The SEC's
| bounty program makes it a pretty good idea.
| https://www.sec.gov/whistleblower
| madrox wrote:
| This was my thought as well. In all likelihood, the CCO
| is the person who informed to the SEC. If I were in that
| role, I would have.
| drexlspivey wrote:
| SEC is supposed to tell them what is a security and what isn't
| so they can refrain from selling them. Exchanges have been
| asking for clarification over and over. So far the only thing
| the SEC said on the subject is that BTC in _not_ a security but
| nothing about the other cryptos.
|
| In the absence of regulatory clarity Coinbase have devised
| their own framework to classify what tokens aren't securities
| and proceeded to list them. I don't know how you can blame
| them. It's the SEC's job to tell them what they can trade and
| what they can't but they refuse to do it.
| TylerE wrote:
| They did tell them - Howey test etc, Coinbase just didn't
| like the answer and thus has been pretending they didn't hear
| it.
| drexlspivey wrote:
| Please point to where the SEC has made any official
| statement defining which crypto is and isn't a security.
| TylerE wrote:
| That's not how it works. They say what a security is.
| It's not their job to be babysit. Corps wishing to play
| in this field are expected to understand the basic
| foundations.
| Yizahi wrote:
| When tokenbro industry invented a very convoluted asset class
| they expected government to say "Oh, it's really hard to
| understand and classify it, that's why we won't do it at all.
| You guys can do whatever you want now.". But actually they
| said "Oh, it's really hard to understand and classify it,
| that's why we will have to do it the long and painful way,
| and you guys can wait for us or not. But if you want to
| operate before the decision is reached - it's on you if you
| break the law.".
|
| Apparently a really convoluted business plan is not an
| inherent human right, if it is masking law infringement in he
| mean time. Who knew, right?:)
| krunck wrote:
| That's odd. All these years I thought I was exchanging dollars
| for Bitcoin for spending it. Thanks for setting me straight.
| _fizz_buzz_ wrote:
| I know lots of people that own bitcoin. I haven't met anybody
| that uses bitcoin to spend it on anything.
|
| It still makes front page news on reddit if someone does
| groceries with crypto: https://old.reddit.com/r/CryptoCurrenc
| y/comments/13a9q3r/yes...
|
| People write articles if a house gets sold with bitcoin:
| https://finbold.com/house-in-portugal-sold-for-3-bitcoins-
| in...
|
| Spending bitcoin on "stuff" basically doesn't exist. It's a
| rounding error.
| dopa42365 wrote:
| It's almost as if people don't actually want a multiple
| dollar transaction fee that can take an hour (or more) to
| process.
|
| That may be acceptable when you use bitcoin (or more likely
| Monero) to buy whatever your heart desires, but is
| absolutely not usable for regular purchases.
| achillean wrote:
| As a vendor that tried accepting crypto I can confirm that
| it's basically non-existent. And the few transactions that
| do take place have a lot more issues than regular payments:
| https://blog.shodan.io/accepting-crypto-a-vendor-
| perspective...
| throw1234651234 wrote:
| It's absolutely unclear what the SEC is doing here at all. Why
| is ALGO a security and ETH is not? They do the same thing. What
| are the implications of this lawsuit? Completely unclear. This
| is vague and unhelpful.
|
| edit: Keep downvoting - the fact, with a clear example,
| remains.
| pjc50 wrote:
| Howey test.
| tromp wrote:
| I think ETH should have been classified as one too, due to
| its ICO. Making an exemption for that was a mistake...
| WinstonSmith84 wrote:
| Let's ask Gensler what are his thoughts about ETH then
|
| https://twitter.com/sassal0x/status/1648338351832064003
|
| Oh wait ... :-)
| throw1234651234 wrote:
| That's amazing on the level of refusal to answer a simple
| question.
| simpsond wrote:
| The primary use cases of ETH are changing state of the
| network and collateral for state change validation.
| Requester pays to effect change and some ETH is burnt and
| some goes to validators to incentivize operation. What
| other security does that? I don't expect profit when using
| it to change state of the network.
| EscapeFromNY wrote:
| When was ETH declared as not a security? I don't remember
| hearing anything about that.
|
| The SEC says only BTC is a commodity:
|
| https://www.axios.com/2022/06/28/bitcoin-is-the-only-coin-
| th...
|
| The CFTC says only BTC is a commodity:
|
| https://cryptoslate.com/cftc-chair-rostin-behnam-snubs-
| ether...
|
| People keep saying that regulation is unclear, when let's be
| honest, it's perfectly clear. Just not what a lot of people
| wanted to hear.
| whimsicalism wrote:
| > People keep saying that regulation is unclear, when let's
| be honest, it's perfectly clear. Just not what a lot of
| people wanted to hear.
|
| I honestly don't know how you can say that with a straight
| face if you have ever looked into this for more than 5
| minutes.
|
| The regulation is _not_ clear and they refuse to clarify
| when asked on many important topics. Compare that to other
| security related issues, where regulators are very
| proactive about _clearly_ defining what is what, publishing
| explainers, etc. etc.
| taeric wrote:
| The fact that they have been asked, point blank, by
| congress, "is ETH a security?" and the SEC wouldn't answer
| is pretty fair for claiming "not perfectly clear."
|
| Even here, it wasn't all of ETH that is under question. So,
| if you have bought some ETH from coinbase, it isn't under
| fire here. If you paid them to stake your ETH, it is. It is
| unclear, to me, what it would mean for any ETH you staked
| personally.
| vkou wrote:
| I've watched that interview, congress would ask a loaded
| question, framed in a fallacy[1], the chair would start
| answering it, and the congresscritter would interrupt him
| and throw a tantrum. Repeat 5x.
|
| It wasn't a good look. For the congresscritter.
|
| (I wonder how much money he's gotten from Sam, CZ, and
| Coinbase...)
|
| [1] The fallacy in question is the congresscritter's
| claim[2] that a security can't also be a commodity. This
| is trivially disprovable by a simple example - an
| isolated company town using scrip, where the scrip also
| happens to be company stock.
|
| [2] Whenever the chair would start responding to the
| fallacy, the congresscritter shouts over him, because if
| he doesn't, his argument-in-the-form-of-a-question falls
| to pieces.
| taeric wrote:
| He wouldn't start answering. He was asked "yes or no, is
| ..." and would start hemming and hawing with words that
| were neither "yes" or "no."
| vkou wrote:
| Have you stopped beating your wife?
|
| Yes or no. No hemming or hawing. It's a simple question,
| yes, or no?
|
| ----
|
| Is it clear to you now that a simple yes or no question,
| couched in an incorrect assertion is not actually a
| simple yes-or-no question?
| taeric wrote:
| A question where answering easily implies past behavior
| is very different from one that does not. "Do you think
| it is ok to beat your spouse?" better not get any slow
| rolled answer, and is more comparable here.
|
| Hell, I'd be fine with a hedged answer of "it can be."
| That would make a ton of sense and would make sense. Akin
| to asking "is it speeding to drive your car at 40?" The
| answer would be "in certain situations, certainly. Can be
| too fast and it can be too slow." So an answer of "I
| can't answer without more context" would be fine.
|
| None of that is what I saw.
| vkou wrote:
| Past behaviour isn't the issue. An incorrect assertion is
| the issue.
|
| Let me give you another chance to answer a simple yes or
| no question.
|
| ----
|
| Since it's obvious that democrats are all criminals and
| baby-eaters, is Elizabeth Warren a democrat?
|
| Yes or no. No hemming or hawing. I'll interrupt you as
| soon as I hear any words besides those two. Your answer
| or failure to answer will appear as a headline in the New
| York Times.
|
| ----
|
| The chair _was_ responding to the statement made in the
| question, the congressman just didn 't like what that
| response was, which is why he kept interrupting.
| whimsicalism wrote:
| For any who might be interested, a link to the exchange
| that this user is comparing to asking if "democrats are
| all criminals and baby-eaters" [0]. Remember, the law is
| "extremely clear" on whether these tokens are securities
| or commodities, according to the GGP commentator.
|
| [0]: https://youtu.be/VhA1dZXeao0?t=58
| taeric wrote:
| The question was literally "is ETH a security?" To
| compare that to the questions you are stating is
| laughably bad faith argument.
|
| Though, I'll bite. What statement is made by the question
| "Is ETH a security?" Why is that a question that can't be
| answered with "Yes", "No", or "it depends how it is
| packaged"?
| vkou wrote:
| The question was literally "Because something cannot be
| both a security and a commodity, is Eth a security?"
|
| The chair's answer was, as we can glean from the
| interruptions (but who the hell really knows, the man's
| not allowed to finish a sentence) 'It depends'.
| taeric wrote:
| If he was saying "it depends" he had a lot of words to
| say that. His sentences were like my talking to the kids
| when I ask "did you do your homework?" It was painful.
|
| And note that some things can be both a security while
| wrapped around a commodity. Just look at brokered CDs.
| Such that, even if you agreed that ETH is a commodity,
| you can still have financial instruments on ETH that are
| securities.
| trifurcate wrote:
| No, I have not stopped beating my wife.
| throw1234651234 wrote:
| That's the root of the problem - it's absolutely unclear
| what the global implications are and if this will be used
| to go after individuals staking on their own, etc.
| loeg wrote:
| No agency has the resources or interest to go after
| individuals that aren't doing anything especially
| egregious.
| throw0101c wrote:
| > _Crypto companies think they don 't trade securities_ [...]
|
| I think the main debate is whether they are (in the US)
| securities under the SEC or commodities under the CFTC.
|
| Though there may be related products and funds that are being
| traded.
| EricDeb wrote:
| People buy houses, dont live in them, purely to sell them for
| more later.
| gonzo41 wrote:
| What's the use of crypto again? Because I think it's kinda
| useless. Just like NFT's
| cultureswitch wrote:
| Imagine your business or employer is suddenly blacklisted by
| payment processors over political/cultural reasons.
|
| The advantages of crypto should become pretty clear at that
| point.
| greenie_beans wrote:
| imagine your crypto wallet being blacklisted by a 51%
| attack, over political/cultural reasons.
| sebzim4500 wrote:
| This hasn't happened to any large coins though, whereas
| people have had their bank accounts frozen for political
| reasons.
| Demmme wrote:
| Destroying our planet even faster by tons and tons of Asics
| garbage and CO2 production
|
| Lucky enough VC is now going to ml
| matheusmoreira wrote:
| Monero is private and perfectly usable for payments. I've
| gotten paid in Monero, works great. People just need to start
| using it.
| taeric wrote:
| I could ask the same for a lot of things, though? Time
| shares, collectible card games, collectibles at large,
| fashion at large, etc.
|
| Not that I can or will wholly defend crypto. That just
| doesn't seem like a relevant complaint.
|
| I do question the desire for everlasting permanence of the
| blockchain. I know we like to keep real estate deed records
| and such going back as far as we can, but even there we have
| limited utility of that. Encasing it in a technical solution
| that expands to cover more transactions does feel limited in
| usefulness. Largely ironic/funny that it makes it incredibly
| unsuited to criminal use.
| jakear wrote:
| > Time shares
|
| They bring the probability that you will be harassed by
| police/landowners/elements/civilians when residing in an
| area way down. Personally, I take the harassment and sleep
| on the street. But it's not easy and many would pay not to.
|
| > collectible card games
|
| You have fun when you play them. People pay to have fun.
|
| > collectibles at large
|
| Idk some people just get weird addictions. I put
| collectables at large in the same bucket as crypto, no
| defense there.
|
| > fashion at large
|
| Looking good is more likely to get you laid. People like
| getting laid, and will pay for it.
| alwayslikethis wrote:
| Permissionless electronic worldwide payment. That's it. An
| optional but good to have part is anonymity, which you get
| with Monero.
| fullshark wrote:
| Economic actvity that you don't want a bank or government
| body to stop, so: illegal activity.
| foodjinn wrote:
| Mastercard and paypal have both shut down legal activity in
| the last 4 years on the backs of government decisions or
| targeting legal, but politically inconvenient activity and
| there seems to be no slowing down on that avenue. Pornhub
| is one recent major example of that.
|
| The idea that it's just criminal enterprises that benefit
| from being able to participate in markets without
| interference is laughable at best given the increased
| interconnectedness between banks and the regulators
| themselves, especially not even 6 months after a rash of
| major banking failures within the traditional financial
| markets.
|
| There is very little reason to have a favorable opinion of
| the SEC following the 08 collapse given their own hand in
| it or the banking failures existing now, especially when
| they refuse to clarify their position on what is or is not
| a security so people CAN legally operate in the space. It
| appears to many both inside and outside of the space that
| the SEC is wielding its regulatory arm to create winners
| and losers, and with their own track record it's a failing
| proposition.
|
| It may be hyperbolic, but the holocaust was a legal
| activity in Nazi occupied territory.
| Kaytaro wrote:
| Giving individuals the power to be their own banks is not
| useless. Unpractical maybe, but not useless.
| __MatrixMan__ wrote:
| Crypto is for coordinating group behavior in the presence of
| powerful adversaries (e.g. governments), always has been.
| JohnFen wrote:
| Umm, OK. Funny that's not how it's been marketed. But I'm
| baffled as to how cryptocurrency is better for doing that
| than all of the other ways of doing that.
| __MatrixMan__ wrote:
| The drugs I've bought with cryptocurrency have been
| cheaper and of better quality than the drugs I've bought
| with dollars, by a wide margin. So there's that.
|
| The marketing you're talking about is for the investors.
| By the nature of the product, the users have powerful
| adversaries and are probably operating in secret. You
| can't expect their use cases to show up in the marketing,
| that would defeat the purpose.
|
| Sure, you get the bad with the good. There are definitely
| unsavory things going on under the covers. But you have
| to weigh that against the misbehavior of the powerful in
| a world where they're more difficult to coordinate
| against due to a underdeveloped crypto.
|
| It's a trade off, but I think it's a worthwhile one.
| JohnFen wrote:
| > in a world where they're more difficult to coordinate
| against due to a underdeveloped crypto.
|
| This is the part I don't understand. How does
| cryptocurrency make it easier to coordinate people than
| all the other tools we have to coordinate people?
| __MatrixMan__ wrote:
| If you rely on systems that involve implicit custodial
| trust (i.e. not crypto) to coordinate with your homies,
| and you have powerful adversaries, your adversaries will
| compel those custodians to prevent you from communicating
| with your homies. They also might find you and hurt you.
|
| This happened with thepiratebay and DNS. It happened with
| wikileaks and paypal. It happened at the ISP level with
| Signal during recent unrest in Iran. It happens with the
| US banking system anytime somebody manages to get
| somebody else on one of the OFAC lists. It happens to
| would-be radicals on twitter all the time.
|
| On the other hand, systems that don't involve implicit
| custodial trust don't have these problems, which is why
| journalists in China occasionally publish on Ethereum,
| because the Chinese censors don't have a single-point-of-
| failure to attack.
|
| I don't think that currencies are an especially
| interesting application (although the wikileaks case is
| an example where they are relevant to group
| coordination). It's just that the currencies are what
| gets hyped because they're relevant to the investment
| side--without them, there's less money to build the other
| stuff.
|
| Another example which I expect to emerge, but which I
| don't think has been developed yet, would be the use of
| NFT's in a successor system. If the leader of a movement
| gets apprehended or incapacitated and they don't check in
| after a certain number of blocks, then a contract moves
| the leadership token to their successor. This denotes the
| successor's signing keys as authoritative, and the
| leader's (presumably compromised) keys as deprecated. If
| you keep signatures on-chain you can also tell which ones
| were registered at a time when they were valid.
|
| You couldn't do this on AWS, somebody would just compel
| AWS to remove the data they don't like, you need
| something like a blockchain. But it only works if enough
| people are running nodes to make attacking all of the
| node operators infeasible. For that you need to provide
| incentives, and now we're back to cryptocurrency.
|
| For me it comes down to whether you think dissent is more
| important than preventing all of the shady business that
| goes on in secret online. I do, so I'm pro-crypto. The
| currency bit is an ugly necessity which I hope we can
| find a way to get rid of.
| thesausageking wrote:
| If that's true, then why did the SEC approve Coinbase's IPO and
| not doing anything about it until years later? Even in spite of
| Coinbase meeting with the SEC hundreds of times and testifying
| before congress. This is a complete change in their stance by
| the SEC.
| thisgoesnowhere wrote:
| Because the SECs role in IPOs have nothing to do with wether
| or not you are breaking securities law.
|
| They are just testing that you are not lying in your public
| financial declarations.
| pnpnp wrote:
| Isn't it true that the SEC wouldn't let Coinbase register since
| they said Bitcoin _isn't_ a security? It's my understanding
| that Coinbase tried.
| strangescript wrote:
| If you opened an exchange and did nothing but trade bitcoin,
| and only bitcoin, you would be free and clear, but there is
| no real money in that. Coinbase argued a few years ago they
| were losing to competition because their competitors could do
| a lot of gray area stuff they couldn't to do being a US-based
| traded company. Getting listed on Coinbase used to be the
| gold standard of a trusted, respectable crypto, but they at
| some point decided screw it and just embraced the coming
| legal challenges.
| pnpnp wrote:
| Interesting! I hadn't looked at it this way.
| dragontamer wrote:
| Article discusses Coinbase Earn, which was a staking service
| providing APY yields.
|
| Is that not an unregistered financial product? That's also
| the kind of financial product directly behind FTX, Voyager,
| Gemini, and Lunacoin / Celsius collapses.
|
| So we have direct evidence of a particular produce (staking)
| that is both unregistered and dangerous. That many Americans
| lost money over.
| andreygrehov wrote:
| > That many Americans lost money over.
|
| This requires a citation with data points, eg how many
| Americans lost money, how much money did they lose, etc.
| Because, what if there are more Americans who've made money
| than those who have lost?
|
| > SEC said Coinbase has since at least 2019 made billions
| of dollars by handling cryptocurrency transactions, while
| evading the disclosure requirements meant to protect
| investors
|
| This is a pure framing - it doesn't matter how much money
| Coinbase made. Otherwise, it means that if you don't make
| _billions_, you can conveniently avoid the disclosure
| requirements intended to protect investors. So really, they
| should've written something like: "Coinbase has been
| facilitating cryptocurrency transactions since at least
| 2019, while evading the disclosure requirements intended to
| protect investors".
|
| While I do understand that these are the legal
| requirements, the protect investors "narrative" (khm-khm,
| requirement) is a joke. People lose money trading stocks /
| options / etc every day. To me, as a consumer, there is
| zero difference between trading AAPL on TD Ameritrade App
| vs trading crypto through Coinbase App. How's TD Ameritrade
| _protecting_ me from losing money?
| anonymouskimmer wrote:
| > How's TD Ameritrade protecting me from losing money?
|
| https://www.tdameritrade.com/regulation-best-interest-
| and-fo...
| itake wrote:
| > Because, what if there are more Americans who've made
| money than those who have lost?
|
| Why does this matter? Even if Americans are scamming
| foreigners (0 Americans losing money), that doesn't make
| this legal.
|
| The difference between aapl and coinbase is there is
| regulatory audits of the books and required publications
| about the health of the security. There are rules about
| insider trading and insurance protections if a brokerage
| mishandles your money (see Blockfi).
| andreygrehov wrote:
| > Why does this matter?
|
| Because the parent said "that many Americans lost money
| over". Plus the SEC is "protecting investors". So I'm
| asking, what if there are more people who've made money
| over those who lost? Does that mean life's good? Coinbase
| has been pretty transparent about their operations. Not
| only transparent, they've publicly mentioned several
| times how frustrated they are dealing with SEC, the
| organization that is slow to come up with various legal
| requirements for the cryptocurrency industry. In a way,
| Coinbase helps the SEC to raise their own bar.
| itake wrote:
| Would the SEC be protecting investors if they allow 1
| investor to get scammed to the benefit of 2+ investors?
|
| We need systems in place where everyone can make
| trustworthy investments. If people can't feel safe (even
| if it's one person or many people), then our economy will
| slow down (see current crypto prices post-terra, ftx, and
| more).
| [deleted]
| dragontamer wrote:
| > This requires a citation with data points, eg how many
| Americans lost money, how much money did they lose, etc.
|
| My coworker lost $X0,000 over Celsius.
|
| So yes, maybe this is a personal bias. But its based in
| reality. His entire account at Celsius is written off. He
| managed to save his money from Voyager. I got cousins who
| lost money in FTX. Different people, but same overall
| problem.
|
| If my personal social circle is showing huge losses in
| these companies, I have to imagine that other people out
| there have similar experiences. I don't need a study to
| prove the facts, I just talk to my cousins / coworkers /
| other people who are directly affected.
|
| EDIT: I forgot about this lovely thing: https://cases.str
| etto.com/public/x191/11749/PLEADINGS/117491...
|
| See page 34, containing links to the customers who lost
| money in celsius. For the list of customers starting with
| the letter "A": https://cases.stretto.com/public/x191/117
| 49/CORRESPONDENCE/1...
|
| There, that's Celsius alone. Is that enough proof for ya?
|
| > Because, what if there are more Americans who've made
| money than those who have lost?
|
| Its not about making or losing money. Its about accounts
| disappearing because they've been lied to.
|
| We're all adults here. We know that investments can lose
| money. But lying about those investments is where the law
| needs to step in. Liars need to be punished. And I get
| that people have been skirting the truth recently. But
| when we get to Celsius, Voyager, and FTX, the money was
| just straight up being stolen. Its the worst case
| offenders.
|
| So now we need to think about what kind of culture caused
| these crimes. And its increasingly looking like
| "staking", and the culture surrounding it, is to blame.
| andreygrehov wrote:
| > If my personal social circle is showing huge losses in
| these companies, I have to imagine that other people out
| there have similar experiences.
|
| This is a personal bias. I've made $86,000 trading
| Ethereum. My brother-in-law made $24,000 trading Bitcoin.
| My reality is different from your reality -\\_(tsu)_/-
|
| I can't speak for Celsius, Voyager, and FTX. If there was
| a scam, it has to be punished. No questions asked. But
| Coinbase has been closely working with SEC for years.
| lifeonlars wrote:
| That's irrelevant.
|
| By definition, Ponzi schemes involve some investors
| making a lot of money and others losing. That doesn't
| make them any less illegal.
|
| If some people are harmed by unlawful behavior, that is a
| reason to prosecute, just the same as if you mugged Alice
| and bought Bob an icecream with the proceeds.
| anonymouskimmer wrote:
| Would pumping Bob's stomach be an unreasonable seizure?
| How can Alice be made whole if it is?
| dragontamer wrote:
| > I've made $86,000 trading Ethereum
|
| That's not the problem.
|
| The problem is that companies like Celsius, FTX, and
| Voyager are disappearing and collapsing.
|
| Binance and Coinbase are two other companies that could
| just randomly disappear because of how incredibly sketchy
| their products are (especially "Earn" or "Staking"
| products).
|
| I'm pointing out companies that collapse (taking
| literally Billions of American money away). And you're
| just coming in here saying "But I made money on something
| totally unrelated", as if its a good argument?
|
| > This is a personal bias.
|
| I'll proudly be biased in favor of reality. There's
| nothing wrong with taking a stance when my real world
| friends get affected.
|
| > I can't speak for Celsius, Voyager, and FTX. If there
| was a scam, it has to be punished. No questions asked.
| But Coinbase has been closely working with SEC for years.
|
| Coinbase is doing the same thing as Celsius, Voyager, and
| FTX with their Earn / Staking products. And now the SEC
| is suing them over it.
|
| There's a pattern here. And I for one, am glad that the
| SEC is no longer fickle and is trying to be proactive
| about it. Trying to get American money out of these
| dangerous instruments before they collapse, rather than
| after (when its too late).
| andreygrehov wrote:
| Dude, I made that comment in response to your "My
| coworker lost $X0,000 over Celsius" to highlight the fact
| that not everyone's circle is losing money.
|
| > Coinbase is doing the same thing as Celsius, Voyager,
| and FTX with their Earn / Staking products. And now the
| SEC is suing them over it.
|
| Why can't SEC work with Coinbase before suing them?
| Again, Coinbase has been seeking help from SEC for years.
| Brian Armstrong, the CEO of Coinbase, talked about this
| so many times. They are trying to work with the
| regulators, but the problem is that the regulators lack
| expertise dealing with these new asset types.
| dragontamer wrote:
| > Dude, I made that comment in response to your "My
| coworker lost $X0,000 over Celsius" to highlight the fact
| that not everyone's circle is losing money.
|
| But you making money doesn't allow my friend, or anyone
| from FTX, or Voyager to get their money back.
|
| And you fail to see that it is HOW he lost money that I
| take issue with. Celsius lied about unregulated
| staking/interest yielding instruments to him and the
| natur of how it worked.
|
| And Coinbase is making the same lie right now with
| Coinbase Earn. And you are sitting here defending it, and
| ignoring three major collapses last year while doing so.
| anonymouskimmer wrote:
| > Why can't SEC work with Coinbase before suing them?
| Again, Coinbase has been seeking help from SEC for years.
|
| How has Coinbase been "seeking help"? They are a company,
| they should be going to the SEC with all of the
| particulars of each of their investment items and saying
| to the SEC "We believe we have met your standards of
| fiduciary duty on these items that appear to be
| securities, have we?" They shouldn't be saying, "Hey,
| SEC, are these things we're selling securities, and thus
| need a higher standard of duty of care? Tee hee, we can't
| figure it out on our own, as we're just a little company
| with thousands of employees trading billions of dollars a
| year. Until you get back to us we'll just assume that
| they aren't securities and won't bother meeting the
| higher standard of care."
| andreygrehov wrote:
| They filed a petition which SEC failed to address. The
| result is Coinbase suing SEC. Now, SEC sues Coinbase
| back. Seriously, wtf? SEC needs a massive slap on their
| hands. If they lack expertise and don't have enough
| knowledge (literally), then whoever works there should go
| "back to school" (figuratively speaking), learn all the
| ins and outs of crypto, and only after consider joining
| the SEC as an employee.
|
| https://assets.ctfassets.net/c5bd0wqjc7v0/5PWsXaPsqQ61gA9
| wlF... Coinbase brings this mandamus
| action to seek modest, but meaningful and time-sensitive,
| relief: a writ requiring the Securities and Exchange
| Commission (SEC or Commission) to act on Coinbase's
| pending rulemaking petition to provide clarity for the
| crypto industry. Coinbase does not ask the Court to
| instruct the agency how to respond. It simply requests
| that the Court order the SEC to respond at all. The
| Commission has repeatedly demonstrated that its mind is
| made up to deny the petition. But the Commission's delay
| in formally announcing that decision has enabled it to
| improperly delay judicial review at a critical moment for
| the industry.
| dragontamer wrote:
| https://www.sec.gov/news/press-release/2023-102
|
| > "We allege that Coinbase, despite being subject to the
| securities laws, commingled and unlawfully offered
| exchange, broker-dealer, and clearinghouse functions,"
| said SEC Chair Gary Gensler. "In other parts of our
| securities markets, these functions are separate.
| Coinbase's alleged failures deprive investors of critical
| protections, including rulebooks that prevent fraud and
| manipulation, proper disclosure, safeguards against
| conflicts of interest, and routine inspection by the SEC.
| Further, as we allege, Coinbase never registered its
| staking-as-a-service program as required by the
| securities laws, again depriving investors of critical
| disclosure and other protections."
|
| Seems rather straightforward to me given this press
| release.
|
| Quit comingling functions. Bring your exchange to proper
| legal structure in the USA. Split the broker-dealer and
| clearinghouse functions off.
|
| And quit operating Coinbase Earn, which is an obvious
| security by any other name. Either that, or properly
| register Coinbase Earn as a security before offering it
| as a product to the public. If you are to keep operating
| Coinbase Earn, then bring it under security regulations,
| which means reporting upon your assets and such under
| whatever filing system you want (probably bonds?)
|
| Its... not even that hard to read the SEC complaint. Just
| read it, the complaint is right there for all of us to
| see.
| andreygrehov wrote:
| This is indeed straightforward, but I'm not complaining
| about it. If all of these requirements had been outlined
| by the SEC prior to the release of the products, Coinbase
| would've followed the rules. Now when all of these
| products are in production, the SEC woke up and like:
| "heeey, this is a security, you must follow the rules".
| But there were no rules before. So, shall Coinbase just
| sit there and wait while the SEC learns more about
| blockchains? I don't know if there was any "warning" from
| the SEC, but if not, they should've published a public
| one first: "Due to X, Y and Z, the SEC gives Coinbase 6
| months to split the broker-dealer and clearinghouse
| functions off".
| loeg wrote:
| Gains and losses between different investors don't net
| out. The SEC is interested in protecting the investors
| who lost (or would lose).
| pa7x1 wrote:
| Minor clarification. Coinbase Earn is a lending product,
| you lend to Coinbase and you receive interest. The same
| applies to Celsius, it provided interest on money they
| borrowed. Coinbase also offers staking as a service, the
| SEC is also going after this.
|
| But both of the above are different from actual Proof of
| Stake, as conceived by Ethereum. The SEC has made no
| mention of this in neither of the 2 current lawsuits.
| Unfortunately many of these products misused the term to
| whitewash or as a marketing gimmick.
| hirako2000 wrote:
| Gemini didn't collapse, and an evidence takes a bit more
| clarity to be treated as such. Luna is.. a coin
|
| Can't you get APY returns as a retail customer with pretty
| much any high street banks? In what ways is that less
| dangerous than going through a crypto exchange: by the fact
| the SEC is actively criminalising the activity rather than
| issuing licenses so that some customer protection via the
| justice system remains out there for this sort of market.
|
| You mentioned FTX, that's a good example, an exchange run
| by a con goofy looking artist, that achieved such massive
| penetration even on the US market was made possible exactly
| because it is so cumbersome or impossible for a legit
| business to get a license, the crypto affiliated threats
| making it also difficult for normal banks to do any sort of
| business with crypto entities.
|
| All that being said, sure, if they don't have a license
| they can be sued for their earn products.
|
| The only clear distinctions, the one thing the name
| mentioned and many others still running
| wins32767 wrote:
| >Can't you get APY returns as a retail customer with
| pretty much any high street banks? In what ways is that
| less dangerous than going through a crypto exchange:
|
| Well, given that there are clear ways of issuing
| securities that have worked for hundreds of years that
| aren't being followed and that people generally don't get
| the rug pulled in normal securities, I'd say that it's
| less dangerous in many obvious ways.
| hirako2000 wrote:
| if coinbase pulls off its earn products you can be well
| assured that more people will get rug pulled elsewhere.
|
| Would you concede that?
| robryan wrote:
| Those products elsewhere would also be unregistered
| securities.
| dragontamer wrote:
| Ehhh, I got confused over the myriad of collapsed
| companies. Perhaps I shouldn't try to get better memory,
| but instead cryptocoin companies need to stop collapsing.
| Its getting difficult to remember each company's
| situation on an individual basis.
|
| Gemini was sued by SEC for running unregulated securities
| and was forced to shut down Gemini Earn months ago.
| Whatever, but its just another example of the kind of
| products the SEC is clearly looking at.
|
| > Luna is.. a coin
|
| Lunacoin supported Terra, and Celsius was backing its
| staking product with Terra coins. Are... you unaware of
| the connection between Luna and Celsius?
|
| I wrote "Lunacoin / Celsius" for a reason. This didn't
| even happen that long ago, so I guess I assumed people
| would know where I was going.
|
| I'm trying to describe the scope of unregistered,
| unregulated, super-dangerous "staking" schemes that
| collapsed over the last year. The names I discussed are
| all related to staking.
| hirako2000 wrote:
| I'm aware, I'm just pointing out luna is a coin. It's a
| bit hard to assimilate it to business entities running
| unregistered financial products on the US soil. My
| understanding is that Celsius or any lender that gets
| exposed to a token value collapsing can quickly get
| itself in serious muds since loans have a collateral, and
| in crypto those are often crypto tokens. Anyhow that's my
| recollection of what happened to Celsius, i could be
| wrong.
|
| I don't think the problem the SEC is invoking is
| "dangerous" investments. I'm not sure who would be
| entitled to make the difference.
|
| You could stake eth and that would be one of the safest
| positions to take in the crypto space. Actually anybody
| can, whether the SEC sees it as OK, via centralised
| exchanges for those who can access them or decentralized
| exchanges for those who can't. But then of course eth
| could drop 95% in value by next year and the yield would
| mean nothing to compensate. It could go the other way and
| go the other way.
|
| Does it make it a dangerous product? A security illegal
| to trade without a license which the SEC wouldn't grant a
| license to offer as a product to anyone? Because it's
| dangerous or because it's a security having drastic
| volatility? More volatile than Gamespot shares not so
| long ago? Does it make gamespot so dangerous it should be
| banned from trading as a security? And one last one, what
| is more dangerous, owning eth tokens staked for long term
| returns, or some treasury bonds issued by a country that
| is systematically on the verge of defaulting on its
| unbearable debt?
|
| And who's to say? I don't think the SEC has any
| legitimacy left to be taken seriously, it let SBF runs
| business inside and outside the US soil for years,
| embezzling well over 10B dollars, whether he is innocent
| or an idiot crook the ridicule crown goes to the SEC for
| not having seen anything suspect until after the empire
| entirely collapsed.
|
| About having flimsy memories, it's OK but it discounts
| serious weight throwing incorrect facts when attacking a
| type of trading activity as a whole. Your argument did
| read like because so many collapsed, the whole thing must
| be flagged as a failure. Anyhow, coinbase, kraken,
| binance, gemini, kucoin and many others have been
| operating for years just fine, and are successful,
| profitable businesses to this day despite all the
| obstacles regulators and the press threw at them.
|
| Anyhow back to the main point, I'm with you earn products
| if unregistered are non compliant with regulations, so
| the SEC can have its case and continue to pretend it's
| doing its job.
| Ekaros wrote:
| Bitcoin itself might not be. Even many other currencies might
| not. But what other "products" they are running? Those could
| and probably would fall under various classifications.
| pnpnp wrote:
| Ah, of course. I forgot that they have many other
| offerings.
| spaceman_2020 wrote:
| What about tokens that are used to pay the network, like
| Ethereum? If you want to use any chain that uses Ethereum,
| either as a L1 or L2, you need ETH.
| redox99 wrote:
| _Some_ cryptocurrencies may or may not be securities. Gary
| Gensler himself has said that Bitcoin is _not_ a security.
| api wrote:
| A security represents ownership in something. This is just
| gambling. It's more like an unregulated casino than an
| unlicensed stock exchange.
| butlerm wrote:
| If you look up the definitions of "security", "financial
| instrument", "commodity", and "currency", it is pretty clear that
| a plain vanilla crypto-currency like Bitcoin is no ordinary
| security nor a financial instrument. It is not a claim on
| something else, even less so than a traditional bank note. It is
| more like a commodity. Since when is "aluminum" a security?
|
| A crypto currency business however may be engaged in trading of
| crypto currencies which are negotiable financial instruments, and
| a stable coin that is a claim on a traditional currency is an
| example of that. A stable coin bears a direct relationship to a
| bank note. It is a claim on something else. It is not really an
| investment though, so not much of a security.
|
| And then of course there are more creative negotiable financial
| instruments which are definitely securities. Options,
| derivatives, swaps, futures, and the like.
|
| The Supreme Court has a broader definition of securities, that
| involves a promoted investment in a "common enterprise", but it
| is unclear that a commodity currency really is a common
| enterprise like a corporation is for example. It seems unlikely
| to me that Bitcoin as such would even meet that definition of a
| security. But other products offered by crypto currency exchanges
| might.
| dsg42 wrote:
| The only question here is whether cryptocurrency is a security
| or a commodity. Securities fall under regulation by the SEC
| (SECURITIES and Exchange Commission). Commodities are regulated
| by the CFTC (COMMODITIES Future Trading Commission). SEC Chair
| Gensler agrees that Bitcoin is a commodity, but thinks
| everything else is a security.[1] Securities are much more
| tightly regulated than commodities. The SEC is making it clear
| with these complaints that they believe certain
| cryptocurrencies are securities.
|
| A court might disagree. The CFTC could potentially disagree,
| although yesterday's agreement makes me think they may have
| given up on that to some extent. But I actually think it's
| pretty clear that any cryptocurrency project offering a reward
| for "staking" or similar is a security.
|
| [1] https://www.axios.com/2022/06/28/bitcoin-is-the-only-coin-
| th...
| adsfgiodsnrio wrote:
| You capitalized the wrong word. The CFTC is the Commodities
| FUTURES Trading Commission. After all, a commodity is defined
| as anything traded with a futures contract (except for onions
| and movie tickets)!
|
| https://www.law.cornell.edu/definitions/uscode.php?width=840.
| ..
|
| A whole lot of things that aren't commodities in common
| parlance are within the jurisdiction of the CFTC because they
| are traded with futures contracts. This includes some
| securities. A whole lot of things that _are_ commodities in
| common parlance are _not_ within its jurisdiction, as the
| CFTC only deals with futures contracts.
|
| Orange juice concentrate is a commodity by any definition.
| The CFTC regulates futures contracts on orange juice
| concentrate. It does not regulate its production, sale,
| transportation, or anything else unrelated to futures
| contracts. That is the job of the USDA, FDA, DoT, and so
| forth.
|
| Stocks are securities. As they are traded with futures
| contracts, they are also commodities. The CFTC regulates
| futures contracts on securities jointly with the SEC. It does
| not regulate any trading of securities that does not involve
| futures contracts. That is the job of the SEC. The fact that
| people trade stocks with futures has never hampered the SEC's
| efforts to regulate them.
|
| https://www.cftc.gov/IndustryOversight/ContractsProducts/Sec.
| ..
| ForHackernews wrote:
| It's obviously gambling and should be regulated as such: http
| s://www.theguardian.com/technology/2023/may/17/cryptocur...
|
| Commodities have real-world uses (e.g. gold, oil, frozen
| orange juice), securities represent a claim on some
| productive enterprise. Cryptocurrency is neither.
| darksaints wrote:
| Gambling happens in real world markets as well, but that
| doesn't mean that real world markets are casinos.
|
| Beaniebabies were effectively regulated and taxed like
| commodities. Commodities do not require a real-world use.
| All they are are tradable non-currency things which can
| result in capital gains.
|
| The speculative (HODL!!) cryptocurrencies should probably
| be treated like commodities, and regulated as such by the
| CFTC. The cryptocurrencies that are actually being used
| like currencies (e.g. actually used to buy things) should
| be regulated like foreign currencies, which would also be
| regulated by the CFTC (this is essentially the same exact
| thing as Commodities trading, but with simpler accounting
| rules which reflect the much higher liquidity,
| divisibility, and likelyhood that a unit changes hands).
| Neither of these scenarios involve the SEC. The SEC should
| only be involved when coins are being issued like
| securities (e.g. as a way to raise funding and sell
| financial stakes in some kind of enterprise).
| ProjectArcturis wrote:
| IIRC beanie babies and similar are classified as
| "collectibles" and have different (worse) tax treatment
| than commodities.
| darksaints wrote:
| Collectibles are just a subclass of Commodities which
| can't be taxed using Mark To Market rules, but there are
| a whole host of commodities which are just like that.
| Precious metals, rare coins, cards, comics, etc., are all
| collectibles, but they are still commodities for
| regulatory purposes. For example, here is PR release of a
| CFTC enforcement action against some fraudulent coin
| dealers:
| https://www.cftc.gov/PressRoom/PressReleases/8694-23
|
| IIRC, the IRS and CFTC have already issued rules to treat
| NFTs as collectibles.
| ForHackernews wrote:
| > The cryptocurrencies that are actually being used like
| currencies (e.g. actually used to buy things
|
| So... none of them? How long are y'all going to carry on
| this charade?
| darksaints wrote:
| How long are you gonna bury your head in the sand? There
| are millions of ways to buy actual things with Bitcoin.
| dcow wrote:
| Curious: is "bitcoin" being used by the SEC as a general term
| to mean "all cryptos that fundamentally employ a work-based
| consensus algorithm", or "pure" cryptos or whatever? Or is it
| not yet clear to the SEC that there are more instances of
| Nakamoto consensus networks out there and not everything
| other than BTC is a security?
|
| I agree that staked projects and derivative projects are
| securities since they are fundamentally a representation of
| or proxy for the actual thing of value, BTC, XCH, formerly
| ETH, etc.
| potatototoo99 wrote:
| Of course not everything other than bitcoin is a security.
| My private blockchain no one knows about is not a security.
| It's not a universal law of the universe.
|
| What they mean is every coin/token they looked at. If asked
| to evaluate litecoin for example probably they'd say it's
| not a security as well. They don't need to pass judgement
| on each of the thousands of coins individually because
| definitions and common sense exists.
| [deleted]
| dcow wrote:
| I'm just trying to understand the context. I hope it is
| as you say and it would be my baseline assumption that it
| is as well. But it's not unquestionably obvious given
| history and what relatively little context is present in
| this thread. The SEC _used_ to think all crypto is a
| security to the point where honest miners are instructed
| to declare blockchain rewards as income (I have, and
| TurboTax even asks you if you acquired crypto in the last
| year with no nuance as to how you acquired it or which
| one you acquired). It may be obvious to you and me but my
| question was more about how far the SEC's understanding
| has evolved.
| whimsicalism wrote:
| They refuse to offer guidance even on the largest
| cryptocurrencies outside of BTC.
| [deleted]
| tempsy wrote:
| They aren't claiming Bitcoin is a security. In fact they've
| made it pretty clear Bitcoin and maybe ETH are not.
|
| They are claiming a bunch of the newer cryptos like SOL are,
| though.
| paulddraper wrote:
| > Crypto currency is a commodity
|
| Could you explain this to me?
|
| Are there any other examples of non-physical commodities?
| jcranmer wrote:
| SEC isn't suing Coinbase over Bitcoin. They're suing under two
| things:
|
| 1. Unregistered exchange for several tokens the SEC believes
| are securities:
|
| > This includes, but is not limited to, the units of each of
| the crypto asset securities further described below--with
| trading symbols SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW,
| ICP, NEAR, VGX, DASH, and NEXO--(the "Crypto Asset
| Securities").
|
| 2. Unregistered sale of securities related to the staking
| program for XTZ, ETH, ATOM, ADA, SOL. This in particular has a
| full, point-by-point rationale for why they are defined as
| securities under the Howey test (in short, you deposit money,
| and the terms make clear that it's Coinbase's money at that
| point, not your money, so definitely an investment; staking
| involves a common enterprise; and it's clearly advertised as
| making you money based on Coinbase doing stuff with your
| investment).
|
| Maybe Coinbase should have listened to its own advisors on how
| to tailor a prospectus to not meet the Howey test definition of
| a security... or maybe their advisors didn't do a good job in
| the first place!
| MrMan wrote:
| [dead]
| moralestapia wrote:
| >Maybe Coinbase should have listened to its own advisors ...
|
| Maybe they just hired @butlerm which definitely knows what
| s/he's talking about and ... well here we are :)
| mrcode007 wrote:
| Very good points. People often go a long way to argue against
| the Howey test. The best example is Howey Co case. If someone
| is a lawyer dealing in securities and acting as an advisor I
| would have expected them to be familiar with the law.
| Coinbase issuing public statements to SEC "tell us what is a
| security" were basically a ploy or the lawyers involved were
| extremely inexperienced.
|
| https://en.m.wikipedia.org/wiki/SEC_v._W._J._Howey_Co.
| yieldcrv wrote:
| The stance isn't about whether Howey can be applied
| literally everywhere
|
| The stance is that applying it to digital tokens as
| unregistered securities means applying it to other places,
| like Nike shoes and baseball cards, just because any random
| individual expected to profit when they bought one
|
| that this framework is not applied everywhere, specifically
| how congress exempted spot commodities and commodities
| derivatives from the SEC framework specifically because it
| was untenable
|
| That there is a difference between a digital commodity and
| a digital security that is mutually exclusive, but the SEC
| has provided no way of understanding that distinction, and
| now has resorted to just arbitrarily claiming random assets
| are securities in cases against the people that trade those
| assets, instead of taking up cases against the issuers of
| those assets and letting those issuers defend themselves or
| reach a definitive conclusion
|
| That it is impossible to comply if it was applied
| everywhere, as registered security status inherits tons of
| unrelated regulations to protect incumbent intermediaries
|
| That the SEC will never achieve congress' delegated mission
| of investor protection and only hurt investors
|
| And that actually inconveniencing everyone will put this
| framework under a constitutional test that the SEC probably
| needs to avoid, but I'm all the SEC going after the entire
| sneaker trading ecosystem as unregistered broker dealers as
| fallout to their crusade just to prove they aren't just
| trying to debilitate crypto
|
| (The staking program has a separate evaluation)
| majormajor wrote:
| Why would a sneaker fall under the terms they're using to
| define a security if not every digital token does?
| yieldcrv wrote:
| > Why would a sneaker fall under the terms they're using
| to define a security
|
| because the sneaker trade market focuses on sneakers that
| are released with artificial scarcity, where many
| participants in that market buy with an investment of
| money, with a reliance on the issuer and others to keep
| them scarce and valuable and promote them, with an
| expectation of profit.
|
| the SEC is basically saying if any random person has an
| expectation of profit guiding their purchase at any time,
| the entire asset and all transactions is a security and
| everyone that is trading it needs to be a registered
| broker dealer or registered promoter, and then even if
| they could be registered they would not be allowed to
| trade unregistered securities, or even registered
| esoteric securities like shoes and digital commodity
| units because the Self Regulatory Organizations are too
| permissioned for shares and bonds exclusively.
|
| > if not every digital token does?
|
| that's the point. there is either a way where a digital
| asset is exclusively a commodity, or there isn't at all
| and every corporate controlled unnatural commodity
| inherits the same regulatory framework that the SEC is
| trying to impose on digital assets and the entire trading
| ecosystem.
| reaperman wrote:
| They wouldn't. 'yieldcrv is not demonstrating knowledge
| of the Howey test, and appears to be heavily focused on a
| narrower reading, "buying something with the expectation
| of increased future value" -- which they're setting up as
| a strawman's Howey's test.
|
| Sneakers would not meet the Howey Test: An investment
| contract exists if there is an "investment of money in a
| common enterprise with a reasonable expectation of
| profits to be derived from the efforts of others."
|
| The four parts of the Howey test, distilled down to plain
| English (and therefore losing a great deal of nuance in
| the process):
|
| - It is an investment of money.
|
| - The investment is in a common enterprise.
|
| - There is an expectation of profits.
|
| - The expectation of profits is solely from the efforts
| of the promoter or a third party.
|
| Buying the latest Yeezy's is not a common enterprise. The
| fourth point is debatable.
| lmm wrote:
| > Buying the latest Yeezy's is not a common enterprise.
|
| And yet buying a token is? What's the distinction here?
| yieldcrv wrote:
| that's an interesting use of strawman to invalidate the
| observation
|
| The howey test doesn't need all prongs satisfied and
| avoidance is based on probability only
|
| The SEC and securities industry has enjoyed a symbiosis
| for 70 years, where things that blurred the lines didnt
| exist, were never imagined, or were never challenged.
| Challenging one challenges them all.
| esotericimpl wrote:
| Nike shoes and baseball cards are clearly commodities.
|
| If you were to stake your Air Jordan's with coinbase and
| Coinbase told you in a years time you'd have 2 pairs, it
| would become a security.
| yieldcrv wrote:
| like I wrote, the staking program has a different
| evaluation and my post was not about that. we agree that
| any asset can be transferred in a way that is a
| securities transaction.
| George83728 wrote:
| > _Coinbase issuing public statements to SEC "tell us what
| is a security" were basically a ploy or the lawyers
| involved were extremely inexperienced._
|
| I take it as a stunt intended shift the layman's perception
| of Coinbase's legal responsibilities onto the SEC. They're
| counting on cryptobros using this _" SEC won't tell us
| what's legal"_ talking point to affect favorable political
| / legislative change.
|
| But newsflash: government regulators aren't obliged to act
| as your legal council.
| whimsicalism wrote:
| It is not obvious a priori how regulators will treat tokens
| or which ones will be permissible.
| qeternity wrote:
| It was obvious to a lot of people who were wondering what
| was taking regulators so long.
| whimsicalism wrote:
| Interesting, maybe you should let Gensler know that the
| law is much more obvious than he appears to realize [0]
|
| [0]: https://youtu.be/VhA1dZXeao0?t=58
| earnesti wrote:
| Crypto people constantly point to this video as some kind
| of evidence that the SEC is clueless. Maybe it just
| doesn't make sense for them to give clear answers in that
| kind of hearings,or answers related to specific crypto
| token. Just normal for government officials to cover
| their own asses primarily and giving specific guidance
| related to a specific issue at a hearing doesn't just
| serve them well.
| whimsicalism wrote:
| I don't own any crypto [outside of very small curiosity
| amounts when I was playing with it to figure out how it
| works years ago] nor do I consider myself a 'crypto
| person' (only, perhaps, compared to the backdrop of
| extreme HN negativity around the topic). I just think
| that people saying 'regulations are perfectly clear' on
| this issue have not spent that much time dealing with
| regulators in emerging technology.
|
| > Just normal for government officials to cover their own
| asses primarily
|
| I agree - I just disagree with people suggesting that the
| same logic doesn't apply to _regulators_ and _their
| actions_.
|
| They want to keep it unclear precisely so they have the
| ability to maneuver in the future and regulate if they
| want. That is the exact opposite of the 'super clear'
| regulations & guidance that GP was suggesting currently
| exists.
| JumpCrisscross wrote:
| > _people saying 'regulations are perfectly clear' on
| this issue have not spent that much time dealing with
| regulators in emerging technology_
|
| I work in a regulated industry. I have my criticisms of
| Gensler. And I've (separately) profited off crypto.
|
| The regulations for non-Bitcoin exchanges were clear from
| the start. Nobody liked that clarity. And the regulators
| spent a few years navel gazing. But the legal advice I
| got at the start has remained consistent: the operators
| are putting themselves in jeopardy.
| unyttigfjelltol wrote:
| One way to look at it is a generation of boiler room
| operators moved their pump'n-dump schemes from central
| securities clearinghouse to crypto ledgers, because they
| realized what a loophole the Bitcoin exception was. And
| they brought in enough politicians and celebrities to
| slow walk promises of updated regulations, and regulators
| cautiously warned and waited, and here we are, with some
| bowtied man criticizing the SEC for doing its job
| precisely in the manner politicians demanded.
| foodjinn wrote:
| Not that they are clueless, that they are corrupt.
| [deleted]
| mrcode007 wrote:
| Under the Howey test, the rules are clear.
|
| "The test is whether the scheme involves an investment of
| money in a common enterprise with profits to come solely
| from the efforts of others. If that test be satisfied, it
| is immaterial whether the enterprise is speculative or
| non-speculative or whether there is a sale of property
| with or without intrinsic value."
|
| I think it is plausible that all pure staking initiatives
| will go. I don't think you have much of an argument here
| but I could be wrong. It will definitely be an
| interesting case to watch.
| jacoblambda wrote:
| > investment of money in a common enterprise with profits
| to come solely from the efforts of others
|
| This is where I see the "staking makes a cryptocurrency a
| security" fall apart. There are a handful of definitions
| for "staking" and some of them definitely meet the
| criteria of "a common enterprise with profits to come
| solely from the efforts of others" however many do not.
|
| 1. Ethereum's staking at a protocol level requires you to
| run a staking node and you are paid for what is basically
| an SLA between you and the network and you only get paid
| if your node maintains a certain uptime, is kept up to
| date, and operates correctly. That I don't believe meets
| the criteria as it requires direct, sustained effort from
| you the operator (even if it's generally low effort).
|
| 2. Cardano's (or Tezos') staking is similar. Stake pool
| operators are effectively the same as Ethereum's stake
| node operators. But even delegators (who aren't required
| to stay online) still provide a service in that they are
| picking the stake pools who then fill the SLAs. If they
| pick pools that can't meet the requirements then the
| delegators don't get paid until they can find one that
| does.
|
| 3. Meanwhile you have networks like Algorand where
| participation in consensus does not effect staking
| rewards and you never have to perform a service to get
| paid out by the network. Those would meet the criteria by
| my understanding.
|
| 4. And then you have all the DeFi "staking" which is
| better described as lending or liquidity pooling. You
| aren't doing anything proof of stake related but are just
| lending out capital as an investment.
|
| I can't speak on other networks but generally I found
| that networks fell into one of those 4 categories. The
| first two only pay people who provide a service back to
| the network while with those like the third, even if you
| can provide a service back to the network, you aren't
| required to to be able to get paid. And then the fourth
| category is just a security outright.
|
| Edit (because I forgot to mention it): With regards to
| Coinbase's staking program, it's in a weird spot. With
| those you aren't directly staking but you are outsourcing
| the responsibility to a 3rd part (coinbase) to stake for
| you. I wouldn't be opposed to considering this type of
| custodial staking as meeting the criteria to be a
| security but I don't think proof of stake at a protocol
| level constitutes "a common enterprise with profits to
| come solely from the efforts of others" as they require
| work on behalf of the participants to get paid out.
| [deleted]
| skybrian wrote:
| Yes, I think a reasonable position would be that if you
| perform staking by self-hosting then you're providing a
| service. An example is getting paid for running a machine
| on the Ethereum network.
|
| If you pay money in now and get more money out later, and
| someone else runs the machines, then it's just a loan.
|
| Then there's a question of where to draw the line with
| cloud hosting, and I have no opinion about that. Someone
| will sell a service that's barely on the right side of
| that line, wherever it is.
| qeternity wrote:
| You're ignoring all the ICOs which are almost certainly
| unregistered security offerings.
|
| Ethereum was funded as a public ICO.
| xorcist wrote:
| That doesn't even seem to be the issue here.
|
| Which is weird. In my humble layman's opinion, an ICO
| looks an awful lot like a security offering, while a
| staking protocol doesn't.
|
| Compare the simplified statements "Buy my token! It's
| going to be great in the future!" with "Let's pool our
| money and execute an agreed-upon protocol where those who
| have the most get more". Why is the SEC wasting time by
| going after all the weird ones before the easy pickings?
| sealeck wrote:
| Is it really surprising that the chair of the SEC cannot
| just dispense SEC positions without consulting with
| lawyers?
| whimsicalism wrote:
| Has Gensler never consulted lawyers on the status of
| ethereum prior to this hearing?
|
| It should be easy yes or no from the lawyers, I'm hearing
| that the law is _incredibly clear_ and not really prone
| to misinterpretation so it shouldn 't be an issue. Or
| maybe Gensler's lawyers are "extremely inexperienced" if
| they couldn't figure out such an obvious issue?
| arcticbull wrote:
| You're not answering the question. Why do you think
| Gensler in official capacity should just dispense one-off
| soundbite determinations at the request of some clown
| grilling him?
|
| > It should be easy yes or no from the lawyers...
|
| When has that ever been the case, and why should it be
| the case now?
|
| [edit] The law is not just what's written but the
| entirely of case law. The SEC has provided a framework
| for analysis of securities in the context of crypto. It's
| here. [1] And it builds on the DAO report, here. [2]
|
| [1] https://www.sec.gov/files/dlt-framework.pdf
|
| [2]
| https://www.sec.gov/litigation/investreport/34-81207.pdf
| whimsicalism wrote:
| It is not at all surprising to me that he would refuse to
| answer the question, but the precise reason he is doing
| that is so that the SEC has freedom of movement to
| regulate without being pinned down by public statements
| he has made in front of congress. But that entire notion
| belies the idea that the regulations are super clear or
| predictable. The whole reason for this kind of maneuver
| is because the regulations are not clear or predictable.
|
| I have no doubt he has discussed the status of ethereum
| with SEC lawyers before.
| freejazz wrote:
| You don't seem to understand that what he says isn't
| binding on the SEC
| willcipriano wrote:
| How does he or the SEC benefit by making a statement?
| freejazz wrote:
| He doesn't
| arcticbull wrote:
| > It is not at all surprising to me that he would refuse
| to answer the question, but the precise reason he is
| doing that is so that the SEC has freedom of movement to
| regulate without being pinned down by public statements
| he has made in front of congress.
|
| Because they're a legal body and what they say off hand
| is precedent, so of course they have to be measured and
| thoughtful. This was a shameful display, but not by
| Gensler.
|
| > I have no doubt he has discussed the status of ethereum
| with SEC lawyers before.
|
| Me too, but again, I refer you to the DAO Report and the
| Framework for "Investment Contract" Analysis of Digital
| Assets
|
| > But that entire notion belies the idea that the
| regulations are super clear or predictable. The whole
| reason for this kind of maneuver is because the
| regulations are not clear or predictable.
|
| They're quite clear, and the whole reason for this kind
| of maneuver is showboating and pandering. Based on this
| thread it seems to be working.
|
| In a similar vein I'm confident that Brian and his
| attorneys have spoken and concluded that they're almost
| 100% certain to be securities, and for that reason, they
| chose to avoid working with the SEC at all costs at every
| point along the way. But of course that determination
| would undermine the business, so off to court we go.
| lmm wrote:
| > Why do you think Gensler in official capacity should
| just dispense one-off soundbite determinations at the
| request of some clown grilling him?
|
| Because the whole point of the rule of law is that the
| law same law applies to any clown. If the head of
| securities law in the country can't tell you whether a
| basic thing is legal or not then why even bother having a
| congress and elections and any pretense that we live in
| something other than a corrupt oligarchy?
|
| > [edit] The law is not just what's written but the
| entirely of case law. The SEC has provided a framework
| for analysis of securities in the context of crypto. It's
| here. [1] And it builds on the DAO report, here. [2]
|
| If the SEC themselves is incapable of applying their
| framework to the second-most-prominent entry in the
| category of things it's designed to analyse, then what is
| that framework good for?
| beambot wrote:
| > It should be easy yes or no from the lawyers [...]
|
| I've rarely received such an unequivocal binary response
| from a lawyer...
| nradov wrote:
| In general if you're thinking of doing something in a
| gray area of federal law or regulations then you can
| write a formal letter to the competent regulatory agency
| and request an opinion. But you have to be extremely
| _specific_ and pose your questions in ways that can be
| answered with a clear yes or no; you can 't expect a
| useful response to a vague request for clarifications or
| definitions. If the agency does give you a letter
| containing a positive opinion then it serves as a nearly
| ironclad defense against any civil enforcement actions or
| criminal prosecution. Those opinions can change later for
| political reasons, but you won't be punished
| retroactively for actions prior to the change.
| sroussey wrote:
| FundersClub did this for creating a portal to invest in
| startups.
| nradov wrote:
| Right, good example. You can read the SEC letter here. As
| long as you ask the right questions you can get useful
| answers and protect your business.
|
| https://www.sec.gov/divisions/marketreg/mr-
| noaction/2013/fun...
| whimsicalism wrote:
| Yes, see for instance prediction markets in the US.
| choppaface wrote:
| It's not a matter of what tokens are "permissible" but
| rather what protections market participants get against
| fraud and instability. There was plenty of opportunity
| for crypto to actually raise the bar in protecting the
| consumer and it just never happened.
| mrkramer wrote:
| Bitcoin is a commodity [0] under the US Commodity Exchange Act
| (CEA) and it is regulated by the US Commodity Futures Trading
| Commission (CFTC).
|
| [0]
| https://www.cftc.gov/sites/default/files/2019-12/oceo_bitcoi...
| arcticbull wrote:
| Someone holds an opinion that this is the case, it has not
| been resolved as a matter of law yet. It could be, in my
| opinion, a commodity.
| sjtgraham wrote:
| That could change in a second if another agency like the SEC
| decides it's something else. There is nothing to say that two
| agencies couldn't hold conflicting positions over what BTC is
| or isn't.
| tiahura wrote:
| EPA v. West Virginia
|
| "The agency instead must point to 'clear congressional
| authorization' for the power it claims."
| eli wrote:
| The SEC didn't sue them over Bitcoin.
|
| Seems obvious that Bitcoin shouldn't be unregulated and that
| there should be no question of which regulator has
| jurisdiction. Unfortunately that probably needs Congress to
| act.
| EscapeFromNY wrote:
| I don't think there's any question who has jurisdiction. The
| SEC and CFTC have both agreed it's the CFTC:
|
| https://www.axios.com/2022/06/28/bitcoin-is-the-only-coin-
| th...
|
| https://cryptoslate.com/cftc-chair-rostin-behnam-snubs-
| ether...
| Karunamon wrote:
| The problem is this is not formalized. It needs to be a law
| (legislative, not administrative), ideally with the
| individual tokens named.
|
| Relying on the goodwill of regulators is unwise.
| throwaway7356 wrote:
| > Since when is "aluminum" a security?
|
| But you don't buy "bitcoin". You buy an entry in a ledger that
| you are assigned "a bitcoin", so it is just a claim you trade.
| jonathankoren wrote:
| >If you look up the definitions of "security", "financial
| instrument", "commodity", and "currency", it is pretty clear
| that a plain vanilla crypto-currency like Bitcoin is no
| ordinary security nor a financial instrument. It is not a claim
| on something else, even less so than a traditional bank note.
| It is more like a commodity. Since when is "aluminum" a
| security?
|
| It's a financial instrument. A commodity is used to make or do
| something. Crypto currencies are literally just money making
| devices. Sure they call themselves currencies, but that's not
| their primary purpose. They're investment vehicles. Even the
| limited ability to trade them for goods an services doesn't get
| around this fact. It's like being paid in stock. That's how
| they're marketed. Not as a way to buy takeout, but rather get
| rich.
| [deleted]
| Demmme wrote:
| I read them and concluded that Bitcoin fits currency very well.
|
| While googling those terms I also found that gold is defined as
| a currency in the open market.
|
| I'm pretty sure the us sec will figure it out for us
| esonoi wrote:
| Gold is not a currency, it is a commodity that is similar
| enough to a currency (meaning it can substitute as a
| currency). ISO 4217 includes precious metals that it
| explicitly states are not currencies.
|
| Currencies do not exist outside a monetary system. If I sell
| you something, and accept skittles as payment, that does not
| make skittles a currency.
| jksmith wrote:
| There was no ICO, it has an immutable fixed supply, it's not in
| perpetual startup mode, and not centrally controlled
| operationally and can't be bought back.
| darksaints wrote:
| So many of these HN conversations devolve into shit bonanzas
| because so many people approach this topic as if it is a
| "Regulation vs No Regulation" topic, instead of the more
| appropriate "Bad Regulation vs Good Regulation" topic, or even
| more appropriately the "Which agency should have jurisdiction"
| topic. And it is a shame, because cryptocurrency has largely
| outgrown the anarchocapitalist utopian's mindshare, and the
| people involved that actually want no regulation are an extreme
| minority now.
|
| You're spot on here. The vast majority of cryptocurrencies
| (modulo a bunch of shittokens) are better described as foreign
| currencies or commodities, and they should be regulated as
| such. Unfortunately for the SEC, that implies that they don't
| have jurisdiction, and that regulatory burden lies with the
| CFTC. And from my handful of years as a commodities trader, I
| would much rather have the CFTC involved than the SEC. The SEC
| is too inconsistent...institutionally they act like a
| primadonna that is interested in making headlines more than
| creating effective policy. The CFTC is all business. They're
| not perfect, but they are damn good at their job, and they are
| transparent about what they do and how they work, and they
| don't see enforcement action as a PR move, but rather as a way
| to ensure functioning markets and common public interest.
|
| The Supreme Court seems to agree. The SEC has lost 4 out of
| their last 5 SC cases on cryptocurrency. All indicators from
| those decisions are pointing in the direction of cryptocurrency
| being regulated as a commodity, which is pointing towards the
| CFTC being the ones in charge.
|
| This case makes the news because that is how the SEC works.
| They won't win this case, and they will cover up that fact by
| doing what they always do...create more news.
| anonymouskimmer wrote:
| > And from my handful of years as a commodities trader
|
| If crypto was limited to commodities traders we wouldn't have
| had nearly the number of problems we have had.
|
| > The vast majority of cryptocurrencies (modulo a bunch of
| shittokens)
|
| You can't eliminate a huge part of the sector that the
| exchanges are actively involved in trading.
| [deleted]
| m00dy wrote:
| No one said Bitcoin is a security...The issue is that howey
| test might be too old to work on cryptos.
| thisgoesnowhere wrote:
| What is too old about it?
| m00dy wrote:
| So, do you think everything is crystal clear ?
| esonoi wrote:
| I'm not a lawyer but work in the industry.
|
| This is a slightly incorrect interpretation. Not all financial
| instruments are securities. Financial instruments are legal
| contracts between an issuer and one or more holders + other
| parties. If you own any stock in a company, you don't own part
| of that company... what you own is a portion of a legal
| contract that defines what rights you have as a shareholder and
| what obligations the issuer has.
|
| Currency isn't a commodity. It's treated as a commodity because
| they shares characteristics - you can buy and sell them over FX
| market. It's a bit of an oddity because its value isn't solely
| based on supply and demand, but stability and existence of a
| central authority controlling its supply.
|
| (Opinion) Bitcoin, on the other hand, is a virtual Commodity.
| It is not recognized as a currency. Similarly, gold is a
| commodity but not a currency, though it does have a place as a
| non-standard currency in ISO-4217.
|
| Commodities can be hedged against (oil futures) through
| derivative products. Those are formalized through a legal
| contract.
|
| Your notion of a financial instrument doesn't cover the fact
| that it is the legal contract involving money that makes it an
| instrument.
|
| But as others have pointed out that's not why the SEC is suing.
| dforrestwilson wrote:
| Getting sued to fall under govt regulation - and therefore
| gaining imprimatur - seems like exactly what these exchanges
| should want.
|
| We never regulated Beanie Babies.
| mmastrac wrote:
| I don't think Beanie Babies collectors tended towards the
| libertarian part of the axis, however.
| bannedbybros wrote:
| [dead]
| strangescript wrote:
| I mean, that makes some assumptions about the overall
| outcomes here.
| spaceman_2020 wrote:
| Bitcoin might be classified as a commodity, but nearly every
| other crypto out there, especially anything with a premine or
| any sort of revenue sharing, is pretty clear cut a security.
| whimsicalism wrote:
| I disagree that the line between 'premine' and what happened
| with Bitcoin is actually all that clear.
|
| Sure, genesis block yada yada but Satoshi (if he were
| alive/inclined) is still a multi-billionaire from behaviors
| that are pretty similar to what we call premining.
| 0xbadcafebee wrote:
| pretty much everything can be a security, and everything is
| securities fraud. ask Matt Levine if you don't believe me.
| Retric wrote:
| Binance was up for "money laundering and tax offenses" issues
| because they deal with large sums of fiat money independent
| from what's being sold. Replace Bitcoin with physical artwork
| and you can still run into issues here.
|
| Coinbase similarly ran into issues not because they were
| selling crypto but from related activities which fall under SEC
| regulations. It's one thing to operate an auction selling pigs
| or crypto, but when you start getting into 'related activities'
| they don't necessarily fall under the same umbrella. Read up on
| "Pork Bellies" and you might start to understand the issues.
| ethanbond wrote:
| I think the real crux of the issue is that these instruments
| were designed to be confusing to regulate and, alas, they're
| confusing to regulate. The error was in thinking that a
| confused regulator says "I don't understand what's going on
| here, carry on and rest easy" rather than what actually
| happens: "I don't understand what's going on here, and until I
| do -- on my schedule, not yours -- your business is always at
| risk of falling on the wrong side of my reasoning."
| foobarbazetc wrote:
| Nobody is actually "confused" though.
|
| Crypto proponents (like every other industry that has come
| before, and will come after) want zero regs.
|
| Everything else is just hand waving.
|
| Regulators clearly know (from these filings) exactly what's
| going on.
|
| Congress needs to pass laws to spell out exactly what falls
| under which new regulations.
|
| It's clearly possible (see: Australia, NZ, UK, EU, etc, etc)
| xapata wrote:
| Except I'd replace "whims" with "reasoning".
| ethanbond wrote:
| Yep that's closer to the reality IMO! Edited :)
| dcow wrote:
| I don't think the pure commodity coins (layer 1 networks like
| btc, xch, etc) are confusing at all. You do work and get
| rewarded with a digital commodity. It's exactly like digging
| up gold, or tapping a tree for maple syrup.
|
| Then a bunch of crypto anarchists showed up and started
| speculating that these coins would be worth a lot in the
| future because we could topple the financial hegemony by
| their powers combined. Okay whatever, still commodity
| trading.
|
| Then we started getting all these fake Ponzi coins that are
| standing in for something else. That's a _security_.
|
| What is possible with e.g. BTC is that it's easy to trade at
| scale. A commodity that's easy to trade isn't a security, but
| if you squint it kinda looks like one. Regardless, it's not
| crypto's fault that regulators are having a hard time
| understanding it. That's the regulators' and lawmakers'
| problem. (So elect people into power who are your peers, and
| who aren't 70 years old and have no hope of anything more
| than a cursory understanding world from the last 20 years.)
|
| But, of course they're not going to stand aside while people
| get scammed. Only the anarchists want that. The rest of us
| just want crypto to be treated fairly.
| antasvara wrote:
| Where the definition gets confusing is when a
| cryptocurrency gives you voting rights to modify the
| underlying protocol, or determine the direction of an
| entity that manages the underlying protocol, etc.
|
| There isn't (AFAIK) a commodity that operates in this
| manner. Owning a lot of gold doesn't mean that I'm able to
| unilaterally adjust how gold is mined or obtained, for
| example.
| duskwuff wrote:
| Or when a cryptocurrency has bizarre rules controlling
| how it can be traded -- for instance, a number of
| Ethereum tokens like Safemoon had rules enforcing a "tax"
| on all transfers, ostensibly to reduce volatility.
| davidgerard wrote:
| > Then a bunch of crypto anarchists showed up
|
| they literally started bitcoin and were the guys mapping
| out what they wanted from a digital currency over the
| previous twenty years, this is well known history
| dcow wrote:
| My point is simply that crypto requiring a nuanced legal
| treatment is not implicitly _by design_ even if it was
| promoted as a feature early on by grifters and
| anarchists. It's a technology like any other and it's the
| regulators' job to create fair and appropriate treatment
| for it (and our job to elect ones who will).
| ethanbond wrote:
| Bitcoin was literally designed to circumvent state
| monetary systems and their affiliated controls. Almost
| all the crypto descendants follow this path as well.
|
| So yes, it was _by design_ that it's hard to regulate.
| dcow wrote:
| What about bitcoin makes it any harder to regulate than
| cash?
| ethanbond wrote:
| First of all, the _actual_ difficulty is not really
| material since we 're debating whether it was a design
| _goal._ Bitcoin came out of a long line of libertarian
| /anarchist projects to circumvent state controls. I don't
| know why you're pretending like this is some unique
| interpretation of history. E.g. the problem that the
| Satoshi whitepaper sets out to solve was ( _as cited in
| the whitepaper_ , source [1] in the footnotes) laid out
| with this preamble:
|
| > I am fascinated by Tim May's crypto-anarchy. Unlike the
| communities traditionally associated with the word
| "anarchy", in a crypto-anarchy the government is not
| temporarily destroyed but permanently forbidden and
| permanently unnecessary.
|
| Secondly, a lot of features make it harder to regulate
| than cash. Off the top of my head, being able to
| transport it over national borders via the Internet.
| Storing arbitrarily large amounts of it in zero physical
| square meters. Keeping it relatively secure without
| having to rely on third parties (banks) gaining knowledge
| of your ownership, etc. etc.
| dcow wrote:
| Bitcoin isn't any different than cash except it's got a
| decentralized public immutable ledger and therefore isn't
| a bearer currency. But like cash its transactions are not
| governed by an authoritative financial institution that
| can repudiate and/or reverse them. (It's proven
| effectively _easier_ to regulate than cash on the
| tracking transactions front, though.)
|
| That's the "anarchy" the paper refers to.
|
| In the paper, the goal was not to topple governments. It
| was to build a digital cash equivalent where the _payment
| processing_ happened in a distributed and ultimately
| trust-less "anarchist" manner. Thus allowing people to
| transact as they do in cash, but digitally.
|
| All this anti-regulation no laws style of anarchist stuff
| is downstream. Sure it's adjacent, but also easily
| conflated.
|
| Anyway, to be super clear, being resistant to the rule of
| law is a very different property than being resistant to
| centralized control.
|
| Cash is decentralized.
|
| Credit, debit, ACH, are centralized.
|
| Crypto is decentralized.
|
| All are subject to the rule of law. But only centralized
| transactions can be manipulated without coercion or use
| of force against a one of the parties involved (if they
| are unwilling to abide).
|
| I don't know any technology that fundamentally cannot
| have laws created governing its use. It's just not
| possible to prevent someone from legally regulating
| something. But it is possible to design systems that
| don't require 3rd parties to mediate transactions and do
| require an actual authoritative monopoly on violence to
| manipulate, as we've seen with cash and as is the case
| with BTC.
| [deleted]
| lottin wrote:
| But what on earth is a digital commodity? I think the whole
| concept of digital commodity is nonsensical.
|
| A commodity is a product. Products are either consumed or
| used as raw materials. A digital commodity is not a
| product. It can't be consumed or used, because it's
| entirely imaginary.
|
| I think a better term is "abstract unit of account".
| dcow wrote:
| Respectfully, I think your understanding is behind the
| curve. Even the SEC says BTC _itself_ is a commodity.
|
| You consume a BTC by using/trading it. You consume gold
| or maple syrup by using/trading it. Just because the uses
| are a little different doesn't mean it's incompatible
| with the definition of commodity. If I started using gold
| in a _nonsensical_ way you wouldn 't start saying "oh now
| it's a security", would you?
| mulmen wrote:
| I think the hangup with BTC as a commodity is that I can
| make a loaf of bread with wheat and eat it and the amount
| of wheat in the world is depleted as a result. Similarly
| I can use gold to build a cell phone or some jewelry and
| while it is possible to recover it isn't as simple as
| trading BTC. How is a BTC _consumed_?
| scottiebarnes wrote:
| The majority of gold usage is in investment/central bank
| reserve. Technology applications are a fraction of the
| usage. Jewelry is a major usage, however part of the
| reason for its use in jewelry is a hybrid combination of
| its store of value properties (ex. in Indian culture
| afaik, gold jewelry plays a large part in passing down
| wealth, families gift gold jewelry at weddings etc.).
|
| So you consume bitcoin the same way a central bank
| consumes gold: by sitting on it, selling it when you need
| to, or buying more in times of expected turmoil.
|
| Bitcoin is far younger than gold (12 years vs thousands),
| so its obviously more volatile.
|
| https://www.statista.com/statistics/299609/gold-demand-
| by-in...
| mulmen wrote:
| Trading something doesn't consume it. That's a very
| confusing overloading of terminology.
| scottiebarnes wrote:
| Well consumer comes from the base word consume, which by
| definition includes the buying of a good or service,
| which is essentially a trade.
|
| Consume:
|
| - eat, drink, or ingest (food or drink).
|
| - buy (goods or services).
|
| - use up (a resource).
|
| - (especially of a fire) completely destroy.
|
| - (of a feeling) absorb all of the attention and energy
| of (someone).
| mulmen wrote:
| I was asking an honest question but I don't like being
| trolled. Have a nice day.
| skinnymuch wrote:
| How would you be trolled? You asked and you got answered.
| What are you disagreeing with?
| mulmen wrote:
| None of these responses answer the question.
| scottiebarnes wrote:
| Not sure why you think you're being trolled. Have a good
| one.
| dcow wrote:
| You're not bing trolled? Wat.
| [deleted]
| jallen_dot_dev wrote:
| Technically the thing you hold and use is a transaction
| output, and once an unspent transaction output (UTXO) is
| spent it can't be spent again. So from that perspective
| it is consumed!
| [deleted]
| ryathal wrote:
| BTC is consumed when someone forgets their password.
| ethanbond wrote:
| Commodities are usually raw/close-to-raw inputs into some
| process. Bitcoin doesn't really meet that, but again the
| whole point is recent technological innovations haven't
| really settled into the language yet.
|
| And again, that is _by design_ of both the instruments
| themselves _and_ the massive PR campaigns /grifts around
| them.
|
| The whole trick is attempting to position these things as
| "the half of the definition of commodity that means this
| has intrinsic value but not the other half of the
| definition which says it's a raw input," or "the half of
| the definition of a security that means You Can Make
| Money, but not the other half that says I can be
| regulated as someone selling a You Can Make Money
| instrument."
| thisgoesnowhere wrote:
| This is my read as well. However,I think if you regulate
| the security like stuff in the same way we regulate
| existing financial instruments the whole thing collapses
| anyways, so who really cares what we call this specific
| coin.
| [deleted]
| JumpinJack_Cash wrote:
| You can consume a Fortnite skin or a Call of Duty weapon.
|
| The point is that you cannot consume crypto, it's a
| problem which is understood inside the community, that's
| why the push for NFTs which started as legitimate art to
| enjoy on huge 8K screens or VR headsets but quickly ended
| up becoming Twitter avatars built for the purpose of
| trading and offloading to a bigger fool.
| dcow wrote:
| You consume it by trading it or, for a direct analog to
| your example, by showing off your wallet balance. Your
| Fortnite skin is no more consumable than a BTC. It just
| has a different value and use.
| lottin wrote:
| Trading a commodity doesn't consume it. If I trade a
| hamburger, the hamburger isn't consumed. It's only
| consumed when I eat it.
| JumpinJack_Cash wrote:
| > > You consume it by trading
|
| Hence the SEC is right to clampdown on crypto for
| violations of securities law, in order to prevent bubbles
| that emerge when the only use for something is trading it
| for something else. We already have that, people who want
| to participate in that game know where to go, the stock
| market.
|
| > > for a direct analog to your example, by showing off
| your wallet balance
|
| That's the most circular thought I've ever heard.
| [deleted]
| skinnymuch wrote:
| Do you mean libertarians or the contradictory "ancaps"?
| What does anarchist mean to you in your writing? Or why use
| that word?
|
| Any examples of anarchists doing what you're saying for
| extended periods of time like cryptobros would be helpful
| to understand.
|
| Thanks.
| this_user wrote:
| I think it's more a case that anyone who was involved in
| crypto early, and who has actually taken the time to
| understand the technology, has realised about a decade ago
| that crypto currencies are mostly useless.
|
| But then people had they idea that they could still make
| money from it by grifting people if they just added layer
| upon layer of complexity in order to disguise the ultimate
| uselessness of the underlying technology. That is where all
| of your Ponzis, rugpulls, NFTs and everything else comes
| into the picture.
| dcow wrote:
| Meh, I'm no bull but I also don't think "cryptos are
| mostly useless" is accurate. I believe there are solid
| use cases for _distributed global ledger_ and _digital
| replacement for cash_. Is Bitcoin the winning /best
| manifestation? I doubt it, we likely need something much
| more energy efficient (like Chia is trying to be). But I
| don't think the idea is bust. It just isn't as
| overwhelmingly applicable as people dreamed it might be.
| We're trying out use cases, vetting the good ones and
| sometimes painfully learning the which ones were stupid
| or bad ideas. And once all the speculation settles, I do
| think true currency is still a viable one. Logistics and
| markets are another, etc.
| acjohnson55 wrote:
| I think that it's still unproven that a distributed
| global ledger is actually a fundamentally useful thing,
| outside of speculation. We're 15 years out from the
| invention of Bitcoin, and if all of blockchain technology
| snapped out of existence today, there are very few
| people, other than speculators, who would be impacted. It
| has comprehensively failed to be adopted into any value
| chains.
| thisgoesnowhere wrote:
| I don't think anyone here is arguing that digital cash or
| a global ledger is bad they are arguing that the specific
| structures and incentives of crypto are bad.
|
| Bring on the digital cash IMO but bearer instruments
| underpinning any large scale finance is a recipe for
| disaster.
| whimsicalism wrote:
| > I think it's more a case that anyone who was involved
| in crypto early, and who has actually taken the time to
| understand the technology, has realised about a decade
| ago that crypto currencies are mostly useless.
|
| I don't know what it is about crypto that makes HN
| commentators want to make the most ridiculous, put-downy
| statements without evidence to back it up.
|
| Crypto is not mostly useless, it is just that people
| don't like the uses. crypto is absolutely massive for
| avoiding capital controls in countries with inflation,
| etc.
| ohgodplsno wrote:
| [flagged]
| whimsicalism wrote:
| Yes, evading capital controls is illegal, part of the
| informal economy in large parts of the world, and very
| helpful to many people.
|
| I also think there are useful legal uses, but yes - where
| crypto has the best comparative advantage is when people
| are trying to circumvent harmful laws. Not every country
| is a (relatively) well-run procedural democracy. Crypto
| helps people route around that.
| throw9away6 wrote:
| Also in low trust transactions. Often you have low trust
| buyers that need to pay via irreversible transactions and
| crypto is cheaper and more secure
| JumpCrisscross wrote:
| > _Crypto is not mostly useless, it is just that people
| don 't like the uses_
|
| Crypto has legitimate use as a rebel medium. It's also
| plagued with criminality. Its promoters had a decade to
| clean up its act and refuse to self regulate.
|
| That's soured the public's mood towards the whole
| enterprise. If crypto's benefits are niche, its
| development should be niche. And if its sole
| beneficiaries are people in failing foreign countries, it
| might make sense to put the whole thing under the aegis
| of State versus continuing to create chaos from the
| private sector.
| arcticbull wrote:
| > Crypto has legitimate use as a rebel medium.
|
| This only applies to literally one or two
| cryptocurrencies, stuff like Monero. They're very much
| the exception to the rule. Most cryptocurrencies like
| Bitcoin and Ethereum just publish the entire ledger which
| is constantly being pulled in by the PLA, the SEC, the
| FBI and myriad other law enforcement authorities the
| world over. Not to mention Chainalysis.
|
| If the government that's oppressing you is capable enough
| to oppress you they're more than capable enough to, in
| the fullness of time, deanonymize your transactions and
| send you directly to jail for them. You're not just
| defending against the current start of the art tech but
| all future improvements - against an adversary with
| dramatically more resources than you have.
|
| Illicit transactions on public ledgers are simply
| prosecution futures. People get jail time constantly for
| crypto transactions.
|
| If I were a dissident in a country like the PRC
| hypothetically, I'd run like hell from crypto. Talk about
| asking for trouble.
|
| That's before we even get to the point of how you plan to
| acquire these currencies without the government noticing.
|
| They have a use: gambling and speculation at a massive
| decentralized offshore casino. Coinbase and Kraken are
| the cage. Binance, for example, and DeFi are the table
| games.
| acdha wrote:
| > I don't know what it is about crypto that makes HN
| commentators want to make the most ridiculous, put-downy
| statements without evidence to back it up.
|
| HN has many people who understand how technology work and
| a smaller but still large number of people who understand
| economics. Cryptocurrency has a few people like that but
| also a ton of get-rich-quick types who think their best
| work is making random claims until someone buys whatever
| they're selling. We're a decade and a half into that,
| with billions of dollars of real money pumped in and
| almost no benefit outside of some early investors being
| able to cash out before the inevitable dip.
|
| At this point, the onus is on anyone promoting
| cryptocurrencies to show up front why they're different
| than their waves of predecessors. One big challenge here
| is the inherent conflict of interest: unlike other things
| which have come in and out of popularity, someone who
| tries cryptocurrency but realizes it's not really useful
| to them doesn't have an option for getting out without a
| financial loss which doesn't involve finding a buyer for
| something they know isn't really worth the price. If you
| backed MongoDB a decade ago, you can just switch to
| Postgres without either eating a loss or finding someone
| to buy your old Mongo server.
|
| This also leads me to your next sentence: for years, the
| claim was that cryptocurrency was going to transform the
| financial world and beyond. Sales guys went on at length
| about how you'd use blockchains to buy coffee and a ride
| to work, make sure the farmer who grew your coffee beans
| was organic, store your software licenses, record the
| deed to your house, etc. They couldn't explain how any of
| that would work and dismissed criticism, and were
| especially upset if people said the only real use cases
| seemed to be illegal transactions. Now, in 2023 we're
| back to the primary use being breaking laws, hoping that
| the government in question chooses not to monitor
| cryptocurrencies?
|
| > Crypto is not mostly useless, it is just that people
| don't like the uses. crypto is absolutely massive for
| avoiding capital controls in countries with inflation,
| etc.
| JumpinJack_Cash wrote:
| > > crypto is absolutely massive for avoiding capital
| controls in countries with inflation
|
| Inflation hedge means mantaining parity against a
| weighted basket of stable currencies such as
| USD/EUR/CHF/JPY. Maybe gold?
|
| Bitcoin didn't mantain parity at all, it's up some
| 20,000% since 2013 and +[?] since its inception.
|
| So crypto failed as inflation hedge too, because the
| world of finance is very specific, you can't say 'this
| asset is an inflation hedge' and then it's up 20,000%
|
| It also failed as a tool for capital controls and tax
| evasion because if you do that sort of things you don't
| want publicity...what happened is that crypto-bros and
| crypto-enthusiast went on to scream off the top of their
| lungs and it resulted in the death of the largest capital
| control avoidance use case: getting money out of China.
|
| Nobody uses Crypto for getting money out of China
| anymore.
| whimsicalism wrote:
| > Bitcoin didn't mantain parity at all, it's up some
| 20,000% since 2013 and +[?] since its inception.
|
| Dai and other stablecoins maintain parity and are what is
| mostly used.
|
| > It also failed as a tool for capital controls and tax
| evasion because if you do that sort of things you don't
| want publicity...what happened is that crypto-bros and
| crypto-enthusiast went on to scream off the top of their
| lungs and it resulted in the death of the largest capital
| control avoidance use case: getting money out of China.
|
| I don't know what to tell you, these are heavily used
| behind-the-scenes in the dollar black market in places
| like Argentina, etc.
|
| > Nobody uses Crypto for getting money out of China
| anymore.
|
| Yeah, the informal economy is not actually very large in
| China, it's not a good example.
| JumpinJack_Cash wrote:
| > > Dai and other stablecoins maintain parity and are
| what is mostly used.
|
| Dai and stablecoins are currencies issued by private
| companies, if the private company sponsoring it were to
| disappear, the decentralized and federated (or whatever)
| community won't be able to support such a huge
| undertaking.
|
| Besides the whole thing is pointless because whatever
| authority or control system you are evading with crypto
| sooner or later you'd have to come back into it, because
| nobody sells food, water, shelter, houses for crypto. Nor
| bitcoin nor stablecoins. Actually it's worse because the
| authorities will be waiting for you at on and off ramps.
| whimsicalism wrote:
| Wrong from the jump about Dai, and I don't think you know
| about how black market cash economies work - there are
| plenty of informal economy places you can exchange local
| currency for dollar, dollar for crypto, etc.
| gen220 wrote:
| I think people are latching on to the magnitude of your
| claim rather than the direction and therein missing the
| point. FWIW, as somebody who meets your criteria, myself
| and my network of people from that time offer much
| credence to your claim.
|
| Even back in 2016/17, many people involved were openly
| bemoaning how 80+% of ICOs were unregistered security
| offerings to vaporware.
|
| You can almost pinpoint the inflection point at which
| Coinbase decided their goal was short-term profit
| maximization vs developing a healthy ecosystem. The
| company in the last 5 years is completely unrecognizable
| in contrast to when there were only 3 coins you could buy
| from them (USDT, BTC, ETH).
| foobarbazetc wrote:
| It's kind of interesting that the "commonwealth" countries
| (AU/NZ/GB/CA) have different classifications of crypto (AU/NZ
| treat them as property, CA as securities, GB varies depending
| on the thing).
|
| The SEC filings do give the rationale for why _specific_ coins
| are securities though.
|
| Hard to summarize each filing though. Worth reading because,
| unfortunately (?), they make a good case.
| Consultant32452 wrote:
| Are there any crypto tokens not backed by a state that the SEC
| has officially and clearly declared a currency and not a
| commodity?
|
| I'm starting to feel, as a practical matter, they will never
| consider non-government backed crypto a currency regardless of
| what the rules on paper are. But maybe this has already
| happened and I'm ignorant, I don't follow this space closely.
| retrocryptid wrote:
| My experience with Coinbase led me to ask people "where do I sign
| up for the class action law suit?" so this is welcome news.
| sebzim4500 wrote:
| That's interesting. What did Coinbase do to you exactly?
| paulpauper wrote:
| Crypto is like the worst investment ever: huge legal risk, does
| not hedge inflation, not a safeguard in crisis, does not benefit
| from tech/ai boom, does not generate profits. Only downside, no
| upside, no strengths, only weaknesses.
|
| the chart is only one direction: down
|
| The obvious weakness of bitcoin relative to QQQ demonstrates
| this. A daytrading pair trade method that shorts Bitcoin in
| market hours and goes long qqq would have cleaned house over the
| past year, including a huge win yesterday. i was running this and
| made a lot.
|
| Who goes against the fed. government and wins? big tobacco
| couldn't do it. neither could the auto industry.
| awaythrow483 wrote:
| This is an obvious troll. Bitcoin has absolutely stomped $QQQ
| of $NDX over this period as basically every other person here
| is pointing out.
| EddieEngineers wrote:
| This is true when it's going down and false when it's going up.
| Do the same analysis of previous years during bull crypto
| markets and does this hold up?
| paulpauper wrote:
| bitcoin's performance since late 2017 lags QQQ. the rolling
| 5-year returns have gotten way worse. Much of the gains were
| from pre-2018. many people five years ago were predicting
| six-figures by now, nowhere even close.
| EddieEngineers wrote:
| Huh? BTC is up 56% YTD, QQQ is up 34.5%. Over five years
| BTC is up 300%, QQQ is 100%. Over life BTC is 7850% while
| QQQ is 570%. Today QQQ is up 0.12%, BTC is up 0.95%.
|
| I don't know which slice you want to compare but general
| holds of BTC have outperformed QQQ significantly, even
| today it's done better while it's two largest exchanges
| have been sued by the SEC.
| paulpauper wrote:
| bitcoin peaked at 20k in 2017. it is only up 30 percent
| to 26k. QQQ is up a lot more. over 5.5 years of weak
| performance. The major problem with bitcoin are the huge
| declines like in 2018 and 2022. It stopped going up as
| much anymore either like it did in 2013 or 2017.
| vagab0nd wrote:
| This reminds me of those "biggest X since Y" headlines.
| No matter how insignificant the event, you can always
| write a clickbait-y title.
| EddieEngineers wrote:
| But you've picked the very peak of a previous bull run
| against a dip of a bear market... QQQ peaked in 2021 at
| $404 but is now at $355 so it's down 15%. This is just as
| relevant as what you're saying but obviously doesn't
| capture the whole picture? QQQ dipped from $101 to $20
| once which is a huge loss, larger than BTCs largest dip
| as a percentage, but again that doesn't really tell the
| whole picture either.
|
| Not trying to be rude or argumentative here, I just
| really don't understand your point.
| awaythrow483 wrote:
| Let's layout the fallacy here because it is trivially
| obvious:
|
| You are cherry picking the exact top for bitcoin while not
| doing the same thing for QQQ.
|
| You mention 5 years ago so lets use your arbitrary data
| point:
|
| Bitcoin was floating between 7500 and 6500 this week 5
| years ago. Let's use the upper end. Bitcoin is up well over
| 300% over this period.
|
| QQQ is up 103.10% according to google over the last 5
| years.
|
| Nothing about adding the word "rolling" changes this.
| flanfly wrote:
| I'm not sure what you mean. BTC is up 29x since 2017 while
| QQQ is up 1.8x
| paulpauper wrote:
| it went up 20x in 2017. i said late 2017. it peaked at
| 20k in dec 2017.
| awaythrow483 wrote:
| As pointed out above, complete fallacy. You are cherry
| picking a handful of dates that support your argument and
| those dates are completely arbitrary.
| adsfgiodsnrio wrote:
| Winning lottery tickets are a good investment. Losing tickets
| are a bad one.
| EddieEngineers wrote:
| The probability of making money investing in lottery
| tickets and BTC are obviously different
| spurgu wrote:
| > Who goes against the fed. government and wins? big tobacco
| couldn't do it. neither could the auto industry.
|
| Millions of people. Not a centralized exchange like this.
| Vecr wrote:
| Pretty much any short is way worse, unlimited downside! If you
| bought Bitcoin and stored it correctly you would be down less
| than 100%. Buying S&P 500 is probably less risky though.
| I_am_tiberius wrote:
| I don't understand why even the hackernews community doesn't see
| that this is all a political strategy to make sure the digital
| dollar can exist.
| zarriak wrote:
| None of the time that libertarian beliefs could protect civil
| liberties is it ever taken seriously. It exists solely to
| launder corporate protections and deregulation.
|
| Nothing significant happen to the NSA after the Snowden leaks,
| nothing significant happened to the FISA court. Also I don't
| get how something like CBDC ever exists because of how powerful
| Visa is.
| __tmk__ wrote:
| I doubt the USG is competent enough to have a masterplan like
| that. This just seems to me like the actions of a person (Gary
| Gensler) who personally dislikes cryptocurrencies and who is
| trying to establish himself as a political player through his
| "bold actions".
| eggy wrote:
| I know their are legalities I am not an expert in on finance, but
| my conspiracy theorist is bubbling up given the failed crypto
| bank, the SEC suing Binance and Coinbase, and the US and world
| government move for traceable, government managed and controlled
| digital currencies.
|
| I was at the first HOPE in 1994[1] at the Penn Hotel in NYC when
| Eric Hughes (known for the Cypherpunk Manifesto) and others gave
| a talk on cryptography and how it would be part of a future of
| privacy and security for anonymous banking etc. I was so enthused
| about getting rid of the middle man (a minimum of 4 or 5 entities
| process your latte purchase at Starbucks and take a cut as well
| as track you and your data trail). Government doesn't like this.
| "What do you have to hide?" is a tired defense of prying eyes.
|
| Yes, there were a lot of bad fish in the pool, but the goal was
| and is still good in my book.
|
| [1] https://youtu.be/v5kayD5IQQU
| throitallaway wrote:
| It's gotten to the point where political candidates (and
| politicians) have to cover their tracks when paying for things,
| lest they be criticized for their choices. If you ever want to
| run for office you'd better never use a credit card at a porn
| shop, McDonald's (it's unhealthy), etc. This applies to data
| that insurance companies harvest from as well.
|
| I used to be one of those people that said "I have nothing to
| hide and the conveniences outweigh the negatives", but I'm
| getting more and more cynical on data dragnets as I'm growing
| older.
| timerol wrote:
| Do you pay cash at Starbucks?
| awaythrow483 wrote:
| Bitcoin up 2% on the news despite people in this thread
| explicitly saying "it made crypto price tank" in the thread
| paulpauper wrote:
| umm...check what it did yesterday.
| awaythrow483 wrote:
| This is an article about the SEC coinbase announcement. That
| happened today. So I'm not talking about what happened
| yesterday, I'm talking about what happened today, because
| that is what is relevant to the article we are discussing.
|
| so, ummmmm..... like..... bruh. go check what it did today
| ForHackernews wrote:
| Alternative headline: Coinbase and Binance enter the "finding
| out" phase of unlicensed securities dealing
| x86x87 wrote:
| Alternative alternative headline: the SEC wants to have their
| cake and eat it too while "protecting" "investors"
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