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SEC charges Kraken for operating as an unregistered securities exchange

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Re: SEC charges Kraken for operating as an unregistered securities exchange

#191

Post by kdwikzncba »

AnthonyMouse wrote: post #184
jcranmer wrote: post #73

Earlier quoted context omitted.

Matt Levine I think put it best: if Bernie Madoff were to go to the SEC and ask them "I don't know how to run a Ponzi scheme legally, can you please update the guidelines to make it easier", of course the SEC is going to refuse. And the situation with cryptocurrencies seems to be broadly similar: there's actually a pretty clear answer as to what would need to be done to be fully above-the-board and legal, it's just n…

> if Bernie Madoff were to go to the SEC and ask them "I don't know how to run a Ponzi scheme legally, can you please update the guidelines to make it easier", of course the SEC is going to refuse. The actual problem is that no part of the government wants to be the one to tell you if something is legal, because whoever actually makes the decision takes the blame for the consequences one way or the other. So Congress…

This is a crazy way to operate, especially for a country that brands itself as the best for business.

Re: SEC charges Kraken for operating as an unregistered securities exchange

#192

Post by lmm »

donmcronald wrote: post #159
TacticalCoder wrote: post #104

Earlier quoted context omitted.

My favorite part is this: > Meanwhile, groups of lawmakers from both sides of the aisle have questioned what they call SEC’s “regulation via enforcement” approach. They have asked why the agency’s actions against crypto firms seem less focused on “compliance and customer protection,” but were instead “calculated for maximum publicity and political impact.” Others have observed that the SEC’s strategy “does not protec…

> “calculated for maximum publicity and political impact.” I'm not a fan of crypto currency, but a big part of my dislike for it is how difficult it is to actually use it. I don't mean technically though. I mean legally. In Canada, all crypto transactions are considered taxable events. Did you sell a couch on Facebook Marketplace using Bitcoin? Time to calculate your capital gain or loss from a vaguely worded set of…

> In Canada, all crypto transactions are considered taxable events. Did you sell a couch on Facebook Marketplace using Bitcoin? Time to calculate your capital gain or loss from a vaguely worded set of guidelines.

Even if it were a real honest-to-god currency it would be the same though, right? That's how it works here in Japan at least - buy a couch in dollars, now you have to calculate capital gains against your average cost basis for dollars (which I guess includes every dollar you earned in your whole working life, if you lived in Canada before you moved here?)

Re: SEC charges Kraken for operating as an unregistered securities exchange

#193

Post by pavlov »

arctek wrote: post #178
ascendantlogic wrote: post #65

I feel like this won't end up going well for the SEC. This whole methodology of telling exchanges "I don't know, you figure it out" when they ask for clarity and then turning around and suing them for not figuring it out is extremely shaky legal ground.

I also don't think this will work for them in the context of the Ripple case they just lost - and decided to not appeal - as this will be referenced as part of Kraken's defense. It'd be very different if the SEC maintained a list of even examples of tokens that are/aren't compliant and a straightforward registration process with active registrants. The fact that neither of these exist but the SEC likes to pretend the…

There are at least hundreds of thousands (probably millions) of securities that have been properly registered in the USA: stocks, corporate bonds, private offerings, and many other kinds of financing structures. It’s not that hard since obviously all kinds of issuers can figure it out.

The crypto people want to pretend their tokens are something completely different, so they’re not willing to use the existing process and instead cry out for SEC to come up with something just for them.

Re: SEC charges Kraken for operating as an unregistered securities exchange

#194

Post by AnthonyMouse »

pmulard wrote: post #94
jongjong wrote: post #80

Earlier quoted context omitted.

The SEC has no place in a free market. If people trust a company which co-mingles funds, they should be punished for misplacing their trust. Both the scammer and the scammed deserve a share of the punishment. Life naturally punishes the scammed already and teaches them a lesson at the same time... Without the help of the SEC... How good is that?! If my startup fails because I hired the wrong people, I take the full b…

The FDA has no place in a free market. If people trust a company which poisons their food, they should be punished for misplacing their trust. Both the scammer and the scammed deserve a share of the punishment. Life naturally punishes the scammed already and teaches them a lesson at the same time... Without the help of the FDA... How good is that?! -- I'd much rather pool our money into a commission that does this fo…

> If people trust a company which poisons their food, they should be punished for misplacing their trust. Both the scammer and the scammed deserve a share of the punishment. Life naturally punishes the scammed already and teaches them a lesson at the same time... Without the help of the FDA... How good is that?!

If your food is poison, you don't have the opportunity to learn from your mistake and stop doing business with that company, because you die. If you don't eat any food, you still die.

But Coca Cola is fully FDA-approved -- even though it's bad for you. Because it doesn't immediately kill you, which gives you the opportunity to make your own choices and learn from your mistakes.

Which is how investments work. Some of them are better than others. The role of the government isn't to make the decision for you, it's to punish the people who deceive you. And since bad investments don't cause anaphylaxis or liver damage, the case for heavy-handed rules or pre-registration is missing.

If someone is running a ponzi or committing fraud, you arrest them, the same as you do if they're selling counterfeit electronics. If someone is just buying and selling cryptocurrency on the internet, which is the thing you purposely intended to exchange for your money, and they do nothing more than faithfully convey to you the thing you knowingly requested, what does the government need to regulate about it? Nothing nefarious is occurring.

Re: SEC charges Kraken for operating as an unregistered securities exchange

#195

Post by AnthonyMouse »

cheriot wrote: post #157
pitaj wrote: post #152

Earlier quoted context omitted.

How many people have died because of FDA gatekeeping delaying the release of life-saving treatment?

What could possibly go wrong > Bayer marketed diacetylmorphine as an over-the-counter drug under the trademark name Heroin.[91] It was developed chiefly as a morphine substitute for cough suppressants https://en.wikipedia.org/wiki/Heroin

It's perfectly legal to buy drain cleaner at any department store and if you drink it you are likely to die. But you are under no obligation to drink it. Or do heroin. So that has an obvious solution.

Whereas if you have cancer and cannabis can prevent your nausea but the federal government maintains a prohibition on it for three generations, what are your options?

Re: SEC charges Kraken for operating as an unregistered securities exchange

#196

Post by vasco »

legutierr wrote: post #161
jcranmer wrote: post #73

Earlier quoted context omitted.

Matt Levine I think put it best: if Bernie Madoff were to go to the SEC and ask them "I don't know how to run a Ponzi scheme legally, can you please update the guidelines to make it easier", of course the SEC is going to refuse. And the situation with cryptocurrencies seems to be broadly similar: there's actually a pretty clear answer as to what would need to be done to be fully above-the-board and legal, it's just n…

> And given that we've seen exchange after exchange fail to perform basic tasks like "don't commingle customer funds," I have a hard time feeling any sympathy for cryptocurrency companies here. There is nothing per se nefarious about co-mingling customer funds, provided that you are otherwise compliant with the law. Banks, for instance, don't just co-mingle customer funds, they invest those funds on their own behalf…

> Banks, for instance, don't just co-mingle customer funds, they invest those funds on their own behalf and reap the profits for themselves. Sometimes a bank will share a portion of its profit with its customers, in the form of intest; more often, the bank pays little or no interest, and actually charges the customer fees. A bank will risk its customers' money, and its customers will pay for that privilege.

Banking has not worked like this in quite a few years.

Re: SEC charges Kraken for operating as an unregistered securities exchange

#197

Post by throwawaymaths »

nvy wrote: post #105
jongjong wrote: post #80

Earlier quoted context omitted.

The SEC has no place in a free market. If people trust a company which co-mingles funds, they should be punished for misplacing their trust. Both the scammer and the scammed deserve a share of the punishment. Life naturally punishes the scammed already and teaches them a lesson at the same time... Without the help of the SEC... How good is that?! If my startup fails because I hired the wrong people, I take the full b…

Regulators keep big fish from engaging in predatory behavior. Is the SEC flawed? Absolutely. But the SEC makes markets more free, not less.

Does it? Suppose you'd like to keep the fruits of your hard earned labor on an asset that isn't subjected to inflation at the hands of a capricious or warmongering country. And you'd rather not speculate on greedy capitalists. The SEC is effectively limiting your freedom to do so (whether or not that's a good personal choice)

Re: SEC charges Kraken for operating as an unregistered securities exchange

#198

Post by Broken_Hippo »

ahallock wrote: post #169
kadoban wrote: post #68

Earlier quoted context omitted.

Law enforcement has no obligation to explain the laws to you.

Interesting. I thought government was there to serve the people not to be an adversary. No wonder our tax code is so convoluted.

It is: You might or might not be considered one of the people, though. Long history of making people not people (See: Slavery and incarceration)

Re: SEC charges Kraken for operating as an unregistered securities exchange

#199

Post by AnthonyMouse »

oblio wrote: post #177
foooobaba wrote: post #100

Earlier quoted context omitted.

I am also glad the FDA protects us from chemicals and ingredients that would cause processed food to be unhealthy and harmful, if they didn’t do that we would probably end up with an overweight population and tons of food related health problems.

That's the industry lobbying to prevent beneficial regulation for consumers so you're kind of making the opposite point to what you meant, I think.

No, it's making the correct point. The government can't get you out of having to do the evaluation yourself because the government is broken, which is unlikely to change. In fact this is a major problem with the existence of the regulations -- they protect incumbents. Patented drugs get FDA approval, public domain drugs that could be alternatives to them don't because there is no one to pay for the approval process.

If heroin is legal, nobody forces you to buy it. If generic insulin is illegal, you're in trouble.

Re: SEC charges Kraken for operating as an unregistered securities exchange

#200

Post by robbywashere_ »

jcranmer wrote: post #73
ascendantlogic wrote: post #65

I feel like this won't end up going well for the SEC. This whole methodology of telling exchanges "I don't know, you figure it out" when they ask for clarity and then turning around and suing them for not figuring it out is extremely shaky legal ground.

Matt Levine I think put it best: if Bernie Madoff were to go to the SEC and ask them "I don't know how to run a Ponzi scheme legally, can you please update the guidelines to make it easier", of course the SEC is going to refuse. And the situation with cryptocurrencies seems to be broadly similar: there's actually a pretty clear answer as to what would need to be done to be fully above-the-board and legal, it's just n…

One is operating in good faith the other is by definition defrauding people. That’s not equivalent.
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