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The SEC said any virtual coins or tokens bought by investors through an ICO were subject to the same laws governing the sale of stocks and shares sold via mains

The SEC said any virtual coins or tokens bought by investors through an ICO were subject to the same laws governing the sale of stocks and shares sold via mainstream stock markets. I thought the whole point of crypto currency was that it WASN'T regulated and so how is the government able to do this, let alone say this with any authority?

pavel_lishin 9y ago
> I thought the whole point of crypto currency was that it WASN'T regulated That's what the people with a monetary or ideological investment in cryptocurrencies say, because of course they would.
toufka 9y ago
The government doesn't regulate the USD or NASDAQ shares, but currencies, income, value, and ownership. Cryptocurrencies are entirely regulated, already.
- libertymcateer 9y ago
  > The government doesn't regulate the USD or NASDAQ shares... Yes, it most certainly, unequivocally does. (I believe this reinforces your point.)
  - umanwizard 9y ago
    I think the point was that even if stock exchanges were totally unregulated, normal laws and regulations could still be applied to stock ownership. (And even if they weren't, common law on property ownership still would)
dcole2929 9y ago
By regulating it? The whole argument that crypto-currencies weren't regulated was always more of a marketing gimmick than fact. Yeah in their infancy (which we might still be in) regulators didn't care much about them, but it was always apparent that if any of them ever took off governments would step in. Here they've basically said, just because these commodities are taking a new form they still are a commodity and as such the existing rules around them must be honored. Whether that's fair or right? Who knows but it was an obvious outcome. They don't have to be able to control the currency itself to still enforce their rules because they have access to the people using it.
paulmd 9y ago
> I thought the whole point of crypto currency was that it WASN'T regulated and so how is the government able to do this, let alone say this with any authority? Because nerds have this assumption that judges are beep-boop robots whose processors can be overloaded by a logical paradox or One Weird Trick, Lawyers Hate Him, and they are not. The fact that it's "on a computer" means nothing to the judicial system. Just because they can't physically seize a pile of cash, or order a bank to transfer your balance doesn't mean that they can't make and enforce laws. They can order you to transfer money and if you refuse they'll throw your ass in jail for contempt. And they will not give a single fuck about "code is law" or the color of the fringe on the flag if you are trading in illegal securities. Crimes committed on a computer are still crimes. Seriously, judges are human beings and while the law is certainly technical, they're not going to be impressed by an obvious attempt to end-run around a law. In many situations, merely attempting to do so is itself a crime (f.ex structuring transactions). Do not fuck with the SEC. Screwing around with rich people's money is Serious Business.
libertymcateer 9y ago
> I thought the whole point of crypto currency was that it WASN'T regulated and so how is the government able to do this, let alone say this with any authority? The SEC regulates securities. Cryptocurrency (arguably) meets many different definitions that would qualify at as one of several types of security (or future, or commodity). Therefore, the SEC has the power to regulate cryptocurrency. To put it another way, the government already has authority. Trying to engineer around the authority of the government is the intent of (some) cryptocurrency designers - but it doesn't work that way. For all the same reasons that 'sovereign citizens' are wrong and (comically) misguided. The government exists. It has authority. Denying either of these two things is utterly and totally delusional - not to mention childish and indefensible. If you really are trying to argue that the SEC has no authority to begin with - well, good luck with that, and have fun talking to your lawyer through bars or reinforced glass. The debate is about whether cryptocurrency has been adequately designed to legally circumvent the legal requirements that would make it subject to current regulation. In other words, whether, according to the rules of the SEC, it does not meet the SEC's definition of what it regulates (or the FTC's, or the CTFC's for that matter). As of now, the prevailing legal opinion is that it has not and that cryptocurrency meets many different definitions of security, future or commodity. Is it possible to change this? Possibly, but it is an engineering issue and it requires working within the bounds of the law - not just pretending that these authorities do not and cannot have actual jurisdiction. More reading: http://www.morrisoncohen.com/siteFiles/files/For%20Blockchain%20a%20Coming%20Wave%20of%20Change%20-%20NLJ%20-%2010-01-17.pdf http://www.morrisoncohen.com/siteFiles/files/For%20Blockchai...
AgentME 9y ago
Cryptocurrency is about enabling value transactions online without the need for relying on a third party. You don't need to ask your bank to transfer your money and risk them saying "no" depending on who you're sending to, etc. You can do the sending yourself. Bitcoin doesn't mean you don't pay your taxes.

pavel_lishin 9y ago

> I thought the whole point of crypto currency was that it WASN'T regulated That's what the people with a monetary or ideological investment in cryptocurrencies say, because of course they would.

toufka 9y ago

The government doesn't regulate the USD or NASDAQ shares, but currencies, income, value, and ownership. Cryptocurrencies are entirely regulated, already.

libertymcateer 9y ago
> The government doesn't regulate the USD or NASDAQ shares... Yes, it most certainly, unequivocally does. (I believe this reinforces your point.)
- umanwizard 9y ago
  I think the point was that even if stock exchanges were totally unregulated, normal laws and regulations could still be applied to stock ownership. (And even if they weren't, common law on property ownership still would)

dcole2929 9y ago

By regulating it? The whole argument that crypto-currencies weren't regulated was always more of a marketing gimmick than fact. Yeah in their infancy (which we might still be in) regulators didn't care much about them, but it was always apparent that if any of them ever took off governments would step in. Here they've basically said, just because these commodities are taking a new form they still are a commodity and as such the existing rules around them must be honored. Whether that's fair or right? Who knows but it was an obvious outcome. They don't have to be able to control the currency itself to still enforce their rules because they have access to the people using it.

paulmd 9y ago

> I thought the whole point of crypto currency was that it WASN'T regulated and so how is the government able to do this, let alone say this with any authority? Because nerds have this assumption that judges are beep-boop robots whose processors can be overloaded by a logical paradox or One Weird Trick, Lawyers Hate Him, and they are not. The fact that it's "on a computer" means nothing to the judicial system. Just because they can't physically seize a pile of cash, or order a bank to transfer your balance doesn't mean that they can't make and enforce laws. They can order you to transfer money and if you refuse they'll throw your ass in jail for contempt. And they will not give a single fuck about "code is law" or the color of the fringe on the flag if you are trading in illegal securities. Crimes committed on a computer are still crimes. Seriously, judges are human beings and while the law is certainly technical, they're not going to be impressed by an obvious attempt to end-run around a law. In many situations, merely attempting to do so is itself a crime (f.ex structuring transactions). Do not fuck with the SEC. Screwing around with rich people's money is Serious Business.

libertymcateer 9y ago

> I thought the whole point of crypto currency was that it WASN'T regulated and so how is the government able to do this, let alone say this with any authority? The SEC regulates securities. Cryptocurrency (arguably) meets many different definitions that would qualify at as one of several types of security (or future, or commodity). Therefore, the SEC has the power to regulate cryptocurrency. To put it another way, the government already has authority. Trying to engineer around the authority of the government is the intent of (some) cryptocurrency designers - but it doesn't work that way. For all the same reasons that 'sovereign citizens' are wrong and (comically) misguided. The government exists. It has authority. Denying either of these two things is utterly and totally delusional - not to mention childish and indefensible. If you really are trying to argue that the SEC has no authority to begin with - well, good luck with that, and have fun talking to your lawyer through bars or reinforced glass. The debate is about whether cryptocurrency has been adequately designed to legally circumvent the legal requirements that would make it subject to current regulation. In other words, whether, according to the rules of the SEC, it does not meet the SEC's definition of what it regulates (or the FTC's, or the CTFC's for that matter). As of now, the prevailing legal opinion is that it has not and that cryptocurrency meets many different definitions of security, future or commodity. Is it possible to change this? Possibly, but it is an engineering issue and it requires working within the bounds of the law - not just pretending that these authorities do not and cannot have actual jurisdiction. More reading: http://www.morrisoncohen.com/siteFiles/files/For%20Blockchain%20a%20Coming%20Wave%20of%20Change%20-%20NLJ%20-%2010-01-17.pdf http://www.morrisoncohen.com/siteFiles/files/For%20Blockchai...

AgentME 9y ago

Cryptocurrency is about enabling value transactions online without the need for relying on a third party. You don't need to ask your bank to transfer your money and risk them saying "no" depending on who you're sending to, etc. You can do the sending yourself. Bitcoin doesn't mean you don't pay your taxes.