Statement on Potentially Unlawful Online Platforms for Trading Digital Assets • Hacker News Board

Re: Statement on Potentially Unlawful Online Platforms for Trading Digital Assets

#11

Post by gwatch » Wed, Mar 07, 2018, 5:36 PM UTC

1) SEC will not be able to enforce regulation on distributed exchanges that are coming. 2) If you stake your coins on Lightning it may come under the purview of some regulation, but difficult to enforce. 3) If you trade on international exchanges, SEC cannot do much.

Crypto is censorship resistant after you onboard (convert fiat to crypto) through a regulated exchange. I do not generally read or comment on HN because it is too leftist biased both in articles they post and in the comment section (for my personal taste). I urge anyone to educate themselves further about DEX (distribute exchanges), and how it plays out with KYC/AML (know your customer/anti money laundering) laws.

Re: Statement on Potentially Unlawful Online Platforms for Trading Digital Assets

#12

Post by ivraatiems » Wed, Mar 07, 2018, 5:40 PM UTC

not_that_noob wrote: post #9

This is a press release - nothing more. A CYA from the SEC in case something blows up tomorrow. It's not a cease and desist letter to the exchange operators - so on balance, this is good news for them. I think the SEC is not confident that the courts will support their position, and so the next best option is.... a press release.

Did you notice the list of enforcement actions at the bottom of the page?

The SEC can't just blanket C&D every single crypto exchange; they have to go one at a time. This is a clear message that they're going to do just that, especially when coupled with all the enforcement they're doing.

Re: Statement on Potentially Unlawful Online Platforms for Trading Digital Assets

#13

Post by nokcha » Wed, Mar 07, 2018, 5:40 PM UTC

moonka wrote: post #3

Does this mean that Coinbase isn't registered but should be? Wonder how this will play out.

Coinbase has been extremely conservative in which digital assets it supports (viz., only Bitcoin, Litecoin, Ethereum, and Bitcoin Cash). None of these are securities.

Re: Statement on Potentially Unlawful Online Platforms for Trading Digital Assets

#14

Post by g09980 » Wed, Mar 07, 2018, 5:41 PM UTC

philfrasty wrote: post #7

nice instant BTC drop from $10700 to $9400 following this news...

May be more likely due to the Binance "hack." http://markets.businessinsider.com/currencies/news/bitcoin-p...

Edited for clarity.

Re: Statement on Potentially Unlawful Online Platforms for Trading Digital Assets

#15

Post by ianai » Wed, Mar 07, 2018, 5:42 PM UTC

bhouston wrote: post #2

It looks like they are going after the exchanges, see this choice quote: > A platform that trades securities and operates as an "exchange," as defined by the federal securities laws, must register as a national securities exchange or operate under an exemption from registration, such as the exemption provided for ATSs under SEC Regulation ATS. And it says that online wallets may qualify if they facilitate trading: >…

So crazy thing about government, they can deem themselves regulators of anything. Some choices are certainly easier to police than others, granted, but they don’t have to massage their definitons to declare something illegal.

Re: Statement on Potentially Unlawful Online Platforms for Trading Digital Assets

#16

Post by ricardobeat » Wed, Mar 07, 2018, 5:44 PM UTC

bhouston wrote: post #2

It looks like they are going after the exchanges, see this choice quote: > A platform that trades securities and operates as an "exchange," as defined by the federal securities laws, must register as a national securities exchange or operate under an exemption from registration, such as the exemption provided for ATSs under SEC Regulation ATS. And it says that online wallets may qualify if they facilitate trading: >…

This will not scale, being that many of the modern cryptocurrencies make it really easy to implement token exchange mechanisms. Fully de-centralized exchanges are coming too, how are they ever going to regulate that?

Re: Statement on Potentially Unlawful Online Platforms for Trading Digital Assets

#17

Post by aje403 » Wed, Mar 07, 2018, 5:45 PM UTC

TallGuyShort wrote: post #8

So if some anonymous person invents cryptocurrencies, at what point are you supposed to be considered securities? If the first exchange had gone to SEC to register as a securities exchange, would the SEC not have laughed in their face? The headline itself really captures the ambiguity and uncertainty of all of this: "potentially unlawful".

Of course they would have laughed in their face. Do you see Nasdaq trying to list Dogecoin? There is no ambiguity or uncertainty here - there is a big problem and they're trying to reign it in with gloved hands before it becomes one and it turns into a big economic mess that the government will have to foot the bill to eventually clean up.

This site likes to complain about wealthy inequality - common people like your grandparents and uninformed but good hearted relatives are providing liquidity for a growing number of new millionaires and billionaires to exit imaginary money who have provided less than zero benefit or service to our society and are leaving the country to avoid tax payments and taking money out of our economy.

Re: Statement on Potentially Unlawful Online Platforms for Trading Digital Assets

#18

Post by Animats » Wed, Mar 07, 2018, 5:45 PM UTC

This is going to put a dent into the classic Bitcoin exchange business models of "claim we were hacked", "front run the customers", and "speculate with the funds on deposit".

Re: Statement on Potentially Unlawful Online Platforms for Trading Digital Assets

#19

Post by not_that_noob » Wed, Mar 07, 2018, 5:45 PM UTC

ivraatiems wrote: post #12

not_that_noob wrote: post #9

This is a press release - nothing more. A CYA from the SEC in case something blows up tomorrow. It's not a cease and desist letter to the exchange operators - so on balance, this is good news for them. I think the SEC is not confident that the courts will support their position, and so the next best option is.... a press release.

Did you notice the list of enforcement actions at the bottom of the page? The SEC can't just blanket C&D every single crypto exchange; they have to go one at a time. This is a clear message that they're going to do just that, especially when coupled with all the enforcement they're doing.

Those are for Bitfunder and the like, where the issues are more about fraud than about the correct classification of coin offerings. There is no enforcement action against Coinbase for example. If the SEC was that confident in its position, then they would have gone after Coinbase, and we would have heard about it on CNBC first. This is a tacit admission from the SEC that they don't have much of a legal basis to stand on for such enforcement.

Re: Statement on Potentially Unlawful Online Platforms for Trading Digital Assets

#20

Post by whb07 » Wed, Mar 07, 2018, 5:46 PM UTC

From my untrained perspective it seems like they are warning against "the appearance of a regulated market". Therefore, all these markets should do is have a big banner at the top stating:

"We are not regulated by the SEC and any activity here is not protected by any rules and regulations which might apply to a SEC registered company. Please be careful"

Or am i crazy?