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Crypto unlikely to survive as investment if unregulated, SEC chairman says

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Re: Crypto unlikely to survive as investment if unregulated, SEC chairman says

#61

Earlier quoted context omitted.

It's more interesting to me why we have a seemingly obvious belief that pump and dump schemes (which are effectively a sort of coordinated social phenomenon rather than a material movement) should be regulated. Begs the question: what is the "point" of the financial system, considered as a kind of bounded game, and why is that interesting to the state as an institution?

I'm no political philosopher, but I'd say, for example, the Preamble of the U.S. Constitution says the government's purpose is to “promote the general welfare." Phenomena like bank runs harm the general welfare, so the government has an interest in preventing or mitigating them.

I agree that bank runs harm the general welfare, and the reason why we can make that claim is because of the material relationship between the banks and the general population, as individuals participating in the economic system in order to ensure their own welfare.

But if we look at other sorts of more complex financial instruments, the sort of thing that's inaccessible to an average citizen, then why are they protected by the state as well? The obvious answer would be "well, banks invest in complex financial instruments, and the state wants banks to be protected". But regulating financial instruments isn't necessarily the only way of ensuring that the banks' service to their customers remains stable, it's just one possible path.

Re: Crypto unlikely to survive as investment if unregulated, SEC chairman says

#62
post #46

Earlier quoted context omitted.

The rest of the population is protected. It's problematic to have both the disillusioned scammed and scammers running around with freshly acquired capital to do more harm to other people.

The rest of the population should be made aware of the risks before participating

I am talking about people who won't participate like me. It's in my interest to regulate crypto. It's not because I care about people who lose money investing in some nonsense. It's all good, stupidity should have consequences. I do care however about scammers having more capital to conduct more scams in other areas of life or worse yet using it to buy politicians. I also care about the danger of having some % of the population (mainly young men) who just lost everything and won't find a place in society pushing them to crime or marginalized life.

I mean those are the same reasons we have to ban pyramid schemes for example - we don't want to have a lot of losers (even if they are dumb losers who entered the scheme on purpose) and unethical now wealthy winners.

Re: Crypto unlikely to survive as investment if unregulated, SEC chairman says

#63

It is difficult to get a crypto proponent to understand something, when their crypto wealth depends on them not understanding it. EDIT: If you steal my gold or other metal store of value, I can pursue you in court and recover my loss (either the actual materials lost or fiat value). If you steal my single named security, I can pursue you in court and recover my loss (or the clearinghouse will reverse the transaction)…

How much value has been lost to inflation this year? Why is that acceptable but coding errors are not? I am not a crypto-currency enthusiast but I remember the Bitcoin whitepaper arguing against centralized currency. So it was critical of the Federal Reserve. I think people should be allowed to choose. If they don't want regulation then fine.

> Why is that acceptable but coding errors are not?

People voted for and happily accepted the policies that created the inflation. Inflation is a consequence of Congress allocates trillions of dollars in spending that can only be funded by debt. Whether the Federal Reserve converting that debt into money is merely the only way the elected government can receive the money it desires without collapsing the economy.

Re: Crypto unlikely to survive as investment if unregulated, SEC chairman says

#64
post #24

This guy of course talks from the comfort zone of being a beurocrat. He doesn't have to deal with alienating all the crypto boys and girls. And there are millions of them! Given that every election is won and lost by a couple of % points give or take... What will happen is an implosion first and foremost, only once that happens the public will be calling for congressional hearings. Get ready to see Saylor, Musk, Arms…

There maybe be millions of crypto holders, but how many of them will be single issue crypto voters? Probably only a fraction. I would be legitimately surprised to learn that it had any kind of measurable voting impact.

> single issue crypto voters

Every voter is a single issue voter.

And the single issue is : "My net worth"

Re: Crypto unlikely to survive as investment if unregulated, SEC chairman says

#65

I don't understand this push for regulation of cryptocurrencies. Just let the mathematics govern. It'll either work on its own, or as people lose their money to trickery and/or carelessness, there will be less and less to regulate as people stop participating.

This is a statement by a major regulator in favour of more regulation, it’s as simple as that

Re: Crypto unlikely to survive as investment if unregulated, SEC chairman says

#66
post #20

It is difficult to get a crypto proponent to understand something, when their crypto wealth depends on them not understanding it. EDIT: If you steal my gold or other metal store of value, I can pursue you in court and recover my loss (either the actual materials lost or fiat value). If you steal my single named security, I can pursue you in court and recover my loss (or the clearinghouse will reverse the transaction)…

Fun fact but the gov basically stole gold from ppl b4 in the good ole USA. They made it illegal to hold - if you were caught having gold it was a 10k fine. PPL were forced to go to their banks and sell their gold at a loss. https://en.wikipedia.org/wiki/Executive_Order_6102#:~:text=E... . That article uses the term hoarding but don't be fooled they made holding any relevant amount of gold for investment illegal. You…

I have heard mixed things about the historical event you're mentioning. I've heard it was a law that wasn't strongly enforced. Of course just having the law in the books probably served its purpose of reducing gold transactions. But that's different than the government actively fining people $10K. Which would be like $200K today by the way.

Also, I'm not sure if it is an apples-to-apples comparison. Back then the main money of the society was associated to gold. There is no such link today. I.e. the value of USD isn't associated to BTC. The government had a existential need to reduce gold transactions. You can argue the government is threatened by crypto etc. but like I said it's not apples-to-apples.

Re: Crypto unlikely to survive as investment if unregulated, SEC chairman says

#67

I don't understand this push for regulation of cryptocurrencies. Just let the mathematics govern. It'll either work on its own, or as people lose their money to trickery and/or carelessness, there will be less and less to regulate as people stop participating.

That's a rather heartless take. You could make the same argument regarding the need to protect any vulnerable members of society. Say, people who are immunocompromised during a global pandemic. Oh wait... It's never just pure mathematics. You always have a human layer on top, and that means that there is an attack surface for self-interested people to take advantage of others. The purpose of regulation is to minimize…

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Re: Crypto unlikely to survive as investment if unregulated, SEC chairman says

#68

I don't understand this push for regulation of cryptocurrencies. Just let the mathematics govern. It'll either work on its own, or as people lose their money to trickery and/or carelessness, there will be less and less to regulate as people stop participating.

That's a rather heartless take. You could make the same argument regarding the need to protect any vulnerable members of society. Say, people who are immunocompromised during a global pandemic. Oh wait... It's never just pure mathematics. You always have a human layer on top, and that means that there is an attack surface for self-interested people to take advantage of others. The purpose of regulation is to minimize…

It's odd that people don't conceive of the health of their neighbor's investments as a support for their own.

Lots of people losing lots of money in your neighborhood is bad. A good number of people winning the lottery by defrauding others is bad, they make for shitty neighbors.

Re: Crypto unlikely to survive as investment if unregulated, SEC chairman says

#69
post #14

1. They ignore you 2. They mock you 3. They fight you 4. You win!

A useless generalization which you could apply to a lot of things or people. First, they ignored Trump, then they mocked him, then they fought him, then he won.

The point is that this only works when the truth is on your side. “They” are understood to be the dominant/incumbent forces, but the truth eventually wins.

Re: Crypto unlikely to survive as investment if unregulated, SEC chairman says

#70

It is difficult to get a crypto proponent to understand something, when their crypto wealth depends on them not understanding it. EDIT: If you steal my gold or other metal store of value, I can pursue you in court and recover my loss (either the actual materials lost or fiat value). If you steal my single named security, I can pursue you in court and recover my loss (or the clearinghouse will reverse the transaction)…

> That is incompatible with the law.

who says? that premise seems to operate on the idea that justice only works on stuff that can be returned to its previous state.

if anything crypto has proven that big heists don't pay off because naughty wallets get immediately blacklisted by exchanges.

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