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Congressmembers Tried to Stop the SEC’s Inquiry into FTX
- spir 4y agoThere are politicians and media publications protecting Sam Bankman-Fried's criminality, but these congressmen aren't among them. The letter in this article was written in March. FTX's long-term fraud has only been known since early November.
- Dylan16807 4y agoYou don't have to know about specific bad actions to shield the entity that is doing them.
- themitigating 4y agoTrue but it changes the amount of guilt right? Maybe they were just helping companies donating to then, the letter is about cryptocurrenty in general.
- JamesianP 4y agoBut if you fight against overzealous enforcement you will necessarily be shielding some bad actors along with the good. Not that I'm personally against the SEC (and other agencies) crossing into crypto and interpreting their mandate broadly, rather than being overly conservative and waiting for new laws while the scammers run wild. But in other areas these paperwork demands could be a huge burden...
- skippyboxedhero 4y agoThe SEC tried to stop the SEC's inquiry into FTX. Gensler said earlier this year that the SEC should be regulating FTX. SBF unleashes his torrent of mid-term money and then Gensler was saying up until FTX went bust (he was reportedly lobbying for them a few weeks before) that it should be the CTFC's job (which was the position that FTX were lobbying for as they had also bought a few people at the CTFC).
- Animats 4y ago"Enforcement powers, while conceptually broader with respect to non-SEC regulated entities, are still circumscribed by statute, federal judicial review, congressional oversight and the Commission’s own policies and procedures for initiating and conducting inquiries and investigations." Now that's being squishy-soft on crime. That's the point to make when those members of Congress come up for re-election. They're soft on crime. The basic law the SEC enforces, the Securities Exchange Act of 1934, is pretty clear on what's a security. The Supreme Court has clarified that. Investment of money, expectation of profit, common enterprise - it's a security. That's called the Howey Test. It's also been established that what you call it or how it works doesn't matter. There have been, over the years, many imaginative schemes cooked up to get around this. The Howey case involved tradeable orange grove harvesting rights in Florida. That was held to be a security. The crypto crowd has been yammering for years "but this is different". Well, it's not. The scams around crypto are classic. It's usually insiders stealing the money. The crashes are also classic. It's someone being over-leveraged when something goes down. This is not financial innovation.
- BuyMyBitcoins 4y ago>”The crypto crowd has been yammering for years "but this is different". Well, it's not.” In what way? Some cryptocurrencies have been declared securities, while many have not. Those such as Bitcoin and Ethereum have been around for long enough that if they were going to be ruled as securities via Howey, that would have surely been done by now.
- JumpCrisscross 4y ago> that would have surely been done by now We are getting damn close to that being done through statute in the U.S.
- Animats 4y agoThat was done years ago. The SEC cracked down on initial coin offerings back in 2018. They're still working down the backlog.[1] The "cyber" enforcement staff was doubled a few months back to catch up. The SEC does not consider Bitcoin to be a security because there's no "common enterprise". It's distributed more like a mined commodity. Miners are competitors. But where there's an issuer, or "minting", or "pre-mining", or anything like that, you can buy it, and it's expected to go up, it's clearly a security. Etherium is in an interesting position with the shift to proof of stake. That may have made it a security, because it's now controlled by voting owners, just like a stock. So now there's a "common enterprise", unlike in the "mining" phase. The big question now is exchange regulation. Are Bitcoin exchanges and brokers going to have to register with the SEC, pay for and be covered by SIPC insurance, and be regulated by FINRA? After FTX, that's probably coming. FTX acted like a retail broker, after all. Nobody runs Super Bowl ads or buys stadium naming rights for something sold only to institutional clients. The law in this area looks at the economic realities, not the form. If it looks like a security, is marketed like a security, and is bought and sold for the same reasons as securities, it's a security. Doesn't matter what you call it. [1] https://www.sec.gov/spotlight/cybersecurity-enforcement-actions https://www.sec.gov/spotlight/cybersecurity-enforcement-acti...
- zx8080 4y agoTell me it's not a corruption.
- themitigating 4y agoI can tell you the headline is manipulative BS because they were questioning the ability of the SEC to investigate these types of companies in general and they didn't specifically mention FTX
- deleted 4y ago[deleted]
- woodpanel 4y agoYou know things are looking bad if out of the gazillions of $ FTX laundered into the DNC they front-run their "reports" with the handful Republicans which were allowed to nibble at the trough. Meanwhile, SBF is still not in jail and on the contrary even invited to speak: https://twitter.com/andrewrsorkin/status/1595517635441090565 https://twitter.com/andrewrsorkin/status/1595517635441090565
- yalogin 4y agoWhen it comes to doing shady things and not having the backs of regular people there is a lot of unity and bipartisanship in congress.
- ourmandave 4y agohttps://archive.ph/KeNum https://archive.ph/KeNum
- dragonne 4y agoFYI this site isn't paywalled, it just has an obnoxious popup.
- neilv 4y agoLet's not Friday (Holiday) News Dump this possible story. If there's something to it, next week people will have more time to look into it, without it spoiling their turkey appetite.
- themitigating 4y agoNot everyone celebrates Thanksgiving
- hinkley 4y agoIf the topic is a US domestic matter, most of the people who need to pay attention do. This idea that having accurate information about things happening on the opposite side of the world is going to change anything? You don't have to think about it for more than two seconds to see that's not true. It's an Illusion of Control. Exposing something is only the first step do changing it. But you can expose things and not change a damn thing.
- MetaMonk 4y ago"Blockchain Eight" when you coulda had "Chain Gang"? Cmon.
- IfOnlyYouKnew 4y agoIt's a reference to the "Keating Five".
- MetaMonk 4y agoDidn't know about that scandal, but it's also just standard to uncreatively (but tersely) name important events etc. with a structure of <noun/adjective> <number> (Boston Six, Gang of Four).
- jmpman 4y agoJust like the Keating Five. These politicians should be vilified.
- rdxm 4y ago
- ericbarrett 4y agoThe eight congressmen: Tom Emmer (R-MN) Warren Davidson (R-OH) Byron Donalds (R-FL) Ted Budd (R-NC) Josh Gottheimer (D-NJ) Jake Auchincloss (D-MA) Ritchie Torres (D-NY) Darren Soto (D-FL) The signed letter: https://emmer.house.gov/_cache/files/0/c/0c7fc863-7916-4b19-bc44-52bef772287e/9B0B9D1CA9B3C215DDC762DF5B0F6864.3.16.22.emmer.sec.letter.pdf https://emmer.house.gov/_cache/files/0/c/0c7fc863-7916-4b19-...
- googlryas 4y agoHow much was donated to them versus other senators?
- deleted 4y ago[deleted]
- HarryHirsch 4y agoA sufficient amount of money, clearly.
- qup 4y agoIf one of the Ds or Rs was flipped, we could all condemn the most-guilty party with great conviction.
- smt88 4y agoI don't know anyone with basic knowledge of Congress who doesn't understand that lobbying heavily influences both parties, although not at all equally.
- deleted 4y ago[deleted]
- dotancohen 4y agoPossibly, but what percentage of the population actually has the basic knowledge you presume?
- d1str0 4y agoThis is quite an inflammatory title by HN standards.
- deleted 4y ago[deleted]
- UberFly 4y agoIt's the same title as the article, but yea, click bait title all the same.
- AnimalMuppet 4y agoIn March. And not FTX specifically, but crypto in general. So, as d1str0 said, yes, very inflamatory (and misleading) headline.
- encryptluks2 4y agoThe headline is still accurate, as stopping SEC inquiry in crypto would have the same effect.
- MichaelCollins 4y agoAccurate maybe, but very imprecise.
- AnimalMuppet 4y agoWould an inquiry in March have prevented the FTX mess? Maybe. It would have been good to at least give it the chance. But in the current situation, the headline reads like these 8 tried to stop an inquiry specifically into FTX after the collapse, which is totally not what happened.
- themitigating 4y agoIt's accurate but extremely manipulative because it implies this the congressman were directly helping FTX.
- dylan604 4y ago"The March letter from eight House members—four Democrats and four Republicans—questioned the SEC’s authority to make informal inquiries to crypto and blockchain companies, and intimated that the requests violated federal law." This wasn't an investigation into just FTX. This was a broader investigation into crypto companies, plural. The current post title of "Inquiry into FTX" seems to be editorializing. Dang must be slow on the tryptophan to not post the usual HN guidelines reprimand
- alsetmusic 4y agoIt’s the title of the article which makes it appropriate here. That it’s a bad title, however, is not in dispute.
- junofan 4y agoI mean there’s zero mention of FTX in the letter. Perhaps a question mark is in order.
- themitigating 4y agoI wouldn't blame the poster but the source which is using an extremely manipulative headline.
- egberts1 4y agoPaywall
- racked 4y agoYes, the crypto world is a hornet's nest, but the non-crypto world is ruled by bankers with an ever-increasing thirst for control over our lives. (Read up about the Fed's new CBDC plans) As far as I'm aware, Monero and cash are the only practical ways to pay anonymously. So, who are worse? The congressmen who (perhaps in this case naively) tried to avoid overregulating crypto, or the remaining congressmen who continue to condone an economy completely manipulable by private bankers by way of the Federal Reserve?
- brian-armstrong 4y agoRegulating a sketchy Ponzi scheme with vaguely crypto trappings != regulating crypto
- throwaway1777 4y agoThey both suck and both should be criticized. But also both crypto and banks are diverse and not all bad.
- kelnos 4y agoIntent matters. Even if these congresspeople are correct that the SEC shouldn't be doing what they're doing, if the reason the congresspeople wrote that letter is because they received "donations" from cryptocurrency companies or PACs, then I think we should still give it some scrutiny.