51–60 of 65 posts
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SEC regulates securities-based derivatives. I used to professionally make markets in those. SEC and CFTC are both claiming jurisdiction over Bitcoin.
Correct. And this case hinges on the yet undecided question as to whether or not Bitcoin and numerous other cryptocurrencies are actually securities.
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The CFTC seems to think it would be perfectly competent to handle the situation too. I don't think the only options are federal legislation or the (allegedly) overreaching SEC.
> CFTC seems to think it would be perfectly competent to handle the situation too The way these businesses are run, it probably does too. A good amount of effort in finance goes into avoiding unneeded regulatory duplication. But if you’re a you’re a bank you get both the FDIC and SEC, a public drug manufacturer the SEC and FDA; if you’re selling crypto through your brokerage app, the SEC and CFTC.
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> it isn't actually unreasonable to argue that Bitcoin and certain other currencies like it are not securities It’s not. But it’s clear the industry needs supervision, and it isn’t really worth the time drafting federal legislation. The SEC keeping the most egregious behaviour checked, e.g. policing positioning with retail investors, is the best worst option for now.
Centralized exchanges need supervision, they have the history of doing the most harm. Look at Mt Gox and FTX
"Everything is Securities Fraud" - Matt Levine
There is no accusation of fraud here. What seems to be happening is, as with similar enforcement actions, Robinhood is being dinged for trading securities improperly, without ticking off the legal requirements for notification, tracking, authentication, etc... The idea that crypto assets aren't "securities" and thus not subject to SEC regulation is, and always has been, laughable. Virtually everyone trading these thi…
Except, ya know.. the courts.
"Everything is Securities Fraud" - Matt Levine
There is no accusation of fraud here. What seems to be happening is, as with similar enforcement actions, Robinhood is being dinged for trading securities improperly, without ticking off the legal requirements for notification, tracking, authentication, etc... The idea that crypto assets aren't "securities" and thus not subject to SEC regulation is, and always has been, laughable. Virtually everyone trading these thi…
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Centralized exchanges need supervision, they have the history of doing the most harm. Look at Mt Gox and FTX
The things Mt Gox and FTX did were already criminal. If they didn't follow those regulations, what makes you think they'd follow any others?
The point is enforcement. We ban weapons in some areas despite murder being illegal.
"Everything is Securities Fraud" - Matt Levine
If a listed firm does something bad (anything, really), but doesn't immediately disclose it (as is usually the case), it can then be sued later - not directly for doing the bad thing, but indirectly for not having disclosed it (that being the securities fraud).
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As the ongoing court case with Coinbase shows, though, part of the problem is that the SEC might not be using reasonable standards. It's letting the pitcher call the balls and strikes.
The only reasonable standard the crypto true believers would accept from the US government is that cryptocurrency tokens and derivatives are 100% unregulated and nontaxable by any current or future statute.
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That's a nice ad hominem attack you've made there, but it isn't actually unreasonable to argue that Bitcoin and certain other currencies like it are not securities. Heck, even the SEC has said as much. It's even more reasonable to argue that things like NFTs are more like digital baseball cards than securities.
I don't think that's an ad-hominem attack at all. The entire point of crypocurrency from jump was to escape the "reckless inflation/deflation of fiat currency", fiat currency meaning state-sponsored currency. The goal was to create an object that would hold value outside the traditional financial sector, similar to things like gold. I think the only real problem is that the crypto community took the several decades o…
Agree with most of your comment, just to say that this was not the goal as originally described by Nakamoto, but rather an ex-post justification for crypto when it blatantly failed in reaching the specific goals it set out to achieve.
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The things Mt Gox and FTX did were already criminal. If they didn't follow those regulations, what makes you think they'd follow any others?
> If they didn't follow those regulations, what makes you think they'd follow any others? The point is enforcement. We ban weapons in some areas despite murder being illegal.
Anyone who was working at Coinbase during the rise of Binance or FTX can tell you everybody knew they were playing outside the rules. Once you know how hard it is to do things right, it's easy to see when some upstart flies in and starts gobbling up market share that they're cutting corners.
It took 7 years for Binance and CZ to get fined like they finally did. FTX might even still be operating if SBF hadn't panicked and filed for bankruptcy. Riding those guys out was one of Coinbase's major challenges, and competitors who didn't have established market share and teams couldn't even effectively enter the market and compete with those players.
Regulation often sounds like a good idea to honest people, but it doesn't account for the reality that many people don't care at all about playing by anybody else's rules.