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

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

#71

Post by WJW » Wed, Mar 07, 2018, 6:35 PM UTC

qbrass wrote: post #65

dragonwriter wrote: post #32

Earlier quoted context omitted.

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…

(3) operate outside of the US.

(3a) Not allowing US customers (3b) Hopefully in a country that does not have any extradition treaties with the US.

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

#72

Post by mcs_ » Wed, Mar 07, 2018, 6:35 PM UTC

yzmtf2008 wrote: post #55

crypt1d wrote: post #52

Earlier quoted context omitted.

by allowing u to transact wealth without the control and oversight of the oppressive regime.

And how would their people acquire this “wealth” in the first place?

Working?

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

#73

Post by crypt1d » Wed, Mar 07, 2018, 6:36 PM UTC

yzmtf2008 wrote: post #55

crypt1d wrote: post #52

Earlier quoted context omitted.

by allowing u to transact wealth without the control and oversight of the oppressive regime.

And how would their people acquire this “wealth” in the first place?

Are you implying that because someone lives in an oppressive country that they have no money to transact? I really dont understand your question.

Oppressive regimes tend to control money flow in/out of the country. So if you, for example, have an aunt somewhere outside that wants to send you money -> you just might not be able to receive it, or would need to give some official a slice of the pie. Bitcoin obviously can help as u can just move the money without government oversight.

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

#74

Post by [deleted] » Wed, Mar 07, 2018, 6:37 PM UTC

nsxwolf wrote: post #66

lagadu wrote: post #56

Earlier quoted context omitted.

"money" is a representation of value that is recognised as such by a group of people. If a few people decide that a bunch of stones are now money[0] (in other words, represents value), should they be arrested? Similarly, when a group does the same not to stones but to seashells [1] or salt are they committing securities fraud? Someone decides to do the same for a few hashes on the internet and suddenly they can't? Wh…

Is it really money if nobody's using it like money? When people started using sea shells as money, they were buying stuff with it, not just speculating about its value using some other currency.

[deleted]

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

#75

Post by wyldfire » Wed, Mar 07, 2018, 6:38 PM UTC

hesdeadjim wrote: post #68

jeffreyrogers wrote: post #53

Earlier quoted context omitted.

You have to convert USD to some cryptocurrency at some point, and vice-versa, so that's what they'll regulate.

Yea and the IRS will be quite curious about your transaction history when you do.

The IRS and SEC have remarkably different goals. They likely interact very little with one another with regards to enforcement.

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

#76

Post by fiatjaf » Wed, Mar 07, 2018, 6:39 PM UTC

jimrandomh wrote: post #23

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".

Worth noting that the first major cryptocurrency exchange, MtGox, had no accountants and stole a lot of customer money. Preventing that is precisely what the SEC is for.

So it must be failing a lot.

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

#77

Post by cal5k » Wed, Mar 07, 2018, 6:39 PM UTC

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 the definition of a public offering). He also failed to report a massive theft of Bitcoin and misappropriated customer funds.

This guidance does not claim that Bitcoin or Ethereum are securities.

This is the birth of a new industry. It's unregulated, messy, and the massive amounts of money involved have invited all manner of fraudsters and scam artists - just like the stock market did 100 years ago. There will be a regulatory shakeout and we can all hopefully get back to the business of building a useful ecosystem.

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

#78

Post by awt » Wed, Mar 07, 2018, 6:39 PM UTC

nokcha wrote: post #13

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.

Eth used an ICO.

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

#79

Post by saosebastiao » Wed, Mar 07, 2018, 6:40 PM UTC

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".

Money transmitter regulation at state level already enforce the first and third. Money transmitters must retain and account for all customer funds on deposit. That is why I won't put any money into an exchange that avoids states that regulate exchanges as money transmitters (looking at you, Kraken).

I really wish the SEC or FinRA would supercede the state level money transmitter regulations. It makes little sense for a money transmitter that transmits money across state borders to be regulated by the whims of both states instead of the government that has regulation of interstate commerce as part of its constitution. And it would give regulatory evaders like Kraken an all or nothing choice instead of their current practice of only doing business where there's no regulation.

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

#80

Post by WJW » Wed, Mar 07, 2018, 6:41 PM UTC

AbenezerMamo wrote: post #57

This won't age well with the rise of decentralized exchanges like 0x

Unless the decentralized exchanges get a licence, they'll still be illegal, right?

I could imagine jail time for the developers for knowingly supporting illegal activity would seriously dampen enthusiasm from the open source community. Also, depending on how decentralized such an exchange is, this would expose its customers to the same type of consequences (or possibly "just" large fines). It would not be too difficult to pass a law prohibiting consumers to knowingly trade on non-registered exchanges I'd think. (Possibly this is already illegal in your particular jurisdiction, IANAL)