Earlier quoted context omitted.
There is nothing in the law that explicitly prevents the registration of a cryptocurrency. The problem is that the people making them are not able to answer the kinds of questions the SEC asks. How many cryptocurrency companies do you know of that could pass an audit? Even when ICOs aren't out-and-out scams I have never encountered one transparent enough for me to want to touch it with a ten foot pole. Why should the…
> How many cryptocurrency companies do you know of that could pass an audit? This is, quite simply, zeitgeisty prejudice. Most well-funded cryptocurrency companies have passed audits. I've worked for or with four crypto companies and three of them were audited (also all of them still exist). You aren't allowed to count "fraud cryptobros from miami creating an ICO" if you don't count "fraud fratbros from harvard/yale…
This is true in practice but untrue in spirit. Any nonsense project can pass an audit by hiring an equally nonsense auditor.
> You aren't allowed to count "fraud cryptobros from miami creating an ICO" if you don't count "fraud fratbros from harvard/yale creating a hedge fund". And if you do count both, then you'll notice that the proportion of fraud is roughly the same everywhere, we just allow ourselves to notice it in some places more than others.
This is blatantly untrue. Yes, there are plenty of forms of fraud which occur in hedge funds, but the public is shielded from many of these, because the most obvious forms of fraud were recognized and regulated decades ago. There's practically no such protections around crypto, and as a result, a whole host of obvious scams have flourished.
If you talk to almost any crypto investor, most of them have been scammed at some point. The same is not true of investors in traditional markets.