America's Legal System May Be 'Closing In' on Regulating Cryptocurrencies (msn.com) 45
A business columnist at the Los Angeles Times notes Sam Bankman-Fried's judge issued another ruling "that may have a more far-reaching effect on the crypto business.
U.S. Judge Failla "cleared the Securities and Exchange Commission to proceed with its lawsuit alleging that the giant crypto broker and exchange Coinbase has been dealing in securities without a license." What's important about Failla's ruling is that she dismissed out of hand Coinbase's argument, which is that cryptocurrencies are novel assets that don't fall within the SEC's jurisdiction — in short, they're not "securities." Crypto promoters have been making the same argument in court and the halls of Congress, where they're urging that the lawmakers craft an entirely new regulatory structure for crypto — preferably one less rigorous than the existing rules and regulations promulgated by the SEC and the Commodity Futures Trading Commission...
Failla saw through that argument without breaking a sweat. "The 'crypto' nomenclature may be of recent vintage," she wrote, "but the challenged transactions fall comfortably within the framework that courts have used to identify securities for nearly eighty years...." Since Congress hasn't enacted regulations specifically aimed at crypto, Coinbase said, the SEC's lawsuit should be dismissed. The judge's opinion of that argument was withering. "While certainly sizable and important," she wrote, "the cryptocurrency industry 'falls far short of being a "portion of the American economy" bearing vast economic and political significance....'"
Failla's ruling followed another in New York federal court in which a judge deemed crypto to be securities. In that case, Judge Edgardo Ramos refused to dismiss SEC charges against Gemini Trust Co., a crypto trading outfit run by Cameron and Tyler Winkelvoss, and the crypto lender Genesis Global Capital. The SEC charged that a scheme in which Gemini pooled customers' crypto assets and lent them to Genesis while promising the customers high interest returns is an unregistered security. The SEC case, like that against Coinbase, will proceed....
The hangover from March continued into this month. On April 5, a federal jury in New York found Terraform Labs and its chief executive and major shareholder, Do Kwon, liable in what the SEC termed "a massive crypto fraud...." The value of UST fell in effect to zero, the SEC said, "wiping out over $40 billion of total market value ... and sending shock waves through the crypto asset community."
U.S. Judge Failla "cleared the Securities and Exchange Commission to proceed with its lawsuit alleging that the giant crypto broker and exchange Coinbase has been dealing in securities without a license." What's important about Failla's ruling is that she dismissed out of hand Coinbase's argument, which is that cryptocurrencies are novel assets that don't fall within the SEC's jurisdiction — in short, they're not "securities." Crypto promoters have been making the same argument in court and the halls of Congress, where they're urging that the lawmakers craft an entirely new regulatory structure for crypto — preferably one less rigorous than the existing rules and regulations promulgated by the SEC and the Commodity Futures Trading Commission...
Failla saw through that argument without breaking a sweat. "The 'crypto' nomenclature may be of recent vintage," she wrote, "but the challenged transactions fall comfortably within the framework that courts have used to identify securities for nearly eighty years...." Since Congress hasn't enacted regulations specifically aimed at crypto, Coinbase said, the SEC's lawsuit should be dismissed. The judge's opinion of that argument was withering. "While certainly sizable and important," she wrote, "the cryptocurrency industry 'falls far short of being a "portion of the American economy" bearing vast economic and political significance....'"
Failla's ruling followed another in New York federal court in which a judge deemed crypto to be securities. In that case, Judge Edgardo Ramos refused to dismiss SEC charges against Gemini Trust Co., a crypto trading outfit run by Cameron and Tyler Winkelvoss, and the crypto lender Genesis Global Capital. The SEC charged that a scheme in which Gemini pooled customers' crypto assets and lent them to Genesis while promising the customers high interest returns is an unregistered security. The SEC case, like that against Coinbase, will proceed....
The hangover from March continued into this month. On April 5, a federal jury in New York found Terraform Labs and its chief executive and major shareholder, Do Kwon, liable in what the SEC termed "a massive crypto fraud...." The value of UST fell in effect to zero, the SEC said, "wiping out over $40 billion of total market value ... and sending shock waves through the crypto asset community."
BAN INSTEAD (Score:3, Insightful)
The only "regulation" there needs to be for 'cryptocurrency' in the US is a total ban.
It's a scam that wastes a lot of electricity, there's no reason it should be legal.
Re: (Score:3)
Hey, libertarian nutcase: so, you're mining crypto at home. Are you also running lines to steal your neighbors' electricity (I had a landlord who did that for cable)....
And con artists like you who want to take the suckers for everything they've got, you don't care if they lose their home, right, that's just business.
Go shove your head in the toilet and flush.
Re: BAN INSTEAD (Score:1)
No. Banning a particular kind of computing you don't like? That would open the door to banning other types of computing. Like encryption, which various governments would love to prohibit.
If you don't like crypto (which I totally understand), then don't use it. Bannng it - aside from being ineffective - would also be a dangerous precedent.
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Such bans are commonplace. Digital porn is heavily regulated, copyright violation is regulated, and supercomputer construction and export are quite heavily controlled. So is cryptography export.
Re: BAN INSTEAD (Score:3)
+1
But in the meantime it should be shorted to death, like DJT
That took a while (Score:3, Interesting)
But obviously the big pump & dump scammers behind crapto have now made most of the profits they expected and have stopped bribing politicians.
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It's probably more like they're looking for another chance to buy in cheap, so they got this guy to write this crypto slam "opinion" piece and share it around social media.
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A little article isn't going to do much. Now, if Coinbase were to shut down or abscond with everyone's money, that would cause a nice crash.
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But obviously the big pump & dump scammers behind crapto have now made most of the profits
People were saying that when Bitcoin crossed the one-cent threshold.
It's gone up 653,000,000% since then.
The grand master plan of crypto (Score:1)
It's gone up 653,000,000% since then.
The plan for all cryptocurrencies isn't what they want to make you think it is. It's more sinister than the egalitarian image the crypto boys portray for it.
After the 2008 financial meltdown, cryptocurrencies were born out of it, declared to be the means by which people could be freed from banks/governments, and promised to avoid any such future meltdowns from happening ever again.
But the crypto boys watched closely the result of that meltdown, and formulated their plan: create a new form of currency, and f
Re: (Score:2, Funny)
People were saying that when Bitcoin crossed the one-cent threshold.
It's gone up 653,000,000% since then.
Heard a guy talking about Bitcoin in a bar:
He said: "Fiat currencies are obsolete. They're total crap."
His friend: "Really? Like what currencies?"
Guy: "Anything - the Euro, the Yen, even the USD - all crap."
Friend: "Uh Ok; so like, what's Bitcoin's worth then?"
Guy: "Each coin is worth north of $60K right now."
Friend: "What?! $60K?? As in USD??"
Guy: "Yeah - over $60K USD each"
Friend: "Wow. Bitcoin sure is a lot of crap!"
If it looks, swims and quacks like a duck... (Score:5, Funny)
Regulator: So, you've got this "currency" thing that you're moving around. That looks a lot like a money transfer business. Where's your FinCEN Form 107?
Crypto Bro: Oh no, not at all! People are investing in tokens that give them a share of the services in the network.
Regulator: Investing in a share of something? That looks a lot like a security. Where are your SEC and CFTC filings?
Crypto Bro: Oh no, not at all! Everyone knows that these are completely speculative and have no inherent value. They are just playing the game in the hope of making some money.
Regulator: Playing a game in the hope of making some money? So it's gambling them? Across state boarders? We seem to be missing some paperwork here.
Crypto Bro: Oh no...
Re:If it looks, swims and quacks like a duck... (Score:5, Insightful)
Indeed. Regulators are often slow to catch on (here probably helped by political bribes), but it was pretty much inevitable that they do.
Let me add one more:
Regulator: So, you are doing financial transactions with people you do not know, so money laundering, terror and crime financing and the like?
Crypt Bro: [has no answer]
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Relative to volume used? No. Insightless "argument" is insightless.
The regulators weren't slow to catch on (Score:3, Insightful)
Those guys have been protecting crypto for some time from the beat cops that make up the SEC law enforcement. Basically providing mixed
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Oh, sure, the regulators _know_. They are just slow to act and you just gave a number of reasons that made them even slower in this case. Personally, I thing regulators should become fully and personally accountable when they do crap like that, but there is nobody to judge them that is not just as corrupt.
Re: The regulators weren't slow to catch on (Score:2)
That's not actually why they go slow. Nice conspiracy theory but not very realistic.
I worked at a regulator once. Discussed it with them as they were experimenting with crypto themselves. They don't want to kill off crypto per sé as it provides a valuable service in certain parts of the world. They also don't want to see it used mostly for tax dodging and drug money laundering. It's a tough choice but it's safer to go slow and not kill something of value by accident, than to go too fast and kill
You working for a regulator (Score:2)
I'm not going to bother digging up the quotes for you, so don't ask, but a little googling and you'll find the people who set policy for the cops walking the beat like you were said they were holding off for the sake of "innovation".
I question their motives because anyone with half a brain can see crypto was only ever going to be useful for money laundering and ponzi schemes.
I guess it *is* possible they're all co
You can find them talking about crypto (Score:2)
We figured out ages ago it was useless as a currency and little more than an expensive gift card program when used as such.
If you think the regulators and various law enforcement didn't figure that out too you're not paying attention.
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Such transactions are reserved to governments, as Oliver North and President Reagan and Vice President Bush so eagerly showed, to evade political checks and balances on their bribery.
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I may be a bit off the mark here, but crypto currencies are a framework for recording and executing contracts between pairs of parties. And so are equities, futures contracts, various securities, etc. So if you can regulate the latter, then why not crypto as well?
So now we are coming pretty close to regulating and tracking any agreements between two parties. Nope. I don't want to go there. If the various regulating bodies can figure out how to handle crypto without sticking their nose into every last type
Re: If it looks, swims and quacks like a duck... (Score:2)
We do have contract laws. They already apply to private party contracts.
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But (with a few exceptions) I don't have to register my private contracts with a government agency. Or make sure it complies with some government regulations. If they violate some law, they just won't stand up in court. As long as all of the parties involved are satisfied with performance, it never makes it to court and the government doesn't even need to know of the existence of the agreements.
In one way, I must agree with Coinbase (Score:5, Insightful)
'... she dismissed out of hand Coinbase's argument, which is that cryptocurrencies are novel assets that don't fall within the SEC's jurisdiction — in short, they're not "securities."'
It's pretty obvious that the word "secure" should never appear in the same sentence as the word "cryptocurrency".
Re: In one way, I must agree with Coinbase (Score:2)
If you think securities are secure, you shouldn't invest.
Pro tip: they're potentially worse than crypto in a number of cases. Unsecured securities are pretty standard. Basically, loans without the means for recovery.
Welcome to the real world... (Score:1, Interesting)
This is a very basic concept, no matter how much geeks would like to pretend to the contrary: NO nation will long tolerate money it cannot control.
It's practically a definition thing. Nation states are sovereign entities - they consider themselves the highest human authorities (and in Godless, officially atheist, countries those governments consider themselves the highest authorities, PERIOD. Full-Stop). Currency is too powerful a thing for ANY sovereign nation state to permit to be off on its own somewher
Re: Welcome to the real world... (Score:2)
In most countries, credit and debit card processing fees are minimal. The US is an exception, and not in a good way. This due to a combination of lobbying corruption and inertia. And many participants reap rewards out of the system, at the expense of others. I would hate to see my annual $5k-10k of cash back and travel rewards disappear. But I would love to see merchants charge 2-3% less when paying with plastic. Some merchants have started charging credit card processing fees. Sometimes they are reasonable
Pyrite Pete's failed prediction (Score:1)
On Monday April 26, 2021 @02:16AM UTC, Pyrite Pete [urbandictionary.com] had said:
That was back when bitcoin had already fallen, and down to about $47K at the time. It should've been back up to "twice its value" no later than June 26 2021 - over 2.5 years ago. It's currently nowhere near the $94K Pyrite Pete promised us.
Now that's what I call a prediction #FAIL!
Want more LOLs @ Pyrite Pete shitposts? Here are but a sample:
"It is pretty much a given that BTC will be up to 1 [slashdot.org]
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Every nation except one tolerates currency it cannot control - the US dollar.
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I wouldn't say it is beyond their control. If a country wants to get rid of the dollar, there is always hitching one's cart to BRICS.
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This would be true if only it wasn't so spectacularly false. The entire concept of the modern central bank is that it doesn't answer to the goverment / politicians, because they cannot be trusted to make sound decisions about the currency. Yes, we can argue the semantics about just how much independence there truly is, but the point still stands.
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They are answerable to the government. The government might choose not to ask too many questions, but they still reserve the right to.
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They are answerable to the government. The government might choose not to ask too many questions, but they still reserve the right to.
Yes, but not really. In the end politicians can always make new legislation that dissolves the central bank, forces a takeover of it's control or establishes an entirely new currency, Any of the 3 options also just so happen to be to absolutely ruinous for the valuation of whatever form of money we are talking about. Yes, the government "wins" any such dispute, but the cost is simply way too high to bear.
ahhh, you have been mesmerized (Score:2)
Do you TRULY believe the federal government has zero control over the supposedly private Federal Reserve Bank?
Many time politicians implement schemes that are designed to make it LOOK like they are not the cause of things the voters would dislike, and make it SEEM as though there's some rogue unnamed and unaccountable entity pulling the strings. "Don't get mad at ME", they tell the voters, when with a single vote on the House, one in the Senate, and the stroke of a Presidential pen entire systems, agencies,
Treat Crypto LIke Gambling (Score:1)
Cryptocurrencies -- "coins" if you will -- are just like the chips in a casino. They have no inherent value just like their casino counterparts. They are merely used to make gambling easier/safer.
The crypto industry should be regulated as just another form of gambling -- with the same types of controls and regulations.