Regardless of how you feel about crypto, if you're at all familiar with law you'd understand that we're simply in uncharted territory here; saying that crypto is super dirty and non-compliant is quite literally as inaccurate as saying that it's super clean and fully in-line. The law simply isn't there yet.
The law isn't there yet if you want crypto to work. But Gensler wants to kill crypto, and for that simply applying the existing rules fairly will do.
Crypto doesn't have an inherent right to have the laws rewritten to enable it, it needs to make the case for why that would be good for the public. So far it hasn't.
Crypto as in crypto-currencies is simply two (or multiple) peers exchanging information between them. They do not need a law to permit that, a case for the "good for the public", or anyone authorization for that matter.
The way the law works is often by banning based on intent and meaning and content. Exchanging information is too general: the law looks at what information, by whom, for what purpose.
Nearly every white collar crime fundamentally involves some sort of unauthorized communication. (Insider trading, for example, involves receiving information by virtue of a trusted position and then communication information to a broker which causes them to execute trades on your behalf). We can even get beyond white collar: hiring a hitman is obviously illegal even if it involves. communication.
I'm not saying (in this comment) crypto is necessarily bad. I am saying you need to defend it on the merits; it's just info so it's ok isn't how anything in society works.
You don't get to summarily declare crypto verboten and make crypto prove it's okay -- the burden is on crypto's detractors to show specifically why it's bad.
Gensler doesn't get to wave his hand and eliminate crypto. But he does get to bring lawsuits against crypto companies alleging they violate existing law. He will have the burden of proof in those lawsuits. If he wins them he may be able to effectively eliminate crypto through application of existing law.
Edit: I realize "you have to defend it on the merits" was poorly phrased. What I meant was that I predict judges will find crypto against existing law. So if you want it to be allowed you'll need to argue for new laws. But it was a very bad way to put it.
And that will be when things get really interesting; the entire point of crypto is to route around this.
I'm not saying this as particularly pro OR anti, but feels like there's a lot of heads in the sand on the fact that some of this stuff provably works VERY WELL, and its especially odd that even tech folks (who would be expected to understand it) appear to be so "luddite" on it.
> its especially odd that even tech folks (who would be expected to understand it) appear to be so "luddite" on it.
Have you considered the alternative hypothesis that these smart people are actually understanding the true nature of crypto very well, and you are stuck in a confirmation bias loop?
Whether the "tech" works is very different question than the social effect of it. A biochemist can be awed by the effectiveness of fentanyl while also maintaining that the average person should never be getting their hands on it.
I almost like your fentanyl comparison -- but where it fails to me is that your biochemists will have very specific ideas about what will happen.
To me, tech's war on crypto feels more like "the War on Drugs." It's fine to be against, but it's the extreme lack of interest in discussing detail (which if you were anti you'd need to get into to stop it) and they don't do that.
Let's say you wanted to attack crypto on principle? Great. First you'd need to ID and figure out their weak points. Bitcoin kills the environment so you attack there. Now, others don't - but a lot of the post ETH coins are centralized with a small number of founders, so you can get them there. Now, ETH is going to be harder because they've done a better job on decentralization...
ETC.
That little paragraph above is orders of magnitude more detailed than any actual attack I've seen. Which again- SUPER WEIRD for tech folks!
Your problem is thinking that the issue with crypto is primarily technological. It is not, it's mostly social.
Same reason why you don't see people arguing about the technical details of the slot machine in gambling regulation. However innovative the mechanism is, the ill is social and that's how it should be regulated. Or similarly, the regulation around alcohol are centered around limiting the social ills (like drunk drivers plowing into unsuspecting people). I am perfectly happy with crypto getting a similar regulation, with Coinbase getting similar terms, disclosure requirements, and responsibilities as the sports betting sites. What I am not ok with is Coinbase shilling tokens as "finance of the future" when it's really just the dumping ground of the latest of Anderssen Horowitzs' scam coins.
Very fair point. I guess the part of me that keeps wanting folks to consider is sort of analogous to perhaps guns or other kinds of weapons.
My strong belief is that SOMEONE is absolutely going to be using this stuff. It's going to be a thing, a big and very influential thing. Might as well get ahead of it and understand it and possibly use it for good?
The difference between regulating cars and regulating crack cocaine is that cars have actual, provable use cases. Even fentanyl has legitimate, real world use cases in anesthesia. And no, money laundering isn't a valid use case.
> And no, money laundering isn't a valid use case.
Working-class folks sending money to their families abroad without predatory middlemen like Western Union, on the other hand, is a valid use case. So is making/accepting payments without being subject to credit card processors playing morality police (or payment handlers like Paypal outright confiscating money from individuals/businesses they don't like).
Real question: have you ever sent money to a third world country? Because I have, both using traditional means and using crypto. And using Wise has been _so much_ easier (5 minutes and money goes from your bank account to their mobile banking account) than figuring out binance's bullshit, and finding a buyer at the other end for the sent cryptocurrency, especially after the "leveraged trading" aka gambling market imploded.
Sorry, your bullshit "but muh African finance!" would have probably worked for less world-aware folks. But not today.
I hope you really are a person deluded by crypto pumper propaganda rather than an intentionally evil pump-and-dumper, and in that case, please take the above anecdote as a real counterpoint to the hopium you've been fed by other pumpers.
> Real question: have you ever sent money to a third world country?
Yes.
> And using Wise has been _so much_ easier (5 minutes and money goes from your bank account to their mobile banking account) than figuring out binance's bullshit, and finding a buyer at the other end for the sent cryptocurrency, especially after the "leveraged trading" aka gambling market imploded.
And yet plenty of people figure it out nonetheless. Maybe they're better able to grasp the technology? Or perhaps simply more motivated to do so?
> Sorry, your bullshit "but muh African finance!" would have probably worked for less world-aware folks.
Sorry, your bullshit "but muh pump-and-dumpers" would have probably worked for less socioeconomically-aware folks.
I hope you really are a person deluded by the legacy financial system's propaganda rather than an intentionally evil beneficiary of said legacy financial system, and in that case, please recognize that anecdotes do not meaningfully refute even so much as others' anecdotes, let alone actual facts.
Yeah, bad example. I do know plenty of people (non-Americans sending money home from here) that are absolutely using crypto in this generally legit and intended way.
They're not just exchanging information they're exchanging something that, by their very own account, has financial value. We as society figured out long ago through hard real life lessons that there must be sophisticated rules and regulations around financial transactions or else enormous negative consequences and human suffering follow.
Introducing your own currency and printing your own notes is legal and has a long history in the US and elsewhere. One famous example is the Ithica Hours.
Not necessarily; a reasonable argument is "it's just another commodity that can change in value." Someone can introduce Pokemon cards and they can change value just fine.
except with cryptocurrency the added exploitation of a broader social custom (privacy) shrouds "you" in a thin veil of decentralized deniability, removing all sense of accountability.
I get what you want but that's NOT HOW LAW WORKS or should work.
You don't get to declare something is bad first without reasoning your way through it through a tested system like law. That's more or less anti Constitutional / American etc.
For example, suppose a drug cartel invents a new formula. The DEA gets to ban it under existing law.
I'm not saying that's analogous. I'm merely providing a counterexample for your idea that the government always has to create custom laws whenever something new happens.
> For example, suppose a drug cartel invents a new formula. The DEA gets to ban it under existing law.
The cartels exist in the first place specifically because the DEA exists and keeps knee-jerk banning things without bothering to demonstrate actual harm.
Unregistered securities are legal, you just can't sell them to the public. That is one possible outcome for crypto tokens - you could still own Ethereum, and one individual privately selling some to another individual would be legal, but companies like Coinbase wouldn't be allowed to sell it to the public.
No, if you want to sell some crypto to a friend of your, that's fine. I don't know why localbitcoins shut down, but it's perfectly consistent for "facilitating transactions at scale" to be illegal while "doing a single peer to peer transaction" is legal.
That's how unregistered securities work, right? I am allowed to buy half of your small business, even though it isn't registered with the SEC. That doesn't mean you're allowed to sell stock in your small business and advertise that on the internet.
Great, now prove crypto is a security. They haven't done this yet. I'm sure some fall under that definition, but some of the big boys, especially ETH, are at least ARGUABLY not, and the SEC simply hasn't done enough homework yet.
Some things are “uncharted” but others are simply illegal, like selling unregistered securities. The supposed confusion on this point is a pretense to help the legal defense whenever regulators get around to enforcing the law.
And again, why is crypto a security? There are a lot that clearly do fall under it, but many of the big guys don't. I don't believe you can summarily call Ethereum a security without more homework.
That's where Gensler failed. He may not be wrong, but he needs to show his work.
> I don't believe you can summarily call Ethereum a security without more homework.
Ethereum voluntarily changed its definition since the last time SEC gave it "not a security" status.
> That's where Gensler failed. He may not be wrong, but he needs to show his work.
I am sure he would be very happy to show his work to the court. Thus the Wells notice to Coinbase and the lawsuit against Bittrex. He is just not required to show his homework to Coinbase, much to the dismay of crypto shillers.
Just because some cryptocurrencies are obvious securities, especially the ICO ones, doesn't mean there aren't tulip like cryptocurrencies.
Cryptocurrencies are inherently non monolithic in design.
We're not. Gensler certainly doesn't think so. With a few exceptions, the overwhelming majority of crypto are securities. In most instances, they are indistinguishable from equity.
Just because some people believe in the promise of blockchain technologies doesn't change the nature of the things that you ultimately store on said chains.
Yes, the head of the Commodities Futures Trading Commission has a clear incentive to call things commodities. Unfortunately, he's not the one who gets to say whether they're securities.
The head of the Securities and Exchange Commission has a clear incentive to call things securities.
He doesn't "get to say" whether things are securities either. He can claim they're securities but he has to prove cases in court, which isn't turning out to be that easy even for XRP.
Ultimately, Congress decides the rules, and not everyone in Congress thinks the SEC is doing a good job here.
Again, "Crypto is securities" is an interesting proposition, but there are legal tests and crypto doesn't always "pass" all of them. I'm not saying he's definitely wrong, I am saying that there's not enough "homework" out there to prove he's right and he (et al) need to do better about putting up or shutting up.
Gensler doesn't need to prove _all_ crypto is definitely 100% unregistered security, just that some of the ones sold by Coinbase is. How certain are you in the claim that none of the cryptocurrencies peddled by Coinbase is not legally a security?
I think you've just made a point in favor of crypto, and certainly against Gensler, who pretty much made an argument in favor of banning "bananas" entirely.
Regardless of how you feel about crypto, if you're at all familiar with law you'd understand that we're simply in uncharted territory here; saying that crypto is super dirty and non-compliant is quite literally as inaccurate as saying that it's super clean and fully in-line. The law simply isn't there yet.