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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

#291

Post by midmagico »

ChainOfFools wrote: post #167
Quindecillion wrote: post #124

Earlier quoted context omitted.

100 million baht in 2 years? So about $1.5m USD in a year. That's not exactly "staggering" or significant in the context of the Bitcoin network. Unlikely that such operations have any meaningful control over the network or liquidity, even if it's just 1% of what's known. You seem to think that these sorts of operations are somehow connected in a large coordinated cartel the controls the industry, but given that they'…

So you read the article, as well as the quote that I put above and therefore you know that this is estimated to be only 1% of the illegal mining done in _Thailand_ alone, and this in just the past couple of years when visibility of cryptocurrency has been well established even in non-tech circles. It's been happening ever since crypto mining, especially Bitcoin, existed. Long before most anyone knew what mining was,…

this logic would apply to literally every facet of human existence if it were true; your argument has devolved into "people would make more money if they were engaged in criminality and didn't get caught, therefore everyone eventually devolves into a criminal."

the papers studying the amount of black market activity in Bitcoin have consistently shown Bitcoin to be cleaner than the economies in virtually every country on the planet, except for the occasional ultra-clean tiny european state.

literally every bitcoiner since the first roll-out of the Silk Road and the resulting senatorial attacks on them, have been ultra-interested in exactly how much of their hobby is black market and how much is criminality. literally every single one of them is heavily invested in knowing more about the nature and extent of bitcoin criminality. to say that it didn't occur to them that self-interested criminals are operating in BitcoinLand is .. stupid.

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

#292

Post by midmagico »

kylebenzle wrote: post #53
SeanAnderson wrote: post #51

Earlier quoted context omitted.

Well, I had started the conversation about BTC not BCH. Personally, I feel that BCH has more of a team associated with it than BTC. That said, none of what we're talking about addresses the fact that, in 2018, Gensler said, quote, "Bitcoin. Ether. Litecoin. Bitcoin Cash. Why did I name those four? They’re not securities." Since then, things have changed, and now Gensler only highlights BTC as not a security. If the i…

Isn't BTC controlled by one single very centralized group, Blockstream? I could be wrong but I thought Adam Back's Blockstream long ago hijacked the GitHub repo and took full control of that project.

No.

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

#293

Post by westurner »

legutierr wrote: post #270
discodave wrote: post #170

Earlier quoted context omitted.

> For what its worth, banks don't just co-mingle customer funds, they invest those funds on their own behalf and reap the profits for themselves. And that is why banks are regulated, must register, follow certain rules etc. > Kraken has been operating under the money transmitter licensing scheme for a decade Yeah, but that doesn't give them a license to operate a securities exchange, or a bank. How many other money t…

> How many other money transmitters (that are not registered securities exchanges or banks) have 'tokens for sale' like Kraken? Quite a few. In fact, all of the major centralized exchanges operating in the US are authorized to do so because they are licensed money transmitters (with the exception of some that might be operating under the NYS "Trust" licensing scheme), and none of them are broker-dealers regulated by…

In order to justify such a specific claim against Kraken to be heard, isn't it necessary to first qualify that such assets are themselves securities?

Am I crazy to call this vexatious harassment?

If P then Q:

If {x,y,z} are securities, [ then {Exchanges a, B, and C} have provided securities exchange services of assets {x,y,z} without the requisite license are thus owe a civil fine. ]

But how is a suit against Exchange A the appropriate forum to hear whether assets {x, y, or z} are securities?

Given that - presumably - assets {x,y,z} are not yet ruled to be securities, there was not sufficient cause or standing to make a claim of bad faith or intent to provide exchange services for unregistered securities.

Exchange A operated in good faith, pursued the requisite state and federal procedures for assessing whether or not such assets were securities, and specifically does not intend to sell securities.

Should there be an is_this_a_security() function of a US government regulatory agency, defendants would be required to request such review before listing said specific types of assets.

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

#294

Post by Auracle »

sillysaurusx wrote: post #84
Auracle wrote: post #56

Earlier quoted context omitted.

At least you’ll probably get some. I had a fair amount on btc-e which the government happily took.

Sorry for your loss. Truly.

Thank you. Luckily I didn't have it all in one place, but it's beyond frustrating that the government effectively took what would have been hundreds of thousands of dollars from me. I could really use that.

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

#295

Post by tim333 »

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…

A case for sympathy for companies like Kraken is they are the ones that do do the proper thing and are US based and regulated. If the SEC goes after them and shuts them down then the punters will move to non US companies like the Bahamas based FTX insead with the problems that we have seen there.

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

#296

Post by 1vuio0pswjnm7 »

1vuio0pswjnm7 wrote: post #234
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.

You "feel" the SEC will lose against Kraken. Is that correct.

https://www.reuters.com/investigates/special-report/fintech-...

"Investigators tracked the money through many layers of bank accounts to Binance and another exchange, U.S.-based Kraken, police said. By the time Binance and Kraken provided account records, the police said the funds had been withdrawn or sent to a "mixer," a service which anonymises crypto transactions by breaking them up and mixing them with other funds. The personal information held by both exchanges on the accounts was often fake or stolen from victims, the officers said.

Kraken told Reuters it has "bank-grade" customer checks and robust tools to prevent fraud. Kraken disputed that customer information provided to Braunschweig police was fake, saying "every indicator we have suggests these accounts were used by legitimate clients.""

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

#297

Post by nvm0n2 »

pavlov wrote: post #250
NoboruWataya wrote: post #245

Earlier quoted context omitted.

I think you're overcomplicating this. In reality, people ask their lawyers whether they are allowed to do something, and those lawyers research the law in conjunction with any interpretive guidance published by the regulators, and sometimes they do consult with regulators directly on behalf of their clients. Where the law is unclear and the regulator refuse to publish guidance or discuss their approach with market pa…

And what if Coinbase's lawyers did all that, the SEC told them in those informal consultations that these altcoins that Coinbase wanted to list sure look a lot like securities, but Coinbase executives decided they'd rather ask forgiveness later because there was so much money to be made pushing all those VC-funded tokens onto retail investors while the good times lasted. The fundamental problem here is that nobody in…

Sure, what if the SEC did that. Except they didn't and we know this because they've very clearly refused to issue any decisions for a decade+ now.

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

#298

Post by AnthonyMouse »

cheriot wrote: post #289
AnthonyMouse wrote: post #195

Earlier quoted context omitted.

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?

For something more recent, I'd recommend any of the books or documentaries on oxycontin sparking a more recent opium epidemic. As badly as the FDA failed, we'd be worse off if we didn't have one. There's good reasons people want more effective regulation instead of none. Part of the ban on cannabis, psychedelics, etc has been to ban research on their effects as well. I think there's some clear lines that can be drawn…

> For something more recent, I'd recommend any of the books or documentaries on oxycontin sparking a more recent opium epidemic. As badly as the FDA failed, we'd be worse off if we didn't have one.

I feel like the problem we have is that we've utterly failed at informed consent.

You go to the doctor for a minor surgery and come home with a prescription for opioids. You take them even if you're not in any real discomfort, because your doctor prescribed them. Or maybe you could have done with half as much, but then there's a chance it wouldn't have been enough, and having the patient rely on their own judgment is discouraged. So now you're addicted to opioids.

Then we get a backlash where the people who are actually in severe pain can't get their medication because doctors used to over-prescribe it.

This entire system is asinine. The problem is not that people have access to opioids. Anybody can get them by going to a doctor and lying about their symptoms, therefore anybody should be able to just get them from the pharmacy. Stop rewarding mendacity. But the process of getting them from the pharmacy should require being informed of the risks so you can be responsible -- not being handed a bottle with a bunch of papers you're not going to read and then taking them whether you really need them or not.

We need to stop banning everything and start better informing people so they can make reasonable choices.

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

#299

Post by 1vuio0pswjnm7 »

jgilias wrote: post #271
1vuio0pswjnm7 wrote: post #234

Earlier quoted context omitted.

You "feel" the SEC will lose against Kraken. Is that correct.

They did lose against Ripple. That’s one case law precedent right there for determining what is a security. There’s also a non-negligible chance that they are going to either lose or have a dismissed case against Coinbase. Given that this case is basically a copy-paste of that one, it’s a possible outcome. There’s a reason why the lawmaking, executive, and judicial powers are separated in a democracy.

Kraken already lost against the SEC in February. Will Kraken lose again.

https://www.sec.gov/news/press-release/2023-25

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

#300

Post by oblio »

AnthonyMouse wrote: post #283
oblio wrote: post #256

Earlier quoted context omitted.

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 --->

> The government is as broken as we let it be. How do "we" fix it? You can vote for two Senators and one Congressperson and even assuming that your vote in particular was the deciding vote and one of your choices on the ballot was someone actually inclined to do something, you now have a legislature in which the bad laws pass with a margin of 33 Senators and 174 members of Congress instead of 35 and 175. The only way…

Laws are about statistics. Statistically you can't trust even adults with stuff like gambling or smoking. Statistically they will make bad decisions that will wreck the lives of a big percentage of adults. Not a majority, but maybe 20%.

Accepting that fact is hard, but it's reality.

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