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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

#251

Post by davidgerard »

olalonde wrote: post #249
Nursie wrote: post #238

Earlier quoted context omitted.

Perhaps because the 'route' to compliant trading in unregistered securities is to not trade in them?

That's kind of my point. The SEC does not have a mandate to evaluate the merits of transactions or determine whether a securities investment is "good" or "bad". However, it's possible that they are effectively doing so by making the securities registration process for crypto tokens so stringent, it becomes impossible to fulfill. If it was actually possible to register crypto token securities with the SEC, why doesn't…

> so stringent,

the laws on penny stocks are extremely well established. Crypto is asking for a free ride just because.

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

#252

Post by palmfacehn »

RandomLensman wrote: post #246
palmfacehn wrote: post #240

Earlier quoted context omitted.

There's an important distinction between observing the status quo and holding or aspiring towards ideals. If we only observed what is and ignored principles and ideals, we would never be able to improve the human condition. Even so, I doubt we'll be able to see eye to eye given your starting premises about collectivism. I'd venture that the individual does own himself and that the liberal tradition starts from this p…

I don't think we are that far apart. I don't disagree that there are certain ideals to aspire to. However, practically, we find out time and time again that these ideals are not enough to sustain themselves and that in the defense of those ideals there are trade offs to be made that compromise them to some extent. Realising some idealised version would require different humans and I don't subscribe to ideas of realit…

"Making the perfect the enemy of the good"

It is similar to the argument against utopia. It is true that we probably will not achieve the anarchocapitalist ideal within our lifetime. Any steps towards a freer and more prosperous society are still laudable. Those incremental steps would most likely involve pragmatic compromises.

Asserting that free-markets don't exist, because they have never lived up to the utopian ideal is a stretch. More so in the context of the discussion. There are already private financial ratings agencies, auditors and more. If people don't like cryptocurrencies or Kraken, they can simply choose not to participate.

The human condition will always contain challenges. This is what gives us the opportunity to improve. When we speak of laissez-faire, the claim is not that it will bring about a utopia or that living within a perfect ideal is a possibility for imperfect humans. The claim is that moves towards the ideal will offer an incremental improvement. History has illustrated this well.

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

#253

Post by RandomLensman »

palmfacehn wrote: post #252
RandomLensman wrote: post #246

Earlier quoted context omitted.

I don't think we are that far apart. I don't disagree that there are certain ideals to aspire to. However, practically, we find out time and time again that these ideals are not enough to sustain themselves and that in the defense of those ideals there are trade offs to be made that compromise them to some extent. Realising some idealised version would require different humans and I don't subscribe to ideas of realit…

"Making the perfect the enemy of the good" It is similar to the argument against utopia. It is true that we probably will not achieve the anarchocapitalist ideal within our lifetime. Any steps towards a freer and more prosperous society are still laudable. Those incremental steps would most likely involve pragmatic compromises. Asserting that free-markets don't exist, because they have never lived up to the utopian i…

Ok, then we fundamentally disagree as I don't see anarchocapitalism as an ideal to strive towards. Not because I am a collectivist, but because philosophically I think it a far too narrow ideal for humans to aspire to.

In a similar vein, I don't think free markets exists because of how humans are, not because they don't live up to some utopia. We might move towards certain ideals, but there might be a limit how close we get and beyond that there is no net improvement.

Also, no, people cannot just not participate: if cryptocurrencies cause some wider issue then everyone will have to pick up the tab one way or another.

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

#254

Post by olalonde »

davidgerard wrote: post #251
olalonde wrote: post #249

Earlier quoted context omitted.

That's kind of my point. The SEC does not have a mandate to evaluate the merits of transactions or determine whether a securities investment is "good" or "bad". However, it's possible that they are effectively doing so by making the securities registration process for crypto tokens so stringent, it becomes impossible to fulfill. If it was actually possible to register crypto token securities with the SEC, why doesn't…

> so stringent, the laws on penny stocks are extremely well established. Crypto is asking for a free ride just because.

Perhaps the laws on penny stock registration don't translate well to crypto tokens? How do you explain that basically no one registers? Surely, "just because" is not it.

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

#255

Post by rkangel »

miohtama wrote: post #247
pseg134 wrote: post #237

Earlier quoted context omitted.

Yes, and the SEC sued them in COURT so they can make their case that they are securities and Kraken can make the case they aren’t. Isn’t this what Kraken wanted?

It would be more efficient use of tax payers money to work with Kraken and Coinbase directly and set up rules for what tokens should be securities or not. Like the EU, Hong Kong, Japan and other countries are doing.

The SEC doesn't actually have the power to do that - the US law does. The SEC can only guide on what it thinks the law says. A court is the way to determine what the law says.

[Obviously the SEC can recommend changes to the law, and if it loses this case it might well do]

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

#256

Post by oblio »

AnthonyMouse wrote: post #199
oblio wrote: post #177

Earlier quoted context omitted.

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.…

The government is as broken as we let it be.

No government is lawlessness, which is MUCH worse than a mediocre government.

I'd argue that up to a point, lawlessness is worse than even a bad government.

And nothing can beat a good to great government.

If you don't want regulations, sure, Somalia is that way --->

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

#257

Post by mattdesl »

pavlov wrote: post #216
mattdesl wrote: post #214

Earlier quoted context omitted.

How do you propose Bitcoin, or Ethereum, or any other decentralized & peer-to-peer asset be registered as a security? Coinbase and Kraken argue that there is no clear path toward registering these assets within the current framework. For an example, some of the stringent per-transaction KYC/AML reporting requirements in traditional financial systems are often incompatible with today’s mechanisms of distributed ledger…

These cases aren’t about Bitcoin and Ethereum but the dozens of other coins that these exchanges have listed. Coinbase actively cooperated with token founders and venture capitalists like A16Z to list various newly issued tokens so that the creators and VCs could sell them to retail investors. This arrangement sure makes them look like securities. Personally I’m fine if Coinbase and Kraken trade Bitcoin and Ethereum.…

I checked, and the complaint[1] lists specific tokens, including ADA (Cardano), NEAR, SOL (Solana), ALGO (Algorand), MATIC (Polygon) and others. I have purchased some of these in the past from Kraken to evaluate the technology on my own terms. It would be a shame if the SEC forces consumers to use less reputable exchanges to access these tokens all in the name of "consumer protection."

There appears to be no clear path forward for crypto exchanges to legally list new crypto tokens to the public. I suspect that is the goal of the SEC and administration; to limit what is available to the public, rather than define clear policies that would enable regulated trading. The only token actually tested is XRP, which was deemed to not be a securities offering[2], and is notably absent from this new filing.

[1] https://www.sec.gov/files/litigation/complaints/2023/comp-pr...

[2] https://www.investopedia.com/crypto-exchanges-allow-xrp-trad...

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

#258

Post by pavlov »

mattdesl wrote: post #257
pavlov wrote: post #216

Earlier quoted context omitted.

These cases aren’t about Bitcoin and Ethereum but the dozens of other coins that these exchanges have listed. Coinbase actively cooperated with token founders and venture capitalists like A16Z to list various newly issued tokens so that the creators and VCs could sell them to retail investors. This arrangement sure makes them look like securities. Personally I’m fine if Coinbase and Kraken trade Bitcoin and Ethereum.…

I checked, and the complaint[1] lists specific tokens, including ADA (Cardano), NEAR, SOL (Solana), ALGO (Algorand), MATIC (Polygon) and others. I have purchased some of these in the past from Kraken to evaluate the technology on my own terms. It would be a shame if the SEC forces consumers to use less reputable exchanges to access these tokens all in the name of "consumer protection." There appears to be no clear pa…

> "There appears to be no clear path forward for crypto exchanges to legally list new crypto tokens to the public."

That's American securities law. The exchanges can always sell these tokens to accredited investors, but that's not the business they want to be in, I guess.

Of the tokens you mention, Solana was a major component of Sam Bankman-Fried's fraud empire. You dismiss the consumer protection aspect, but clearly it would have been better for consumers if SBF and FTX/Alameda didn't have access to American retail investors through this token.

What I'm trying to say is, it's probably very hard right now to change securities laws in a direction that would make it easier for Americans to buy the kinds of tokens that SBF manipulated. That just seems like political reality.

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

#259

Post by b112 »

lottin wrote: post #224
b112 wrote: post #171

Earlier quoted context omitted.

Kraken has been operating under the money transmitter licensing scheme for a decade, and like banks, money transmitters don't have any legal requirement to segregate customer funds—although they do have the responsibility to maintain sufficient cash balances or liquid investments to cover all of what they owe to customers. I think you meant to say here and unlike banks , because banks absolutely do not need to have s…

Canada follows Basel rules for banking, which are much more complicated than that.

Basel does not hold sway over the Dominion of Canada! We follow Her Majesty's Bank Act.

https://laws-lois.justice.gc.ca/eng/acts/b-1.01/

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

#260

Post by afroboy »

bobsmooth wrote: post #209
robbywashere_ wrote: post #206

Earlier quoted context omitted.

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?

Shiba is securities?
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