America's Legal System May Be 'Closing In' on Regulating Cryptocurrencies (msn.com)
- Reference: 0173527028
- News link: https://yro.slashdot.org/story/24/04/14/2256204/americas-legal-system-may-be-closing-in-on-regulating-cryptocurrencies
- Source link: https://www.msn.com/en-us/money/other/column-the-legal-system-is-closing-in-on-crypto-and-things-may-only-get-worse/ar-BB1lnMY1
U.S. Judge Failla "cleared the Securities and Exchange Commission to proceed with its lawsuit alleging that the giant crypto broker and exchange Coinbase has been dealing in securities without a license."
> What's important about [2]Failla's ruling is that she dismissed out of hand Coinbase's argument, which is that cryptocurrencies are novel assets that don't fall within the SEC's jurisdiction — in short, they're not "securities." Crypto promoters have been making the same argument in court and the halls of Congress, where they're urging that the lawmakers craft an entirely new regulatory structure for crypto — preferably one less rigorous than the existing rules and regulations promulgated by the SEC and the Commodity Futures Trading Commission...
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> Failla saw through that argument without breaking a sweat. "The 'crypto' nomenclature may be of recent vintage," she wrote, "but the challenged transactions fall comfortably within the framework that courts have used to identify securities for nearly eighty years...." Since Congress hasn't enacted regulations specifically aimed at crypto, Coinbase said, the SEC's lawsuit should be dismissed. The judge's opinion of that argument was withering. "While certainly sizable and important," she wrote, "the cryptocurrency industry 'falls far short of being a "portion of the American economy" bearing vast economic and political significance....'"
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> Failla's ruling followed another in New York federal court in which a judge deemed crypto to be securities. In that case, Judge Edgardo Ramos [3]refused to dismiss SEC charges against Gemini Trust Co., a crypto trading outfit run by Cameron and Tyler Winkelvoss, and the crypto lender Genesis Global Capital. The SEC charged that a scheme in which Gemini pooled customers' crypto assets and lent them to Genesis while promising the customers high interest returns is an unregistered security. The SEC case, like that against Coinbase, will proceed....
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> The hangover from March continued into this month. On April 5, a federal jury in New York found Terraform Labs and its chief executive and major shareholder, Do Kwon, liable in what the SEC termed " [4]a massive crypto fraud ...." The value of UST fell in effect to zero, the SEC said, "wiping out over $40 billion of total market value ... and sending shock waves through the crypto asset community."
[1] https://www.msn.com/en-us/money/other/column-the-legal-system-is-closing-in-on-crypto-and-things-may-only-get-worse/ar-BB1lnMY1
[2] https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/r7x7HF9k57ig/v0
[3] https://storage.courtlistener.com/recap/gov.uscourts.nysd.592343/gov.uscourts.nysd.592343.54.0.pdf
[4] https://www.sec.gov/news/statement/grewal-statement-040424
That took a while (Score:3)
But obviously the big pump & dump scammers behind crapto have now made most of the profits they expected and have stopped bribing politicians.
Re: (Score:2)
It's probably more like they're looking for another chance to buy in cheap, so they got this guy to write this crypto slam "opinion" piece and share it around social media.
Re: (Score:2)
A little article isn't going to do much. Now, if Coinbase were to shut down or abscond with everyone's money, that would cause a nice crash.
Re: (Score:2)
> But obviously the big pump & dump scammers behind crapto have now made most of the profits
People were saying that when Bitcoin crossed the one-cent threshold.
It's gone up 653,000,000% since then.
If it looks, swims and quacks like a duck... (Score:5, Funny)
Regulator: So, you've got this "currency" thing that you're moving around. That looks a lot like a money transfer business. Where's your FinCEN Form 107?
Crypto Bro: Oh no, not at all! People are investing in tokens that give them a share of the services in the network.
Regulator: Investing in a share of something? That looks a lot like a security. Where are your SEC and CFTC filings?
Crypto Bro: Oh no, not at all! Everyone knows that these are completely speculative and have no inherent value. They are just playing the game in the hope of making some money.
Regulator: Playing a game in the hope of making some money? So it's gambling them? Across state boarders? We seem to be missing some paperwork here.
Crypto Bro: Oh no...
Re: (Score:2)
Indeed. Regulators are often slow to catch on (here probably helped by political bribes), but it was pretty much inevitable that they do.
Let me add one more:
Regulator: So, you are doing financial transactions with people you do not know, so money laundering, terror and crime financing and the like?
Crypt Bro: [has no answer]
Re: (Score:1)
Still doesn't change the fact that it's the USD that sees the largest share of fraud, money laundering and crime financing and yet it is one of the most regulated.
Re: (Score:2)
Relative to volume used? No. Insightless "argument" is insightless.
The regulators weren't slow to catch on (Score:3)
There's a bunch of them at the top who know exactly what crypto is and are letting it swim to see if it makes money. A small handful of them are die hard, some might say extremist capitalist types who will let anything slide and then there's a bunch who are just kind of squeezy and corrupt and want to see if them and their buddies can make some scratch off this new scam.
Those guys have been protecting crypto for some time from the beat cops that make up the SEC law enforcement. Basically providing mixed
Re: (Score:2)
I may be a bit off the mark here, but crypto currencies are a framework for recording and executing contracts between pairs of parties. And so are equities, futures contracts, various securities, etc. So if you can regulate the latter, then why not crypto as well?
So now we are coming pretty close to regulating and tracking any agreements between two parties. Nope. I don't want to go there. If the various regulating bodies can figure out how to handle crypto without sticking their nose into every last type
In one way, I must agree with Coinbase (Score:5, Insightful)
'... she dismissed out of hand Coinbase's argument, which is that cryptocurrencies are novel assets that don't fall within the SEC's jurisdiction — in short, they're not "securities."'
It's pretty obvious that the word "secure" should never appear in the same sentence as the word "cryptocurrency".
Welcome to the real world... (Score:2)
This is a very basic concept, no matter how much geeks would like to pretend to the contrary: NO nation will long tolerate money it cannot control.
It's practically a definition thing. Nation states are sovereign entities - they consider themselves the highest human authorities (and in Godless, officially atheist, countries those governments consider themselves the highest authorities, PERIOD. Full-Stop). Currency is too powerful a thing for ANY sovereign nation state to permit to be off on its own somewher
BAN INSTEAD (Score:1)
The only "regulation" there needs to be for 'cryptocurrency' in the US is a total ban.
It's a scam that wastes a lot of electricity, there's no reason it should be legal.