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Crypto to me reads increasingly like classical finance as time goes by. The parallel here is that banks lobby against new regulation, then once the regulation e

Crypto to me reads increasingly like classical finance as time goes by. The parallel here is that banks lobby against new regulation, then once the regulation exists as a moat, they lobby to keep the regulation. I'm sure the 100M fine didn't feel great but unless it bankrupts the company I doubt that BlockFi would want to go backwards now. For the low price of 100M they now have a map of how to legally do business in the space, in a way that is now much scarier to any would be new entrants. At its most optimistic I think crypto is trying to avoid some of these regulatory rube goldberg value extraction machines. Maybe it will in some spots, but you can see too where it may also just reinvent them.

capableweb 5y ago
> Crypto to me reads increasingly like classical finance as time goes by. The parallel here is that banks lobby against new regulation, then once the regulation exists as a moat, they lobby to keep the regulation. If you focus on the centralized institituions like cryptocurrency<>centralized currencies exchanges, or centralized lending platforms, then yeah, they sure get closer and closer to classical finance (except being based around decentralized platforms). But if you look at actual cryptocurrencies, without focusing on the exchanges or any other centralized parties, they actually get further and further away from classical finance. But it requires you to read GitHub/IRC/Matrix/Forum discussions between developers, rather than following reported news.
sirspacey 5y ago
This: “They now have a map” Regulators won’t generally tell you how to comply with a rule, often because they don’t know. So you force them to make a ruling and then have a proprietary roadmap. What was learned in those meetings by both parties is a huge moat. In the end, the SEC just got a hefty pay day for doing their job.
- pranavjoneja 5y ago
  How is this a moat for BlockFi? Why can't a competitor do exactly the same thing as BlockFi without paying the $100M fine? Asking this question earnestly because I actually want to know more.

capableweb 5y ago

> Crypto to me reads increasingly like classical finance as time goes by. The parallel here is that banks lobby against new regulation, then once the regulation exists as a moat, they lobby to keep the regulation. If you focus on the centralized institituions like cryptocurrency<>centralized currencies exchanges, or centralized lending platforms, then yeah, they sure get closer and closer to classical finance (except being based around decentralized platforms). But if you look at actual cryptocurrencies, without focusing on the exchanges or any other centralized parties, they actually get further and further away from classical finance. But it requires you to read GitHub/IRC/Matrix/Forum discussions between developers, rather than following reported news.

sirspacey 5y ago

This: “They now have a map” Regulators won’t generally tell you how to comply with a rule, often because they don’t know. So you force them to make a ruling and then have a proprietary roadmap. What was learned in those meetings by both parties is a huge moat. In the end, the SEC just got a hefty pay day for doing their job.

pranavjoneja 5y ago
How is this a moat for BlockFi? Why can't a competitor do exactly the same thing as BlockFi without paying the $100M fine? Asking this question earnestly because I actually want to know more.