I can agree with most of what you're saying, but there is a sticking point that I take issue with.
> Now they may have sold unregistered securities, but that's very different compared to downright theft (like Genesis or SBF or so many others did).
I mean, is it? They compared it directly to a bank account [1], and mentioned FDIC insurance for GUSD [2]. They might have not meant for my money to be stolen, but I am quite confident that they were playing fast and loose with terms in order for me to believe that there was lower risk in this than there actually was. There's actually a word for "purposefully making someone believe something that's not true", and it's called "lying", and if they're lying then I kind of have to assume some nefarious intent.
That said, I can broadly agree that maybe they're just morons? I'm probably an idiot too, but it's a little different for a software engineer without any financial training vs. two adults trying to start "legitimate" crypto exchange without doing the proper due diligence to make sure their partners are also legitimate?
GUSD is FDIC insured though. GUSD deposited in the 'Earn' program is not. Just like your bank account dollars are no longer FDIC insured once you buy bonds with them.
Even that is a somewhat dubious claim. They even stopped emphasizing that one their website so I suspect they realize that as well.
> Just like your bank account dollars are no longer FDIC insured once you buy bonds with them.
Then their ads and tweets shouldn't have been comparing it to a bank account. That's getting into unregistered security territory. Which again, not my opinion, but what the SEC is alleging.
> Now they may have sold unregistered securities, but that's very different compared to downright theft (like Genesis or SBF or so many others did).
I mean, is it? They compared it directly to a bank account [1], and mentioned FDIC insurance for GUSD [2]. They might have not meant for my money to be stolen, but I am quite confident that they were playing fast and loose with terms in order for me to believe that there was lower risk in this than there actually was. There's actually a word for "purposefully making someone believe something that's not true", and it's called "lying", and if they're lying then I kind of have to assume some nefarious intent.
That said, I can broadly agree that maybe they're just morons? I'm probably an idiot too, but it's a little different for a software engineer without any financial training vs. two adults trying to start "legitimate" crypto exchange without doing the proper due diligence to make sure their partners are also legitimate?
[1] https://pbs.twimg.com/media/F1lMbFqWIAAcpKc?format=jpg&name=... [2] https://web.archive.org/web/20211201224824/https://www.gemin...