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> it was up to you to think about the fact that this was bound to attract regulators' attention Oh please, these people are what, 22? 25? They are supposed

> it was up to you to think about the fact that this was bound to attract regulators' attention Oh please, these people are what, 22? 25? They are supposed to know the basics of security law off the tops of their heads? They got an idea and spun it up in a weekend. Yes, on reflection, allowing this sort of thing opens all sorts of loopholes for bad actors. And it had to be shut down. But it isn't as if this was done by a bunch of associates at Sullivan & Cromwell, or the interns at Goldman Sachs. They did something fun, it got afoul of the securities laws, whatever. Explain the legal breech and practical problem and tell them to pack it up, boom, we're done. But bureaucrats are basically sycophants and / or bullies. They aren't in the job to protect the public. They're in the job to make money by connections, and to push around people without the knowledge or stones to tell them to fuck off.

tzs 11y ago
> Oh please, these people are what, 22? 25? They are supposed to know the basics of security law off the tops of their heads? No, but they should have known that it might be relevant and done some research online and/or talked to a lawyer. Later, when Matt Levine, who is a columnist from Bloomberg and a lawyer, wrote about them in his column and said that he could not see how it is legal, specifically mentioning SEC and CFTC regulations as problem areas, that should have been a giant freaking clue that they should investigate these things. Instead, they tweeted "Cool! NYC banker hipster @matt_levine is hating on us. We must be getting too mainstream :)".
- chernevik 11y ago
  Because we should all talk to lawyers before we do anything.
  - tzs 11y ago
    I said do research online and/or talk to a lawyer. And we are not talking about doing just "anything". We are talking about a very specific thing: starting a company that is going to take real money from people, and help them do risky things with it--a company that depending on how you look at it is a securities company or a gambling company or a prediction market. According to their FAQ, they planned to have no limits on how much money someone could put into this, and they were aiming for very high volume, so if it had worked out they would be dealing with vast amounts of money. All of those are highly regulated areas, and it is hard to believe that anyone who had even glanced in the general direction of doing a company in any of those areas would not be aware of that. So are you seriously suggesting that it is reasonable to start a company that is going to handle, you hope, vast quantities of money for a vast number of people in a highly regulated industry, and NOT do any online research or seek legal advice to make sure that you are legal? And do you seriously think that when a prominent writer who covers your field and is a lawyer tells you he can't see how your business is legal, it's reasonable to mockingly dismiss that?
    - chernevik 11y ago
      My understanding is that this was a project -- not really a company, never intended to make a lot of money. Now if that is wrong -- if they intended to generate real revenue and profit off this thing, and raise money -- then yes, they're idiots. But if this was something put together as a project, something fun and interesting to do, then I understand why they didn't consult a lawyer.
      - anigbrowl 11y ago
        It would have been fine as long as they were running it with fantasy money, like many of the other play markets out there. When you create a mechanism for people to put real money into it, though, that's like the difference between breadboarding some electronics with a battery or DC adapter, and plugging straight into the wall socket. Once you take in money, for whatever purpose, you're operating some sort of business - and the laws surrounding issues are money transmission, transacting with bitcoin vs national currencies and other topics are discussed frequently on HN.
  - dragonwriter 11y ago
    > Because we should all talk to lawyers before we do anything. Not "anything". Starting a business, especially in a highly-regulated domain, OTOH, is not the same as "anything". And, even granting that one might not be aware enough of the regulatory landscape to recognize that need, when someone who is knowledgeable points to the specific areas of risks and you just blow it off as a sign of success than someone is "hating on" you, yeah, then its arguably gone from innocent to willful ignorance.
anigbrowl 11y ago
They know enough to be reading HN (for a good while now) and making a stock market game. I don't expect them to know the details of securities laws, but I do expect to know that there are some laws about that sort of thing which they should look up or ask someone about, because that's just basic common sense that you'd know if you were interested in stocks in the first place. Plus, every sort of contest or public entertainment website or write-in competition has a bunch of fine print that says things like 'For entertainment only, not valid in every state etc. etc.' I've been aware of those disclaimers since I was , I dunno, 8 or 10. You don't have to be a securities lawyer to figure out that they're there for a reason and that there must be some rules in each state about how you conduct such activities. They got an idea and spun it up in a weekend. They ran it over a few months, publicized it, and demonstrated their knowledge of brokerage history history. Plus just about every 'How to set up a small business' guide ever written warns about setting up a structure to protect yourself such and LLC or the like. But bureaucrats are basically sycophants and / or bullies. They aren't in the job to protect the public. They're in the job to make money by connections, and to push around people without the knowledge or stones to tell them to fuck off. Yes, everyone is exactly the same. They're all big old killjoys who don't want you to have any fun man. Grow up.
dragonwriter 11y ago
> Oh please, these people are what, 22? 25? They are supposed to know the basics of security law off the tops of their heads? They are supposed to do due diligence before starting a business and accepting money. That doesn't mean knowing things "off the tops of their heads", it means doing their homework.

tzs 11y ago

> Oh please, these people are what, 22? 25? They are supposed to know the basics of security law off the tops of their heads? No, but they should have known that it might be relevant and done some research online and/or talked to a lawyer. Later, when Matt Levine, who is a columnist from Bloomberg and a lawyer, wrote about them in his column and said that he could not see how it is legal, specifically mentioning SEC and CFTC regulations as problem areas, that should have been a giant freaking clue that they should investigate these things. Instead, they tweeted "Cool! NYC banker hipster @matt_levine is hating on us. We must be getting too mainstream :)".

chernevik 11y ago
Because we should all talk to lawyers before we do anything.
- tzs 11y ago
  I said do research online and/or talk to a lawyer. And we are not talking about doing just "anything". We are talking about a very specific thing: starting a company that is going to take real money from people, and help them do risky things with it--a company that depending on how you look at it is a securities company or a gambling company or a prediction market. According to their FAQ, they planned to have no limits on how much money someone could put into this, and they were aiming for very high volume, so if it had worked out they would be dealing with vast amounts of money. All of those are highly regulated areas, and it is hard to believe that anyone who had even glanced in the general direction of doing a company in any of those areas would not be aware of that. So are you seriously suggesting that it is reasonable to start a company that is going to handle, you hope, vast quantities of money for a vast number of people in a highly regulated industry, and NOT do any online research or seek legal advice to make sure that you are legal? And do you seriously think that when a prominent writer who covers your field and is a lawyer tells you he can't see how your business is legal, it's reasonable to mockingly dismiss that?
  - chernevik 11y ago
    My understanding is that this was a project -- not really a company, never intended to make a lot of money. Now if that is wrong -- if they intended to generate real revenue and profit off this thing, and raise money -- then yes, they're idiots. But if this was something put together as a project, something fun and interesting to do, then I understand why they didn't consult a lawyer.
    - anigbrowl 11y ago
      It would have been fine as long as they were running it with fantasy money, like many of the other play markets out there. When you create a mechanism for people to put real money into it, though, that's like the difference between breadboarding some electronics with a battery or DC adapter, and plugging straight into the wall socket. Once you take in money, for whatever purpose, you're operating some sort of business - and the laws surrounding issues are money transmission, transacting with bitcoin vs national currencies and other topics are discussed frequently on HN.
- dragonwriter 11y ago
  > Because we should all talk to lawyers before we do anything. Not "anything". Starting a business, especially in a highly-regulated domain, OTOH, is not the same as "anything". And, even granting that one might not be aware enough of the regulatory landscape to recognize that need, when someone who is knowledgeable points to the specific areas of risks and you just blow it off as a sign of success than someone is "hating on" you, yeah, then its arguably gone from innocent to willful ignorance.

anigbrowl 11y ago

They know enough to be reading HN (for a good while now) and making a stock market game. I don't expect them to know the details of securities laws, but I do expect to know that there are some laws about that sort of thing which they should look up or ask someone about, because that's just basic common sense that you'd know if you were interested in stocks in the first place. Plus, every sort of contest or public entertainment website or write-in competition has a bunch of fine print that says things like 'For entertainment only, not valid in every state etc. etc.' I've been aware of those disclaimers since I was , I dunno, 8 or 10. You don't have to be a securities lawyer to figure out that they're there for a reason and that there must be some rules in each state about how you conduct such activities. They got an idea and spun it up in a weekend. They ran it over a few months, publicized it, and demonstrated their knowledge of brokerage history history. Plus just about every 'How to set up a small business' guide ever written warns about setting up a structure to protect yourself such and LLC or the like. But bureaucrats are basically sycophants and / or bullies. They aren't in the job to protect the public. They're in the job to make money by connections, and to push around people without the knowledge or stones to tell them to fuck off. Yes, everyone is exactly the same. They're all big old killjoys who don't want you to have any fun man. Grow up.

dragonwriter 11y ago

> Oh please, these people are what, 22? 25? They are supposed to know the basics of security law off the tops of their heads? They are supposed to do due diligence before starting a business and accepting money. That doesn't mean knowing things "off the tops of their heads", it means doing their homework.