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That’s rich coming from the guy who couldn’t even answer a basic yes/no question by Congress, “Is ethereum a commodity?”. His congressional testimony was a jo

by koolba 4y ago

That’s rich coming from the guy who couldn’t even answer a basic yes/no question by Congress, “Is ethereum a commodity?”. His congressional testimony was a joke. How that man still has the job of SEC chief is quite the mystery. Being CFO of Hillary Clinton’s 2016 campaign is probably a factor.

duxup 4y ago
Is not giving a yes or no bad? Maybe it isn’t clear?
- hbbio 4y ago
  It's really bad. In the press, he says that "actors are not complying" but not being able to answer the most simple question (there are others more complex) is *not* playing in SEC favour. Comply with what? Ethereum is the most used "crypto"-currency and the ecosystem players like Coinbase (a YC company) are right by saying they *can't* comply... they don't know what they are supposed to do despite asking repeatedly for years.
  - duxup 4y ago
    You didn’t answer my other question.
    - latchkey 4y ago
      "the rules are clear" "great! how would they apply to this simple example?" "lol, no I can't tell you that!"
      - thisgoesnowhere 4y ago
        That's not how regulation works with the SEC. The rules are broad and are specificly designed to not be strict so that they can be applied to new technologies and businesses. You can say you don't like these rules or how they are applied but that's how they have been applied since their inception. This isn't new.
        latchkey 4y ago
        Sadly, the existing rules are clearly not being applied well to these "new" (10+ year old) technologies. After, whatever decades of "the rules", new technologies have come along that have stumped "the rules". Now, the SEC has to deal with that. Instead of being an adult and having a good conversation, they are just kicking and screaming. What's happening is that SEC is saying that you're breaking "the rules" (ie: Wells Notice to coinbase). So, coinbase says... "ok, cool... what rules am i breaking?" The response is: "lol, no I can't tell you that!" So now Brian is in DC this week talking to regulators trying to get some clarity. He's posting all sorts of pictures of this on Twitter. Let's see what happens.
        growse 4y ago
        The response to the wells notice is meant to be an argument as to why you're not in breach of the law. Not a request for more information. If they're not able to argue why they're not breaking the law, then they should hire better lawyers.
        latchkey 4y ago
        Comments like this and your second one below, seem so low brow and childish. Account from 2011 and 1400 karma... keep up the good work there. Of course they can argue it, that's what is happening. They are going to sue the government. Why? Because the SEC refuses to even have a conversation about things. They've been trying, for years, to do so. This isn't some random small company, this is a public company that the SEC should be supporting with better answers than just refusing to even meet. Worse off, along this same thread, Gensler doesn't even have basic answers to questions that he was prepared for.
        growse 4y ago
        You appear to be very confused about the role the SEC plays in the industry. They're not a friendly, supportive legal advice service, they're law enforcement. In any case, even if the SEC did give out legal advice, I don't believe it would form any type of legal precedent. Nothing stops the next administration from taking a different view. If you're a large public company knowingly entering into a regulated industry where your activities are considered by everyone to be a "a bit of a legally grey area", then litigation is the entire ball game. Do the thing, wait to get prosecuted, hope you win. Alternatively, do some lobbying, get the law changed how you want, then do the activity. Been happening for centuries. Easy as pie.
      - growse 4y ago
        The regulators aren't obligated to tell you how to stay out of trouble.
        latchkey 4y ago
        Gensler knows what trouble is and isn’t. https://twitter.com/zk_shark/status/1650689125580668931 https://twitter.com/zk_shark/status/1650689125580668931
    - ghayes 4y ago
      Yes, it’s very bad, as if you’re a US company, how do you comply if one government agency tells you one thing, and another tells you the opposite. Rule of law fundamentally requires a shared understanding of the law.
      - duxup 4y ago
        Did you ask a government agency? This whole congressional testimony as legal advice for your business makes no sense.
  - re-thc 4y ago
    > Comply with what? Comply by not operating at all probably. Just the SEC can't outright say that.
    - dontknowwhyihn 4y ago
      The SEC could have prevented Coinbase from becoming a publicly traded company, but they didn’t.
      - thisgoesnowhere 4y ago
        What are you suggesting here? Are you saying that because they said coinbase could list that means that crypto is compliant?
- bpodgursky 4y ago
  Do you really want to live in a country where the government is not willing to tell you whether you are breaking the law?
  - duxup 4y ago
    I don’t think congressional testimony is quite that.
  - mikeryan 4y ago
    That’s literally one of the main jobs of lawyers because there’s a shit ton of law that’s not clearly defined and based on obscure precedents or never been tried in a court. Heck half of the court system from Appellate to the Supreme court is to figure out what is and isn’t legal. Most government agencies won’t tell you if something is legal or illegal because they don’t know unless there clear case law on the subject, in which case your attorney should know, and they’d spend all day guessing. If Coinbase wants clarity then take it to court and run it up the flagpole.
  - growse 4y ago
    > Do you really want to live in a country where the government is not willing to tell you whether you are breaking the law? Show me a country where the government tells whether or not you're breaking the law without actually prosecuting you.
deleted 4y ago
[deleted]
ackbar03 4y ago
So is ethereum a commodity? No seriously, I can't answer that either.
- chaxor 4y ago
  It's just a currency. That seems rather simple. WTF is a "commodity"?
  - scrollaway 4y ago
    https://www.investopedia.com/terms/c/commodity.asp https://www.investopedia.com/terms/c/commodity.asp
pclmulqdq 4y ago
The answer to that question is a little like people arguing in court "it depends on what your definition of 'is' is." It seems like a simple question, but it's heavily loaded with both future implications and past precedents, and it can be very hard to answer questions like that unless you're prepared to back up your answer. He clearly hadn't done enough research to answer one way or the other.
- latchkey 4y ago
  > He clearly hadn't done enough research to answer one way or the other. He definitely has, or at least he should have. When ETH switched to PoS things changed, but he hasn't officially updated his opinion on it and wasn't willing to go on record about it at this latest hearing. https://coingeek.com/is-eth-a-security-if-it-wasnt-before-it-is-now/ https://coingeek.com/is-eth-a-security-if-it-wasnt-before-it...
  - bushbaba 4y ago
    You assume he hasn’t done research. Instead it could be his research found there to not be a clear “good” answer and the response was his way out of making a call at such a relatively early industry stage.
    - latchkey 4y ago
      > You assume he hasn’t done research. That's literally the opposite of what I just said.
  - pclmulqdq 4y ago
    It sounds like we agree that he should have, but he hasn't.
    - latchkey 4y ago
      The guy taught courses at MIT on bitcoin and previously shilled algorand. He's done research. Although, oddly, he's never done a crypto transaction. He's probably really good at doing standard SEC things, but I'm really starting to question his role in the cryptodigital economy.
e63f67dd-065b 4y ago
The reason he won't answer the question is because it's complicated. On one hand, yes, Ethereum is obviously a security, it raised money from investors to make a thing, and investors expected to get rich off it. On the other hand, Ethereum is currently regulated as a commodity by the CFTC. If he says Ethereum is a security, then there's a political mess. If he says Ethereum is a commodity, then it breaks down the SEC's case for all the crypto projects out there that's basically stock IPOs but with a thin crypto layer on top. I would not impute his credentials, he was a partner at Goldman Sachs and was chair of CFTC under Obama. He was involved in crafting a great deal of policy after 08 around the new regulations for financial institutions. He's not stupid, he's clearly a better person for the job than most of the people here on HN.
- marcell 4y ago
  How can crypto companies be expected to follow the law, if the head of the SEC cannot say if Ethereum is a security or a commodity?
  - lacker 4y ago
    Well, it's easy to follow the law. Just be conservative and treat Ethereum like an unregistered security. Ie, don't offer it for sale to the public. That certainly isn't a good outcome for Coinbase, though, so I can see why the crypto companies wish the SEC had a different suggestion.
    - jeremyjh 4y ago
      Laws the CEO doesn’t like are “unclear”. He doesn’t like any laws because they are intended to thwart grifters like him. So all regulation is unclear.
lacker 4y ago
My guess is he doesn't want to answer the yes/no question because this question is going to be the subject of a lawsuit, and his lawyers like most lawyers are in favor of not talking publicly about court cases outside the courtroom.
JumpCrisscross 4y ago
> That’s rich coming from the guy who couldn’t even answer a basic yes/no question by Congress, “Is ethereum a commodity?” Commodities aren't Gensler's job. It would be like someone asking him about the tax code. It's fair for him to say "I don't know." What he knows are securities.

by koolba 4y ago

duxup 4y ago

Is not giving a yes or no bad? Maybe it isn’t clear?

hbbio 4y ago
It's really bad. In the press, he says that "actors are not complying" but not being able to answer the most simple question (there are others more complex) is *not* playing in SEC favour. Comply with what? Ethereum is the most used "crypto"-currency and the ecosystem players like Coinbase (a YC company) are right by saying they *can't* comply... they don't know what they are supposed to do despite asking repeatedly for years.
- duxup 4y ago
  You didn’t answer my other question.
  - latchkey 4y ago
    "the rules are clear" "great! how would they apply to this simple example?" "lol, no I can't tell you that!"
    - thisgoesnowhere 4y ago
      That's not how regulation works with the SEC. The rules are broad and are specificly designed to not be strict so that they can be applied to new technologies and businesses. You can say you don't like these rules or how they are applied but that's how they have been applied since their inception. This isn't new.
      - latchkey 4y ago
        Sadly, the existing rules are clearly not being applied well to these "new" (10+ year old) technologies. After, whatever decades of "the rules", new technologies have come along that have stumped "the rules". Now, the SEC has to deal with that. Instead of being an adult and having a good conversation, they are just kicking and screaming. What's happening is that SEC is saying that you're breaking "the rules" (ie: Wells Notice to coinbase). So, coinbase says... "ok, cool... what rules am i breaking?" The response is: "lol, no I can't tell you that!" So now Brian is in DC this week talking to regulators trying to get some clarity. He's posting all sorts of pictures of this on Twitter. Let's see what happens.
        growse 4y ago
        The response to the wells notice is meant to be an argument as to why you're not in breach of the law. Not a request for more information. If they're not able to argue why they're not breaking the law, then they should hire better lawyers.
        latchkey 4y ago
        Comments like this and your second one below, seem so low brow and childish. Account from 2011 and 1400 karma... keep up the good work there. Of course they can argue it, that's what is happening. They are going to sue the government. Why? Because the SEC refuses to even have a conversation about things. They've been trying, for years, to do so. This isn't some random small company, this is a public company that the SEC should be supporting with better answers than just refusing to even meet. Worse off, along this same thread, Gensler doesn't even have basic answers to questions that he was prepared for.
        growse 4y ago
        You appear to be very confused about the role the SEC plays in the industry. They're not a friendly, supportive legal advice service, they're law enforcement. In any case, even if the SEC did give out legal advice, I don't believe it would form any type of legal precedent. Nothing stops the next administration from taking a different view. If you're a large public company knowingly entering into a regulated industry where your activities are considered by everyone to be a "a bit of a legally grey area", then litigation is the entire ball game. Do the thing, wait to get prosecuted, hope you win. Alternatively, do some lobbying, get the law changed how you want, then do the activity. Been happening for centuries. Easy as pie.
    - growse 4y ago
      The regulators aren't obligated to tell you how to stay out of trouble.
      - latchkey 4y ago
        Gensler knows what trouble is and isn’t. https://twitter.com/zk_shark/status/1650689125580668931 https://twitter.com/zk_shark/status/1650689125580668931
  - ghayes 4y ago
    Yes, it’s very bad, as if you’re a US company, how do you comply if one government agency tells you one thing, and another tells you the opposite. Rule of law fundamentally requires a shared understanding of the law.
    - duxup 4y ago
      Did you ask a government agency? This whole congressional testimony as legal advice for your business makes no sense.
- re-thc 4y ago
  > Comply with what? Comply by not operating at all probably. Just the SEC can't outright say that.
  - dontknowwhyihn 4y ago
    The SEC could have prevented Coinbase from becoming a publicly traded company, but they didn’t.
    - thisgoesnowhere 4y ago
      What are you suggesting here? Are you saying that because they said coinbase could list that means that crypto is compliant?
bpodgursky 4y ago
Do you really want to live in a country where the government is not willing to tell you whether you are breaking the law?
- duxup 4y ago
  I don’t think congressional testimony is quite that.
- mikeryan 4y ago
  That’s literally one of the main jobs of lawyers because there’s a shit ton of law that’s not clearly defined and based on obscure precedents or never been tried in a court. Heck half of the court system from Appellate to the Supreme court is to figure out what is and isn’t legal. Most government agencies won’t tell you if something is legal or illegal because they don’t know unless there clear case law on the subject, in which case your attorney should know, and they’d spend all day guessing. If Coinbase wants clarity then take it to court and run it up the flagpole.
- growse 4y ago
  > Do you really want to live in a country where the government is not willing to tell you whether you are breaking the law? Show me a country where the government tells whether or not you're breaking the law without actually prosecuting you.

deleted 4y ago

[deleted]

ackbar03 4y ago

So is ethereum a commodity? No seriously, I can't answer that either.

chaxor 4y ago
It's just a currency. That seems rather simple. WTF is a "commodity"?
- scrollaway 4y ago
  https://www.investopedia.com/terms/c/commodity.asp https://www.investopedia.com/terms/c/commodity.asp

pclmulqdq 4y ago

The answer to that question is a little like people arguing in court "it depends on what your definition of 'is' is." It seems like a simple question, but it's heavily loaded with both future implications and past precedents, and it can be very hard to answer questions like that unless you're prepared to back up your answer. He clearly hadn't done enough research to answer one way or the other.

latchkey 4y ago
> He clearly hadn't done enough research to answer one way or the other. He definitely has, or at least he should have. When ETH switched to PoS things changed, but he hasn't officially updated his opinion on it and wasn't willing to go on record about it at this latest hearing. https://coingeek.com/is-eth-a-security-if-it-wasnt-before-it-is-now/ https://coingeek.com/is-eth-a-security-if-it-wasnt-before-it...
- bushbaba 4y ago
  You assume he hasn’t done research. Instead it could be his research found there to not be a clear “good” answer and the response was his way out of making a call at such a relatively early industry stage.
  - latchkey 4y ago
    > You assume he hasn’t done research. That's literally the opposite of what I just said.
- pclmulqdq 4y ago
  It sounds like we agree that he should have, but he hasn't.
  - latchkey 4y ago
    The guy taught courses at MIT on bitcoin and previously shilled algorand. He's done research. Although, oddly, he's never done a crypto transaction. He's probably really good at doing standard SEC things, but I'm really starting to question his role in the cryptodigital economy.

e63f67dd-065b 4y ago

The reason he won't answer the question is because it's complicated. On one hand, yes, Ethereum is obviously a security, it raised money from investors to make a thing, and investors expected to get rich off it. On the other hand, Ethereum is currently regulated as a commodity by the CFTC. If he says Ethereum is a security, then there's a political mess. If he says Ethereum is a commodity, then it breaks down the SEC's case for all the crypto projects out there that's basically stock IPOs but with a thin crypto layer on top. I would not impute his credentials, he was a partner at Goldman Sachs and was chair of CFTC under Obama. He was involved in crafting a great deal of policy after 08 around the new regulations for financial institutions. He's not stupid, he's clearly a better person for the job than most of the people here on HN.

marcell 4y ago
How can crypto companies be expected to follow the law, if the head of the SEC cannot say if Ethereum is a security or a commodity?
- lacker 4y ago
  Well, it's easy to follow the law. Just be conservative and treat Ethereum like an unregistered security. Ie, don't offer it for sale to the public. That certainly isn't a good outcome for Coinbase, though, so I can see why the crypto companies wish the SEC had a different suggestion.
  - jeremyjh 4y ago
    Laws the CEO doesn’t like are “unclear”. He doesn’t like any laws because they are intended to thwart grifters like him. So all regulation is unclear.

lacker 4y ago

My guess is he doesn't want to answer the yes/no question because this question is going to be the subject of a lawsuit, and his lawyers like most lawyers are in favor of not talking publicly about court cases outside the courtroom.

JumpCrisscross 4y ago

> That’s rich coming from the guy who couldn’t even answer a basic yes/no question by Congress, “Is ethereum a commodity?” Commodities aren't Gensler's job. It would be like someone asking him about the tax code. It's fair for him to say "I don't know." What he knows are securities.