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> “Somebody should have to officially tell you if you're allowed to do something or not, ahead of time.” And how would this process actually work in practice?

• NoboruWataya 3y ago
  I think you're overcomplicating this. In reality, people ask their lawyers whether they are allowed to do something, and those lawyers research the law in conjunction with any interpretive guidance published by the regulators, and sometimes they do consult with regulators directly on behalf of their clients. Where the law is unclear and the regulator refuse to publish guidance or discuss their approach with market participants, lawyers are unable to give a strong opinion. If the SEC were to publish comprehensive guidance on this (clearly a question that a lot of people are asking), it would probably remove any need for people to go asking them, and would also help people to comply with the law and make any enforcement actions easier as a less risky. The idea of people DDOSing the regulator with thousands of slight variations of a proposal is unrealistic. These are people, not computers - if someone was blatantly abusing the system like that, the SEC would just tell them to knock it off.
  • pavlov 3y ago
    And what if Coinbase's lawyers did all that, the SEC told them in those informal consultations that these altcoins that Coinbase wanted to list sure look a lot like securities, but Coinbase executives decided they'd rather ask forgiveness later because there was so much money to be made pushing all those VC-funded tokens onto retail investors while the good times lasted. The fundamental problem here is that nobody in crypto is acting in good faith. They're just looking for loopholes to exploit. Publishing more guidance is pointless against such actors. Remember, this is an industry where Sam Bankman-Fried stood out as the honest guy who wants to play along with regulators.
    • nvm0n2 3y ago
      Sure, what if the SEC did that. Except they didn't and we know this because they've very clearly refused to issue any decisions for a decade+ now.
• AnthonyMouse 3y ago
  > Probably not, since they would consume a lot of lawyer time at the relevant agencies. If it were free, people could file thousands of slightly different requests for all imaginable variations of their dubious business plan, hoping that something would slip by. If they tell you that you can't do it, that should give you standing to challenge their determination in court. And, of course, if they tell you that you can do it, they can't later prosecute you for the thing they officially approved. Asking them a hundred times doesn't matter; if they say yes then you're happy and if they say no you can sue them and it becomes an issue for the courts in the same way as if they charged you for it, except that you don't go to jail if the courts rule against you because you haven't done it yet. > There would maybe need to be a new profession of counterfactual judges who decide on the legality of things that haven’t happened. We could call them lawyers and have them work for the agency in charge of prosecuting that part of the law, so when they publish their opinion it expresses the official position of the prosecutor's office and precludes them from reinterpreting the existing law in a different way against your behavior ex post facto. > How much should such a process cost? They're lawyers. They get paid by the hour. The first thing they do is evaluate how many hours it will take to research your question, the estimate is free, and then you decide if you want to pay them. In most cases this will not take much; these are professionals answering questions in the specific area of their expertise. How much time does it take to answer a simple yes or no question? The answers all get published (no secret interpretations of the law) and can be used by anyone, so large entities will often pay to have an ambiguous law clarified and then everybody knows the answer. The only thing you're doing here is requiring them to tell you how they intend to interpret the law. That doesn't seem like too much to ask.