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SEC Claims All of Ethereum Falls Under US Jurisdiction

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Re: SEC Claims All of Ethereum Falls Under US Jurisdiction

#21

Post by skybrian »

adastra22 wrote: post #18
JohnHaugeland wrote: post #6

Earlier quoted context omitted.

so i don't mean to seem rude, but, i'm not really sure what other options there are if ethereum isn't bound by us law, is it that they should be bound by someone else's law, or not at all? like, you know that if you're a german person in france, and you make a visa transaction, because visa is an american company, they still have american requirements, right? so i'm not being sarcastic. i'm really genuinely asking. w…

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…

I don't think this works because even if a transaction is irreversible, the court could still impose monetary damages, if it has jurisdiction. Or some other penalty.

And it seems hard to keep US machines (or any other country) out of a permissionless distributed algorithm? Effectively, any country could claim jurisdiction pretty easily, if it wanted, by adding a machine to the network.

Re: SEC Claims All of Ethereum Falls Under US Jurisdiction

#22

Post by customkitchen »

junofan wrote: post #19
customkitchen wrote: post #12

Earlier quoted context omitted.

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 fol…

It’s kind of bad if the SEC is making dumb arguments. They aren’t infinitely powerful; why erode their power this way?

ETH is operating and trading with the US. It falls under US jurisdiction. The line of "we are not registered anywhere therefore we don't have to follow laws in any jurisdiction" is pretty weak and farcical. And sorry to be cheeky but... Have you seen some of the absurd claims and arguments crypto people make about the "infinite power" of crypto to somehow evade all laws and solve all social problems, while simultaneously making everyone rich just for holding some tokens? I wish I was making this up, or maybe I was just getting trolled...

Re: SEC Claims All of Ethereum Falls Under US Jurisdiction

#23

Post by junofan »

customkitchen wrote: post #22
junofan wrote: post #19

Earlier quoted context omitted.

It’s kind of bad if the SEC is making dumb arguments. They aren’t infinitely powerful; why erode their power this way?

ETH is operating and trading with the US. It falls under US jurisdiction. The line of "we are not registered anywhere therefore we don't have to follow laws in any jurisdiction" is pretty weak and farcical. And sorry to be cheeky but... Have you seen some of the absurd claims and arguments crypto people make about the "infinite power" of crypto to somehow evade all laws and solve all social problems, while simultaneo…

I take it you did not read the complaint.

Re: SEC Claims All of Ethereum Falls Under US Jurisdiction

#24

Post by bendews »

adastra22 wrote: post #18
JohnHaugeland wrote: post #6

Earlier quoted context omitted.

so i don't mean to seem rude, but, i'm not really sure what other options there are if ethereum isn't bound by us law, is it that they should be bound by someone else's law, or not at all? like, you know that if you're a german person in france, and you make a visa transaction, because visa is an american company, they still have american requirements, right? so i'm not being sarcastic. i'm really genuinely asking. w…

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…

> but they can't force you to decrypt it if the key is lost or you don't give in.

A very US-centric view is it not? Many places can force you to decrypt something by law. In fact the US does on entry to the country and can refuse entry if you do not comply.

> there ain't shit they can do to actually enforce that demand.

Watch forks become more commonplace and "official" forks being recognised and non-official forks being barred from use in any legitimate transactions. The courts will have the power to force blockchains to reverse transactions or other fraud this way - at a technical level still quite difficult but if it becomes law then solutions to make it easier will be created. Perhaps to cherry pick transactions just like you can cherry pick git commits.

Re: SEC Claims All of Ethereum Falls Under US Jurisdiction

#25

Post by customkitchen »

junofan wrote: post #23
customkitchen wrote: post #22

Earlier quoted context omitted.

ETH is operating and trading with the US. It falls under US jurisdiction. The line of "we are not registered anywhere therefore we don't have to follow laws in any jurisdiction" is pretty weak and farcical. And sorry to be cheeky but... Have you seen some of the absurd claims and arguments crypto people make about the "infinite power" of crypto to somehow evade all laws and solve all social problems, while simultaneo…

I take it you did not read the complaint.

I did read it and it is honestly not that complicated. The SEC is being generous here. They could make the argument even if there were no validators. But I hope this is the start of them shutting down the validators too.

Re: SEC Claims All of Ethereum Falls Under US Jurisdiction

#26

Post by junofan »

customkitchen wrote: post #25
junofan wrote: post #23

Earlier quoted context omitted.

I take it you did not read the complaint.

I did read it and it is honestly not that complicated. The SEC is being generous here. They could make the argument even if there were no validators. But I hope this is the start of them shutting down the validators too.

They could make the argument the transaction took place in the US due to validator density even if there were no validators?

Regardless, that’s not the argument.

Re: SEC Claims All of Ethereum Falls Under US Jurisdiction

#28

Post by c3534l »

JohnHaugeland wrote: post #14
yucky wrote: post #10

Earlier quoted context omitted.

Isn't Google a US company? Ethereum is an open source protocol with an unknown number of applications. I'm not sure this works as an analogy.

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 ye…

The airplane was invented by the Wright Brothers, does that mean someone on a flight from Japan to South Korea is bound by US law? I can understand if the SEC said that all compute nodes residing in the United States, and any organization likewise located here is under their jurisdiction. I'm not a lawyer, so I can't argue whether the SEC is legally correct, but it seems absurd to me to claim jurisdiction over an intangible idea whose related productive work occurs all over the world.

Re: SEC Claims All of Ethereum Falls Under US Jurisdiction

#29

Post by mw888 »

bendews wrote: post #24
adastra22 wrote: post #18

Earlier quoted context omitted.

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…

> but they can't force you to decrypt it if the key is lost or you don't give in. A very US-centric view is it not? Many places can force you to decrypt something by law. In fact the US does on entry to the country and can refuse entry if you do not comply. > there ain't shit they can do to actually enforce that demand. Watch forks become more commonplace and "official" forks being recognised and non-official forks b…

> Courts forcing forks

I wouldn’t be so sure about that, unless you are equally convicted in that court’s jurisdiction’s conviction to outright ban the whole chain from use - because as soon as two courts mandate two different forks, one of them will be banning a chain that the rest of the globe has consensus on. It’s a lot like banning a whole region from sending mail because one person in that region got caught mailing drugs.

Re: SEC Claims All of Ethereum Falls Under US Jurisdiction

#30

Post by mattwilsonn888 »

> “validated by a network of nodes on the Ethereum blockchain, which are clustered more densely in the United States than in any other country.” The SEC then concludes: “As a result, those transactions took place in the United States.”

I wonder what other legal implications this precedent has (if it holds).

I probably won't think of any before hitting send on this comment, but this seems like the type of claim sufficiently disconnected from the reality of how a blockchain network functions (though Gensler has proven competence on the subject) to allow some unintended loopholes or interpretations in other cases.

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