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Cryptocurrencies are so rife with scam that I'm shocked that major governments haven't done anything to stop them yet. Are they so ineffective that if you paper

by Felz 8y ago

Cryptocurrencies are so rife with scam that I'm shocked that major governments haven't done anything to stop them yet. Are they so ineffective that if you paper over a scam with "but the blockchain!" they won't do anything? I guess if they did institute bans there'd be backlash, and it's not like cryptocurrencies won't blow up all on their own. Still, it's distressingly spineless and/or incompetent.

davidgerard 8y ago
I doubt we can ban people from buying and selling cryptos, and there'd be quite a bit of resistance to that. But this is about advertising to consumers - and there's ample precedent that advertising for financial products unsuited to retail investors can quite definitely be banned, especially in the UK. We should not be seeing crypto ads on the Tube.
- Felz 8y ago
  Yea. In the US agencies like the SEC and FTC and legal concepts such as "securities" and "accredited investors" were created to prevent exactly what's happening with crypto- people getting scammed, or overhyped on something they don't understand. Except apparently, we have to relearn this lesson in blood every time somebody makes something slightly different but mechanically equivalent to something that's burned us in the past. You're right that it'd be hard to enforce a ban on buying/selling (although most people wouldn't do it simply because it's illegal, which would pop the bubble in and of itself). But I think banning ads, issuing public warnings, and pervasively cracking down on the clear scam ICOs would help a lot, without really impinging on peoples' freedom to shoot themselves in the foot. The nuclear option would be to rule that cryptocurrencies have no legal standing- that you can't enforce a contract around them. This would cause a swift collapse of backstabbing within the market, and the government would only be clarifying what's already true for the overwhelming majority of ICOs- they don't entitle you to anything.

by Felz 8y ago

davidgerard 8y ago

I doubt we can ban people from buying and selling cryptos, and there'd be quite a bit of resistance to that. But this is about advertising to consumers - and there's ample precedent that advertising for financial products unsuited to retail investors can quite definitely be banned, especially in the UK. We should not be seeing crypto ads on the Tube.

Felz 8y ago
Yea. In the US agencies like the SEC and FTC and legal concepts such as "securities" and "accredited investors" were created to prevent exactly what's happening with crypto- people getting scammed, or overhyped on something they don't understand. Except apparently, we have to relearn this lesson in blood every time somebody makes something slightly different but mechanically equivalent to something that's burned us in the past. You're right that it'd be hard to enforce a ban on buying/selling (although most people wouldn't do it simply because it's illegal, which would pop the bubble in and of itself). But I think banning ads, issuing public warnings, and pervasively cracking down on the clear scam ICOs would help a lot, without really impinging on peoples' freedom to shoot themselves in the foot. The nuclear option would be to rule that cryptocurrencies have no legal standing- that you can't enforce a contract around them. This would cause a swift collapse of backstabbing within the market, and the government would only be clarifying what's already true for the overwhelming majority of ICOs- they don't entitle you to anything.