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We can't apply 1:1 laws to crypto precisely because of this. I can write a piece of code in a few minutes for all the collection I own, does not make it wash t

We can't apply 1:1 laws to crypto precisely because of this. I can write a piece of code in a few minutes for all the collection I own, does not make it wash trading. In fact, you can very easily check it on etherscan or similar tools that this was a flash loan.

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arcticbull 5y ago
> We can't apply 1:1 laws to crypto precisely because of this. I think in a lot of cases that's simply wishful thinking. They Howey test is actually a very good fit in the crypto space broadly, especially alongside the guidance from the SEC on how to interpret it with respect to digital assets. [1] Most tokens are just straight-up securities, what we're lacking isn't regulation but enforcement. NFTs are likely not securities as they fail the Howey test. [2] Fractionalized NFTs, however, probably are securities. > I can write a piece of code in a few minutes for all the collection I own, does not make it wash trading. It's still wash trading, of course, it may not be a crime because it's not done against a security as I mentioned. IMO it could be some other kind of fraud or civil matter already as you're enticing a purchase on the basis of intentionally misrepresenting past trades. If not, I agree, this might be a good area for some additional regulation, either here or in markets broadly (I'm looking at you, art and collectibles). [1] https://www.sec.gov/files/dlt-framework.pdf https://www.sec.gov/files/dlt-framework.pdf [2] https://clsbluesky.law.columbia.edu/2021/03/19/latham-watkins-discusses-whether-nfts-are-securities/ https://clsbluesky.law.columbia.edu/2021/03/19/latham-watkin...
- Animats 5y ago
  NFTs are likely not securities as they fail the Howey test. NFTs for things that already exist are likely not securities. But NFTs for things that don't exist yet, such as as virtual land in un-implemented virtual worlds, do pass the Howey Test. You're funding the development of something, not buying something that already exists. That's an investment. At some point, probably after the first widely publicized collapse, the SEC will shut many of the future-oriented NFTs down, much as they did to the ICOs starting in 2018. Virtual land in vaporware virtual worlds is the same scam as selling undeveloped swampland in Florida, a popular scam in the 1950s.[1] There are few new scams. It's mostly the same old ones with new shiny packaging. Most of them are listed in Extraordinary Popular Delusions and the Madness of Crowds, from 1841. [1] https://en.wikipedia.org/wiki/Swampland_in_Florida https://en.wikipedia.org/wiki/Swampland_in_Florida
  - arcticbull 5y ago
    Good point, that would rely on the efforts of others, yeah?
TomSwirly 5y ago
> We can't apply 1:1 laws to crypto precisely because of this. Why do you think the rule against wash trading is there? Because people systematically manipulated markets with it. > I can write a piece of code in a few minutes for all the collection I own, does not make it wash trading. Your argument is, "I can do this really fast, therefore it's not criminal"?
- throaway6942 5y ago
  No, my argument is that someone like me can easily verify that this was a wash trade. In fact, marketplaces have already started to flag these transactions[1]. [1] https://larvalabs.com/cryptopunks/details/3100 https://larvalabs.com/cryptopunks/details/3100

deleted 5y ago

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arcticbull 5y ago

> We can't apply 1:1 laws to crypto precisely because of this. I think in a lot of cases that's simply wishful thinking. They Howey test is actually a very good fit in the crypto space broadly, especially alongside the guidance from the SEC on how to interpret it with respect to digital assets. [1] Most tokens are just straight-up securities, what we're lacking isn't regulation but enforcement. NFTs are likely not securities as they fail the Howey test. [2] Fractionalized NFTs, however, probably are securities. > I can write a piece of code in a few minutes for all the collection I own, does not make it wash trading. It's still wash trading, of course, it may not be a crime because it's not done against a security as I mentioned. IMO it could be some other kind of fraud or civil matter already as you're enticing a purchase on the basis of intentionally misrepresenting past trades. If not, I agree, this might be a good area for some additional regulation, either here or in markets broadly (I'm looking at you, art and collectibles). [1] https://www.sec.gov/files/dlt-framework.pdf https://www.sec.gov/files/dlt-framework.pdf [2] https://clsbluesky.law.columbia.edu/2021/03/19/latham-watkins-discusses-whether-nfts-are-securities/ https://clsbluesky.law.columbia.edu/2021/03/19/latham-watkin...

Animats 5y ago
NFTs are likely not securities as they fail the Howey test. NFTs for things that already exist are likely not securities. But NFTs for things that don't exist yet, such as as virtual land in un-implemented virtual worlds, do pass the Howey Test. You're funding the development of something, not buying something that already exists. That's an investment. At some point, probably after the first widely publicized collapse, the SEC will shut many of the future-oriented NFTs down, much as they did to the ICOs starting in 2018. Virtual land in vaporware virtual worlds is the same scam as selling undeveloped swampland in Florida, a popular scam in the 1950s.[1] There are few new scams. It's mostly the same old ones with new shiny packaging. Most of them are listed in Extraordinary Popular Delusions and the Madness of Crowds, from 1841. [1] https://en.wikipedia.org/wiki/Swampland_in_Florida https://en.wikipedia.org/wiki/Swampland_in_Florida
- arcticbull 5y ago
  Good point, that would rely on the efforts of others, yeah?

TomSwirly 5y ago

> We can't apply 1:1 laws to crypto precisely because of this. Why do you think the rule against wash trading is there? Because people systematically manipulated markets with it. > I can write a piece of code in a few minutes for all the collection I own, does not make it wash trading. Your argument is, "I can do this really fast, therefore it's not criminal"?

throaway6942 5y ago
No, my argument is that someone like me can easily verify that this was a wash trade. In fact, marketplaces have already started to flag these transactions[1]. [1] https://larvalabs.com/cryptopunks/details/3100 https://larvalabs.com/cryptopunks/details/3100