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Blockfi agrees to pay $100M in penalties and pursue registration

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Re: Blockfi agrees to pay $100M in penalties and pursue registration

#201

Post by chernevik »

yrral wrote: post #88

Here is SEC commissioner Hester Peirce's dissenting opinion: https://www.sec.gov/news/statement/peirce-blockfi-20220214 Essentially she says that while they did misrepresent the over collateralization, a 100m fine is too much since they did fulfill their end of the loans. Additionally, she says that the categorization this stuff as securities is not effective. US consumers want interest on their crypto-assets now, bu…

BlockFi has already blown its chance to provide full and reliable information on its own. The complaint here isn't that BlockFi made full disclosure but just forgot to check the S-1 box. The disclosures they have made were _false_. They wouldn't be paying $100mm otherwise.

And it doesn't matter whether BlockFi has paid its loans so far. If misrepresentation of collateralization is penalized only when loans aren't paid, then it can never be penalized at all.

I can easily believe that US accounting practices have problems with crypto; do we even have GAAP for this stuff? And it's easy to complain that SEC filings are complex and time-consuming. But at the end of the day there must be some sort of accounting of how these companies and products work.

I suspect that a lot of crypto products won't meet SEC disclosure requirements because they can't meet any real disclosure requirement. And if that's right, then no, they shouldn't be available.

Re: Blockfi agrees to pay $100M in penalties and pursue registration

#202

Post by chernevik »

smt88 wrote: post #27
300bps wrote: post #20

...and at the end of the day DeFi will be so regulated it will have all the bad parts of DeFi and regular finance.

Regulations are the good parts of regular finance. There are no financial regulations that currently harm me, a consumer. We honestly need to return to a time when we had a bit more financial regulation.

Stuff like S-1 filings are complicated, slow and expensive. I'm prepared to believe there is a better way -- but someone has to tell me that better way actually is. So far, I'm not hearing much here.

Re: Blockfi agrees to pay $100M in penalties and pursue registration

#203

Post by smt88 »

smoovb wrote: post #129
smt88 wrote: post #27

Earlier quoted context omitted.

Regulations are the good parts of regular finance. There are no financial regulations that currently harm me, a consumer. We honestly need to return to a time when we had a bit more financial regulation.

Regulations are the costly part of regular finance. DeFi is exploring a low friction space in finance and need to be given the freedom to continue to do so. $100m fines, chargebacks, compliance, transaction fees and the labor behind these are all fat that could be trimmed with DeFi.

It seems like you're responding to a different comment...

> $100m fines, chargebacks, compliance, transaction fees and the labor behind these are all fat that could be trimmed with DeFi.

Yes, I know. These are the things I like about regular finance and don't want to give up. All of those things are pro-consumer except the transaction fees.

DeFi has not demonstrated an ability to eliminate transaction fees or even to make them predictable or consistently low! It's the worst of both worlds.

Re: Blockfi agrees to pay $100M in penalties and pursue registration

#204

Post by coolspot »

discodave wrote: post #138
cdiddy2 wrote: post #100

Earlier quoted context omitted.

Compound and Aave both existed before they had tokens and there was still yield on the platforms. The yield is from borrowers paying interest to the lenders.

Where are the borrowers investing the tokens to generate profit to pay interest to the lenders? Like, are they investing in real estate that pays rent? Companies that pay dividends?

They are buying hot shitcoins on leverage.

Re: Blockfi agrees to pay $100M in penalties and pursue registration

#206

Post by joelbondurant1 »

ar_lan wrote: post #183
sbierwagen wrote: post #132

Earlier quoted context omitted.

Check out the interest rates on their crypto accounts: https://blockfi.com/rates/ A guaranteed 9.25% APY on crypto deposits when US dollar savings accounts at FDIC banks do 0.50% is odd. Where is the extra money coming from?

If you check DeFi rates, 9.25% is fairly low currently.

No post body was provided.

Re: Blockfi agrees to pay $100M in penalties and pursue registration

#207

Post by Animats »

ryanSrich wrote: post #160
schmichael wrote: post #123

Earlier quoted context omitted.

> it's unrelenting hate for crypto and crypto adjacent topics is unfounded. How is it unfounded? The carbon and ewaste problems are well documented. Any fixes for that (eg Proof of Stake) have either compromised Bitcoin's original focus on decentralization, continually delayed release, or both. Over a decade after Bitcoin's launch few use cases have emerged and none of them have proven durable. The ICO craze came and…

> How is it unfounded? The carbon and ewaste problems are well documented. Without a benchmark this means nothing. Just because a new technology contributes to ewaste we should just ignore it and bury it? No use in trying to fix it right? Just kill the technology because it contributes to ewaste. That doesn't make any sense. Not to mention the majority of the uproar around Crypto being a danger to the environment is…

ICOs (not really a thing anymore)

Right. This is why.[1] That's the SEC's list of "cyber enforcement actions". They have been bringing the hammer down on about two ICOs a month since 2018. Last August, they started in on DeFi.[2] “The federal securities laws apply with equal force to age-old frauds wrapped in today’s latest technology,” said Daniel Michael, Chief of the SEC Enforcement Division’s Complex Financial Instruments Unit. “Here, the labeling of the offering as decentralized and the securities as governance tokens did not hinder us from ensuring that DeFi Money Market was immediately shut down and that investors were paid back."

[1] https://www.sec.gov/spotlight/cybersecurity-enforcement-acti...

[2] https://www.sec.gov/news/press-release/2021-145

Re: Blockfi agrees to pay $100M in penalties and pursue registration

#208

Post by astrange »

smt88 wrote: post #27
300bps wrote: post #20

...and at the end of the day DeFi will be so regulated it will have all the bad parts of DeFi and regular finance.

Regulations are the good parts of regular finance. There are no financial regulations that currently harm me, a consumer. We honestly need to return to a time when we had a bit more financial regulation.

> There are no financial regulations that currently harm me, a consumer.

All consumer banks have identical products, preventing you from starting things like a tontine/friends cash pool without a business behind it. KYC means you have to send in recordings of your face. Accredited investor rules often mean only rich people can get richer. There's definitely some harmful ones.

Re: Blockfi agrees to pay $100M in penalties and pursue registration

#209

Post by unclebucknasty »

ryanSrich wrote: post #160
schmichael wrote: post #123

Earlier quoted context omitted.

> it's unrelenting hate for crypto and crypto adjacent topics is unfounded. How is it unfounded? The carbon and ewaste problems are well documented. Any fixes for that (eg Proof of Stake) have either compromised Bitcoin's original focus on decentralization, continually delayed release, or both. Over a decade after Bitcoin's launch few use cases have emerged and none of them have proven durable. The ICO craze came and…

> How is it unfounded? The carbon and ewaste problems are well documented. Without a benchmark this means nothing. Just because a new technology contributes to ewaste we should just ignore it and bury it? No use in trying to fix it right? Just kill the technology because it contributes to ewaste. That doesn't make any sense. Not to mention the majority of the uproar around Crypto being a danger to the environment is…

It's interesting that you see "disrupting the banking system" as "ground-breaking" and obviously positive, while at the same time being uncertain as to how any new system that replaces it will actually take shape.

Why do you assume that the replacement will be net-positive?

Likewise, you reference "decentralizing finance" as a positive thing that's occuring. However, to-date, this has been nothing but a mirage--as illusory as fractional-penny transaction fees and other promises.

We're not even on a path to decentralization, and it's not a temporary aberation to be sorted out. It's actually the design, despite the ruse that tries to focus us on the idea that anyone could operate a node. Crypto is at least as centralized as traditional currency/finance. It only seeks to displace the incumbent financial class with a new one.

Re: Blockfi agrees to pay $100M in penalties and pursue registration

#210

Post by [deleted] »

sailfast wrote: post #181
bduerst wrote: post #171

Earlier quoted context omitted.

Can you give specific examples of these 'things' though?

Becoming "your own" domain registrar without having to deal with ICANN was another interesting one to me (after checking into how all those .eth domains popped up). It was exciting when I first looked at it and then I realized that this was actually not "democratizing" anything so much as ensuring a new class of folks would be able to create new centralized "everythings" in a new environment outside of the current sy…

[deleted]
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