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Statement on Potentially Unlawful Online Platforms for Trading Digital Assets

sec.gov

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

#201

Post by njarboe »

patrickaljord wrote: post #141
cal5k wrote: post #77

I'm flabbergasted by how much disinformation is infecting this threat. If you look at the list of legal actions the SEC has pursued at the bottom of the article, they are all flagrant violations of securities law and clearly unethical practices. For example, in "SEC v. Jon E. Montroll and Bitfunder", the individual in question was accepting "investments" in his exchange that were clearly securities (probably fitting…

I think the concept of accredited investor needs to go away though. Why should only the super rich be able to invest in risky ventures? Why do I see so many on the left supporting these regulations that only favour the super rich? I'm not just talking about crypto-currencies but any venture really, since the internet at least, anyone with an internet connection should be free to invest as they want. I'm personally no…

"I think the concept of accredited investor needs to go away though."

At least some modification of who can be an accredited investor. Keep the current 200k income or 1 million in non-residental assets. Add some kind designation where you can declare an asset set aside for more risky (accredited investor level) investments and, after a year of sitting to prevent rash decisions, you are allowed to invest those assets in the risky investments. That would at least prevent people from cashing out there IRAs into obvious bubble situations and pyramid schemes and loosing all of their retirement assets. A lot harder for a con man to keep you fooled for a whole year.

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

#202

Post by pembrook »

vanattab wrote: post #194

Can anyone tell me if Valve's Steam Marketplace would constitute a "securities" platform. What is the diffrence between Valve facilitating the buying/selling some ingame currency for arbitrary amounts of real dollars between users and facilitating the buying/selling of a cryptocurrency?

No. The difference here is 99% of people holding crypto assets are doing so as (and literally calling them “Investments”). People putting money into steam are knowingly doing so for the purpose of playing games.

The former represents a significant threat to the stability of American households when a large portion of the population thinks they are “investing” in something that is also not required to follow the safeguards in place for investments. In case you didn’t realize it, there are many many people putting much more money into crypto than they can afford to lose. See credit card purchases on Coinbase for more info.

I’d just assume let stupid people be stupid people, however, when millions of those stupid people collectively lose their money together...it creates huge societal problems and strain on government services which you and I have to pay for...with US dollars of course.

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

#203

Post by lambda »

drcode wrote: post #26
Animats wrote: post #18

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".

Yup, we'll probably be stuck with only 2-4 exchanges that are able to afford the regulatory burden and then the regulators will claim a victory for "helping the little guy."

As a "little guy" who lost a lot of USD and Bitcoin in the MtGox fiasco (luckily, nothing I couldn't afford to lose, though with the price BTC is trading at now it would be really nice to still have those BTC), and any possible partial payout through the bankruptcy process is tied up in potential litigation, I'm a fan of more heavily regulated exchanges that I can actually trust.

Since the MtGox fiasco, I've never bothered trying to liquidate any more of my Bitcoin, and instead just occasionally use it to pay for things which accept direct Bitcoin payment.

I'd be a lot happier with a trustworthy, audited exchange.

If there are smaller exchanges that couldn't deal with the regulation, they probably also can't deal with security, keeping enough secure reserves to be able to pay out in the case of losses, auditing both their security and finances to ensure that they stay healthy and liquidate gracefully if they ever run into financial trouble.

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

#204

Post by Qub3d »

lmkg wrote: post #60
drcode wrote: post #26

Earlier quoted context omitted.

Yup, we'll probably be stuck with only 2-4 exchanges that are able to afford the regulatory burden and then the regulators will claim a victory for "helping the little guy."

We'll be stuck with the 2-4 exchanges run by the few people still interested in using BitCoin as a way to change the world, instead of trying to use it as a not-yet-illegal get-rich-quick scheme.

"Tulips are an excellent investment strategy. As a guy who can sell you tulip bulbs, you can trust me!"

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

#205

Post by [deleted] »

lambda wrote: post #203
drcode wrote: post #26

Earlier quoted context omitted.

Yup, we'll probably be stuck with only 2-4 exchanges that are able to afford the regulatory burden and then the regulators will claim a victory for "helping the little guy."

As a "little guy" who lost a lot of USD and Bitcoin in the MtGox fiasco (luckily, nothing I couldn't afford to lose, though with the price BTC is trading at now it would be really nice to still have those BTC), and any possible partial payout through the bankruptcy process is tied up in potential litigation, I'm a fan of more heavily regulated exchanges that I can actually trust. Since the MtGox fiasco, I've never bo…

[deleted]

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

#207

Post by paulsutter »

Osiris wrote: post #5

I didn't see any cryptocurrency exchanges in their list of approved exchanges. How does one find out whether a cryptocurrency exchange is registered properly with the SEC?

Coinbase/GDAX have always focused on compliance, and Circle discussed the Poloniex acquisition with the SEC beforehand, and both are actively working with regulators. How that turns out will be interesting to see

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

#208

Post by drcode »

Qub3d wrote: post #204
lmkg wrote: post #60

Earlier quoted context omitted.

We'll be stuck with the 2-4 exchanges run by the few people still interested in using BitCoin as a way to change the world, instead of trying to use it as a not-yet-illegal get-rich-quick scheme.

"Tulips are an excellent investment strategy. As a guy who can sell you tulip bulbs, you can trust me!"

Worked out for the Dutch: They now sell 2/3rds of the world's tulips, and the tulip mania lead to the start of a massive industry.

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

#209

Post by LukaGubo »

Regulated exchanges have in place a lot of measures to ensure transparency and protection of traders/investors including survailance systems which closely look at potential market manipulation. Currently no crypto exchange has such systems in place - even their matching engines are in question, as mentioned by the SEC.

Given the amount of money that is traded every day at crypto exchanges the statement from SEC was expected, but they seem to think that the crypto markets are too important (too large) to go the Chinese way - to shut down crypto exchanges that do not comply with basic rules that all exchanges should follow. But maybe this is just a warning and they will do it later, who knows...

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

#210

Post by shkkmo »

smacktoward wrote: post #135
shkkmo wrote: post #123

Earlier quoted context omitted.

> In this specific case, the SEC is advising crypto-based operations calling themselves "exchanges" that this is a word that has a special legal meaning, Really? I didn't get that reading at all. The discussion of the use of the word "exchange" is under the guidance for investors, not the guidance for trading platforms. The guidance for trading platforms specifically talks about which assets are being traded and how…

It's possible I'm misreading the specific requirements -- I am not a securities lawyer, my HN comments are not legal advice, etc. If you are operating one of these platforms, the issuance of this document is a good reason to have a chat with a qualified attorney to figure out exactly how it affects your business. But that just underlines my main point, which was that this document is a lot more than just a press rele…

I definitely agree with your main point, (and I am also not a lawyer)
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