David Dayen reports today on a letter from the "Blockchain Eight" suggesting the SEC should back off any investigation of crypto trading exchanges:
The March letter from eight House members—four Democrats and four Republicans—questioned the SEC’s authority to make informal inquiries to crypto and blockchain companies, and intimated that the requests violated federal law.
Rep. Tom Emmer (R-MN), whom the Republican caucus just elected as majority whip, the number three position in the House GOP leadership, led the letter. In a contemporaneous Twitter thread, Emmer wrote: “My office has received numerous tips from crypto and blockchain firms that SEC Chair @GaryGensler’s information reporting ‘requests’ to the crypto community are overburdensome, don’t feel particularly … voluntary … and are stifling innovation.”
....The SEC also asked FTX about a rewards program that gave depositors interest on their crypto assets, which could make them a security. SEC chair Gary Gensler has been adamant that crypto platforms are trading and minting securities, and that these securities needed to be registered with the agency.
FFS. If it walks like a security and it quacks like a security, it should be regulated like a security. Ditto for banks. And insurance companies.
When are we going to learn this?
It's not as if tens of thousands of naive people are losing their savings overnight . . . never mind.
My cousin could truly receive money in their spare time on their laptop. their best friend had been doing this 4 only about 12 months and by now cleared the debt. in their mini mansion and bought a great Car.
That is what we do.. https://earningblue.blogspot.com/
"When are we going to learn this?"
When the crypto campaign contributions dry up?
"When are we going to learn this?"
On the twelfth, of course.
If you don't know when that is, ref. "Chances Are."
I recently wrote a short article about a group that uses custom crypto as an investment vehicle for buying new-make bourbon, which appreciates as it ages at a very predictable rate. It is nothing but an unregistered security, but it gets them around the qualified investor regs and allows them to sell "tokens" -- which are basically shares -- to anyone with a couple of bucks. It sidesteps tons of regulations and opens the door for all kinds of schemes. If there's not some regulation soon expect to hear about all kinds of crypto collapses that turn out to be nothing but pump-and-dump stock swindles targeting small, unsophisticated investors.
Geez, Mr Ponzi himself could have had 12 Congress Creeps in his pocket I guess.
If idiots want to "invest" a significant amount of their net worth in this stuff, I don't think I care anymore. My mom mentioned that the SEC was maybe to blame for lack of oversite of crypto, so I assume that Faux News must be on some new "blame the current administration for everything" ranting, just in time for the holidays.
Larry David, Brady, and Shaq are being sued for their involvement in FTX. Don't know if they have any liability, but they all have an enormous net worth as a tempting target for litigation. Maybe FTX will be the theme of the next season of "Curb Your Enthusiasm", but perhaps not.
No, Kevin, you don’t get it. This time its TOTALLY DIFFERENT because its secured with next generation distributed validation technology and proof-of-work algorithms and multi-level blockchain encryption and…
Did I confuse you yet? Now let me steal people’s money please
By George, I think he's got it!
"and are stifling innovation"
Should read "and are complicating our schemes to funnel other people's money into our pockets without their consent."
And this slightly off topic note to the FCC: Regarding internet service providers If it walks like a public utility, and quacks like a public utility, it's a freaking public utility, and should be regulated as such.
Many of the people I see arguing against regulation just want crypto to burn to the ground anyway. That might be fine if the only ones getting hurt were fat cats, but the people getting hurt worst are the ones who can least afford it. Maybe they're suckers, maybe they're in bad straits to begin with, but it's folly to think it's just their tough luck. Especially with the growth of crypto to become a "legitimate" asset for diversified portfolios, even in retirement accounts. Fifteen years ago people thought the mortgage crisis would be limited to subprime borrowers. Didn't turn out that way.
Crypto does not pose as big a threat to the system today, but it could in a few years. Mortgages at least provide some societal good. Crypto's only proven use cases are money laundering and tax evasion. Hard to see crypto dying completely, but we should regulate the hell out of it and drive the frauds out of the business, if nothing else. Otherwise, the bill to pay will be bigger later.
Agree entirely.
I don't see that we need to regulate crypto other than having sellers attach a warning label that let's consumers know they are buying something with no actual value. Do that and forbid any bank, insurance company, retirement fund, or blended mutual fund from owning cyrpto anything as an 'asset' and most of the problem is solved. These people aren't selling a security anymore than a casino is selling a security when you buy a stack of chips.
What’s crypto? Does it have any tangible assets? What’s the reason goes up in value? (Hint: starts with Ponzi). What happens when it goes down? Who loses money? Crypto should not be regulated, it should be made illegal. At a minimum no court of law shall enforce any contract that includes crypto- it is not legal tender thus any contract is unenforceable.
Turns out crypto was just the friends we made along the way, raoul
Apropos of nothing, I'm hoping that the Wednesday before a long, LONG holiday weekend counts as a "Cat Blogging" day.
Apparently not. But perhaps the Friday DURING a long holiday weekend?
I want a bonus cat blogging day!
Crypto Cat strikes again!!!
At least with the rampant sports betting, there's a chance that some small bettor somewhere might win a few bucks.
Bah - Crypto should die by its bizarro world American libertarian ideology.
It should not be regulated but rather allowed to wither and die. (other than perhaps regulated in its marketing)
Don't save it from itself.
Because it is useful for laundering money, it is not going to die on its own.
Learning is going on. In the crisis of 2008 big bankers and those in the shadow banking industry (if they were different) learned that the Fed and Treasury will step in to bail them out if they get in trouble, and they will suffer no personal consequences. There seems to be no huge systemic threat from crypto that would require another bailout, unless you can buy it with borrowed money (?), but the systemic danger was not evident before 2008 either.
You can definitely buy crypto with borrowed money. Some exchanges allow buying it directly with a credit card. And nothing stops you from indirectly buying it with a credit card, a HELOC, or really any source of borrowed cash: you simply take out advances on your credit card, line of credit, whatever… and then buy crypto with those funds as soon as they clear processing into your checking or savings.
https://www.cnbc.com/amp/2022/08/02/buying-crypto-with-credit-cards-what-to-know.html
Fed raised rates, cypto tumbles. Chips are available for other things.
Crypto is a....hmmmm....yeah....
Blockchain might be useful.
Blockchain has value. Cryptocurrency is a waste of resources.
Having said that, I'd like to see a chart comparing the scale of transactions between those used for investments and those used for payments. I continue to believe that the volatility negates its use as currency, making it ultimately a security in the form of a commodity.
“It's difficult to get a man to understand something when his salary depends on not understanding it." -Upton Sinclair
Substitute “learn” for “understand”, and there’s nothing new under the sun.
Did you not see who the letter was from? Refusing to learn things like this is the party line.
So...did FTX actually break the law?
Maybe they could be charged with false advertising and there is the case of the missing "coins"....but it's not a bank, so nothing wrong with making wild bets with "deposits". Curious what their "customer agreements" were....