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Statement on Potentially Unlawful Online Platforms for Trading Digital Assets

sec.gov

31–40 of 282 posts

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

#31
post #20

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?

It seems unlikely that it would be that easy. If it were, you'd see lots of unregulated stock markets out there in the wild (which, to my knowledge, is not the case).

Yes but there are many many markets out there which don't have any sort of regulation. The SEC's main quarrel right now appears to be that they believe investors might come to an exchange and invest believing they are as safe.

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

#32
post #20

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?

They explicitly note that the law requires anything that is an exchange for trading things that meet the legal definition of a security must either (1) meet the requirements for and register as a national securities exchange or, (2) qualify for and secure an exemption under one of the existing legal exemptions from the registration requirement.

They note that they are particularly concerned about customers mistaking something for having the features of a regulated exchange when it does not, but the legal risk and basis for enforcement is not limited to that kind of confusion. So, no, simply announcing that you are an exchange which doesn't comply with the registration requirements won't help, and might hurt.

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

#33

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.

That's not how any of this works.

What you're looking at is not a press release, it is what's called "administrative guidance" (https://en.wikipedia.org/wiki/Administrative_guidance) -- a regulatory agency laying out its interpretation of how existing laws and regulations apply to a given situation. Regulators do this to remove ambiguity, so regulated parties know what the agency expects them to do in order to stay on the right side of the law.

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, and that therefore if they want to continue calling themselves "exchanges" they either need to comply with the same licensing requirements that apply to other "national securities exchanges," or demonstrate a good reason why those requirements don't apply to them. (And not just to crypto in general, to their specific operation in particular.)

The reason this matters is because, now that the SEC has officially gone on the record with this statement, crypto exchanges can't say they weren't warned if they continue using the term and the SEC comes after them later. This statement is their warning that they need to either get licensed or stop calling themselves exchanges. If they choose to do nothing and just keep on calling themselves exchanges, and the SEC takes them to court over it, they won't be able to argue that they didn't know what they were required to do to use that term. The SEC has just told them what they need to do. The ambiguity has been removed.

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

#34
post #28
post #17

Earlier quoted context omitted.

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…

> who have provided less than zero benefit or service to our society Was following your argument up to that point. Making such a value judgment requires, in my opinion, a lot more data and deep analysis. Cryptocurrencies have the potential of loosening the grasp of oppressive regimes over their people. And it takes those other investors for the process to function. But, the reality and therefore data is needed to jud…

I fail to see how crypto-speculators making large sums of USD has anything to do with oppressive regimes.

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

#35
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?

Possibly like pretty much everything else: by writing or clarifying regulations that make such things a violation and then painstakingly going after the most extreme violators and punishing them severely enough that it changes the risk calculation for everyone. Very few things (I can't think of an example) are regulated to the point of impossibility, they are just regulated to the point of implausibility.

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

#36
post #28
post #17

Earlier quoted context omitted.

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…

> who have provided less than zero benefit or service to our society Was following your argument up to that point. Making such a value judgment requires, in my opinion, a lot more data and deep analysis. Cryptocurrencies have the potential of loosening the grasp of oppressive regimes over their people. And it takes those other investors for the process to function. But, the reality and therefore data is needed to jud…

Regardless, the null position which assumes the least is not "crypto currencies run by folks seeking to exit into USD provide real value" but rather "do not provide value".

The claim that someone would prove, of course, would be that they provide value.

So that shouldn't offend you that the null position (and the position which satisfies occams razor) is the default stated position.

Instead of criticizing it, you could actually do the work of proving your claim that crypto has real measurable value to a society. Until that's proven, though...

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

#37
post #14

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.

Binance wasn't hacked. A bunch of idiots gave their API keys to third party bots. The owner of the bots then hijacked their accounts for profit

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

#38
post #17

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…

What's your stance on forex markets then?

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

#39
post #15
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.

There's no massaging. The potentially illegality of many cryptoasset platforms has always been clear to everyone who wasn't in denial. They're trying to race ahead of law enforcement. Kind-of like Uber, but the SEC is a lot harder to plow through than local traffic enforcement.

I, for one, welcome our PonziCoin-banning overlords.

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

#40
post #14

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.

We don't know Binance was hacked. Relatively few people use API keys to trade and every reported account had API keys on it. It's likely some malware that looks for API keys in config / python files laying around.
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