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Perhaps because the 'route' to compliant trading in unregistered securities is to not trade in them?

by Nursie 3y ago

olalonde 3y ago
That's kind of my point. The SEC does not have a mandate to evaluate the merits of transactions or determine whether a securities investment is "good" or "bad". However, it's possible that they are effectively doing so by making the securities registration process for crypto tokens so stringent, it becomes impossible to fulfill. If it was actually possible to register crypto token securities with the SEC, why doesn't anyone do so instead of battling the SEC in court?
- davidgerard 3y ago
  > so stringent, the laws on penny stocks are extremely well established. Crypto is asking for a free ride just because.
  - olalonde 3y ago
    Perhaps the laws on penny stock registration don't translate well to crypto tokens? How do you explain that basically no one registers? Surely, "just because" is not it.
    - davidgerard 3y ago
      The one technical innovation is that in the olden days, a penny stock required paper and phones. You can now press a button and launch a new DeFi token, about 100% of which are unregistered penny stock scams. They don't register because they think they can get away without it, it's pretty simple. Pointing at all the other scofflaws doesn't make you not a scofflaw.
      - olalonde 3y ago
        Your claim is that there is a straightforward way to register crypto tokens with the SEC but projects chose not to because they can get away with it?
        davidgerard 3y ago
        It's called an S-1. It turns out to involve a lot of paperwork, and there's reasons for that.
        olalonde 3y ago
        And you genuinely believe that crypto token projects could just take the time to fill out the S-1 form, but don't because it's too time consuming? I find that hard to believe. I'm tempted to believe that they do, but don't get approved, or that they can't, because some requirements are impossible to fulfill.
        davidgerard 3y ago
        They're impossible to fulfill when the only advantage of crypto in practice is to evade regulation, yes.
- Nursie 3y ago
  No, it has a mandate to determine whether an investment is legal or not. Have you considered it may be impossible to fulfill because by their very nature these things cannot pass the tests to be legal? > why doesn't anyone do so instead of battling the SEC in court? Because none of them meet the bar of legality. Because they do not meet the most basic requirements of consumer protection, transparency, fair market trading. It's not the SEC making requirements for crypto so stringent, it's crypto's complete failure to fulfill the necessary criteria for a registered security. As others have said - the SEC aren't going to make it easy for me to register my ponzi scheme either, should I blame them when I get shut down for running it anyway? Cry about how they're making it difficult to figure out how to follow their guidelines? Whine that ponzi schemes are not being allowed a simple way to compliance? Or should I maybe re-evaluate what I'm trying to do?
  - olalonde 3y ago
    We're in agreement here. The SEC is indirectly making crypto tokens illegal by making it impossible to comply with securities registration requirements. When the SEC says "you have to register", what they really mean is "we think crypto tokens should be illegal". > register my ponzi scheme either, should I blame them when I get shut down for running it anyway In my opinion, if the scheme was transparent and no deception was involved, I do believe consenting adults should be allowed to transact. I am not big on the idea of protecting people from themselves, when no deception is involved. Regardless, ponzi schemes are explicitly illegal. If you think that all crypto tokens should be illegal as well, a law should be passed. Making them implicitly illegal through bureaucracy and at the whims of bureaucrats is not an ideal state of things in a democratic society.
    - Nursie 3y ago
      There are laws, the SEC can’t make things illegal and to enforce the laws it has to take things to court. The laws don’t explicitly say “cryptocurrency is illegal”, instead they are effectively duck-typed, which is good because it stops “oh but my thing is different, this time we’re using bottle-caps”.

Perhaps because the 'route' to compliant trading in unregistered securities is to not trade in them?

by Nursie 3y ago

Perhaps because the 'route' to compliant trading in unregistered securities is to not trade in them?

That's kind of my point. The SEC does not have a mandate to evaluate the merits of transactions or determine whether a securities investment is "good" or "bad". However, it's possible that they are effectively doing so by making the securities registration process for crypto tokens so stringent, it becomes impossible to fulfill. If it was actually possible to register crypto token securities with the SEC, why doesn't anyone do so instead of battling the SEC in court?

davidgerard 3y ago
> so stringent, the laws on penny stocks are extremely well established. Crypto is asking for a free ride just because.
- olalonde 3y ago
  Perhaps the laws on penny stock registration don't translate well to crypto tokens? How do you explain that basically no one registers? Surely, "just because" is not it.
  - davidgerard 3y ago
    The one technical innovation is that in the olden days, a penny stock required paper and phones. You can now press a button and launch a new DeFi token, about 100% of which are unregistered penny stock scams. They don't register because they think they can get away without it, it's pretty simple. Pointing at all the other scofflaws doesn't make you not a scofflaw.
    - olalonde 3y ago
      Your claim is that there is a straightforward way to register crypto tokens with the SEC but projects chose not to because they can get away with it?
      - davidgerard 3y ago
        It's called an S-1. It turns out to involve a lot of paperwork, and there's reasons for that.
        olalonde 3y ago
        And you genuinely believe that crypto token projects could just take the time to fill out the S-1 form, but don't because it's too time consuming? I find that hard to believe. I'm tempted to believe that they do, but don't get approved, or that they can't, because some requirements are impossible to fulfill.
        davidgerard 3y ago
        They're impossible to fulfill when the only advantage of crypto in practice is to evade regulation, yes.
Nursie 3y ago
No, it has a mandate to determine whether an investment is legal or not. Have you considered it may be impossible to fulfill because by their very nature these things cannot pass the tests to be legal? > why doesn't anyone do so instead of battling the SEC in court? Because none of them meet the bar of legality. Because they do not meet the most basic requirements of consumer protection, transparency, fair market trading. It's not the SEC making requirements for crypto so stringent, it's crypto's complete failure to fulfill the necessary criteria for a registered security. As others have said - the SEC aren't going to make it easy for me to register my ponzi scheme either, should I blame them when I get shut down for running it anyway? Cry about how they're making it difficult to figure out how to follow their guidelines? Whine that ponzi schemes are not being allowed a simple way to compliance? Or should I maybe re-evaluate what I'm trying to do?
- olalonde 3y ago
  We're in agreement here. The SEC is indirectly making crypto tokens illegal by making it impossible to comply with securities registration requirements. When the SEC says "you have to register", what they really mean is "we think crypto tokens should be illegal". > register my ponzi scheme either, should I blame them when I get shut down for running it anyway In my opinion, if the scheme was transparent and no deception was involved, I do believe consenting adults should be allowed to transact. I am not big on the idea of protecting people from themselves, when no deception is involved. Regardless, ponzi schemes are explicitly illegal. If you think that all crypto tokens should be illegal as well, a law should be passed. Making them implicitly illegal through bureaucracy and at the whims of bureaucrats is not an ideal state of things in a democratic society.
  - Nursie 3y ago
    There are laws, the SEC can’t make things illegal and to enforce the laws it has to take things to court. The laws don’t explicitly say “cryptocurrency is illegal”, instead they are effectively duck-typed, which is good because it stops “oh but my thing is different, this time we’re using bottle-caps”.