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It looks like they are going after the exchanges, see this choice quote: > A platform that trades securities and operates as an "exchange," as defined by the f

It looks like they are going after the exchanges, see this choice quote: > A platform that trades securities and operates as an "exchange," as defined by the federal securities laws, must register as a national securities exchange or operate under an exemption from registration, such as the exemption provided for ATSs under SEC Regulation ATS. And it says that online wallets may qualify if they facilitate trading: > Some online trading platforms may not meet the definition of an exchange under the federal securities laws, but directly or indirectly offer trading or other services related to digital assets that are securities. For example, some platforms offer digital wallet services (to hold or store digital assets) or transact in digital assets that are securities. These and other services offered by platforms may trigger other registration requirements under the federal securities laws, including broker-dealer, transfer agent, or clearing agency registration, among other things. In addition, a platform that offers digital assets that are securities may be participating in the unregistered offer and sale of securities if those securities are not registered or exempt from registration.

ianai 9y ago
So crazy thing about government, they can deem themselves regulators of anything. Some choices are certainly easier to police than others, granted, but they don’t have to massage their definitons to declare something illegal.
- JeremyBanks 9y ago
  There's no massaging. The potentially illegality of many cryptoasset platforms has always been clear to everyone who wasn't in denial. They're trying to race ahead of law enforcement. Kind-of like Uber, but the SEC is a lot harder to plow through than local traffic enforcement. I, for one, welcome our PonziCoin-banning overlords.
  - CryptoPunk 9y ago
    >>I, for one, welcome our PonziCoin-banning overlords. That's a pretty totalitarian outlook. You're not content with not using cryptocurrency yourself. You want to prevent everyone else, with punitive measures, from using it too.
    - ianai 9y ago
      And bidding all gaming GPUs up isn’t punitive?
      - CryptoPunk 9y ago
        Of course not. Two parties coming to an agreement in a free market to trade currency for a GPU is not a violation of a third party's right to buy that GPU. Putting two people behind bars because they traded some 1s and 0s that happen to be valued by some set of people is a flagrant violation of rights.
        JeremyBanks 9y ago
        Which rights?
        CryptoPunk 9y ago
        My right for me to not have you interfere with and restrict my private interactions. My right to privacy, in keeping the 1s and 0s to myself, and free speech, to publish any series of 1s and 0s I want.
        JeremyBanks 9y ago
        lol
    - deleted 9y ago
      [deleted]
ricardobeat 9y ago
This will not scale, being that many of the modern cryptocurrencies make it really easy to implement token exchange mechanisms. Fully de-centralized exchanges are coming too, how are they ever going to regulate that?
- sanderjd 9y ago
  Possibly like pretty much everything else: by writing or clarifying regulations that make such things a violation and then painstakingly going after the most extreme violators and punishing them severely enough that it changes the risk calculation for everyone. Very few things (I can't think of an example) are regulated to the point of impossibility, they are just regulated to the point of implausibility.
- ThrustVectoring 9y ago
  Through attacking the link between cryptocurrencies and the fiat banking system. It really doesn't matter if you can trade $10MM of bitcoin for $10MM of ethereum if after doing so you are unable to pay your rent with it. Throw some KYC/AML laws on accepting cryptocurrency deposits so that it's treated like a cash deposit for regulatory purposes. Accept as a regulator that a lot of small-time stuff is going to slip through the cracks, in exchange for making gross violations problematic. Like, if you could fit ten million dollars in cash in your pockets, you'd already have trouble getting it into your bank account without a rock-solid explanation as to how you got it. Bitcoin etc is no different - the US government can avoid caring until you try to spend dollars, then nab you for violating regulations.
- piracykills 9y ago
  It definitely won't make cryptocurrencies worthless, but it could tank their value if they start chasing exchanges and adding burdens to new customers on exchanges. If regulations like this start popping up in many countries it could largely do damage to the boom in the field.
- mdip 9y ago
  > Fully de-centralized exchanges are coming too, how are they ever going to regulate that? That's an interesting thought that I hadn't considered. I mean, when we think of trading stocks, we tend to exclusively think of brokerages and the like and forget that at one point in history, it wasn't uncommon to actually hold a stock certificate in a safe somewhere. It's before my time, but I believe you could turn around and sell that certificate to someone else without involving anyone. Were it a straight cash transaction, it would be trivial to perform without anyone but the two parties involved being aware of the transaction. In the case of a decentralized trading platform, one could trade between crypto-currencies without the ability of the government to regulate it, but once you wish to turn it into hard currency, that's where regulation can step in. What would be more interesting, though, is if the "original promise" of bitcoin -- that it could be used without turning it into cash (buy a coffee with Bitcoin!) -- became a reality. Unfortunately, it's looking like that's headed more and more in the other direction. I have a feeling, though, if regulation steps in hard, there'll be greater motivation to solving the problems that have made this difficult in the past[0]. Combined with some of cryptocurrencies aimed at increasing/providing anonymity to transactions, you start to head more toward a very difficult to regulate set of circumstances that might resemble the difficulties the copyright industries have had attacking file sharing technologies[1]. [0] And while there has been plenty of motivation and I'm aware of some folks actively solving this problem, the motivation among all stakeholders has to be there, as well. [1] Though the government has far more motivation to solve this problem than it did as it relates to copyright infringement -- I'll admit it's not a great analogy once you start digging into the details.

ianai 9y ago

So crazy thing about government, they can deem themselves regulators of anything. Some choices are certainly easier to police than others, granted, but they don’t have to massage their definitons to declare something illegal.

JeremyBanks 9y ago
There's no massaging. The potentially illegality of many cryptoasset platforms has always been clear to everyone who wasn't in denial. They're trying to race ahead of law enforcement. Kind-of like Uber, but the SEC is a lot harder to plow through than local traffic enforcement. I, for one, welcome our PonziCoin-banning overlords.
- CryptoPunk 9y ago
  >>I, for one, welcome our PonziCoin-banning overlords. That's a pretty totalitarian outlook. You're not content with not using cryptocurrency yourself. You want to prevent everyone else, with punitive measures, from using it too.
  - ianai 9y ago
    And bidding all gaming GPUs up isn’t punitive?
    - CryptoPunk 9y ago
      Of course not. Two parties coming to an agreement in a free market to trade currency for a GPU is not a violation of a third party's right to buy that GPU. Putting two people behind bars because they traded some 1s and 0s that happen to be valued by some set of people is a flagrant violation of rights.
      - JeremyBanks 9y ago
        Which rights?
        CryptoPunk 9y ago
        My right for me to not have you interfere with and restrict my private interactions. My right to privacy, in keeping the 1s and 0s to myself, and free speech, to publish any series of 1s and 0s I want.
        JeremyBanks 9y ago
        lol
  - deleted 9y ago
    [deleted]

ricardobeat 9y ago

This will not scale, being that many of the modern cryptocurrencies make it really easy to implement token exchange mechanisms. Fully de-centralized exchanges are coming too, how are they ever going to regulate that?

sanderjd 9y ago
Possibly like pretty much everything else: by writing or clarifying regulations that make such things a violation and then painstakingly going after the most extreme violators and punishing them severely enough that it changes the risk calculation for everyone. Very few things (I can't think of an example) are regulated to the point of impossibility, they are just regulated to the point of implausibility.
ThrustVectoring 9y ago
Through attacking the link between cryptocurrencies and the fiat banking system. It really doesn't matter if you can trade $10MM of bitcoin for $10MM of ethereum if after doing so you are unable to pay your rent with it. Throw some KYC/AML laws on accepting cryptocurrency deposits so that it's treated like a cash deposit for regulatory purposes. Accept as a regulator that a lot of small-time stuff is going to slip through the cracks, in exchange for making gross violations problematic. Like, if you could fit ten million dollars in cash in your pockets, you'd already have trouble getting it into your bank account without a rock-solid explanation as to how you got it. Bitcoin etc is no different - the US government can avoid caring until you try to spend dollars, then nab you for violating regulations.
piracykills 9y ago
It definitely won't make cryptocurrencies worthless, but it could tank their value if they start chasing exchanges and adding burdens to new customers on exchanges. If regulations like this start popping up in many countries it could largely do damage to the boom in the field.
mdip 9y ago
> Fully de-centralized exchanges are coming too, how are they ever going to regulate that? That's an interesting thought that I hadn't considered. I mean, when we think of trading stocks, we tend to exclusively think of brokerages and the like and forget that at one point in history, it wasn't uncommon to actually hold a stock certificate in a safe somewhere. It's before my time, but I believe you could turn around and sell that certificate to someone else without involving anyone. Were it a straight cash transaction, it would be trivial to perform without anyone but the two parties involved being aware of the transaction. In the case of a decentralized trading platform, one could trade between crypto-currencies without the ability of the government to regulate it, but once you wish to turn it into hard currency, that's where regulation can step in. What would be more interesting, though, is if the "original promise" of bitcoin -- that it could be used without turning it into cash (buy a coffee with Bitcoin!) -- became a reality. Unfortunately, it's looking like that's headed more and more in the other direction. I have a feeling, though, if regulation steps in hard, there'll be greater motivation to solving the problems that have made this difficult in the past[0]. Combined with some of cryptocurrencies aimed at increasing/providing anonymity to transactions, you start to head more toward a very difficult to regulate set of circumstances that might resemble the difficulties the copyright industries have had attacking file sharing technologies[1]. [0] And while there has been plenty of motivation and I'm aware of some folks actively solving this problem, the motivation among all stakeholders has to be there, as well. [1] Though the government has far more motivation to solve this problem than it did as it relates to copyright infringement -- I'll admit it's not a great analogy once you start digging into the details.