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A cryptocurrency loophole only Congress can close
- samizdis 5y agocf thread yesterday (560+ comments) on Treasury report on stablecoins: https://news.ycombinator.com/item?id=29071895 https://news.ycombinator.com/item?id=29071895
- turminal 5y agoI really wish people would stop calling cryptocurrency crypto. I bet lots of people are very unhappy when they hear "catastrophic crypto bug" or "crypto loophole" and it turns out its about cryptocoins.
- dang 5y agoOk, we've inserted currency into the title above.
- thiscatis 5y ago"I really wish people would stop calling forced labour <Robots>". That's what you sound like. Usage of words and language shifts and changes, get with it or go back learning growls and hissing to communicate.
- ponow 5y agoI guess the same logic should be applied to housing and gentrification then.
- moritonal 5y agoOkay, define "crypto".
- AJ007 5y agoFrom Wikipedia: “Cryptosporidium, sometimes informally called crypto, is a genus of apicomplexan parasitic alveolates that can cause a respiratory and gastrointestinal illness (cryptosporidiosis) that primarily involves watery diarrhea (intestinal cryptosporidiosis) with or without a persistent cough..”
- milliams 5y ago"hidden" Which is much more appropriate for cryptography than it is for cryptocurrency.
- AJ007 5y agoThe irony is that the crypto prefix in cryptocurrency refers to cryptography, which basically no one involved knows a damn thing about. I’ll leave it at this Wikipedia excerpt: “Cryptosporidium, sometimes informally called crypto” https://en.m.wikipedia.org/wiki/Cryptosporidium https://en.m.wikipedia.org/wiki/Cryptosporidium
- lekevicius 5y ago99% of people investing in cryptocurrencies have extremely limited knowledge of cryptography. However, a lot of innovations in cryptography these days come from cryptocurrency world. Aggregated signatures, ZK applications, etc.
- dboreham 5y agoShip. Sailed.
- FriedrichN 5y agoSadly, yes. But I hope it sinks.
- lekevicius 5y agoLanguage is an ever-shifting sand. Some years ago crypto meant cryptography, and "cryptocurrency" had to be used in full for people to understand. Now, positions have swapped. Cryptography is the one that needs to be spelled out in full.
- ekanes 5y agoExample: Camera & "Digital Camera" --> Camera & "Film Camera" -- which one was assumed was reversed.
- lekevicius 5y agoExcellent example. My first thought when I hear the word "camera" is a bunch of sensors on the back of my phone... so maybe sands will shift again, and we'll have "dedicated camera".
- woah 5y agoThe majority of people know "cryptocurrency" but not "cryptography" or "cryptozoology". Sorry. A lot of cryptozoologists are very alarmed when they hear about a "massive crypto bug", thinking it's the return of Mothra.
- ghostwriter 5y agoIt's only a loophole if banks are percieved as legitimate and effective solutions to distributed finances in the era of geographical mobility and IoT. And according to many people, including finance professionals, banks fail to deliver in that environment.
- zmanian 5y agoOne inaccuracy in this article is that BUSD( Binances stable coin) is issued by Paxos which is a New York State Bank. Forcing Tether to become a bank would be interesting...
- unyttigfjelltol 5y agoThe government did not need a new law to prosecute a 'coin' dealer who took pains to distinguish his offerings from U.S. currency.[1] The Treasury stance just underlines how arbitrary and unfair the government was in that instance, and how inconsistent it is being with that precedent just a decade later. [1] https://en.m.wikipedia.org/wiki/Bernard_von_NotHaus https://en.m.wikipedia.org/wiki/Bernard_von_NotHaus
- tenuousemphasis 5y agoThe difference being Liberty Reserve minted physical coins that could be mistaken for U.S. currency.
- ponow 5y agoAll investments require people to do their due diligence. That's no excuse to "forbid capitalist acts between consenting adults".
- mtoner23 5y agoYes it is. We have decided that we have an obligation to protect people from themselves even if they do their due diligence.
- andriesm 5y agoHave "we" ? I certainly didn't. Can I opt out of this "protection" racket please?
- thrill 5y agoFor a price.
- AutumnCurtain 5y agoYou could renounce your citizenship, which is your agreement to participate in the laws of the country, and you certainly should if you feel the deal isn't worth it
- webinvest 5y agoThe article hints that the loophole is that USDC (circle/Coinbase) allegedly welcomes regulation that USDT (Bitfinex) and BUSD (Binance) can’t pass. I’m not sure what to call it but it is not a loophole. I don’t trust the elderly 80 year old congress members to come up with good rules for crypto since it’s something old people barely understand or care about.
- throwawaycities 5y ago> I don’t trust the elderly 80 year old congress members to come up with good rules for crypto since it’s something old people barely understand or care about. Most laws are written by private industry not law makers, odds are you couldn’t find a dozen lawmakers that have read legislation much less written it. They have staff, usually young law grads that read it and give them talking points.
- IncRnd 5y agoIt's a mistake on your part to think them stupid. They are smart and crafty, but the key part is that their goals are mostly not your goals. Many are in Congress to individually make boatloads of cash through one method or another - not to make good rules for you to trade crypto.
- webinvest 5y agoTheir goals are supposed to be the goals of their constituents. They should be making good decisions for the wellness of their people and their economy. Why do they still need to make boat loads of cash —- do they not have stock market retirement accounts and cryptocurrency wallets* so they could retire like normal grandparents? *Jokes on the cryptocurrency wallets.
- deleted 5y ago[deleted]
- renw0rp 5y agoI would argue that most of young people don't understand it either
- ponow 5y agoI really hope the government stays out of this. We need alternatives to their monopoly, and regulating stablecoins will ultimately limit people's choices.
- LogonType10 5y agoThat's kind of the point, no? Limit your ability to buy only stablecoins with factual claims of backing.
- ponow 5y agoNo. There is no protection from a lack of due diligence.
- asah 5y agothe issue isn't you individually losing some money, but the risk of contagion: millions of people all losing a lot of money and this affecting the livelihoods of the people (you!) who didn't bet on it (e.g. usdt).
- victor106 5y ago"I want the government to stay out of this" till everyone launch stable coins and enough people get scammed. After that you will hear the same people cry "What the hell was the government doing?"
- thrill 5y agoThe government being "in" something certainly doesn't prevent scams.
- codyb 5y agoI’m curious what value alternatives to the USD would offer me? It’s an incredibly stable medium of exchange accepted universally in this nation and in many places around the world. My deposits are backed by the FDIC so if I get hacked or there’s a bank run I’ll be made whole up to certain limits most people won’t reach. It’s simple, well understood, easy to use. It’s hard and/or expensive to do certain things with such as send money to certain places. Maybe you can give some good reasons as to why we really need alternatives, as historically, our fragmented monetary system after independence was a total mess.
- savant_penguin 5y ago"But individuals who own stablecoins are exposed to significant counterparty risk from both the coin issuers and the companies offering" Great. Let people pick the risk they are willing to take. If companies holding the wallets steal money, prosecute them for theft. "well as concerns about money laundering and terrorist financing" You forgot the children, think of the children. See, I'm just not scared enough at this point to give in to more laws than any human can possibly read. Maybe if you threw in there some drug dealer buying guns or child molesters it would have worked
- screye 5y agoGiven what we know about terror financing, it is hilarious to think that the money's coming from individual actors. Almost all terrorists are funded by opposing nation's state actors and drugs. Both of which have well established pipelines well before crypto was a thing.
- vineyardmike 5y ago> Let people pick the risk they are willing to take. The (perceived) issue is that most people don't understand the actual risk, either due to marketing, or due to lack of due diligence (potentially made impossible by lack of transparency). A great example is the "interest bearing crypto accounts" that get 8% back. They're advertised as a savings account type product, but because they're not a insured back account, they're actually a security. Securities typically have big warnings like "THIS IS A SECURITY. MAY LOSE WHOLE INVESTMENT. NOT GOVERNMENT INSURED". We don't know how safe the funds are, because we don't always know how the company/smartcontract/whatever are generating those yields, and how at risk that is. Sometimes we could know the risk, and the info is just buried in hard to read smart contracts, but sometimes we can't know the risk because the company doesn't disclose.
- landemva 5y agoYou seem concerned about the custodial companies. Companies are staffed by people who make mistakes. Simply withdraw your funds to your own wallet and interact with the chain yourself. Not your keys not your coins.
- jrm4 5y agoAs someone who definitely believes cryptocurrency is a big part of our future, and that stablecoins are going to be a big part of it -- I still absolutely fail to see what possible advantage strong government regulation provides? It might make sense if we didn't already have regulated banks -- but we do. Honestly, I have no idea what's going to happen to Tether, but I fail to see any advantage to gov't stepping in. Either Tether's a big scam and a lot of people lose their shirts -- fine, that's a healthy failure to learn from. Or it's not, it stays stable despite being backed by nothing and congrats, they invented a new form of fiat.
- midjji 5y agoThe advantage is free insurance if it turns out that the stable coin you picked happens to be a scam. Bringing crypto coin scammers some of that too big to fail money... In exchange governments would get to make the insured coins as regulated and surveilled and inefficient as regular money... So from the perspective of a tether owner, or better yet tether stock owner who thinks its not a scam, well not intentionally at least, then yeah that would be great. Less loss, and less prison time, and for government, well who wants effective banking right... Its a terrible idea of course, but the regulation might be difficult to avoid for long, but historically speaking it takes around a 50 years before it kicks in.
- thesausageking 5y agoPeople in crypto don't use stable coins like banks. They definitely know there's a risk to them and are ok with that. Using banking regulation on stable coins will kill the innovation and doesn't actual solve a real problem.
- 1270018080 5y agoBut if we've learned anything over the past few years, blockchain advocates loves not solving any real problems.
- vineyardmike 5y ago> People in crypto don't use stable coins like banks The way I've seen stable coin interest bearing accounts advertised tells me you're wrong, or the companies want you to be wrong.
- TacticalCoder 5y agoCompared to yesterday's thread on HN, the news is that Circle (part of a joint venture which Coinbase, the HN unicorn, is part of) welcomes the treasury paper. Apparently Circle would love to become a "narrow bank" (a bank without fractional reserve banking). Who knows: maybe that could even turn out to be a bank not giving us headlines like "German chancellor on the brink of second banks bailout"?
- vineyardmike 5y ago> maybe that could even turn out to be a bank not giving us headlines like "German chancellor on the brink of second banks bailout"? Why would they turn down free money once they're government approved?