3 ms·

SEC: absolutely fine with penny stocks with 1000% daily fluctuations SEC: derivatives of a trillion dollar asset are risky This is all a theater. The real rea

SEC: absolutely fine with penny stocks with 1000% daily fluctuations SEC: derivatives of a trillion dollar asset are risky This is all a theater. The real reason is they are trying to slow down the proliferation of cryptocurrencies.

vmception 5y ago
Yes, but it is almost happenstance that the SEC gets a say on these at all. The US stock markets are largely permissionless from the regulatory perspective. The SEC is not in place to make a judgement on the merit of an asset. But when you operate a fund, with a fund manager, that takes custody of retail assets, now they are in a gatekeeping position. Its a combination of Acts that never envisioned “ETFs” at all, let alone “digital asset commodity exchange traded products” So the laws have to be updated to get them back out the way. The SEC itself had a comment period on this but it was largely missed.
- JumpCrisscross 5y ago
  > US stock markets are largely permissionless from the regulatory perspective By default, every securities transaction in the U.S. requires SEC approval [1]. There is a long list of exemptions, a list which the SEC maintains, that permit e.g. the private markets. In this sense, the U.S. took an ersatz European regulatory approach. It is obsessively permissioned. It was a drastic response to a drastic crisis--Black Thursday and the Great Depression. [1] https://www.govinfo.gov/content/pkg/COMPS-1884/pdf/COMPS-1884.pdf https://www.govinfo.gov/content/pkg/COMPS-1884/pdf/COMPS-188...
  - vmception 5y ago
    The exceptions are the rule But less vague, “approval” doesnt mean judgement was pased and gatekept, approval means that disclosures are made and investors can make their own decisions with that level of disclosure. And then there are exceptions to that where the SEC gatekeeps and likes that power
bobthepanda 5y ago
No, the SEC generally tries to limit the blast radius of things. Most people are not day-trading penny stocks. And other tools like accredited investor status are also used to (bluntly) limit the blast radius of risky actions. Poorly regulated derivatives were what caused the last financial crisis.
- antb123 5y ago
  And options that have a 15% spread and rip the face off retail investors are ok? Total nontransparent markets such as the pink sheets? Fingerprinting VWAP trades by institutions and then front running them? SEC likes to protect the status quo
  - perl4ever 5y ago
    >And options that have a 15% spread and rip the face off retail investors are ok? You say that like there was somebody malign doing that. >Total nontransparent markets such as the pink sheets? Or that. Absence of people to trade with is not something that someone is doing to you. If you choose not to go the grocery store, but instead see if anyone is selling anything on a random street corner, whose fault is that? Hey, sometimes there's someone with steaks they have to get rid of fast because the A/C on their truck broke.
- ahallock 5y ago
  Then why is crypto open to so many other first world countries?
  - pjc50 5y ago
    They've not got round to action yet? UK is taking a bit of action: https://edition.cnn.com/2021/12/22/football/arsenal-socios-asa-crypto-ruling-intl-spt/index.html https://edition.cnn.com/2021/12/22/football/arsenal-socios-a... https://www.fca.org.uk/publications/policy-statements/ps20-10-prohibiting-sale-retail-clients-investment-products-reference-cryptoassets https://www.fca.org.uk/publications/policy-statements/ps20-1... / https://www.fca.org.uk/publication/policy/ps20-10.pdf https://www.fca.org.uk/publication/policy/ps20-10.pdf "We are prohibiting the marketing, distribution and sale in or from the UK to all retail clients, of derivatives and ETNs that reference certain types of unregulated, transferable cryptoassets"
modeless 5y ago
> SEC: derivatives of a trillion dollar asset are risky It's actually sillier than this. They think that derivatives of bitcoin are fine (futures ETF approved) while simultaneously saying bitcoin itself is too dangerous (spot ETF denied).
- perl4ever 5y ago
  The comment that managing actual bitcoin is too risky makes sense to me, even if it's unclear that's the SEC's rationale. People say, oh oh oh, GBTC and other substitutes don't track bitcoin. Well, yeah, maybe that's nature's way of telling you that keeping actual bitcoin safe is expensive. Pay your money and take your chances.
deleted 5y ago
[deleted]
ahallock 5y ago
The SEC must know something many other modern, first world countries do not because when I try to use most crypto apps, it says it's unavailable for US citizens, along with places like Yemen and North Korea.
- bufferoverflow 5y ago
  If you live in NY state, your government blocked you from using all kinds of crypto platforms. I live in a more free state that doesn't have such problems.

vmception 5y ago

Yes, but it is almost happenstance that the SEC gets a say on these at all. The US stock markets are largely permissionless from the regulatory perspective. The SEC is not in place to make a judgement on the merit of an asset. But when you operate a fund, with a fund manager, that takes custody of retail assets, now they are in a gatekeeping position. Its a combination of Acts that never envisioned “ETFs” at all, let alone “digital asset commodity exchange traded products” So the laws have to be updated to get them back out the way. The SEC itself had a comment period on this but it was largely missed.

JumpCrisscross 5y ago
> US stock markets are largely permissionless from the regulatory perspective By default, every securities transaction in the U.S. requires SEC approval [1]. There is a long list of exemptions, a list which the SEC maintains, that permit e.g. the private markets. In this sense, the U.S. took an ersatz European regulatory approach. It is obsessively permissioned. It was a drastic response to a drastic crisis--Black Thursday and the Great Depression. [1] https://www.govinfo.gov/content/pkg/COMPS-1884/pdf/COMPS-1884.pdf https://www.govinfo.gov/content/pkg/COMPS-1884/pdf/COMPS-188...
- vmception 5y ago
  The exceptions are the rule But less vague, “approval” doesnt mean judgement was pased and gatekept, approval means that disclosures are made and investors can make their own decisions with that level of disclosure. And then there are exceptions to that where the SEC gatekeeps and likes that power

bobthepanda 5y ago

No, the SEC generally tries to limit the blast radius of things. Most people are not day-trading penny stocks. And other tools like accredited investor status are also used to (bluntly) limit the blast radius of risky actions. Poorly regulated derivatives were what caused the last financial crisis.

antb123 5y ago
And options that have a 15% spread and rip the face off retail investors are ok? Total nontransparent markets such as the pink sheets? Fingerprinting VWAP trades by institutions and then front running them? SEC likes to protect the status quo
- perl4ever 5y ago
  >And options that have a 15% spread and rip the face off retail investors are ok? You say that like there was somebody malign doing that. >Total nontransparent markets such as the pink sheets? Or that. Absence of people to trade with is not something that someone is doing to you. If you choose not to go the grocery store, but instead see if anyone is selling anything on a random street corner, whose fault is that? Hey, sometimes there's someone with steaks they have to get rid of fast because the A/C on their truck broke.
ahallock 5y ago
Then why is crypto open to so many other first world countries?
- pjc50 5y ago
  They've not got round to action yet? UK is taking a bit of action: https://edition.cnn.com/2021/12/22/football/arsenal-socios-asa-crypto-ruling-intl-spt/index.html https://edition.cnn.com/2021/12/22/football/arsenal-socios-a... https://www.fca.org.uk/publications/policy-statements/ps20-10-prohibiting-sale-retail-clients-investment-products-reference-cryptoassets https://www.fca.org.uk/publications/policy-statements/ps20-1... / https://www.fca.org.uk/publication/policy/ps20-10.pdf https://www.fca.org.uk/publication/policy/ps20-10.pdf "We are prohibiting the marketing, distribution and sale in or from the UK to all retail clients, of derivatives and ETNs that reference certain types of unregulated, transferable cryptoassets"

modeless 5y ago

> SEC: derivatives of a trillion dollar asset are risky It's actually sillier than this. They think that derivatives of bitcoin are fine (futures ETF approved) while simultaneously saying bitcoin itself is too dangerous (spot ETF denied).

perl4ever 5y ago
The comment that managing actual bitcoin is too risky makes sense to me, even if it's unclear that's the SEC's rationale. People say, oh oh oh, GBTC and other substitutes don't track bitcoin. Well, yeah, maybe that's nature's way of telling you that keeping actual bitcoin safe is expensive. Pay your money and take your chances.

deleted 5y ago

[deleted]

ahallock 5y ago

The SEC must know something many other modern, first world countries do not because when I try to use most crypto apps, it says it's unavailable for US citizens, along with places like Yemen and North Korea.

bufferoverflow 5y ago
If you live in NY state, your government blocked you from using all kinds of crypto platforms. I live in a more free state that doesn't have such problems.