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> I think the way to understand this is that the SEC is concerned about protecting unsophisticated regular folks from being scammed. Keep in mind, the people t

> I think the way to understand this is that the SEC is concerned about protecting unsophisticated regular folks from being scammed. Keep in mind, the people the SEC are focused on "making whole" are the investors. The actual "unsophisticated investors" who make up the bulk of Celcius's customer base are going to get next to nothing out of the settlement. However, the sophisticated institutional investors who invested directly into Celsius will get most of their money back. It would actually be a completely different legal case if they just said "Celcius misrepresented the security of their assets". In your Pokémon example where I am scamming people, they could bust me for fraud without having to reclassify all cards everywhere. But that's not the case they are making here.

gamblor956 3y ago
The SEC is not focused on making the "institutional investors" whole. That is happening in bankruptcy court, because Celsius declared bankruptcy, and that is how bankruptcies work: the senior creditors get their money back first. If you have problems with that, take it up with the bankruptcy court and U.S. bankruptcy laws that classify customers as junior creditors. In fact, the SEC does not ever get involved in "making investors whole." It leaves that part up to the investors themselves. The SEC's complaint seeks to bar Mashinsky from future involvement in crypto trading, to bar him from being an officer or director of a publicly traded company, and for the disgorgement of profits arising from maintaining the price of crypto tokens through market manipulation tactics. [https://www.sec.gov/news/press-release/2023-133 https://www.sec.gov/news/press-release/2023-133] Also, in your Pokemon example you claim that buying up Pokemon that completes your collection somehow constitutes market manipulation. But that's a thing collectors actually do...so...by definition not market manipulation but a fundamental part of the market for collectibles (and in the Pokemon hypo Pokemons have instrinsic value because they can be used and valued in a Pokemon game independently of their trading value, in addition to their trading fair market value based on their rarity as a collectible item). This is very different from what the Celsisus guy did; he used wash trading to artificially increase the price of a crypto token whose only value was in being traded.
- jnwatson 3y ago
  The SEC does indeed get involved with recovering money for victims of investment fraud. Source: me. The SEC recovered about a third of the money I unwittingly invested in a Ponzi scheme.
  - arlcode 3y ago
    If you are willing to share: How did you end up getting tricked and how can other people avoid the same.
    - jnwatson 3y ago
      It was a pretty good scam. The scammer had a company that sold fractional profit shares in oil wells. Without getting too deep in the weeds, he sold the equivalent of more than 100%. He invested the proceeds of new investment in paying out old investors and buying new oil wells. Eventually he ran out of new investor money and the scheme unraveled. I don’t know how I would have caught it. The regulatory oversight in oil well finances is poor. The guy was on the lam for a few months, then sentenced to 10 years in Federal prison. He then escaped and hasn’t been found.
      - arlcode 3y ago
        Thank you. :)
      - DANmode 3y ago
        > He then escaped Is this...common?
        harambae 3y ago
        Matt Cox talked his way out of imminent arrest, went on the run for 3 years, and was only discovered after his girlfriend slipped up and told something to the wrong person. So yeah it happens https://en.m.wikipedia.org/wiki/Matthew_Cox https://en.m.wikipedia.org/wiki/Matthew_Cox
sroussey 3y ago
When you park money with someone that neither wants to be a bank or an exchange, you get neither of those protections. Assume all the money is gone. Particularly when they are offering 17x the going interest rate.

gamblor956 3y ago

The SEC is not focused on making the "institutional investors" whole. That is happening in bankruptcy court, because Celsius declared bankruptcy, and that is how bankruptcies work: the senior creditors get their money back first. If you have problems with that, take it up with the bankruptcy court and U.S. bankruptcy laws that classify customers as junior creditors. In fact, the SEC does not ever get involved in "making investors whole." It leaves that part up to the investors themselves. The SEC's complaint seeks to bar Mashinsky from future involvement in crypto trading, to bar him from being an officer or director of a publicly traded company, and for the disgorgement of profits arising from maintaining the price of crypto tokens through market manipulation tactics. [https://www.sec.gov/news/press-release/2023-133 https://www.sec.gov/news/press-release/2023-133] Also, in your Pokemon example you claim that buying up Pokemon that completes your collection somehow constitutes market manipulation. But that's a thing collectors actually do...so...by definition not market manipulation but a fundamental part of the market for collectibles (and in the Pokemon hypo Pokemons have instrinsic value because they can be used and valued in a Pokemon game independently of their trading value, in addition to their trading fair market value based on their rarity as a collectible item). This is very different from what the Celsisus guy did; he used wash trading to artificially increase the price of a crypto token whose only value was in being traded.

jnwatson 3y ago
The SEC does indeed get involved with recovering money for victims of investment fraud. Source: me. The SEC recovered about a third of the money I unwittingly invested in a Ponzi scheme.
- arlcode 3y ago
  If you are willing to share: How did you end up getting tricked and how can other people avoid the same.
  - jnwatson 3y ago
    It was a pretty good scam. The scammer had a company that sold fractional profit shares in oil wells. Without getting too deep in the weeds, he sold the equivalent of more than 100%. He invested the proceeds of new investment in paying out old investors and buying new oil wells. Eventually he ran out of new investor money and the scheme unraveled. I don’t know how I would have caught it. The regulatory oversight in oil well finances is poor. The guy was on the lam for a few months, then sentenced to 10 years in Federal prison. He then escaped and hasn’t been found.
    - arlcode 3y ago
      Thank you. :)
    - DANmode 3y ago
      > He then escaped Is this...common?
      - harambae 3y ago
        Matt Cox talked his way out of imminent arrest, went on the run for 3 years, and was only discovered after his girlfriend slipped up and told something to the wrong person. So yeah it happens https://en.m.wikipedia.org/wiki/Matthew_Cox https://en.m.wikipedia.org/wiki/Matthew_Cox

sroussey 3y ago

When you park money with someone that neither wants to be a bank or an exchange, you get neither of those protections. Assume all the money is gone. Particularly when they are offering 17x the going interest rate.