7 ms·

It's coronation disguised as regulation. Casinos and fruit machines are moral, but crypto is not?

headmelted 5y ago
Not going to speak on the FCA’s motives but this is a pretty easy ruling for them to defend. If as the article states the exchange itself is promising certain returns then it doesn’t comply with the law and absolutely is breaking the rules. Financial products in the UK (and most other markets) can’t advertise any returns that aren’t guaranteed without pretty clear and specifically worded disclaimers. The FCA isn’t singling anyone out in applying this rule here that I can see. As per usual, the upshot here is that most crypto holders still think these are all new concepts and don’t realise that the rules are based on hundreds of years of experiences and consequences.
- ipnon 5y ago
  I 100% agree with you that the regulators have the legal advantage here but I am less convinced of the public benefit. The popularity of Binance must indicate some demand for the product.
  - Qworg 5y ago
    There are many popular things that are not in the public benefit, usually things that have socialized losses and indeterminate assignation of costs.
  - AndrewDucker 5y ago
    Of course there's demand for returns that are higher than the norm! But unless they can guarantee those returns they're acting fraudulently. "There's demand for my perpetual motion machine!" is not a good argument.
    - celticninja 5y ago
      They are only acting fraudulently if they say those returns are guaranteed and then dont guarantee them. AFAIK there was no claims that returns are guaranteed. What they have said is Binance cant offer regulated offerings such as derivatives and options, for which a licence from the FCA is required. Those licenses are given out easily enough to places like plus500 wc. They are essentially gambling, you dont buy securities/assets/stocks/currencies you just bet on price movements of those items.
      - KMag 5y ago
        > They are essentially gambling, you dont buy securities/assets/stocks/currencies you just bet on price movements of those items. It sounds like you're defining gambling in terms of tangibility. Very few people take physical delivery of stock certificates, bond certificates, or currencies. In some sense, their trades are just bets on the value of numbers in a database. Are silver futures contracts "just a bet on price movements"? What if the contract is physically settled and the buyer takes delivery of the silver bars to their home? Is it still "just a bet"? What if they always sell the contract before delivery? What if instead it's a cash-settled futures contract? It sounds like you don't consider spot fx trading to be gambling. What about FX futures? What about FX CFDs? What about synthetic financial products with less volatility than some of the more volatile equities. Are those gambling? Without expressing more detail or nuance, it sounds like you're defining gambling as risks you don't take. There's an argument to be made about exposing retail investors to leverage and high volatility. Though, you don't seem to be making that argument. The trouble with defining gambling by tangibility is that most of our modern dealings are very abstract, and it basically ends up being what you're used to vs. what feels novel/foreign.
peytn 5y ago
I believe this ruling is specifically about Binance, not crypto in general.
bildung 5y ago
From the article: > However, they are still allowed to use the website to purchase and sell crypto-currencies, which is not regulated
echelon 5y ago
Binance is built and run by a nation increasingly seen as a foreign adversary. Fiat is run by democracies with elections, they're not pay-to-play oligopolies like crypto. Monetary and fiscal policies can be used to control the health of the economy. It's part of a wide system that also offers education, medical care, transportation, and many other utilities for actual people. Crypto offers what, exactly? NFTs are worthless garbage nobody can legislate. Digital barcodes. Nation states have robust IP laws to protect and transfer ownership. Crypto wastes energy. It also wastes human brains that could be solving more pertinent problems. Gambling on crypto is as dangerous as it gets, and it's best we keep those without money to lose and financial knowledge away from these things. This isn't just a MLM, it's people's lives. Quantum computing will render all of the blockchain useless anyway. Crypto is a religion like meme to some and get rich quick scheme for many more.
- deleted 5y ago
  [deleted]
- BuckRogers 5y ago
  To address a few of your points. Crypto isn’t the new fiat, it’s the new gold. Most of the world does not have a robust nation state ensuring identities and ownership. It’ll be a massive boost to the world economy. NFTs will enable new interconnected markets that we haven’t even dreamed of yet. Not all crypto wastes energy, look into Cardano. Quantum computing will change everything, this isn’t exclusive to blockchains. There’s far more good that’s going to come out of this than bad with people gambling. The gambling is bringing attention to a major advance for humanity. Any press is good press in this case.
  - echelon 5y ago
    > Quantum computing will change everything, this isn’t exclusive to blockchains. Governments will regulate it. They'll protect banks and financial institutions and jail anyone breaking into them. They won't give a shit about crypto.
  - zkldi 5y ago
    > NFTs will enable new interconnected markets that we haven’t even dreamed of yet. How? My understanding of it is that it's a JSON document that points to a URL (which is just some webserver 99% of the time). How does this allow anyone to do anything novel that couldn't be done with a centralised database and an API?

Not going to speak on the FCA’s motives but this is a pretty easy ruling for them to defend. If as the article states the exchange itself is promising certain returns then it doesn’t comply with the law and absolutely is breaking the rules. Financial products in the UK (and most other markets) can’t advertise any returns that aren’t guaranteed without pretty clear and specifically worded disclaimers. The FCA isn’t singling anyone out in applying this rule here that I can see. As per usual, the upshot here is that most crypto holders still think these are all new concepts and don’t realise that the rules are based on hundreds of years of experiences and consequences.

ipnon 5y ago
I 100% agree with you that the regulators have the legal advantage here but I am less convinced of the public benefit. The popularity of Binance must indicate some demand for the product.
- Qworg 5y ago
  There are many popular things that are not in the public benefit, usually things that have socialized losses and indeterminate assignation of costs.
- AndrewDucker 5y ago
  Of course there's demand for returns that are higher than the norm! But unless they can guarantee those returns they're acting fraudulently. "There's demand for my perpetual motion machine!" is not a good argument.
  - celticninja 5y ago
    They are only acting fraudulently if they say those returns are guaranteed and then dont guarantee them. AFAIK there was no claims that returns are guaranteed. What they have said is Binance cant offer regulated offerings such as derivatives and options, for which a licence from the FCA is required. Those licenses are given out easily enough to places like plus500 wc. They are essentially gambling, you dont buy securities/assets/stocks/currencies you just bet on price movements of those items.
    - KMag 5y ago
      > They are essentially gambling, you dont buy securities/assets/stocks/currencies you just bet on price movements of those items. It sounds like you're defining gambling in terms of tangibility. Very few people take physical delivery of stock certificates, bond certificates, or currencies. In some sense, their trades are just bets on the value of numbers in a database. Are silver futures contracts "just a bet on price movements"? What if the contract is physically settled and the buyer takes delivery of the silver bars to their home? Is it still "just a bet"? What if they always sell the contract before delivery? What if instead it's a cash-settled futures contract? It sounds like you don't consider spot fx trading to be gambling. What about FX futures? What about FX CFDs? What about synthetic financial products with less volatility than some of the more volatile equities. Are those gambling? Without expressing more detail or nuance, it sounds like you're defining gambling as risks you don't take. There's an argument to be made about exposing retail investors to leverage and high volatility. Though, you don't seem to be making that argument. The trouble with defining gambling by tangibility is that most of our modern dealings are very abstract, and it basically ends up being what you're used to vs. what feels novel/foreign.

peytn 5y ago

I believe this ruling is specifically about Binance, not crypto in general.

bildung 5y ago

From the article: > However, they are still allowed to use the website to purchase and sell crypto-currencies, which is not regulated

echelon 5y ago

Binance is built and run by a nation increasingly seen as a foreign adversary. Fiat is run by democracies with elections, they're not pay-to-play oligopolies like crypto. Monetary and fiscal policies can be used to control the health of the economy. It's part of a wide system that also offers education, medical care, transportation, and many other utilities for actual people. Crypto offers what, exactly? NFTs are worthless garbage nobody can legislate. Digital barcodes. Nation states have robust IP laws to protect and transfer ownership. Crypto wastes energy. It also wastes human brains that could be solving more pertinent problems. Gambling on crypto is as dangerous as it gets, and it's best we keep those without money to lose and financial knowledge away from these things. This isn't just a MLM, it's people's lives. Quantum computing will render all of the blockchain useless anyway. Crypto is a religion like meme to some and get rich quick scheme for many more.

deleted 5y ago
[deleted]
BuckRogers 5y ago
To address a few of your points. Crypto isn’t the new fiat, it’s the new gold. Most of the world does not have a robust nation state ensuring identities and ownership. It’ll be a massive boost to the world economy. NFTs will enable new interconnected markets that we haven’t even dreamed of yet. Not all crypto wastes energy, look into Cardano. Quantum computing will change everything, this isn’t exclusive to blockchains. There’s far more good that’s going to come out of this than bad with people gambling. The gambling is bringing attention to a major advance for humanity. Any press is good press in this case.
- echelon 5y ago
  > Quantum computing will change everything, this isn’t exclusive to blockchains. Governments will regulate it. They'll protect banks and financial institutions and jail anyone breaking into them. They won't give a shit about crypto.
- zkldi 5y ago
  > NFTs will enable new interconnected markets that we haven’t even dreamed of yet. How? My understanding of it is that it's a JSON document that points to a URL (which is just some webserver 99% of the time). How does this allow anyone to do anything novel that couldn't be done with a centralised database and an API?