I feel like this won't end up going well for the SEC. This whole methodology of telling exchanges "I don't know, you figure it out" when they ask for clarity and then turning around and suing them for not figuring it out is extremely shaky legal ground.
Matt Levine I think put it best: if Bernie Madoff were to go to the SEC and ask them "I don't know how to run a Ponzi scheme legally, can you please update the guidelines to make it easier", of course the SEC is going to refuse. And the situation with cryptocurrencies seems to be broadly similar: there's actually a pretty clear answer as to what would need to be done to be fully above-the-board and legal, it's just not what the cryptocurrency people want, so they want the SEC to make it easier for them.
And given that we've seen exchange after exchange fail to perform basic tasks like "don't commingle customer funds," I have a hard time feeling any sympathy for cryptocurrency companies here.
> And given that we've seen exchange after exchange fail to perform basic tasks like "don't commingle customer funds," I have a hard time feeling any sympathy for cryptocurrency companies here.
There is nothing per se nefarious about co-mingling customer funds, provided that you are otherwise compliant with the law.
Banks, for instance, don't just co-mingle customer funds, they invest those funds on their own behalf and reap the profits for themselves. Sometimes a bank will share a portion of its profit with its customers, in the form of intest; more often, the bank pays little or no interest, and actually charges the customer fees. A bank will risk its customers' money, and its customers will pay for that privilege.
Kraken has been operating under the money transmitter licensing scheme for a decade, and like banks, money transmitters don't have any legal requirement to segregate customer funds—although they do have the responsibility to maintain sufficient cash balances or liquid investments to cover all of what they owe to customers.
Whether Kraken is breaking the law is something that will likely be decided by a court. The SEC asserts that Kraken has broken the law, but it is not up to the SEC to decide—it is up to the courts.
It is not illegal to operate a spot commodities exchange without approval from the SEC, unless those commodities are also the kinds of securities the trading of which require SEC approval. It is also not illegal to operate as an unlicensed broker-dealer of non-security commodities, or as an unlicensed custodian of non-security commodities. The SEC only has jurisdiction over securities.
It is not in the slightest bit clear yet that the crypto tokens for sale on Kraken are in fact securities of any kind. The SEC asserts that they are, but at this point it is just an assertion. The SEC will have to win in court.
> For what its worth, banks don't just co-mingle customer funds, they invest those funds on their own behalf and reap the profits for themselves.
And that is why banks are regulated, must register, follow certain rules etc.
> Kraken has been operating under the money transmitter licensing scheme for a decade
Yeah, but that doesn't give them a license to operate a securities exchange, or a bank. How many other money transmitters (that are not registered securities exchanges or banks) have 'tokens for sale' like Kraken?
> How many other money transmitters (that are not registered securities exchanges or banks) have 'tokens for sale' like Kraken?
Quite a few. In fact, all of the major centralized exchanges operating in the US are authorized to do so because they are licensed money transmitters (with the exception of some that might be operating under the NYS "Trust" licensing scheme), and none of them are broker-dealers regulated by the SEC, because until very recently the SEC has taken the position that broker-dealers are not allowed to sell crypto assets.
For years the money transmitter licensing scheme was understood to be the correct (and sufficient) licensing scheme under which a crypto exchange could legally operate in the United States. It is only since the beginning of the Biden administration that the SEC has taken the position that crypto exchanges have an obligation to register with the SEC. The Ripple lawsuit was filed at the tail end of the Trump administration (after the election), but it was not targeted at exchanges. It's also worth noting that the judge in the Ripple case found that exchange-traded XRP tokens are not securities. In other words, the SEC's assertion of authority over exchange-traded Ripple tokens was explicitly denied.
There is good reason to believe that SEC will be unsuccessful in asserting even broader authority over all tokens that are available on Kraken.
In order to justify such a specific claim against Kraken to be heard, isn't it necessary to first qualify that such assets are themselves securities?
Am I crazy to call this vexatious harassment?
If P then Q:
If {x,y,z} are securities,
[ then {Exchanges a, B, and C} have provided securities exchange services of assets {x,y,z} without the requisite license are thus owe a civil fine. ]
But how is a suit against Exchange A the appropriate forum to hear whether assets {x, y, or z} are securities?
Given that - presumably - assets {x,y,z} are not yet ruled to be securities, there was not sufficient cause or standing to make a claim of bad faith or intent to provide exchange services for unregistered securities.
Exchange A operated in good faith, pursued the requisite state and federal procedures for assessing whether or not such assets were securities, and specifically does not intend to sell securities.
Should there be an is_this_a_security() function of a US government regulatory agency, defendants would be required to request such review before listing said specific types of assets.
Kraken has been operating under the money transmitter licensing scheme for a decade, and like banks, money transmitters don't have any legal requirement to segregate customer funds—although they do have the responsibility to maintain sufficient cash balances or liquid investments to cover all of what they owe to customers.
I think you meant to say here and unlike banks, because banks absolutely do not need to have sufficient funds to cover all customer's savings.
Unless.. are things different in the US? It's been a decade since I've read the Bank Act (Canadian), and when I did, only 5% of customer's account holdings were required to be held in tangible assets (gold, cash, etc), and inspected yearly by the Minister of Finance.
And I believe even that requirement has been dropped.
Yes, banks typically do not have sufficient funds to cover all customer's savings, and when customers realize their bank played with their money but lost, they freak out and do a so called "bank run". At least banks are regulated, so that's fine, right.
By the way, if you put your cash money in a bank, your money is insured up to 250,000USD in the US and up to 100,000EUR in the EU. Anything above is your own risk. But it's perfectly fine because at least, it's regulated.
You seem to be conflating “segregating customer funds” and “having enough assets to cover customer obligations.”
Both banks and money transmitters (including Kraken) need to maintain sufficient assets to cover customer obligations. The difference is that for money transmitters those assets have to be liquid, while for banks they do not have to be liquid (which is why SVB got into trouble).
On the other hand, neither banks nor money transmitters need to designate specific assets as being held on behalf of customers, specifically, separate and apart from their own capital or operating accounts. Designating specific accounts or balances as being held on behalf of customers is typically what is meant by “segregating customer funds”.
> Banks, for instance, don't just co-mingle customer funds, they invest those funds on their own behalf and reap the profits for themselves. Sometimes a bank will share a portion of its profit with its customers, in the form of intest; more often, the bank pays little or no interest, and actually charges the customer fees. A bank will risk its customers' money, and its customers will pay for that privilege.
Banking has not worked like this in quite a few years.
> It is not illegal to operate a spot commodities exchange without approval from the SEC
In the case of spot markets CFTC can only intervene if there is a fraud or manipulation. There is also “actual delivery rule”, I.e. if crypto “exchange” didn’t settled spot trade on underlying Blockchain or a ledger in 28 days - they effectively created a derivative, and fall under the CFTC mandate.
At least in the case of Bernie Madoff, the SEC can say "no, it is illegal to run a ponzi scheme and in this case it should say what law the exchange broke to make it valid
But the only time that a judge has ruled on whether or not a crypto token is a security is in the XRP case, and it ruled that it was not (at least when it was sold on exchanges). This is not comparable to a ponzi scheme where the legality is not in question at all.
And let's not ignore the fact that these exchanges have done this right out in the open for around 10 years now. Coinbase even had their IPO approved by the SEC. So it's very clear that the SEC treated this as legal for a decade before suddenly changing their position. This seems incredibly dishonest to me.
The SEC has been consistently saying that most crytoassets were securities. The only acknowledged exception, for which it had contradictory statements, is if a protocol is "sufficiently decentralized" such as Bitcoin and Ethereum.[1]
On the IPO, the registration is independant from such pursuits as the SEC raised during their approval. [2]
That said, there would have been better course of action to protect consumers, such as establishing an appropriate regulatory framework, but I may be too European.
The SEC saying it is very different from a court saying it. The executive branch can say anything it wants to, but it's the judicial branch's job to interpret the law.
Important nit: they ruled Ethereum was a security, as the initial issuance was at least partially a pre-sale. They just decided in that one case to explicitly not go after Ethereum. The only non-security exception they've named was bitcoin.
Which seems like kind of an arbitrary distinction anyway.
Suppose you create a new coin under similar circumstances as Bitcoin. No pre-mine. But it's a new coin and nobody cares about it, so nobody is mining it, so you can go mine it yourself and get all the block rewards for a while. Then once you have a lot of it you go about promoting the coin and developing the technology which causes it to be worth something.
In theory the difference is that anybody else could have mined the coin from the first day too, but at that point nobody else had any reason to think it would ever be worth anything.
> "Coinbase even had their IPO approved by the SEC."
The SEC reviews the disclosures being made by the company that's filing for public listing, not the legality of their business model.
You can go look at the Coinbase IPO filing [1]. Under the heading "Summary of risk factors", it reads:
"A particular crypto asset’s status as a 'security' in any relevant jurisdiction is subject to a high degree of uncertainty and if we are unable to properly characterize a crypto asset, we may be subject to regulatory scrutiny, investigations, fines, and other penalties, and our business, operating results, and financial condition may be adversely affected."
Nowhere does it say "the SEC has approved our operations, it's all good!" On the contrary, Coinbase is saying that the assets they offer on their exchange may be viewed as securities and it may eventually result in fines or penalties. That's disclosure.
They are only securities in the eyes of SEC. There is no legally binding court decision that cryptocurrencies would be securities, and, for example, are not commodities.
Yes, and the SEC sued them in COURT so they can make their case that they are securities and Kraken can make the case they aren’t. Isn’t this what Kraken wanted?
It would be more efficient use of tax payers money to work with Kraken and Coinbase directly and set up rules for what tokens should be securities or not.
Like the EU, Hong Kong, Japan and other countries are doing.
The SEC doesn't actually have the power to do that - the US law does. The SEC can only guide on what it thinks the law says. A court is the way to determine what the law says.
[Obviously the SEC can recommend changes to the law, and if it loses this case it might well do]
> if Bernie Madoff were to go to the SEC and ask them "I don't know how to run a Ponzi scheme legally, can you please update the guidelines to make it easier", of course the SEC is going to refuse.
The actual problem is that no part of the government wants to be the one to tell you if something is legal, because whoever actually makes the decision takes the blame for the consequences one way or the other.
So Congress punts and passes unclear laws. Then the SEC refuses to comment. Then the courts send you away if you try to get them to decide by asserting that you don't have standing because no one has tried to enforce the law against you yet. But then you have no way to know if they'll try to enforce the law against you in the future -- and the only way to find out is to do the thing that may or may not be illegal and see if you get charged with a crime.
Which is bullshit. Somebody should have to officially tell you if you're allowed to do something or not, ahead of time.
And if you're Bernie Madoff, all they have to do is tell you that no, you're not allowed to do that, and here's why. But then if you think you are allowed to do that, you would have standing to challenge that official determination in court.
> “Somebody should have to officially tell you if you're allowed to do something or not, ahead of time.”
And how would this process actually work in practice?
Would making such a request be free? Probably not, since they would consume a lot of lawyer time at the relevant agencies. If it were free, people could file thousands of slightly different requests for all imaginable variations of their dubious business plan, hoping that something would slip by.
If filing such a request costs money, then maybe the process would be more like applying for a patent. There would be some kind of guarantee about processing time, and some kind of legal promise that the response you received actually offers some level of protection when you do proceed with the thing you applied to do. This is clearly a big deal. There would maybe need to be a new profession of counterfactual judges who decide on the legality of things that haven’t happened.
How much should such a process cost? Seems like $10k would only get you started. Who decides the fee structure? What if the case is very complicated and involves many different aspects of law?
Overall, seems like a massive change from how legal systems work today.
I think you're overcomplicating this. In reality, people ask their lawyers whether they are allowed to do something, and those lawyers research the law in conjunction with any interpretive guidance published by the regulators, and sometimes they do consult with regulators directly on behalf of their clients. Where the law is unclear and the regulator refuse to publish guidance or discuss their approach with market participants, lawyers are unable to give a strong opinion. If the SEC were to publish comprehensive guidance on this (clearly a question that a lot of people are asking), it would probably remove any need for people to go asking them, and would also help people to comply with the law and make any enforcement actions easier as a less risky.
The idea of people DDOSing the regulator with thousands of slight variations of a proposal is unrealistic. These are people, not computers - if someone was blatantly abusing the system like that, the SEC would just tell them to knock it off.
And what if Coinbase's lawyers did all that, the SEC told them in those informal consultations that these altcoins that Coinbase wanted to list sure look a lot like securities, but Coinbase executives decided they'd rather ask forgiveness later because there was so much money to be made pushing all those VC-funded tokens onto retail investors while the good times lasted.
The fundamental problem here is that nobody in crypto is acting in good faith. They're just looking for loopholes to exploit. Publishing more guidance is pointless against such actors. Remember, this is an industry where Sam Bankman-Fried stood out as the honest guy who wants to play along with regulators.
> Probably not, since they would consume a lot of lawyer time at the relevant agencies. If it were free, people could file thousands of slightly different requests for all imaginable variations of their dubious business plan, hoping that something would slip by.
If they tell you that you can't do it, that should give you standing to challenge their determination in court. And, of course, if they tell you that you can do it, they can't later prosecute you for the thing they officially approved. Asking them a hundred times doesn't matter; if they say yes then you're happy and if they say no you can sue them and it becomes an issue for the courts in the same way as if they charged you for it, except that you don't go to jail if the courts rule against you because you haven't done it yet.
> There would maybe need to be a new profession of counterfactual judges who decide on the legality of things that haven’t happened.
We could call them lawyers and have them work for the agency in charge of prosecuting that part of the law, so when they publish their opinion it expresses the official position of the prosecutor's office and precludes them from reinterpreting the existing law in a different way against your behavior ex post facto.
> How much should such a process cost?
They're lawyers. They get paid by the hour. The first thing they do is evaluate how many hours it will take to research your question, the estimate is free, and then you decide if you want to pay them. In most cases this will not take much; these are professionals answering questions in the specific area of their expertise. How much time does it take to answer a simple yes or no question?
The answers all get published (no secret interpretations of the law) and can be used by anyone, so large entities will often pay to have an ambiguous law clarified and then everybody knows the answer.
The only thing you're doing here is requiring them to tell you how they intend to interpret the law. That doesn't seem like too much to ask.
> The actual problem is that no part of the government wants to be the one to tell you if something is legal, because whoever actually makes the decision takes the blame for the consequences one way or the other.
One really interesting thing I found about moving out of the US is that this is not always the case around the world. At a startup in the Netherlands we were discussing whether or not we could use a particular tax deduction in a particular way. The wording was really unclear. A colleague called the tax authority, and the person on the line agreed that the wording was not clear. They put us on hold, discussed, and came back that they thought we could, indeed, do what we wanted to do. Upon asking they sent us a letter clarifying.
I could not imagine this ever happening when dealing with the IRS.
> I could not imagine this ever happening when dealing with the IRS.
Have you tried? I haven’t tried it with the IRS, but I have tried asking my states permitting and planning department about the legality of various rental schemes for a property (that I didn’t own) and they were happy to look up the permits and tell me that indeed what I was asking about was not legal for that property. And further they let me know that tons of people do it anyway and that they don’t really check, but it’s a risk.
> there's actually a pretty clear answer as to what would need to be done to be fully above-the-board and legal, it's just not what the cryptocurrency people want, so they want the SEC to make it easier for them.
Fighting the SEC isn't easy or cheap either, raising questions about the reluctance to pursue the pathway to compliance. If there truly exists a legal route for a company to become "above-the-board and legal", why hasn't this path been taken? My guess is that that route is just for show, it doesn't exist in practice.
That's kind of my point. The SEC does not have a mandate to evaluate the merits of transactions or determine whether a securities investment is "good" or "bad". However, it's possible that they are effectively doing so by making the securities registration process for crypto tokens so stringent, it becomes impossible to fulfill. If it was actually possible to register crypto token securities with the SEC, why doesn't anyone do so instead of battling the SEC in court?
No, it has a mandate to determine whether an investment is legal or not.
Have you considered it may be impossible to fulfill because by their very nature these things cannot pass the tests to be legal?
> why doesn't anyone do so instead of battling the SEC in court?
Because none of them meet the bar of legality. Because they do not meet the most basic requirements of consumer protection, transparency, fair market trading. It's not the SEC making requirements for crypto so stringent, it's crypto's complete failure to fulfill the necessary criteria for a registered security.
As others have said - the SEC aren't going to make it easy for me to register my ponzi scheme either, should I blame them when I get shut down for running it anyway? Cry about how they're making it difficult to figure out how to follow their guidelines? Whine that ponzi schemes are not being allowed a simple way to compliance? Or should I maybe re-evaluate what I'm trying to do?
We're in agreement here. The SEC is indirectly making crypto tokens illegal by making it impossible to comply with securities registration requirements. When the SEC says "you have to register", what they really mean is "we think crypto tokens should be illegal".
> register my ponzi scheme either, should I blame them when I get shut down for running it anyway
In my opinion, if the scheme was transparent and no deception was involved, I do believe consenting adults should be allowed to transact. I am not big on the idea of protecting people from themselves, when no deception is involved.
Regardless, ponzi schemes are explicitly illegal. If you think that all crypto tokens should be illegal as well, a law should be passed. Making them implicitly illegal through bureaucracy and at the whims of bureaucrats is not an ideal state of things in a democratic society.
There are laws, the SEC can’t make things illegal and to enforce the laws it has to take things to court.
The laws don’t explicitly say “cryptocurrency is illegal”, instead they are effectively duck-typed, which is good because it stops “oh but my thing is different, this time we’re using bottle-caps”.
Perhaps the laws on penny stock registration don't translate well to crypto tokens? How do you explain that basically no one registers? Surely, "just because" is not it.
The one technical innovation is that in the olden days, a penny stock required paper and phones. You can now press a button and launch a new DeFi token, about 100% of which are unregistered penny stock scams.
They don't register because they think they can get away without it, it's pretty simple.
Pointing at all the other scofflaws doesn't make you not a scofflaw.
And you genuinely believe that crypto token projects could just take the time to fill out the S-1 form, but don't because it's too time consuming? I find that hard to believe. I'm tempted to believe that they do, but don't get approved, or that they can't, because some requirements are impossible to fulfill.
A case for sympathy for companies like Kraken is they are the ones that do do the proper thing and are US based and regulated. If the SEC goes after them and shuts them down then the punters will move to non US companies like the Bahamas based FTX insead with the problems that we have seen there.
Didn't FTX also have "notable investors", which despite this, were so careless with their money that they didn't even think sending an accountant to check on the (nonexistent) FTX books ?
I would be shocked to learn that claiming "casino" is enough to get the SEC off of your back and I would expect to see a lot more casino licenses if it did.
The SEC has no place in a free market. If people trust a company which co-mingles funds, they should be punished for misplacing their trust. Both the scammer and the scammed deserve a share of the punishment. Life naturally punishes the scammed already and teaches them a lesson at the same time... Without the help of the SEC... How good is that?!
If my startup fails because I hired the wrong people, I take the full blame. Why should it be different if I invested in the wrong company or trusted the wrong company with my money?
As someone who is trustworthy and providing a service, I am harmed by the SEC creating a false veneer or respectability for investors to invest in my biggest competitors. I'd rather investors be forced to do due diligence.
The FDA has no place in a free market. If people trust a company which poisons their food, they should be punished for misplacing their trust. Both the scammer and the scammed deserve a share of the punishment. Life naturally punishes the scammed already and teaches them a lesson at the same time... Without the help of the FDA... How good is that?!
--
I'd much rather pool our money into a commission that does this for the population than spend every waking moment personally auditing companies for breaking the rules. Oh, and I have to set them too. No thanks.
I am also glad the FDA protects us from chemicals and ingredients that would cause processed food to be unhealthy and harmful, if they didn’t do that we would probably end up with an overweight population and tons of food related health problems.
No, it's making the correct point. The government can't get you out of having to do the evaluation yourself because the government is broken, which is unlikely to change. In fact this is a major problem with the existence of the regulations -- they protect incumbents. Patented drugs get FDA approval, public domain drugs that could be alternatives to them don't because there is no one to pay for the approval process.
If heroin is legal, nobody forces you to buy it. If generic insulin is illegal, you're in trouble.
How do "we" fix it? You can vote for two Senators and one Congressperson and even assuming that your vote in particular was the deciding vote and one of your choices on the ballot was someone actually inclined to do something, you now have a legislature in which the bad laws pass with a margin of 33 Senators and 174 members of Congress instead of 35 and 175.
The only way to fix it would be to fix the structural incentives in place, i.e. institute more checks and balances to prevent regulatory capture. But this is the chicken and egg problem -- to change the rules you have to be in power, but if you're already in power then you like the existing rules because they're the things that put you in power.
Or in times of populism, you use your power to remove the rules that were meant to constrain opportunities for corruption because they're inconvenient to your agenda, and then those constraints stay gone because they're inconvenient to the next administration's agenda too. So how do you get them back, or introduce new ones?
> And nothing can beat a good to great government.
The best form of government is a benevolent dictator. The worst form of government is a malevolent dictator. But the only difference is who is in charge, which changes over time.
> If you don't want regulations, sure, Somalia is that way
Is there some way we can get past the thing where people are unable to distinguish between the government prohibiting acts of violence and the government prohibiting informed consensual interactions between adults and imposing competition-destroying bureaucratic rules at the behest of incumbent megacorps?
Laws are about statistics. Statistically you can't trust even adults with stuff like gambling or smoking. Statistically they will make bad decisions that will wreck the lives of a big percentage of adults. Not a majority, but maybe 20%.
Nobody is using statistics to pass these laws. There is no logical reason for cannabis to be illegal when alcohol isn't or for most stimulants to require a prescription when nicotine is available over the counter. They put caffeine in soft drinks and candy for crying out loud. The Federal Government of the United States directly subsidizes the production of high-fructose corn syrup.
There are two ways to deal with the fact that some people make poor decisions. The first is to teach people to make better decisions. This is obviously the correct answer, because it needs to be done anyway, because the second is insane. The second is to make all of their decisions for them.
And there is no "them" -- they're us. The people making the laws are just as human as anyone else. All you're doing is punting the decision to a different fallible entity which has less information because they're choosing in the abstract without the benefit of context. And causing errors to be universal rather than individual, resulting in systemic risk and lethal monoculture.
It's far better to have 20% of people make the wrong choice than 100%.
> If people trust a company which poisons their food, they should be punished for misplacing their trust. Both the scammer and the scammed deserve a share of the punishment. Life naturally punishes the scammed already and teaches them a lesson at the same time... Without the help of the FDA... How good is that?!
If your food is poison, you don't have the opportunity to learn from your mistake and stop doing business with that company, because you die. If you don't eat any food, you still die.
But Coca Cola is fully FDA-approved -- even though it's bad for you. Because it doesn't immediately kill you, which gives you the opportunity to make your own choices and learn from your mistakes.
Which is how investments work. Some of them are better than others. The role of the government isn't to make the decision for you, it's to punish the people who deceive you. And since bad investments don't cause anaphylaxis or liver damage, the case for heavy-handed rules or pre-registration is missing.
If someone is running a ponzi or committing fraud, you arrest them, the same as you do if they're selling counterfeit electronics. If someone is just buying and selling cryptocurrency on the internet, which is the thing you purposely intended to exchange for your money, and they do nothing more than faithfully convey to you the thing you knowingly requested, what does the government need to regulate about it? Nothing nefarious is occurring.
This sounds good in theory, but in a world where you can open companies by the dozen, international jurisdictions, no compulsory registration of company facilities, no private right of audit it's impossible to keep track of who is doing what. Additionally, tainting the news by flooding review sites and what not doesn't help either.
> Bayer marketed diacetylmorphine as an over-the-counter drug under the trademark name Heroin.[91] It was developed chiefly as a morphine substitute for cough suppressants
It's perfectly legal to buy drain cleaner at any department store and if you drink it you are likely to die. But you are under no obligation to drink it. Or do heroin. So that has an obvious solution.
Whereas if you have cancer and cannabis can prevent your nausea but the federal government maintains a prohibition on it for three generations, what are your options?
For something more recent, I'd recommend any of the books or documentaries on oxycontin sparking a more recent opium epidemic. As badly as the FDA failed, we'd be worse off if we didn't have one. There's good reasons people want more effective regulation instead of none.
Part of the ban on cannabis, psychedelics, etc has been to ban research on their effects as well. I think there's some clear lines that can be drawn on good laws vs bad laws here.
> For something more recent, I'd recommend any of the books or documentaries on oxycontin sparking a more recent opium epidemic. As badly as the FDA failed, we'd be worse off if we didn't have one.
I feel like the problem we have is that we've utterly failed at informed consent.
You go to the doctor for a minor surgery and come home with a prescription for opioids. You take them even if you're not in any real discomfort, because your doctor prescribed them. Or maybe you could have done with half as much, but then there's a chance it wouldn't have been enough, and having the patient rely on their own judgment is discouraged. So now you're addicted to opioids.
Then we get a backlash where the people who are actually in severe pain can't get their medication because doctors used to over-prescribe it.
This entire system is asinine. The problem is not that people have access to opioids. Anybody can get them by going to a doctor and lying about their symptoms, therefore anybody should be able to just get them from the pharmacy. Stop rewarding mendacity. But the process of getting them from the pharmacy should require being informed of the risks so you can be responsible -- not being handed a bottle with a bunch of papers you're not going to read and then taking them whether you really need them or not.
We need to stop banning everything and start better informing people so they can make reasonable choices.
We disagree on how human nature works and the ability for normal people to become educated on every topic that can harm them. People trust their doctor and don't have the medical training to know if something is riskier than they're told. Addiction is dangerous precisely because it overrides someone's ability to change their mind later.
Purdue and our system of insurance created monetary incentives for doctors to overprescribe and misled them about the side effects. Normal people died even when they followed instructions because of the cycle of withdrawal symptoms.
History has repeated waves of addictive drugs because there's alway someone with an incentive to sell them. This is not a place where market outcomes work.
If the FDA didn't exist, how many more harmful drugs would there be? Would those harmful drugs that had approval retracted still be out there being prescribed?
Just because the FDA is not perfect does not mean that it's a net negative.
Easy to have the best of both worlds, though. FDA can continue to collect and publish data on safety and efficacy of medications which is incredibly useful and absolutely worth the tax money. But if you want to take something not approved, then they should have no right to tell you that you can't take the risk.
And if you get seriously sick from that we let you die by the wayside?
The first way to take advantage there is to outsource the cost of dangerous experiments to (sometimes) desperate people and then to society at large for picking up the pieces.
That's the hypothetical half of the equation. The tangible, measurable half is how many people the FDA has killed by denying access to life-saving treatments. A number of studies[0] have been conducted on this topic.
Right, of course. Any preventative treatment is difficult to justify, as it's a risk waylaid, whereas treating symptoms has a visible direct impact on problems faced today; nevermind that it costs 500x as much and has worse outcomes.
I agree, FDA has no place in a free market. In a free market, companies would be able to sell poison to their customers... BUT, if something happened to the customers, they (or their estate) would be able to seek damages through the justice system. The problem we have with regulations is that they deflect responsibility... Any company can say "Look, we adhered to all the regulations" and use that as the basis to avoid taking responsibility if it turns out that the regulations were not adequate. Then they can just play the victim and demand more regulations. If you remove the regulator and just let the company deal directly with the consumer and don't let the government interfere with the free market to promote specific producers over others, then it would work itself out. The company would know that they have no regulatory shield to hide behind and they'll be forced to consider long-term implications of their decisions or face severe consequences and backlash from consumers.
Private regulation can exist inside of a free market. Consumers and producers of food or financial products can voluntarily participate with private ratings agencies. These standards can be higher or lower, based upon market preferences. The existence of a state backed monopoly is widely recognized as prohibitive to competition. State monopolies create issues around corruption, gatekeeping and more. Too many to expand upon here.
If you don't like free markets, that's fine. There's no need to misconstrue the options. The anti-market sentiment is somewhat surprising to see here.
There are no free markets in human societies. You can pick your trade-offs, that's it. Privatly regulated markets can fail, goverment regulated markets can fail.
No, because this is always (ultimately) by consent of the societies it is happening in and within those power structures. It always sits on top of a lot of stuff, never in a vacuum.
There's an important distinction between observing the status quo and holding or aspiring towards ideals. If we only observed what is and ignored principles and ideals, we would never be able to improve the human condition.
Even so, I doubt we'll be able to see eye to eye given your starting premises about collectivism. I'd venture that the individual does own himself and that the liberal tradition starts from this point.
A consequentialist might venture that some of the darkest events in history flow from the collectivist ideologies. The opposing deontological view would be that the individual does own himself and private property does exist. We would struggle to define fraud and theft without these premises. Indeed, objecting to fraud and theft becomes problematic when you are simultaneously arguing that private property, individuals and free exchange are impossible.
I don't think we are that far apart. I don't disagree that there are certain ideals to aspire to.
However, practically, we find out time and time again that these ideals are not enough to sustain themselves and that in the defense of those ideals there are trade offs to be made that compromise them to some extent. Realising some idealised version would require different humans and I don't subscribe to ideas of realities that need those (in the same way that that speaks against idealist versions of collectivism).
The real debate is then what trade offs to make and there we might not agree but that is totally fine and part of the process.
It is similar to the argument against utopia. It is true that we probably will not achieve the anarchocapitalist ideal within our lifetime. Any steps towards a freer and more prosperous society are still laudable. Those incremental steps would most likely involve pragmatic compromises.
Asserting that free-markets don't exist, because they have never lived up to the utopian ideal is a stretch. More so in the context of the discussion. There are already private financial ratings agencies, auditors and more. If people don't like cryptocurrencies or Kraken, they can simply choose not to participate.
The human condition will always contain challenges. This is what gives us the opportunity to improve. When we speak of laissez-faire, the claim is not that it will bring about a utopia or that living within a perfect ideal is a possibility for imperfect humans. The claim is that moves towards the ideal will offer an incremental improvement. History has illustrated this well.
Ok, then we fundamentally disagree as I don't see anarchocapitalism as an ideal to strive towards. Not because I am a collectivist, but because philosophically I think it a far too narrow ideal for humans to aspire to.
In a similar vein, I don't think free markets exists because of how humans are, not because they don't live up to some utopia. We might move towards certain ideals, but there might be a limit how close we get and beyond that there is no net improvement.
Also, no, people cannot just not participate: if cryptocurrencies cause some wider issue then everyone will have to pick up the tab one way or another.
Why's it surprising to see anti-market sentiment when we've been given a very clear look at how the free market has operated in the crypto space sans government regulation? The whole ecosystem has been dominated by grifts, outright scams, rug pulls, ponzis, unregulated gambling, etc. etc. with no end in sight. Why didn't the free market step up?
It is surprising to see these sentiments on a site ostensibly for entrepreneurs and builders.
If you'd prefer a centrally planned and regulated economy, that is a different discussion. From my side, I believe you should enjoy your views and the living situation which accompanies it.
Not interested in arguing the virtues of either approach here. Taking exception with the inaccurate characterizations is as far as I go. If you believe an economy driven by central bank policy is a free-market, I'm not sure there's much more we can say here.
It did. People learned that there were a lot of scams and now the market for suckers is drying up. This is a typical pattern: Problem occurs, market responds to problem and results in improvement, government simultaneously responds to problem and has no effect or makes it worse, people point to improvement and credit new government regulations or lack of improvement and demand even more government regulations. Then we get stuck with a bunch of burdensome new rules because Something Had To Be Done.
Notice also that all of the stuff you're listing is fraudulent and already illegal. If regulations work then why didn't they work?
You're right. This is why we don't want a completely _free_ market, we want a _competitive_ market that has actors to prevent and punish fraud and abuse.
In the real world, we try to have government operate law enforcement. Doesn’t always work, but it works a lot better than outsourcing law enforcement on financial scams to retail investors.
The analogy isn't valid. If your startup fails because the people you hire steal from the company, you have legal recourse. If you lose money because you invest in companies that underperform, the SEC won't intervene. No markets operate with perfect information for all participants. That creates the opportunity for fraud, and governments regulate to prevent fraud. In principle this permits broader access to markets (whether this is actually true is a different subject).
You're assuming perfect information which does not exist in the real world.
Regulators are good actually.
Forcing companies to make truthful and accurate disclosures and forcing them to implement basic controls is important. It makes everyone better and protects investors and customers from unnecessary frauds and disruptions.
You're just acceptable collateral damage to someone who is ideologically opposed to regulations. At best, your legal recourse is to "sue" an entity that has already been dissolved and bankrupted.
Because people are not islands? If you live in a non-society then that is fine, otherwise financial schemes can pretty much bring down countries (see Albania).
Even in the US, AFAIK the reason these securities regulations exist is that companies did not disclose information before they were forced through. An efficient theoretical free market requires public information, the SEC exists to enforce that.
But at its best, government agencies are exactly that.
It's free people in a free market learning from their mistakes and saying "well THAT sucked! Let's not do THAT again!". But you know, more efficiently, as is the market's want - rather than re learning the same lesson over and over and over again, we write it down and codify it.
Of course, that's regulations at their best. Regulations at their worst are pretty awful too! But given your post was about the very existence of regulations and their related agencies, I thought I'd offer a perspective :).
Does it? Suppose you'd like to keep the fruits of your hard earned labor on an asset that isn't subjected to inflation at the hands of a capricious or warmongering country. And you'd rather not speculate on greedy capitalists. The SEC is effectively limiting your freedom to do so (whether or not that's a good personal choice)
In our society the concept of a "Free Market" is not one where participants are free to do entirely as they please without consequence. The use of the word Free in "Free Market" implies a freedom from restricted competition which definitionally requires a regulatory body to maintain a somewhat level playing field.
Again, in order to ensure this healthy competition in markets, regulation is required. This is why we attempt to inhibit monopolists, and why antitrust laws in general exist. Absolute freedom in the personal sense is expressly not a goal of modern free market economics.
You are free, subject to taxation of course, to hang onto your "hard earned labor" on your shitcoins but Kraken is not free to operate as a securities exchange unless it complies with the regulations in place so as to ensure an orderly and healthy market.
DeFi people are constantly finding out[0] why some centralization and oversight is a good idea.
I also don't think this will work for them in the context of the Ripple case they just lost - and decided to not appeal - as this will be referenced as part of Kraken's defense.
It'd be very different if the SEC maintained a list of even examples of tokens that are/aren't compliant and a straightforward registration process with active registrants.
The fact that neither of these exist but the SEC likes to pretend they do isn't working in their favour.
There is no such thing as a 'registered securities exchange' for cryptocurrency, so how can they be at fault (note its unregistered, not illegal is the allegation).
There are at least hundreds of thousands (probably millions) of securities that have been properly registered in the USA: stocks, corporate bonds, private offerings, and many other kinds of financing structures. It’s not that hard since obviously all kinds of issuers can figure it out.
The crypto people want to pretend their tokens are something completely different, so they’re not willing to use the existing process and instead cry out for SEC to come up with something just for them.
How do you propose Bitcoin, or Ethereum, or any other decentralized & peer-to-peer asset be registered as a security? Coinbase and Kraken argue that there is no clear path toward registering these assets within the current framework.
For an example, some of the stringent per-transaction KYC/AML reporting requirements in traditional financial systems are often incompatible with today’s mechanisms of distributed ledgers.
These cases aren’t about Bitcoin and Ethereum but the dozens of other coins that these exchanges have listed.
Coinbase actively cooperated with token founders and venture capitalists like A16Z to list various newly issued tokens so that the creators and VCs could sell them to retail investors. This arrangement sure makes them look like securities.
Personally I’m fine if Coinbase and Kraken trade Bitcoin and Ethereum. Being restricted to those would be devastating for their profits though.
I checked, and the complaint[1] lists specific tokens, including ADA (Cardano), NEAR, SOL (Solana), ALGO (Algorand), MATIC (Polygon) and others. I have purchased some of these in the past from Kraken to evaluate the technology on my own terms. It would be a shame if the SEC forces consumers to use less reputable exchanges to access these tokens all in the name of "consumer protection."
There appears to be no clear path forward for crypto exchanges to legally list new crypto tokens to the public. I suspect that is the goal of the SEC and administration; to limit what is available to the public, rather than define clear policies that would enable regulated trading. The only token actually tested is XRP, which was deemed to not be a securities offering[2], and is notably absent from this new filing.
> "There appears to be no clear path forward for crypto exchanges to legally list new crypto tokens to the public."
That's American securities law. The exchanges can always sell these tokens to accredited investors, but that's not the business they want to be in, I guess.
Of the tokens you mention, Solana was a major component of Sam Bankman-Fried's fraud empire. You dismiss the consumer protection aspect, but clearly it would have been better for consumers if SBF and FTX/Alameda didn't have access to American retail investors through this token.
What I'm trying to say is, it's probably very hard right now to change securities laws in a direction that would make it easier for Americans to buy the kinds of tokens that SBF manipulated. That just seems like political reality.
Trying to prohibit citizens from something potentially risky is a poor approach to safety — we've seen it play out with alcohol, drugs, abstinence, etc. Another approach is creating new frameworks to engage and interact with these topics in a safe and secure manner. The SEC and US administration is taking the former approach.
> some of the stringent per-transaction KYC/AML reporting requirements in traditional financial systems are often incompatible with today’s mechanisms of distributed ledgers
> The SEC’s complaint also alleges that Kraken’s business practices, deficient internal controls, and poor recordkeeping practices present a range of risks for its customers. As alleged in the complaint, Kraken commingles its customers’ money with its own, including paying operational expenses directly from accounts that hold customer cash. Kraken also allegedly commingles its customers’ crypto assets with its own, creating what its own auditor had identified as “a significant risk of loss” to its customers.
Basically, the rules for whether a retirement plan meets the qualifications for favorable tax treatment are highly complex, so a plan sponsor can ask the IRS to determine if the structure of the plan fits the rules by asking for a "Favorable Determination Letter". This seems to me highly analogous to what crypto exchanges wanted from the SEC.
Perhaps this is nitpicking too much but now I wonder on the point of obligation. Is this IRS function required per some law or other mandate?
Of course, it seems best that a regulating body is clear about their regulations. It seems weird that’s even in contention, to be honest. But I do wonder about an obligation to do so.
Law enforcement has no obligation to explain the laws to you.
One aspect of common-law, is that it is law that is equally applied to all. The logic is, if Bob did thing $x, and Sally did thing $x, both should expect a similar outcome.
This is because a person has a right to know how specific acts are interpreted by courts, for whatever legislation is being tried against. A person has a literal right in common-law, pre-dating most modern democracies, to know how a thing they do will be interpreted.
And this is why most descendants of common-law legal systems, such as the US, put such strong strictures on prior judgements. It's vital. It's missed by many, but this is how people know how the law will be interpreted.
And my point in all of this is, yes, 100%, under common-law, someone has to give you an idea of how your actions will be interpreted. It's core to common-law, and US law, is predicated upon common-law, criminal or civil.
"Ignorance of the law is no excuse", however, that does not remove the right to be informed of the law when asked!
(Let's not dive into the few places that have napoleonic civil code in the US, and stick to federal law at least)
At some point someone has to explain to you what law you broke and how you broke it. We'll see how this goes for the SEC. I'm not convinced they're going to end up on the winning side with these vague enforcement lawsuits substituting for policy/law from the legislative branch.
> At some point someone has to explain to you what law you broke and how you broke it
The link at the top of this page is 90 pages of the SEC telling Kraken what rules and regulations they have broken. It is certainly possible the court will disagree with the SEC, but I wouldnt bet on it.
>It is certainly possible the court will disagree with the SEC, but I wouldnt bet on it.
I would (not a lot, but I would). They lost on the Grayscale trust, they lost on XRP being a security (extremely relevant here), they're seemingly settling with Binance... the court has been disagreeing with the SEC a whole lot on the matter of blockchain regulation lately.
More to a judge or jury than to you exactly, but yeah they'll have to do that. I don't personally have a lot of doubt in their abilities to do so, but I'm very much not a lawyer. Just the legal system tends to be unsympathetic to hacker technicalities that us techies like.
Morally they do. Secret laws and secret courts are widely recognised as inimical to democracy; laws that are too complex for regular people to understand are too, for the same reasons.
What if your lawyers say one thing, but one of your possible regulators say something else? Or rather, doesn’t say anything, just allude?
It’s for the courts to decide then. That’s what they’re literally for.
You could argue that a more productive approach would be to come up with something at the lawmaker level. Even if it’s so restrictive that it drives most exchanges out, such as Canada has done.
Regulators are not required to consult businesses. That's what McKinsey, and Ernst & Young are for. In fact, I would like it very much that regulators would stay hostile to business as they are meant to. Not coddle with industry in events to have a chat and a coffee. Keeps the revolving door shut.
They did lose against Ripple. That’s one case law precedent right there for determining what is a security. There’s also a non-negligible chance that they are going to either lose or have a dismissed case against Coinbase. Given that this case is basically a copy-paste of that one, it’s a possible outcome.
There’s a reason why the lawmaking, executive, and judicial powers are separated in a democracy.
"Investigators tracked the money through many layers of bank accounts to Binance and another exchange, U.S.-based Kraken, police said. By the time Binance and Kraken provided account records, the police said the funds had been withdrawn or sent to a "mixer," a service which anonymises crypto transactions by breaking them up and mixing them with other funds. The personal information held by both exchanges on the accounts was often fake or stolen from victims, the officers said.
Kraken told Reuters it has "bank-grade" customer checks and robust tools to prevent fraud. Kraken disputed that customer information provided to Braunschweig police was fake, saying "every indicator we have suggests these accounts were used by legitimate clients.""
> The complaint against Kraken alleges no fraud, no market manipulation, no customer losses due to hacking or compromised security, and no breaches of fiduciary duty. It includes big dollar amounts but does not allege a single one of those dollars is missing or misused – no ponzi scheme, no failure to maintain adequate reserves, and no failure to preserve the identity of client funds 1:1. Indeed, none of these things would be true.
> Instead, the complaint makes a technical argument: that Kraken’s business requires special securities licenses to operate because the digital assets we support are really “investment contracts.” This is incorrect as a matter of law, false as a matter of fact, and disastrous as a matter of policy.
...
> The SEC already tried this theory and a court rejected it outright. The SEC argued in that case that digital assets bought and sold on trading platforms were really securities transactions. The Federal Court for the Southern District of New York disagreed, ruling that the SEC failed entirely to satisfy the relevant legal test. The court held that the SEC’s unprecedented legal theory was contrary to the “economic reality” of such transactions. The SEC’s case against Kraken will fail, too, and for the same reasons.
> The SEC alleges that Kraken “commingled” its own funds with its clients’. This is a similar allegation already made of other crypto trading platforms. The SEC cannot and does not allege that any customer funds are missing, or any loss has occurred. Nor does it allege that any loss will occur. The complaint itself concedes that this so-called “commingling” is no more than Kraken spending fees it has already earned.
> The SEC famously argues that digital asset trading platforms like Kraken can simply “come in and register” with the agency. As most securities law experts know, there is not a single law on the books supporting this position. The SEC has promulgated no rule describing how an order in a digital asset should be matched, no guidance on how a trade should be cleared, and articulated no standards for how to broker a digital asset transaction. The allegation is hollow; there is no such thing as an exchange, broker dealer, or clearing agency for investment contracts. The SEC is demanding compliance with a regime that doesn’t exist.
> Meanwhile, groups of lawmakers from both sides of the aisle have questioned what they call SEC’s “regulation via enforcement” approach. They have asked why the agency’s actions against crypto firms seem less focused on “compliance and customer protection,” but were instead “calculated for maximum publicity and political impact.” Others have observed that the SEC’s strategy “does not protect the public.” Indeed, this suit does nothing to protect the public. Like those in complaints that have come before, its allegations are factually incorrect, contrary to law, and the wrong way to create policy in the United States.
To me the SEC and Gary Gensler are going to get their arses handed to themselves once again.
> “calculated for maximum publicity and political impact.”
I'm not a fan of crypto currency, but a big part of my dislike for it is how difficult it is to actually use it. I don't mean technically though. I mean legally.
In Canada, all crypto transactions are considered taxable events. Did you sell a couch on Facebook Marketplace using Bitcoin? Time to calculate your capital gain or loss from a vaguely worded set of guidelines.
It's all political IMO. The real value in crypto is having a currency that isn't subjected to the whims of governments and the people that control monetary policy alongside the massive payment networks like Visa and MasterCard. Controlling the flow of money allows pseudo bans on things the people that control those systems don't like.
My hot take on the whole thing is that half the goal is to make it well known that all the remaining exchanges perform strict KYC and that crypto transactions are trivially easy to track while being extra complicated to report on your taxes (at least in Canada). Once that's done crypto currency doesn't have much value to anyone.
> In Canada, all crypto transactions are considered taxable events. Did you sell a couch on Facebook Marketplace using Bitcoin? Time to calculate your capital gain or loss from a vaguely worded set of guidelines.
Even if it were a real honest-to-god currency it would be the same though, right? That's how it works here in Japan at least - buy a couch in dollars, now you have to calculate capital gains against your average cost basis for dollars (which I guess includes every dollar you earned in your whole working life, if you lived in Canada before you moved here?)
No, transactions in national currencies are exempt if under a reasonable cap. So you don't have to separately declare every time you bought Starbucks overseas or whatever.
It sounds wonderful when the biggest worry you have about money is how to file your taxes. If that were true for most people on this planet bitcoin would probably not be needed.
> It's all political IMO. The real value in crypto is having a currency that isn't subjected to the whims of governments and the people that control monetary policy alongside the massive payment networks like Visa and MasterCard. Controlling the flow of money allows pseudo bans on things the people that control those systems don't like.
What a surprise that the government isn't about to make it convenient to evade its authority.
> Once that's done crypto currency doesn't have much value to anyone.
It already doesn't. The lofty early promises have long fallen flat and all that is left is a game of hot potato. It's not utility, it's just a lottery, which economically speaking is negative utility.
> The real value in crypto is having a currency that isn't subjected to the whims of governments and the people that control monetary policy alongside the massive payment networks like Visa and MasterCard. Controlling the flow of money allows pseudo bans on things the people that control those systems don't like.
Would you say the same is true of arms trafficking or contraband in general? Personally, I can't think of a reason why a society wouldn't want to control who and what goes into and out of its territory.
The SEC seems to bring about 2 or 3 crypto enforcement actions per month.[1]
They're still working down the ICO backlog. Mostly they've been going after issuers and out and out theft.
After FTX, political support for crypto deregulation dropped to near zero. FTX, remember, was lobbying for a bill that would allow all the things for which Kraken is now in trouble. That is going absolutely nowhere now.
Also, the SEC, CFTC, and Main Justice now have their act together on cooperating to deal with crypto scams. There used to be jurisdictional issues. Now, it's just treated as crime.
You're not wrong (and I upvoted you because your comment doesn't deserve to be so negative), but I don't think the previous regime was all that friendly toward crypto either...
Because the of political agenda of Elizabeth Warren and other Democrats who want to protect Wall Street establishment. Prior to this political agenda, the SEC did not care. Now is good time, because the SEC has the required political backing.
Well, Kraken was the conduit through which payments were going to be made. Japan is … fastidious … to the law. I think they wanted to deal with an actual entity.
Thank you. Luckily I didn't have it all in one place, but it's beyond frustrating that the government effectively took what would have been hundreds of thousands of dollars from me. I could really use that.
Uhh, what? I've always considered Kraken to be the most rules-abiding exchange - more so than Coinbase. They're quite shrewd in what they're willing to list.
Well, Gary Gensler is on record in 2023 saying Bitcoin is not a security. So, I don't think it's accurate to say "probably all." In previous years Ethereum had also been described as not a security, but that opinion seems to have shifted with time.
It's still not super clear to me why he says Bitcoin is not a security, but that Ethereum would be a security. I'm fine with whatever ruling as long as I can understand how it's being applied. I feel pretty good about considering stable coins securities. I'm less certain about NFTs since there is receipt of a (semi)tangible product.
I wonder if the recent introduction of ordinals to Bitcoin will result in his opinion on BTC shifting soon, too?
> Take that further to airline points and Chipotle points.
No-one is holding those with an "expectation of profit". Whereas essentially the only use of "stablecoins" is as investment schemes; even if someone isn't expecting the value of their stablecoin to rise against USD, they're expecting it to rise against something.
In general I'm on the "many crypto tokens are securities" side here. However this isn't right:
> Whereas essentially the only use of "stablecoins" is as investment schemes; even if someone isn't expecting the value of their stablecoin to rise against USD, they're expecting it to rise against something.
Stablecoins are very frequently used as transfer tokens for remittances, wages and ecommerce. We pay overseas staff in USDC for example (it's quicker and easier than bank transfers).
Stablecoins are supposed to be stable, and not rise or fall. There is no expectation of profit for a stablecoin like USDC. And USDC doesn't pay interest. People use it for stability and for payments.
It is not the code of the USDC stablecoin paying 5%, so that reward is something else. Maybe the exchange wants to get many people sending coin to them so their asset base looks big for ... some purpose?
Also Ethereum switched to proof of stake. Which means that the "stakeholders" (shareholders) are voting what transactions go into the ledger. Bitcoin is proof of work still.
With proof of stake, a staker eventually gets an opportunity to follow the validation rules and put some transactions in a block. If they don't properly follow the rules, they will get slashed. If they don't submit a block when it is their turn, they will get gently slashed.
In proof of work it is a free-for-all with whoever has the most hashing power winning block submission more frequently. If they submit a block that doesn't follow the validation rules they keep all of their (physical silicon) hashing power and the block is ignored.
A majority of bitcoin miners can also prevent transactions from entering the ledger at cost to themselves, just like Ethereum stakers. It's a misconception that Ethereum works via stakers voting the way people normally think of voting.
Gensler also said in 2018 that 3/4 of all cryptocurrencies were NOT securities. He likes to continuously expand his power by insisting everything is a security and falls under his jurisdiction.
Bottom line is that the founder/owner of Ethereum has said very clearly that investing in ETH is investing in the Ethereum team. Bitcoin Cash has no such "team" you invest in when buying BCH. I think thats the difference.
Well, I had started the conversation about BTC not BCH. Personally, I feel that BCH has more of a team associated with it than BTC.
That said, none of what we're talking about addresses the fact that, in 2018, Gensler said, quote, "Bitcoin. Ether. Litecoin. Bitcoin Cash. Why did I name those four? They’re not securities."
Since then, things have changed, and now Gensler only highlights BTC as not a security.
If the inflection point was various teams speaking publicly about their usage of funds, and those talking points shifted Gensler's opinion, then OK, but I am not aware of an official moment when his sentiment shifted. As another commenter highlights, it could also be the transition to POS for Ethereum, but, again, I am not aware of Gensler highlighting the transition as the inflection point and this rationale fails to explain LTC and BCH.
To me, it feels like chasing opinion and public sentiment - not following rigid, established legal patterns.
> To me, it feels like chasing opinion and public sentiment - not following rigid, established legal patterns.
The sentiment is an integral part of the established legal pattern - the Howey test is about "expectation of profit".
Even if based purely on vibes, I think the man on the Clapham omnibus might well say: someone buying Bitcoin today, or Ethereum in 2018, is not expecting to profit from the efforts of their respective dev team, whereas someone buying Ethereum today is expecting to profit from the efforts of their dev team. (I mean, I didn't even know Bitcoin still had a dev team - isn't it basically "finished" at this point, and has been for years?)
At this point Ethereum doesn't really have "a dev team." There are about ten independent client teams, who have public meetings to come to agreement on upgrades, plus an open research community.
When you say that an ETH buyer is "expecting to profit from the efforts of the dev team" which wasn't the case in 2018, are you talking about proof of stake? Because it's not all that different from proof of work. You run a client, process transactions, and get rewarded for doing that. Instead of buying a server rack you stake some ETH, but what you get rewarded for is running the protocol.
You don't get rewarded for just holding ETH. Unless the value of ETH goes up, but that's the same with Bitcoin and with Ethereum in 2018.
The Howey test, incidentally, is also about an investment contract. That's why an equity is a security, but a bar of gold is not, even if you bought the gold as an investment. Lack of contract is why the SEC lost their case against Ripple recently.
> When you say that an ETH buyer is "expecting to profit from the efforts of the dev team" which wasn't the case in 2018, are you talking about proof of stake?
Not proof of stake qua proof of stake, but the fact that substantial changes to ethereum (like proof of stake) - things that change the usability of the network, and so could be reasonably expected to change the value of ethereum tokens - are still being worked on.
> The Howey test, incidentally, is also about an investment contract.
No, it's the definition of an investment contract. If it included whether something was an investment contract that would be circular.
> That's why an equity is a security, but a bar of gold is not, even if you bought the gold as an investment.
No, the reason gold isn't a security is there's no common enterprise and, more importantly, no efforts of others. You might buy it as an investment, but the investment isn't because you think the gold devs are going to add new features that make gold more useful.
> Lack of contract is why the SEC lost their case against Ripple recently.
Whatever you think about Ripple or cryptocurrency in general, that ruling was just utterly bizarre. You can make reasonable arguments for why these things aren't securities (even if I don't agree with you) but that judgement wasn't it. It's not a precedent for anything, it's just crazy.
Isn't BTC controlled by one single very centralized group, Blockstream? I could be wrong but I thought Adam Back's Blockstream long ago hijacked the GitHub repo and took full control of that project.
Bitcoin along with most cryptocurrencies (broadly priced in it), is controlled by a small cartel of deeply entrenched miners and large wallet stakeholders who were involved early on and have constantly consolidated their positions both over infrastructural custody, that is, mining, and control of liquidity.
There's a staggering amount of illegal mining that is never accounted for in the economic models used to determine how much control these folks have over liquidity; this entire conversation is just broadly discouraged and for whatever reason seems to have attracted very little interest even from the crypto critics out there.
The number one weapon the crypto cartel uses to shut down dangwrous critical turns developing in the story, is their ability to move the last trade price almost at will, completely opposed to any building critical narrative in order to undermine it, knowing full well that the sympathy of the media reliably lies with "number go up", not "number made up." And they can do this because they're sitting on an enormous warchest of unsold coins mined when prices were far cheaper, which they can use to fund their operations while they throttle back current coinbase sales at current prices to prop up the price.
> crypto cartel [...] ability to move the last trade price almost at will
I think there is lots of manipulation, but could you elaborate on how you can, for example, pump the BTC price up when you hold lots of BTC, but no USD? Leveraged futures on crypto-only exchanges?
Miners are the only source of continuous downward pressure on the price, there are other sources of course but miners are nearly clockwork steady sellers, so the market gets accustomed to this effect. all they have to do is let up a tiny bit. the standard narrative is that they can't afford to do so because of the balance between diff rate adjusted mining costs and market price of the mined coin. What I'm pointing out is that because of the massive amount of head start they had from a decade of largely unpoliced mining wherever they found an "opportunity" to do so, legally or not, (as well as continued theft of resources to mine even today), they have plenty of extra reserves to use to cover costs, (assuming that they even pay market cost in the first place - see also: corruption) selling coins at today is prices which were mined at one, two, three+ years old cost rates or less.
This is not even getting into the circus known as tether, which I believe is a significant factor but actually quite a bit of an over-stated red herring serving (along with constant exchange clownery) as a distraction away from the much bigger influence that is the enormous subjective control miners have over the order book price of the coin.
100 million baht in 2 years? So about $1.5m USD in a year.
That's not exactly "staggering" or significant in the context of the Bitcoin network. Unlikely that such operations have any meaningful control over the network or liquidity, even if it's just 1% of what's known.
You seem to think that these sorts of operations are somehow connected in a large coordinated cartel the controls the industry, but given that they're illegal, isn't it far more likely that these "black market" operators are fairly small by comparison to the legitimate players in the US?
The mining ban in China a couple of years back gave us a pretty good indication of the size of the legitimate industry in that country, and it absolutely DWARFS the biggest of the illegal examples you gave.
Interesting way to word it too, "illegal mining". They're just stealing electricity. If they used that stolen electricity for heating, you wouldn't call it "illegal heating", would you?
So you read the article, as well as the quote that I put above and therefore you know that this is estimated to be only 1% of the illegal mining done in _Thailand_ alone, and this in just the past couple of years when visibility of cryptocurrency has been well established even in non-tech circles.
It's been happening ever since crypto mining, especially Bitcoin, existed. Long before most anyone knew what mining was, or knew to look for it being done stealrhily on someone elses's dollar ...or baht. I didn't say I condone stealing electricity for any purpose, but there's a particular hypocrisy with crypto people who claim that mining costs chase the hash rate and difficulty adjustments ensure that everyone has a fair shot at winning a coin base. Obvious nonsense.
It's hypocrisy that crypto people, who like to think of themselves as some sort of sophisticated financial visiinary class, are so hopelessly naive that it would never even occur to them to consider that being rationally self interested will inevitably and swiftly devolve into outright theft, and the obfuscated consolidation of power favors the venal corrupt and those who are willing to benefit from wholesale theft, which is why such people are entrenched at the center of this so-called decentralized system.
this logic would apply to literally every facet of human existence if it were true; your argument has devolved into "people would make more money if they were engaged in criminality and didn't get caught, therefore everyone eventually devolves into a criminal."
the papers studying the amount of black market activity in Bitcoin have consistently shown Bitcoin to be cleaner than the economies in virtually every country on the planet, except for the occasional ultra-clean tiny european state.
literally every bitcoiner since the first roll-out of the Silk Road and the resulting senatorial attacks on them, have been ultra-interested in exactly how much of their hobby is black market and how much is criminality. literally every single one of them is heavily invested in knowing more about the nature and extent of bitcoin criminality. to say that it didn't occur to them that self-interested criminals are operating in BitcoinLand is .. stupid.
It very may well be. I don't own any BTC and I had limited awareness of Blockstream until you mentioned it. I feel that this would make a stronger case for it being considered a security, though, no? And yet on September 27th 2023 Gensler reiterates Bitcoin is not a security:
No one controls Bitcoin, because it's a protocol. Bitcoin Core is the reference implementation, but there are others, and anyone can create new implementations if they wish. Also, the Bitcoin Core maintainers can't just change something on a whim, because users would then switch to another fork. Maintainers (or miners or other groups) can't force their changes on users, because everyone can decide on their own which version of the software they want to use.
BIPs are discussed for years, before (and if) they are implemented, and basically everyone needs to agree on them, because no one wants to fork the blockchain, which could be devastating.
This is completely false, what's your source? Also, it has never been the case. I recall that at some point around 2015, about 4/9 persons with commit access to the github repository (please note that this is a far fetched attempt to find out a metric for "controlled") were co-founders or employees at Blockstream, but right now I am not sure there are more than four or five, out of ~30.
Seems to me that one can make an argument that the following people, named in bitcoin/src/kernel/chainparams.cpp, control BTC:
vSeeds.emplace_back("seed.bitcoin.sipa.be."); // Pieter Wuille, only supports x1, x5, x9, and xd
vSeeds.emplace_back("dnsseed.bluematt.me."); // Matt Corallo, only supports x9
vSeeds.emplace_back("dnsseed.bitcoin.dashjr.org."); // Luke Dashjr
vSeeds.emplace_back("seed.bitcoinstats.com."); // Christian Decker, supports x1 - xf
vSeeds.emplace_back("seed.bitcoin.jonasschnelli.ch."); // Jonas Schnelli, only supports x1, x5, x9, and xd
vSeeds.emplace_back("seed.btc.petertodd.org."); // Peter Todd, only supports x1, x5, x9, and xd
vSeeds.emplace_back("seed.bitcoin.sprovoost.nl."); // Sjors Provoost
vSeeds.emplace_back("dnsseed.emzy.de."); // Stephan Oeste
vSeeds.emplace_back("seed.bitcoin.wiz.biz."); // Jason Maurice
Those are the seed nodes for finding peers in the network when you're starting Bitcoin for the first time, and there aren't other known peers. Sure, you could ask around for additional peers through other channels.
Btw, I couldn't find these on the newest version, so I'm not sure how they do it now.
The SEC’s first strategy was to go after the companies creating the crypto. Most that are targeted settled and exchanges delisted those crypto assets that were ruled to be securities - registered or not - then the SEC went after well funded, more professional and less risk averse ones and have been losing in court.
So this is a war of attrition so the SEC then just went with blanket statements and goes after the exchanges, without telling them which ones are securities. The SEC also has not been winning at this second strategy.
All anybody has been asking is for the SEC to tell them the difference between the assets. How can a crypto asset be issued compliantly as only a product, and when does it transition into not being a security if so?
The SEC has fumbled over its words as if trained on 10 years of HN crypto comments, and the courts say its arbitrary and capracious.
You hit the nail on the head here. A judge or jury is unlikely to side with the SEC because the kraken will undoubtedly mention the dozens of letters they sent to the SEC basically saying they want to be in full legal compliance and will remove any securities from their exchange.
The SEC will argue they just enforce the law and aren't required to tell them how to comply. Buuut they are professionally obligated to tell them, especially when the law is so ambiguous. It's obvious the SEC is being a bully, so the judiciary and public will hopefully side with Kraken.
It’s because laws set out what are securities. A distributed ledger of cryptographic tokens is by definition not a security.
So the SEC just claiming they are isn’t going to win any court. Their goal is really to drain funds and get companies to settle. Because the SEC isn’t supposed to determine what is a security
the security law regulates transactions, that is sufficiently enough to cover cryptographic tokens and the ways they are settled, and thats not where the SEC loses
they lose because they cant articulate when they are securities and when they're not securities
their theory does play into a trap you pointed out, in that there are plenty of non crypto products that function the same way - limited supply runs sold by corporate issuer where a ton of speculator collectors hope the price goes up based on the actions of the issuer - that the SEC never bothered with. Either they're all securities or none of them are. The SEC has been asked to explain the difference and fails. People on this forum played devils advocate on a supposed legal difference just because they dont like crypto, but their arbiter - the SEC - fails to find those points strong enough to argue its position at all! the courts and the senate are like “wait, you don’t have an argument at all? good lord”
but like an abusive spouse it just keeps circling over the same word salad of “you’re supposed to know what I want, its been sufficiently clear the entire time” instead of articulating themselves using their words, to the shock of the couples counselor who already had a bias towards the spouse but can’t come up with anything to help their ridiculous case
You can read the act yourself, a cryptocurrency (depending on the type) is not a security by the definition provided. Nor does the cryptographic token have an issuer. Quite literally, most crypto has none of what’s defined under the SEC scope.
That said, sure _some_ of the crypto tokens would could count as securities. But even then it’s not clear the exchanges should be the ones being targeted.
> The term ‘‘security’’ means any [...] transferable share
Funny, that describes virtually every cryptocurrency token I'm aware of.
But for all practical purposes, you shouldn't be looking at the definition in the law itself, you should be looking at the case law behind it, where of course the ruling test is the Howey test... "an investment of money in a common enterprise with a reasonable expectation of profit derived from the efforts of others."
How is it a "transferable share"? When I buy a crypto token what do I own a share of? And you can't say "a share of the total supply of tokens" because by that definition anything is a security, e.g. a gold coin would be a share of the total supply of gold coins. And it has been clearly decided by the courts that such things are not securities. Even things that are much more "security" like, e.g. a piece of a syndicated bank loan, are not considered securities.
Your interpretation is far removed from reality but I appreciate the enthusiasm
the act regulates the nature of a specific transaction and therefore does not need a description of the asset itself. It never needed to imagine crypto, or fungible orange groves as the howey test was about, or anything.
Presumably Coinbase and Kraken had to register as banks to offer FDIC-insured accounts (and debit cards)?
Non-Security Deposits are interest-bearing products that are not securities.
Non-Security Deposits: CD Certificates of Deposit, MMA Money Market Accounts, Treasury Bills, Savings accounts, Checking Accounts
Do banks require SEC registration to offer interest-bearing Non-Security Deposit products?
Have banks ever been required to qualify interest-bearing products as securities contracts, after qualifying each product for list in each US State of operation?
> The Federal Deposit Insurance Corporation (FDIC) is a United States government corporation supplying deposit insurance to depositors in American commercial banks and savings banks.
> Any broker-dealer that is a member of a national securities exchange or Financial Industry Regulatory Authority (FINRA) and handles orders must report to CAT. Eligible securities include NMS stocks, listed options, and over-the-counter (OTC) equity securities.
Whether USD deposits have FDIC protection (250K (x2 *) or the balance of the account, whichever is lower; since the Great Recession [1] (before that it was 100K per account))
In 1999, GLBA [2] changed the 1933 Glass-Steagall rule [3] that had prevented banks from investing Savings deposits in order to ensure that they would have enough to prevent another run. (As depicted in "It's a Wonderful Life" (1946); Clarence the angel or Mr. Potter's Potterville)
I'm not sure that it's anywhere explicitly stated that the banks' socialist FDIC corporation justified allowing investing of savings deposits. They created a large shared prepaid credit line for themselves in order to operate safely.
Banks invest in non-securities; without any agreement for future performance.
Banks invest in treasuries, which are tokenizable non-security deposits.
(Some time later, the dotcom boom busted and the US went to war/oil/defense instead of clean energy (like the solar panels that were on the roof until 1980 (due to the oil crisis CPI hostage situation, when it became necessary to defensively meddle in the ME with blowback left for Obama to handle, and not pay for)))
> How is client cash stored at Coinbase? The vast majority of Coinbase client cash is stored in FDIC-insured bank accounts and U.S. government money market funds to keep it safe and liquid. Like all assets on Coinbase, we hold client cash 1:1 and your assets are your assets.
> Are balances stored on Kraken insured? Cryptocurrency exchanges do not qualify for deposit insurance programs because exchanges are not savings institutions. Exchanges are not even meant to be cryptocurrency wallets.
There is yet no FDIC protection for any stablecoin, and yet no CBDC (just FedNow), but US banks are specifically allowed to provide crypto custody services.
I'm guessing there was some moving of the goal posts at play here, by the feds, because the SEC does a huge background check on the operations of your company before you're allowed to be publicly traded, and if they didn't find anything there, I have a hard time believing they were breaking rules as the rules were written at the time.
This does not seem to me to be strictly true, at least operating in the space of payments industries. They go very deep into technical details as far as justifying a company's value. Such that in an open source company that I work for, we had to provide metrics as deep as like popularity and contributor-base growth in the open source ecosystem over time. That does not seem like an accounting review, that seems more background. I have a hard time believing that the SEC would not find a detail like whether or not the exchange was even legally operating in the findings of a review of the company's background.
Of course, this was my first time aiding in the effort for taking a company public, so I'm not exactly a well seasoned veteran and there is a lot that I do not know. But based on what we had to provide to the SEC, I do not believe that it is strictly true that the road to publicly traded is only gated by an accounting review.
Securities law is about disclosure. Registering is about filing disclosures.
This is all about disclosure, nothing at all with business function.
I'm sure there's some math behind calculating certain values for disclosure, super important. The importance of this is because the numbers have to reflect reality for the purposes of proper disclosure.
Disclosure.
If your business is to rob trains, not the SEC's business. So long as you disclose your finances you can sell shares of your train robbing business. The criminal conspiracy charges you'll face will have nothing to do with the SEC and everything to do with your state government or the FBI if you messed with interstate commerce.
Sure. They don't review background. They don't go looking around for crimes. But if you straight up tell them "hey SEC, I'm breaking the law" you expect me to believe that they will actually just ignore it and approve? And that's exactly what Coinbase did in it's S-1, if you believe the theory that the SEC has always considered Coinbase to be an illegal operation.
Like do you really believe that if you filed an S-1 with the SEC that said "we raise money from investors and use the proceeds to pay distributions to previous investors" that the SEC would say "sure, whatever, go ahead and IPO your ponzi scheme. We don't review background." Because I sure don't.
i saw that on HN several times, like it would be some excuse
but in my opinion that's just plain stupid, it's like inviting you to my home they I can not stop you from stealing something, because that's not my thing to enforce
> The SEC alleges that Kraken intertwines the traditional services of an exchange, broker, dealer, and clearing agency without having registered any of those functions with the Commission as required by law.
> As alleged in the complaint, Kraken commingles its customers’ money with its own, including paying operational expenses directly from accounts that hold customer cash.
What's interesting this time around is Kraken has fully bought into audits and cryptographic proof of reserves (complete with sample Python code to verify your account balance is included in the proof tree).
If there's any crypto company out there that "gets it" and is doing things right, it's them. The SEC is going after the big one this time. I can't wait to see how it shakes out.
> The SEC alleges that Kraken “commingled” its own funds with its clients’. This is a similar allegation already made of other crypto trading platforms. The SEC cannot and does not allege that any customer funds are missing, or any loss has occurred. Nor does it allege that any loss will occur. *The complaint itself concedes that this so-called “commingling” is no more than Kraken spending fees it has already earned.*
If customers are aware of it, maybe not. But if they're representing to customers that these are their funds, expressly or implicitly claiming that they're held separately, then that would be inherently problematic - it means those customers are a lot worse off if Kraken goes bankrupt, because if Kraken has been paying operational expenses out of those accounts then their suppliers etc. can go after those accounts. (And no, the regulators won't treat it as a "no harm no foul" just because Kraken didn't in fact go bankrupt - they were exposing their customers to risk even if that risk didn't come to pass)
Every regulation comes from some past scam. Clearly there must have been enough "oopsies" in the past attributed to commingled assets that regulators said "no more".
I could borrow $10 from Jim, and $20 from Sue, and deposit them both into the same Chase account which now has $30. As long as the balance stays above $30, everything is fine.
You could let the balance fall below $30 in your example because it’s a loan (“borrow”), not a deposit.
If you’re claiming to hold the funds on their behalf and do otherwise (like “investing” them in your less than arm’s length hedge fund), then you’re breaking your fiduciary obligations.
The main issue I see now is that the SEC should charge himself for not bringing clarity in the space beyond all the scams and frauds.
It is ironic that now when you try to use some of the crypto services it asks you if you are in Iran, North Korea, US, etc... I don't think all they were in the same list before.
(I realize kraken is not a publicly traded company, but...) I want a reverse ETF of companies that sponsor Formula 1 teams, as they seem to attract lots of bottom feeders.
So much hubbub for something completely worthless going to zero anytime and has no use for anyone but criminals. Why does the SEC even care about something so inconsequential.
There is literally people in this thread discussing how their legitimate businesses pay international employees in stable coins because it would be too difficult or costly to use traditional methods. I’m all for crypto criticism, but this blind adherence to anti-crypto tribalism is embarrassing.
Disingenuous comparisons such as this are to be expected when talking about cryptocurrency/blockchain, I suppose. People commit fraud with money, people commit fraud with cryptocurrency. New avenues for a historical misuse of money, without necessitating the misuse portion to be a player, of course that justifies equivocating an exchange with a drug cartel.
Beyond that.. it is very clear that operating a drug cartel is strictly illegal. Operating a cryptocurrency exchange in 2023, it is not completely clear what the requirements are for it to be considered legal or otherwise.
In other words, it would be nice to have a discussion about cryptocurrency that wasn't filled with inflammatory bias.
These are the same guys that encourage their employees to own guns and not tell anyone they work for them. I kind of expected their response to be "over my dead body" than anything reasonable.
Kraken has recruited a significant number of Rust developers, or at least individuals keen on learning Rust, over the past few years. This presents a good opportunity for other companies that adhere to legal standards to consider hiring these developers.
In 2020, I received an interview invitation from Kraken and subsequently received invitations five times in 2022. The engineering managers I conversed with took pride in having one of the largest Rust development teams in the tech industry, in addition to a substantial number of Go developers. Due to my professional experience with both languages, they expressed considerable interest in bringing me on board. However, I faced rejection twice after accepting two of their invitations in 2022. The first time was due to my preference for utilizing basic yet stable features in Rust, as opposed to the alpha features anticipated by their interviewers. The second rejection occurred because I did not exhibit sufficient interest in their crypto business. While this aligns with their business focus, it seemed like a convenient excuse, given that I had consistently communicated my limited interest in the product, and both the technology and hiring manager appeared to be accepting of that fact.
I mean, I don't necessarily align with Apple's mission, but I still got the job there.
> This presents a good opportunity for other companies that adhere to legal standards to consider hiring these developers.
Kraken is my favorite exchange. They appear to put a lot of effort into abiding by local regulations in all countries they operate.
> I had consistently communicated my limited interest in the product, and both the technology and hiring manager appeared to be accepting of that fact
This sentence is so weird for me. Why would you want to work for a company if you seemingly don’t care about their product. And conversely, why would anyone ever hire someone for a role if the person looking to get hired doesn’t care about the product?
> This sentence is so weird for me. Why would you want to work for a company if you seemingly don’t care about their product.
For money, of course. A company’s mission doesn’t pay for my groceries or rent.
A substantial compensation package serves as a strong incentive to perform well.
> And conversely, why would anyone ever hire someone for a role if the person looking to get hired doesn’t care about the product?
That is a good question for the companies that hired me during the last decade to lead some of their projects.
I can only speculate that if a company observes a person with a proven track record of successfully leading and delivering products that significantly contribute to revenue, they would prioritize hiring that individual, even if they lack enthusiasm for the product. Of course, it’s ideal to hire someone with both experience and genuine interest, but in my experience, such individuals are the exception rather than the rule.
If companies exclusively hired people passionate about their products, they might struggle to find suitable candidates.
Please take this as constructive criticism: telling an interviewer you’re not interested in the product and you only care about collecting a paycheck comes across as arrogant and is a huge red flag. Ultimately, people hire people they want to work with. You might be in the top 0.1% rust programmers, and I would still not hire you because of that attitude.
“I don’t care about the product” isn’t the same as “i only care about money here.”
I couldn’t really feel any personal excitement about the product i worked on for my first 4 years out of college. It is kind of difficult to feel personal excitement about a product whose customers are all just enterprises of various sizes, and the product was for managing their internal docs/storage/admin stuff/etc. with tons of legacy stuff on top.
However, I deeply cared about the quality of the work I produced for it, about what customers said and feedback they provided (and I acted on it), and the architecture of the product/health of the codebase.
Of course, you shouldn’t tell the interviewer that you don’t care about the product. That’s just weird and feels borderline antisocial. How can you even claim you don’t care about the product, unless you closely worked with it and know enough about it to feel excited.
I think it is pretty common in general to not be super into something unless you are exposed enough to it. I can definitely say it holds true for me for music, for example. Some of my most favorite current artists were initially not even something i was into even slightly, upon the first few listens.
Thank you for your feedback; I value constructive criticism.
I understand the importance of aligning with the vision of a product, service, or company when working with a team.
I genuinely try to do the best job I can with my skills despite lacking genuine interest in the products I have touched. I acknowledge the significance of shared enthusiasm for a product, but I wonder if there could be merit in having individuals with differing perspectives, even if they don’t personally resonate with the product. It could provide valuable contrast and potentially lead to innovative solutions.
Most of my jobs have been deeply uninteresting at a product level. Not even the designers or product people -really- care. I suspect working on interesting projects is the exception, not the rule.
I think there’s a wide range here: we’re talking about banking so I think a position that it’s not otherwise exciting or that you’re excited by the technology and scale is not going to be seen as “your product sucks” and shouldn’t count against you. Now, it might mean you shouldn’t be doing UX for it but there’s a ton of work where you just need to work well with the people designing the user side & understand how people use it, not be leading the concept.
The only registered cryptocurrency exchange is Prometheus, and it doesn’t have any trading activity. There haven’t been any rules published by the sec regarding cryptocurrencies or crypto exchanges. Since cryptocurrencies aren’t investment contracts, it’s not possible to comply.
