SEC Claims All of Ethereum Falls Under US Jurisdiction

If you take that angle then crypto will still never be a legitimate investment class either way, because all of it (including BTC and ETH and everything else) is a giant fraud predicated on the falsehood that it is "decentralized" and somehow that makes it unregulated. There is no other reason for it to exist. This is just another nail in the coffin, they can't lie about it anymore.

If crypto-land really wants to follow through on their lawless anarchist fantasies, then they should be even happier if the SEC bans all of it outright. Then they can all go back to their roots when the only thing bitcoin was used for was illegal black market drug transactions...

I'm discussing the law, not an analogy.

It's a real system that was made in the United States. You don't have to be a company to be subject to the law.

If you make something in a country, it's subject to that country's laws.

Think about it: you're basically suggesting that if you call something "a protocol," somehow it's no longer subject to the rule of law.

We go through "well yeah but it's not a" every couple of years. The explanations given don't really change anything.

Silk Road wasn't a company, and yet it was subject to US law.

I see that I'm being downvoted again, even though I'm speaking politely in good faith. :(

The truth is, though, as far as I can see, this is legally correct.

You can't just sit in a country and ignore its laws and then say "well no, it's an internet thing, the laws don't apply." That isn't how countries work.

I’m pretty on board with John Perry Barlow’s declaration of the independence of cyberspace[0], so I guess my preference would have to be none at all.

It seems obvious to me that things can happen online without jurisdiction, just like things can happen in international waters or outer space, and that though these can be governed by treaties or agreements, they cannot usefully be said to occur fully under any one or other jurisdiction.

The reality will be more nuanced than the idealised vision of [0], of course, but it will still be profoundly different to the reality that most regulators and governments would like to see, too. (Just like the reality around narcotics bears little resemblance to the world envisaged by the architects of the war on drugs.)

How this turns out remains to be seen, but it’s clear to me that the right thing to do is not necessarily for everyone to lie down and take whatever the legislators come up with. Civil disobedience is a powerful force for democratic change.

[0] https://www.eff.org/cyberspace-independence

That's missing the point, I think. Cryptocurrency applications and services are of course subject to the laws of local jurisdictions in which they operate. But for a decentralized protocol, what law enforcement can do is limited.

Maybe better to consider the same problem in a different domain: encryption. A court can order you to give up your encryption key or password. They can even do this if you don't know or have lost your password/key. But neither the court nor its enforcement agencies can simply issue a judgement to decrypt an encrypted email; your compliance is required. The court can hold you in contempt for the rest of your life for not revealing a key you may or may not have, but they can't force you to decrypt it if the key is lost or you don't give in.

Likewise for cryptocurrency and "code is law" smart contracts. A court (or regulator) could demand all they want that a bitcoin transaction be reversed, or that a DAO smart contract be frozen. But if the underlying protocol works as it is supposed to, and if mining/staking is properly decentralized, there ain't shit they can do to actually enforce that demand.

People transacting on a blockchain are still subject to local laws, and need to comply with relevant regulatory directives. No one of consequence seriously believes that something is above the law just because it happens on a blockchain. But pragmatically, a regulator can control the blockchain about as effectively as NASA could get into space by legislating gravity.

How many people have committed such egregious crimes using blockchains that it is literally worse to spend your entire life in jail than it is to give up your Bitcoins? That scenario you've presented makes absolutely no sense to me.

But anyway, it's still entirely wrong because they can still just catch you using traditional means. Like catching you on tape admitting you stole the Bitcoins, or getting a video of you doing it, or getting credible witnesses to say that you did it. Or similarly, to retrieve the stolen coins just get a video of your keyboard while you type the pass phrase to the wallet, or just liquidate the rest of your assets into dollars and pay back the victim that way... Like the whole thing just makes no sense. Even if it did actually work it would still be terrible because the system you describe means that if you get your bitcoins stolen and you catch the thief and he admits he did it and then intentionally goes to jail to avoid having to give the tokens back so they just sit there unused in the wallet just to spite you... you can literally never get them back. Why would anyone actually want that??? I am honestly trying not to make this so outlandish but this is entirely what you just described. It's completely ridiculous.

The only thing this accomplishes is if you are trying to destroy money and make someone suffer by taking destructive actions... but like, if you are really an evil and petty criminal person you can also just do that with anything else? Like, rob them at gunpoint and set their cash on fire? Or slash their car tires? No one needs Bitcoins just to be an asshole, you can see that every day on this planet...