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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

#201

Post by KRAKRISMOTT »

vasco wrote: post #196
legutierr wrote: post #161

Earlier quoted context omitted.

> 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 h…

Is Glass Steagall still a thing?

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

#203

Post by baq »

robbywashere_ wrote: post #202

So much hubbub for something completely worthless going to zero anytime and has no use for anyone but criminals. Why does the SEC even care about something so inconsequential.

Real people lose real money when it goes to zero.

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

#204

Post by mattdesl »

ac29 wrote: post #185
landemva wrote: post #139

Earlier quoted context omitted.

Stablecoins are supposed to be stable, and not rise or fall. There is no expectation of profit for a stablecoin like USDC. And USDC doesn't pay interest. People use it for stability and for payments.

> USDC doesn't pay interest Coinbase, who co-founded USDC, absolutely pays interest on USDC: https://www.coinbase.com/usdc (they call it rewards instead of interest in an attempt to avoid regulation, but it is functionally the same thing)

A company offering to pay interest on top of stablecoin holdings does not mean the underlying asset features an expectation of profit.

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

#205

Post by AnthonyMouse »

cool_dude85 wrote: post #166
palmfacehn wrote: post #158

Earlier quoted context omitted.

You have presented false alternatives. Private regulation can exist inside of a free market. Consumers and producers of food or financial products can voluntarily participate with private ratings agencies. These standards can be higher or lower, based upon market preferences. The existence of a state backed monopoly is widely recognized as prohibitive to competition. State monopolies create issues around corruption,…

Why's it surprising to see anti-market sentiment when we've been given a very clear look at how the free market has operated in the crypto space sans government regulation? The whole ecosystem has been dominated by grifts, outright scams, rug pulls, ponzis, unregulated gambling, etc. etc. with no end in sight. Why didn't the free market step up?

> Why didn't the free market step up?

It did. People learned that there were a lot of scams and now the market for suckers is drying up. This is a typical pattern: Problem occurs, market responds to problem and results in improvement, government simultaneously responds to problem and has no effect or makes it worse, people point to improvement and credit new government regulations or lack of improvement and demand even more government regulations. Then we get stuck with a bunch of burdensome new rules because Something Had To Be Done.

Notice also that all of the stuff you're listing is fraudulent and already illegal. If regulations work then why didn't they work?

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

#206

Post by robbywashere_ »

baq wrote: post #203
robbywashere_ wrote: post #202

So much hubbub for something completely worthless going to zero anytime and has no use for anyone but criminals. Why does the SEC even care about something so inconsequential.

Real people lose real money when it goes to zero.

Crypto is tulip bulbs! What’s the big deal. Why does the sec care about something so worthless

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

#207

Post by janosdebugs »

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…

This sounds good in theory, but in a world where you can open companies by the dozen, international jurisdictions, no compulsory registration of company facilities, no private right of audit it's impossible to keep track of who is doing what. Additionally, tainting the news by flooding review sites and what not doesn't help either.

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

#208

Post by pants2 »

SeanAnderson wrote: post #42
ketzo wrote: post #37

Earlier quoted context omitted.

I mean, Kraken is not a registered securities exchange. They offer many cryptocurrencies. The SEC has indicated that it considers most, probably all, cryptocurrencies to a be securities. The writing has been on the wall for a while -- Coinbase got a Wells letter, basically a "lawsuit is coming" warning, months ago.

Well, Gary Gensler is on record in 2023 saying Bitcoin is not a security. So, I don't think it's accurate to say "probably all." In previous years Ethereum had also been described as not a security, but that opinion seems to have shifted with time. It's still not super clear to me why he says Bitcoin is not a security, but that Ethereum would be a security. I'm fine with whatever ruling as long as I can understand ho…

Gensler also said in 2018 that 3/4 of all cryptocurrencies were NOT securities. He likes to continuously expand his power by insisting everything is a security and falls under his jurisdiction.

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

#209

Post by bobsmooth »

robbywashere_ wrote: post #206
baq wrote: post #203

Earlier quoted context omitted.

Real people lose real money when it goes to zero.

Crypto is tulip bulbs! What’s the big deal. Why does the sec care about something so worthless

You're asking why the Securities and Exchange Commission is concerned with securities and exchanges?

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

#210

Post by RandomLensman »

jongjong wrote: post #80
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…

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…

Because people are not islands? If you live in a non-society then that is fine, otherwise financial schemes can pretty much bring down countries (see Albania).
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