9 ms·

A congressman asked gensler face to face if ethereum is a security and gensler declined to answer. So no, the SEC has not been clear.

8note 3y ago
For what definition of Ethereum? The one with staking?
- mthoms 3y ago
  Doesn't matter. He refused to give any indication either way. https://www.youtube.com/watch?v=VhA1dZXeao0 https://www.youtube.com/watch?v=VhA1dZXeao0
  - growse 3y ago
    Why are people so desperate to seek legal advice from law enforcement?
    - mmahut 3y ago
      It happens when the law is not clear and the law enforcement has to take a stand on it to enforce it.
      - growse 3y ago
        There's lots of laws that aren't "clear", but people don't phone the police up and ask them what they're going to do. They talk to a lawyer and get advice.
      - hef19898 3y ago
        The opinion only shows how little, read none what so ever, experience some people have in figuring out compliant business processes. Yet another rude awakening for the, let me be blunt, cluelessly naive and in some cases outright criminal tech crowd that seems to flok in huge numbers around crypto in general. That attitude started aroind the time Uber got big. Maybe even with AirBnB. In a sense, crypto is exactly the tech eco system we deserve. Good that there is finally some enforcement of rules that apply tp basically everyone else.
    - ETH_start 3y ago
      Because in this case the agency that enforces the rules is also charged with creating them, and how the rules this agency creates apply to novel instruments with no centralized issuer, centralized operator or investment contract, is not at all clear.
      - growse 3y ago
        No, Congress creates the rules. The SEC decides how to enforce them. A court then decides who's right in any given action.
        ceejayoz 3y ago
        No, in most cases, Congress makes laws that say things like “we delegate our rule making authority to the EPA with regards to air pollution” (Clean Air Act). The agencies then create the rules; https://en.wikipedia.org/wiki/Code_of_Federal_Regulations https://en.wikipedia.org/wiki/Code_of_Federal_Regulations Sometimes the court system decides the agency’s rules exceed the authority granted to them by Congress. Other times Congress uses the Congressional Review Act or new legislation to say “that’s not what we meant”.
        JumpCrisscross 3y ago
        The laws pertinent to the SEC's complaint are the '33 Act, '34 Act and court cases which constructed the Howey Test. None of them were created by the SEC.
        ceejayoz 3y ago
        The '33 and '34 Acts give the SEC the ability to write the regulations, via wording like "under rules and regulations which the Commission shall prescribe". Congress defines a variety of things, but the SEC makes most of the nitty gritty procedure/rules out of those definitions and directives. The Howey test exists because the SEC enforced said new-ish regulations against someone, and the court agreed with them, holding Howey liable for violations of the '33 Act as implemented by regulators at the SEC. All this makes the statement "No, Congress creates the rules" upthread inaccurate.
vba616 3y ago
It suggests bad faith to ask why the SEC didn't crack down earlier. Sure, it was politics, but it seems entirely understandable. We all know that before the crypto bust, a lot of people would've been starting a witch hunt if the SEC had tried to enforce the law. Congress, for starters. Gensler is being opportunistic now because that's the reality they have to work with. The wealthy and powerful in this country take it on themselves to personally ruin public servants who get in their way sometimes.
- paulddraper 3y ago
  Huh??? The SEC decides when, what, and for whom it enforces rules?
  - ceejayoz 3y ago
    This is extremely common practice in our system. https://en.wikipedia.org/wiki/Prosecutorial_discretion https://en.wikipedia.org/wiki/Prosecutorial_discretion
    - paulddraper 3y ago
      Kinda violates "justice is blind" trope, no?
      - ceejayoz 3y ago
        Meh, "justice is stupidly aggressive" isn't an improvement.
      - vba616 3y ago
        No, it's impossible to prosecute every violation of law, and this has been true since the beginning of time. Would you agree that each library can't have every book ever written, and do you think there is a distinction between not selecting a book and "banning" it?
    - vba616 3y ago
      "In our system"? As if there is a system that catches, charges, prosecutes and/or convicts everyone who breaks the law.
JumpCrisscross 3y ago
> congressman asked gensler face to face if ethereum is a security and gensler declined to answer The SEC has brought zero enforcement action that turns on Bitcoin or Ether being securities. Somewhat hilariously, these complaints are an industry endemic with bullshitters flipping out about Gensler being able to say “I don’t know.”
- _fizz_buzz_ 3y ago
  Basically, Gensler is throwing them a bone. Ethereum is very obviously a security but the SEC decided it has been too long since the ICO, it's too big and too decentralized to now go after it. Pretending not to know if Ethereum is a security is a gift from the SEC to the crypto industry and crypto folks should probably shut up about this asap before the SEC feels their gift isn't appreciated.
_fizz_buzz_ 3y ago
The reason Gensler probably didn't want to say anything publicly: Ethereum is legally a bit of mess and should have clearly been classified as a security when it ICOed, but the SEC kind of dropped the ball. Gensler knows this, the Coinbase lawyers know this and the congressman asking probably also knew that Ethereum was in a bit of a grey area. Honestly, crypto folks should be happy that SEC is taking a "don't ask, don't tell" approach with Ethereum. This is how Matt Levine put it: "Some of them did securities offerings, but by the time the SEC noticed they were too entrenched and decentralized and it would have been a pain for the SEC to go after them. Ethereum, most notably, very very clearly did an ICO in 2014, raising about $18.3 million by selling ETH tokens. If they did that today, or in late 2017, the SEC would have some serious questions. But by the time the SEC got around to cracking down on ICOs in 2017, Ethereum was big and decentralized and the SEC would have had a hard time, practically and legally, challenging its 2014 ICO. And so everyone sort of grudgingly concedes that ETH is not a security."

8note 3y ago

For what definition of Ethereum? The one with staking?

mthoms 3y ago
Doesn't matter. He refused to give any indication either way. https://www.youtube.com/watch?v=VhA1dZXeao0 https://www.youtube.com/watch?v=VhA1dZXeao0
- growse 3y ago
  Why are people so desperate to seek legal advice from law enforcement?
  - mmahut 3y ago
    It happens when the law is not clear and the law enforcement has to take a stand on it to enforce it.
    - growse 3y ago
      There's lots of laws that aren't "clear", but people don't phone the police up and ask them what they're going to do. They talk to a lawyer and get advice.
    - hef19898 3y ago
      The opinion only shows how little, read none what so ever, experience some people have in figuring out compliant business processes. Yet another rude awakening for the, let me be blunt, cluelessly naive and in some cases outright criminal tech crowd that seems to flok in huge numbers around crypto in general. That attitude started aroind the time Uber got big. Maybe even with AirBnB. In a sense, crypto is exactly the tech eco system we deserve. Good that there is finally some enforcement of rules that apply tp basically everyone else.
  - ETH_start 3y ago
    Because in this case the agency that enforces the rules is also charged with creating them, and how the rules this agency creates apply to novel instruments with no centralized issuer, centralized operator or investment contract, is not at all clear.
    - growse 3y ago
      No, Congress creates the rules. The SEC decides how to enforce them. A court then decides who's right in any given action.
      - ceejayoz 3y ago
        No, in most cases, Congress makes laws that say things like “we delegate our rule making authority to the EPA with regards to air pollution” (Clean Air Act). The agencies then create the rules; https://en.wikipedia.org/wiki/Code_of_Federal_Regulations https://en.wikipedia.org/wiki/Code_of_Federal_Regulations Sometimes the court system decides the agency’s rules exceed the authority granted to them by Congress. Other times Congress uses the Congressional Review Act or new legislation to say “that’s not what we meant”.
        JumpCrisscross 3y ago
        The laws pertinent to the SEC's complaint are the '33 Act, '34 Act and court cases which constructed the Howey Test. None of them were created by the SEC.
        ceejayoz 3y ago
        The '33 and '34 Acts give the SEC the ability to write the regulations, via wording like "under rules and regulations which the Commission shall prescribe". Congress defines a variety of things, but the SEC makes most of the nitty gritty procedure/rules out of those definitions and directives. The Howey test exists because the SEC enforced said new-ish regulations against someone, and the court agreed with them, holding Howey liable for violations of the '33 Act as implemented by regulators at the SEC. All this makes the statement "No, Congress creates the rules" upthread inaccurate.

vba616 3y ago

It suggests bad faith to ask why the SEC didn't crack down earlier. Sure, it was politics, but it seems entirely understandable. We all know that before the crypto bust, a lot of people would've been starting a witch hunt if the SEC had tried to enforce the law. Congress, for starters. Gensler is being opportunistic now because that's the reality they have to work with. The wealthy and powerful in this country take it on themselves to personally ruin public servants who get in their way sometimes.

paulddraper 3y ago
Huh??? The SEC decides when, what, and for whom it enforces rules?
- ceejayoz 3y ago
  This is extremely common practice in our system. https://en.wikipedia.org/wiki/Prosecutorial_discretion https://en.wikipedia.org/wiki/Prosecutorial_discretion
  - paulddraper 3y ago
    Kinda violates "justice is blind" trope, no?
    - ceejayoz 3y ago
      Meh, "justice is stupidly aggressive" isn't an improvement.
    - vba616 3y ago
      No, it's impossible to prosecute every violation of law, and this has been true since the beginning of time. Would you agree that each library can't have every book ever written, and do you think there is a distinction between not selecting a book and "banning" it?
  - vba616 3y ago
    "In our system"? As if there is a system that catches, charges, prosecutes and/or convicts everyone who breaks the law.

JumpCrisscross 3y ago

> congressman asked gensler face to face if ethereum is a security and gensler declined to answer The SEC has brought zero enforcement action that turns on Bitcoin or Ether being securities. Somewhat hilariously, these complaints are an industry endemic with bullshitters flipping out about Gensler being able to say “I don’t know.”

_fizz_buzz_ 3y ago
Basically, Gensler is throwing them a bone. Ethereum is very obviously a security but the SEC decided it has been too long since the ICO, it's too big and too decentralized to now go after it. Pretending not to know if Ethereum is a security is a gift from the SEC to the crypto industry and crypto folks should probably shut up about this asap before the SEC feels their gift isn't appreciated.

_fizz_buzz_ 3y ago

The reason Gensler probably didn't want to say anything publicly: Ethereum is legally a bit of mess and should have clearly been classified as a security when it ICOed, but the SEC kind of dropped the ball. Gensler knows this, the Coinbase lawyers know this and the congressman asking probably also knew that Ethereum was in a bit of a grey area. Honestly, crypto folks should be happy that SEC is taking a "don't ask, don't tell" approach with Ethereum. This is how Matt Levine put it: "Some of them did securities offerings, but by the time the SEC noticed they were too entrenched and decentralized and it would have been a pain for the SEC to go after them. Ethereum, most notably, very very clearly did an ICO in 2014, raising about $18.3 million by selling ETH tokens. If they did that today, or in late 2017, the SEC would have some serious questions. But by the time the SEC got around to cracking down on ICOs in 2017, Ethereum was big and decentralized and the SEC would have had a hard time, practically and legally, challenging its 2014 ICO. And so everyone sort of grudgingly concedes that ETH is not a security."