Former US SEC attorney: 'Get out of crypto platforms now'

https://twitter.com/johnreedstark/status/1666780985189433347

by legrande • 3 years ago

364 480 3 years ago

twitter.com

simmerup• 3 years ago

Good advice regardless. Every month we get more evidence that exchanges don't adequately protect their users interests.

wolverine8767• 3 years ago

Did you need more evidence? It seemed clear from the start - these were not trustworthy businesses.

eterm2• 3 years ago

Finbold is not a reliable news source / site.

Even r/cryptocurrency flags finbold as unreliable.

capableweb• 3 years ago

Even? Like biased subreddits are the bastion of what's reliable or not

eterm2• 3 years ago

It's a news source which only posts (pro-) crypto news yet gets automatically flagged in the one place it should thrive because it is so unreliable.

A moot point because the URL has been changed regardless.

tedivm• 3 years ago

In this case they're pretty much just quoting the dude, with links back to his tweets.

dang2• 3 years ago

We've changed the URL to the original source, as the HN guidelines request. More at https://news.ycombinator.com/item?id=36408638

waboremo2• 3 years ago

Finbold's reliability doesn't matter much here since this is just a shell article about a tweet https://twitter.com/johnreedstark/status/1666780985189433347

Jason676• 3 years ago

Nop. I noticed r/cryptocurrency flags enormous amount of articles from many recognized websites. And this article is based on a quote from former SEC official.

ramesh31• 3 years ago

Turns out the answer to "How is this not a regulated security?" is "It is."

officialchicken• 3 years ago

Turns out that he isn't attacking the mechanics or underlying offerings (security vs commodity) as you seem to imply.

He does not like the lack of regulation around the (decentralized, unregulated) distribution and prefers the broker-dealers regulation and clearinghouse oversight.

paxys3• 3 years ago

If you don't hold your own keys privately and offline then you don't really own any crypto. At best you own a share in a dicey exchange that may go under at any time (due to regulation, fraud or whatever else).

roarcher3• 3 years ago

An exchange is basically a bank without the regulations and consumer protections of real banks. It also defeats the purpose of crypto. It's the worst of both worlds.

babypuncher• 3 years ago

And then they wonder why regular consumers aren't fleeing banks to start using crypto for everything.

I've yet to see cryptocurrencies actually solve a problem that your everyday average person has when buying groceries or going out to eat.

They just make things more difficult and confusing, and all these attempts to alleviate that just lead us straight to "banks, but worse".

charlieyu12• 3 years ago

Still, exchanges exist because there is a large demand of customers converting between fiat and crypto, also probably reduce transcation fee and time to be low enough to allow trading derivative products. Not perfect but probably a necessary evil.

knocte6• 3 years ago

Completely agree with the general idea of your comment. Although there are non-custodial (decentralized/P2P) exchanges that, because they don't hold user's funds, would not fall into the category that you have described. E.g.:

* P2P exchanges: LNP2Pbot, hodlhodl, etc.

* Decentralized exchanges: FixedFloat, Uniswap, etc.

__loam6• 3 years ago

Crypto has no value without the exchanges. You either have a worthless asset that's too esoteric to use or you have exchanges to make them worth something and all the scams and financial instability that comes from that.

dang2• 3 years ago

Url changed from https://finbold.com/former-us-sec-attorney-get-out-of-crypto..., which points to this.

Submitters: "Please submit the original source. If a post reports on something found on another site, submit the latter." - https://news.ycombinator.com/newsguidelines.html

cinntaile• 3 years ago

This is irrelevant for the thread at hand but I submitted something recently from the original source. The problem was that it's a banned domain on HN.

uLogMicheal11• 3 years ago

John Reed Stark is their expert? https://twitter.com/JohnReedStark/status/1670457201943511040

"The only killer app for crypto that seems tangible is its excellent use to orchestrate global crimes."

The bias is abundant, it's well known this guy hates crypto.

_jab• 3 years ago

I mean, is he wrong? Genuinely the only other application I’ve seen which seems plausible is for use in places like Venezuela where the official currency is worthless.

uLogMicheal11• 3 years ago

Yep, the only use cases for decentralized, programmable monetary systems are criminal. /s

api• 3 years ago

He's not entirely correct. Crime is a major application but by far the largest use case for crypto is "investing" (gambling) in crypto.

bluescrn• 3 years ago

Other uses include local crimes and national crimes. They don't have to be global...

Oh, and gambling/speculating of course.

wongarsu2• 3 years ago

Well, you just said that's he's wrong. One "killer application" is that it's a "stable" store of value. Not perfectly stable, it can quickly fall by a factor of about 2, and if you buy in the worst bubble it might fall to a fourth of its value. That's decidedly less stable than Western currencies, but it's more stable than some others. And for many people Bitcoin is more accessible than the foreign exchange market. It also tends to rise in value over sufficiently long time scales.

The other use is providing online payments to people who aren't in the banking system. The banking system requires trust, and shuts untrustworthy people out - both at the level of individuals and entire regions. Bitcoin eliminates the need for trust (on the monetary layer) and can thus reach more people.

Both are great applications. They are largely irrelevant in the West because only a tiny fraction of us experience those problems, but that doesn't mean they don't exist elsewhere.

meepmorp• 3 years ago

The bias is abundant, it's well known this guy hates crypto.

Does that make him wrong? Or somehow not a reliable commentator on the thinking at the SEC (which is what the actual article is about), given his having worked there? Bias could be an issue if he were speaking about crypto per se, but this is about the SEC.

p_j_w• 3 years ago

Should we only listen to people who love Crypto?

voz_• 3 years ago

This isn't bias, its truth. Sometimes, when one is entrenched, it is difficult to see the difference.

wolverine8767• 3 years ago

Negative comments don't indicate bias. There are many alternative explanations. If I say 'Charles Manson murdered several people', that doesn't indicate bias. If I say it's raining, that's not bias against the weather.

uLogMicheal11• 3 years ago

Hopefully you can see the absolutist nature of his comment and come to the realization that crime is a universal aspect of money, so of course any form of money would be a facilitator of it.

lispisok• 3 years ago

Crypto has been around over a decade now and transactions for illegal goods and services is the only use for it that ever got traction.

jacobwilliamroy3• 3 years ago

Other than crime the only other use-case I've seen for crypto is for getting money into Russia because the sanctions mean my English teacher friend in Vladivostok can't use normal banks to accept payments for the online distance teaching thing he does. But I could oversimplify this to "bypassing international sanctions" which might be a crime? Crypto mainly seems to be useful to people who can't or won't use normal banks, and those people are mostly criminals. People in Russia prefer bitcoin over rubles (even before the sanctions) but that's more an indictment of the ruble than an endorsement of bitcoin.

What am I missing here? What are the cool things bitcoin does that something like visa cannot? I've read Satoshi's paper and Vitalik Buterin's book. I want crypto to work, and I'm really searching hard for a problem crypto solves for which we don't already have a better solution.

BasedAnon6• 3 years ago

Other than crime the only other use-case I've seen for crypto is for getting money into Russia

Violating sanctions is a crime. Given the trend we've seen people should start getting used to being considered criminals.

What am I missing here? What are the cool things bitcoin does that something like visa cannot?

It's easier to send Bitcoin to people without doxing myself than a visa transfer.

fivre• 3 years ago

opinions on the merits aren't necessarily important in assessing the behavior of a regulatory agency

crypto can hypothetically be every bit a brilliant new wheel paradigm as the marketers would suggest (it isn't, but whatever) and that won't stop entities with legal authority to eviscerate all current corporate entities associated with it from doing so (they are).

ya'll wanna believe that binance and coinbase can fight the massive legal assault on their business practices and come out on top simply by virtue of the nobility of the crypto ideal, go right ahead

Hermitian9093• 3 years ago

Do we expect experts to not have informed opinions? You may disagree with his conclusions but I believe we want expert witnesses to tell us what they think. As a former crypto-optimist I think this is a totally reasonable conclusion to make about crypto given a decade of evidence.

rib3ye• 3 years ago

The question is not, "Does this guy hate/understand crypto?"

The question is, "Is this guy right about centralized platform regulation causing industry-wide collapse?"

_9omd2• 3 years ago

The killer app is financial freedom. If people chose to use that to commit crimes then that only proves they are criminals. Any sufficiently powerful tool can be used for good or evil.

zhvihti2• 3 years ago

It's strange to me how people keep comparing cryptocurrencies to equity, but don't compare them to their closest counterpart - fiat currencies.

Are fiat currencies treated like securities? No. Are there "best execution requirements" when I exchange my USD for EUR. No. Did somebody have to register the Brazilian Real with the SEC for it to be exchangeable in the US? No.

vladd• 3 years ago

People cannot create fiat currencies out of thin air. When done it's a crime (currency forgery).

Marsymars2• 3 years ago

That doesn't sound right. e.g. https://en.wikipedia.org/wiki/Canadian_Tire_money

carlosjobim4• 3 years ago

It's a crime if you or I do it. It's a blessing of quantitative easing when the rulers - our lords and saviors - do it.

mrkeen• 3 years ago

That's precisely what fiat currencies are. Currencies which can be created out of thin air. That's what 'fiat' means - "Let there be".

Fiat currencies are 'fiat' in stark comparison to wealth which can't be created out of thin air, e.g. gold or cryptographically-protected numbers.

alephnerd4• 3 years ago

Fiat currencies are backed by the issuing government, who in turn follows globally agreed upon regulations.

This is why a cryptoCURRENCY is treated as a security.

0x457• 3 years ago

That's not exactly true, though. Only coins that are backed by something are treated as securities: ICOs, stablecoins and similar. ETH for example is not a security by any definition used in the US. This is why bitcoin specifically not included in those lawsuits.

adventured2• 3 years ago

You invented and answered your own false premise. You set it up by proclaiming fiat the closest counterpart, and then proclaimed that fiat isn't treated like a security. You're the one saying it's closest to fiat, not the regulators. The regulators consider it to be more like an asset class and not fiat money like USD. They have been very clear about that.

Did somebody have to register the Brazilian Real with the SEC for it to be exchangeable in the US? No.

There is in fact a considerable regulatory system in place as it pertains to exchanging currency, currency laws, and so on.

zhvihti2• 3 years ago

My premise is that I don't agree with the regulator :) Of course a regulator is there to regulate so their incentive is to find things to regulate.

The regulators consider it to be more like an asset class

Being an asset is also applicable in my opinion. But assets and securities are not the same, and this is what's changing - regulators switching the categorization from assets (which was implicitly and somewhat explicitly the state until now) to securities.

waboremo2• 3 years ago

There will never be a better representation of what's wrong with crypto platforms than this tweet[1] here demonstrating the sheer ignorance at every level (tech, finance, regulation, etc) from its biggest proponents. Also very hilarious.

[1] https://twitter.com/Legendary_NFT/status/1667106949840748545

csomar2• 3 years ago

This was posted in 8 June. With big name brokers in the US making a move into the crypto market today, is it fair to say this guy has no idea what he is talking about?

+ https://www.bloomberg.com/news/articles/2023-06-20/crypto-ex...

alephnerd4• 3 years ago

EDX is non-custodial and open ONLY to institutional investors.

The SEC's enforcement on Crypto Platforms is specifically aimed at separating the Broker Function from Exchanges.

adventured2• 3 years ago

Not if the intention is to drive crypto into the ground first and destroy the initial sector players (eg Coinbase), so the establishment banking / finance system can recapture all of it in one swift regulatory move.

It would then be ideal to be entirely out of crypto until the destruction is largely over, and the establishment gets its lock on the market.

There were only ever two possibilities. They control & own it, or it doesn't get to exist legally. Everything else was naive fantasy and ignorance about how the world actually works and will always work (power, politics, guns).

waynecochran5• 3 years ago

     With crypto trading platforms, the SEC lacks any sort of oversight and access — and has scant ability to detect, investigate and deter fraudulent conduct. As a result, the crypto marketplace operates without much supervision

Isn't that the main idea of a decentralized currency?

No doubt this has/does/will harbor criminal activity, but it will also foster the ability to exchange goods and services without third parties. This has huge benefits when the third parties are rogue and overextend their surveillance. Freedom is what we should be after. This has a cost in terms of criminal activity -- even to the extreme.

uLogMicheal11• 3 years ago

I wonder if the SEC knows how to use a blockchain explorer? That claim is made false from a simple glance at one.

alephnerd4• 3 years ago

They do. The SEC pays competitively and there are a lot of crypto adept people who feel there is also a case for regulation in the space.

Hermitian9093• 3 years ago

Sure - and the question is - do we as a society want to allow that, do we think it's worth the tradeoffs? Five years ago I think the answer was still "wait and see", I think it's reasonable by now to say "actually, no, it's not worth it".

waynecochran5• 3 years ago

Not to argue, but it really strange how the things that my generation valued (e.g. individual freedom) are being overturned. The old axiom "Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety." was a mantra in my younger days.

alphanullmeric• 3 years ago

Allow what exactly? Consenting individuals to risk what they want to risk with each other?

friend_and_foe• 3 years ago

No, the question is do we as individuals think it is worth the trade offs. And so any answer here is irrelevant, because it only applies to the person answering the question.

Unfortunately for people who say no to it, it's the same as people who don't like fiat money or the gold standard or whatever: youre stuck with it whether you like it or not. I don't think this stuff is going away.

paxys3• 3 years ago

This entire conversation is about centralized exchanges.

waynecochran5• 3 years ago

Trying to force centralization onto something that was fundamentally designed to be decentralized.

jrm42• 3 years ago

EXACTLY.

I think one of the oddest things is that I don't much see the following view, which is roughly mine:

I'm generally pro the idea of crypto -- but more importantly, whether I love it or hate it, this particular fight was, or should have been, completely expected and anticipated. As in, this was the point of it; anyone into crypto should 100% welcome this battle, if you were paying attention to the idea?

favflam• 3 years ago

Regulations mandate a surveillance module attached to the trading system to detect suspicious trading patterns, and I guess also check the stability of the overall market place. Regulators get visibility into a trading platform through these mechanisms.

Unregistered crypto-firms do not have to allow SEC access.

This thinking does not apply to decentralized exchanges, only CEXs.

cs70210• 3 years ago

Three highly speculative predictions:

1. The courts are more likely than not to rule that many crypto-assets -- but not all -- should be regulated as investments. It won't be fun for a lot of crypto traders.

2. Over time, the usual giant financial institutions are bound to become the dominant market makers in crypto-assets. In all likelihood, one of them will end up buying Coinbase. Those giant financial institutions already know how to comply with regulatory bureaucracies worldwide, efficiently, at scale. Rinky-dink exchanges lacking the machinery for large-scale efficient compliance will not be able to compete and go out of business.

3. Bitcoin, which the SEC considers a commodity (it's explicitly excluded from the lawsuits), is bound to become even more dominant in terms of market capitalization. The longer Bitcoin survives, the more it will get adopted and integrated into the world's financial fabric, e.g., as a store of value. If this sounds far-fetched, consider that many smart and smart-sounding people have predicted Bitcoin's demise, and so far their arguments have been proven wrong: https://99bitcoins.com/bitcoin-obituaries/ .

We sure live in interesting times!

misnome6• 3 years ago

3 - The “value” is higher, but can you actually do more with it now than you could five years ago? Hasn’t the entire community given up on buying things such that they know pretend that was never the goal?

Without any real way to convert back and forth into real money, what reassurance is there that the price even means anything when every single holder is incentivised to lie and transact with themselves just to keep the numbers up?

How can a global system capable of five transactions a second ever be integrated into “the world’s financial fabric”? Side-chains seem to just be a great way to centralise around more unknown entities who may or may not run off with your cash.

cs70210• 3 years ago

...can you actually do more with it [I assume you mean Bitcoin] now than you could five years ago?

Not really. To date, Bitcoin has been used successfully only as an alternate store of value -- one which, like gold, doesn't depend on the financial credibility of a particular government or country. Bitcoin's continued existence depends only on the integrity of its distributed consensus algorithm, which so far has withstood all attempts at hacking it. The "alternate store of value" opportunity is not small. Gold alone has a current market capitalization of $12.9 trillion.[a]

---

[a] https://companiesmarketcap.com/gold/marketcap/

otoburb2• 3 years ago

>If this sounds far-fetched, consider that many smart and smart-sounding people have predicted Bitcoin's demise, and so far all have been utterly wrong

Bernie Madoff pulled off one of the largest (literal Ponzi) scams and evidently stated that he started in the 1990s for a run of just over 15 years until being arrested in 2008, although some investigators thought that his fraudulent activities started as far back as the 1970s (!!).[1]

The Lindy effect[2] works until it doesn't. Taleb popularized the theory in pop-culture with his books, but the problem is that it's seemingly impossible to know when/if something will collapse/fail to the point that this "effect" doesn't seem all that useful as a predictive indicator.

[1] https://en.wikipedia.org/wiki/Madoff_investment_scandal

[2] https://en.wikipedia.org/wiki/Lindy_effect

cs70210• 3 years ago

The comparison to Madoff is not apt. Madoff hid losses by committing accounting fraud, whereas every single transaction in the Bitcoin network is visible to everyone and, moreover, cryptographically verifiable by everyone. As long as the distributed consensus algorithm continues to function, Bitcoin will continue to exist. Period. (Government regulations cannot kill it; they can only drive it underground, as with gold.)

Anyone who predicts Bitcoin's demise must explain precisely how and why its network would stop functioning.

rcme• 3 years ago

The issue I have with the argument is that you can apply it to anything. The fact that Bernie Madoff pulled off a ponzi scheme for years and the fact that "The Lindy effect works until it doesn't" isn't a specific critique of Bitcoin.

username332211• 3 years ago

It's not seemingly impossible, it's scientifically proven that the general public can't know when the price of Bitcoin will collapse. And it has nothing to do with the general public being stupid and any of that bullshit.

It's called the efficient market hypothesis.

If it was known that the price of Bitcoin will collapse on the 7th of June 2025, every owner would have sold their Bitcoins on the 6th of June. But then the price would collapse on the 6th, not on the 7th. But of course, the definite knowledge the price will collapse on the 6th would mean the price would collapse on the 5th and so forth.

Hence why accurate, definite and widely believed predictions are impossible.

ttobbaybbob• 3 years ago

bernie == bernard fwiw

medellin• 3 years ago

The year is 2023 and we still have people arguing this. Can you at least try to be creative with your critique of bitcoin instead of this lame one?

throwme_123• 3 years ago

Wow. Both parent and grand-parent seem wrong.

GP: Bitcoiner, dooming everything else.

Parent: Anti-crypto (the majority here), up to the point on comparing Bitcoin (which might be a bubble, that's not the point here) to a Ponzi (that it is not: Supply is fixed, there is no new deposits paying previous depositors).

travisjungroth• 3 years ago

Something collapsing isn’t an example of the Lindy effect not working. It literally predicts when things will collapse. It’s just a life expectancy for things with a power law distribution.

A healthy 20-year-old can fall over dead from a brain aneurysm. Doesn’t mean actuarial tables aren’t useful.

cyanydeez• 3 years ago

Think of Bitcoin like the martingale betting method.

In theory, it does win. In practice, few people have enough liquidity to keep up and even then, they need to know when to quit.

deevolution• 3 years ago

There's no promises of future gains or profits made explicitly by the protocol, nor is there any central party pushing/benefiting from its adoption. There are plenty of other crypto coins you could accurately label as Ponzis. It's unfortunate that bad actors have tarnished the Bitcoin name...

gwbas1c• 3 years ago

I think it's pretty clear that most crypto currencies a Ponzi schemes.

But... There's enough demand for an international unregulated currency that I think it'll be around for awhile. There are plenty of people that tolerate its flaws. (Specifically, the volatile value.)

I personally think once the scammers and "true believers" move on, Bitcoin will stay around until some other international "unregulated" internet money comes around.

thworp7• 3 years ago

Oh please, again with the "store of value" BS. I made an effort to look at the actual volume of bitcoin being traded in and out of the system (aka actual entries and exits, not just fraud-prone exchange swaps) in 2020 and I concluded that it's probably worse than most scam penny stocks in terms of liquidity. It's really hard to find any kind of reliable data though, but in the absence of that I had to conclude it was just a gigantic scam.

tasuki6• 3 years ago

It's really hard to find any kind of reliable data though, but in the absence of that I had to conclude it was just a gigantic scam.

Interesting! If I couldn't find reliable data, I'd have concluded that I didn't know.

derbOac• 3 years ago

Bitcoin is puzzling to me, in that a commodity usually has some value outside of a trading market per se. That is, it is usually consumable in some abstract sense. I'm not sure what you would "do" with Bitcoin other than as some form of currency.

In this regard, ETH always seemed a bit more on track, in the sense that there have been attempts to use the ETH blockchain from the beginning for the purposes of computation, other than "just" as a currency.

I'm not disputing what you're saying about the SEC position regarding Bitcoin, it just seems to highlight for me something a bit off about the SEC position, even if it is favorable in certain ways toward Bitcoin. I come away from all of this feeling a little like neither the SEC nor the crypto community at large are quite being honest or accurate about what's going on with crypto or how it should be regulated.

lostmsu2• 3 years ago

My inner conspiracy theorist would say that given the crypto market situation and state of ETH and Bitcoin as platforms SEC actions indicate that Bitcoin might have something in its design that US government wants vs ETH.

jfengel2• 3 years ago

In theory, you could think of bitcoin as electricity that has already been consumed. To replace it, you would have to burn more electricity. The bitcoin concept is to manifest that burned electricity as a tradeable value.

That is the sense in which it's commodity-like. It's the underlying electricity which is consumed.

It's far from clear that this is really valid, but that's the sense of it.

anonporridge5• 3 years ago

I think of bitcoin as THE null commodity.

No intrinsic use. No mass. No degradation. Transports at the speed of light. Perfectly scarce and not debaseable.

All other commodities exist at various vectors outside of this null point. They have various usefulness in and of themselves. They have mass and volume. They degrade at different rates. They take a lot of time and energy to transport. They aren't perfectly scarce and some are absurdly abundant.

Humans have overloaded various commodities throughout history with the memetic concept of "moneyness". Mostly gold and other precious metals because they have properties close to the null point that we find most important (primarily scarcity and close to zero degradation). We hoard these non null commodities because we came to collective consensus to imbue them as the database of our debt to each other, otherwise known as money. However, this had the negative effect of tying up otherwise useful commodities that we might have been able to put to productive work. This money also had the negative effect of being difficult to transport, store securely, and fractionalize.

Then came government backed, faith based currency. It's a near null point commodity and we really like that when choosing something to imbue our collective moneyness concept in. No intrinsic use. Low mass (paper) to no mass (digital). Limited degradation (paper with replacement service) to no degradation (digital). Easy transport (paper with high denominations) to light speed transport (digital). However, it's scarcity is highly questionable. To quote Satoshi, "The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust."

Bitcoin is the null commodity because it solved the final piece of the puzzle that we tried to solve with fiat currencies. Eliminating trust in central authorities and perfect scarcity.

JumpinJack_Cash• 3 years ago

> as a store of value

Bitcoin failed as a store of value, it's up some 20,000% since 2010 and basically infinty since the day of its first trade (back when the first bitcoin was traded for some trivial amount of electricity)

Store of value is a very specific term

PragmaticPulp• 3 years ago

The longer Bitcoin survives, the more it will get adopted and integrated into the world's financial fabric, e.g., as a store of value. If this sounds far-fetched, consider that many smart and smart-sounding people have predicted Bitcoin's demise, and so far their arguments have been proven wrong:

You're arguing that because Bitcoin hasn't met its demise, it will therefore be widely adopted as a "store of value"?

As if there are only two possible outcomes: Complete failure or complete dominance as a store of value. This is where your argument doesn't make any sense.

I suspect we'll discover that all of these altcoins and weird financial instruments didn't actually detract from Bitcoin at all. Rather, they contributed to its rise by juicing demand and pumping huge amounts of leverage and pseudo-liquidity into the cryptocurrency ecosystem.

If crypto becomes boring, I don't think the natural conclusion is that adoption will increase.

cs70210• 3 years ago

The longer Bitcoin's network continues to function, the more people will become aware of its resiliency. Governments may topple; banks may fail; exchanges may go bust; Bitcoin keeps on ticking. Difficult-to-forge assets that can survive the failures of governments, banks, exchanges, etc. tend to gain adoption as stores of value. There aren't a lot of assets like that. Gold is one. Bitcoin appears to be one too.

codegeek• 3 years ago

"The longer Bitcoin survives, the more it will get adopted and integrated into the world's financial fabric,"

How long do we need to give Bitcoin a chance to gain mainstream adoption as its been 15 years already ? So far I don't see much real use except speculation, extortions, get rich quick scams and websites where you want to be anonymous. For the most part.

icedchai2• 3 years ago

They follow it on CNBC and have for a while. It's as mainstream as any stock.

cs70210• 3 years ago

How long do we need to give Bitcoin a chance to gain mainstream adoption as its been 15 years already?

"We" don't need to give it a chance. Time is giving it a chance, every new day, indefinitely. For all I know, it could take decades, not years, for Bitcoin to gain as much credibility as, say, gold, which has been around since the advent of ancient human civilizations. I don't know. Maybe it will happen much faster, like everything else online?

So far I don't see much real use except speculation, extortions, get rich quick scams and websites where you want to be anonymous. For the most part.

The biggest use of Bitcoin today is as an alternate store of value, by a large mass of "HODLers" who, as their name suggests, will hold on to it for dear life.

Bitcoin is not the main asset used for speculation, extortion, scams, ransoms, drug deals, etc., today. The main asset used for illegal activities today, worldwide, is the US dollar. It's not a coincidence that the briefcase full of $100 bills is a prop in so many movies/TV series depicting illegal shenanigans. I suspect that more money is stolen in USD via hacked bank accounts, hacked credit cards, hacked online accounts, hacked SIMs, etc. than in BTC via difficult-and-dangerous-to-execute online ransoms.

staunton• 3 years ago

The longer Bitcoin survives, the more it will get adopted and integrated into the world's financial fabric, e.g., as a store of value.
We sure live in interesting times!

I'm not really sure it's that interesting, or new at least. Since ancient times people have valued things as a store of value that have have been valued by other people as a store of value for a long time. Some of the best material examples are gold, silver, natural gemstones and works of art. These things are overpriced by orders of magnitude compared to their material economic value.

Bitcoin just takes it to the extreme in having negative objective physical value, i.e., in being immaterial and physically completely worthless, while taking up resources to even exist as a concept or meme.

So sure, it very well might be here to stay as a store of value for a long time. If history is any guide on these matters, it will be a store of value (and a profitable area of speculation) for the rich and big powerful institutions while the enduring and persistent meme in the heads of the common people keeps its value alive.

peteradio4• 3 years ago

Why would anyone adopt Bitcoin into the financial fabric? That would be paying for something you can spin up for free.

progrus• 3 years ago

It’s bigger than the US. People are starting to get it.

__loam6• 3 years ago

as a store of value

Bitcoin is fundamentally a terrible store of value thanks to how fuckin volatile it is.

discodave• 3 years ago

1. Agree

2. Err, I can't see any big banks or other entities touching COIN, and the CRIMINAL proceedings that it will likely be embroiled in with a 10-ft pole!

3. Maybe BTC will come to 'dominate' the 'crypto' space, but that space will be a smaller and smaller part of the US (and global) economy. Although it never got very big to start with. BTC is used for approximately 0.0% of US transactions right now (rounded to nearest decimal place).

Waterluvian• 3 years ago

I have no idea about bitcoin’s demise, but I don’t understand how anyone can call it a store of value with a straight face.

Or do they mean conceptually it is, even if it’s a terribly volatile one?

anon-39882• 3 years ago

3. Bitcoin, which the SEC considers a commodity (it's explicitly excluded from the lawsuits), is bound to become even more dominant in terms of market capitalization. The longer Bitcoin survives, the more it will get adopted and integrated into the world's financial fabric, e.g., as a store of value. If this sounds far-fetched, consider that many smart and smart-sounding people have predicted Bitcoin's demise, and so far their arguments have been proven wrong: https://99bitcoins.com/bitcoin-obituaries/ .

I have not seen a single of use Bitcoin within 50km of me _and_ online outside of uses in degenerate countries and trading them for the sole purpose of trading them.

This feels like flat-earth theory, which will never go away, but their "science" if you call it that, is so flawed that they can't be used for anything outside of small terrestrial physics.

Similarly, Bitcoin itself will never go away. But there is no way the average folk will be able to wield them given how many times they have been scammed out of their fortune.

paulddraper3• 3 years ago

Maybe. I don't see people using gold for finances within 50km of me, but it's going to be around forever.

anonporridge5• 3 years ago

If you wait until you start to notice it immediately around you, you'll already be a late adopter.

That's ok though. Playing with new paradigms is a young person's game.

BasedAnon6• 3 years ago

that's cool and all but look man i'm just not selling idk how else to tell you man it's just i'm not selling hahahaha

paul_grisham• 3 years ago

Glowies SEETHING

burnished2• 3 years ago

Woof, lots of emotional and nigh incoherent responses to a pretty thoughtful little statement.

Doesn't inspire confidence when the average response seems to boil down to a form of religious fervor.

Which is too bad, seems like it would have been the perfect place for a thorough rebuttal.

EA-3167• 3 years ago

I think there's a lot of sunk cost in those comments, along with a lot of frustrated ideology. For people who thought they had finally gotten a way to bring their ideology into the real world, or imagined all sorts of riches, the state of crypto and the burgeoning regulatory environment may be too much to emotionally process and accept.

As for why there isn't much in the way of thorough rebuttals, I suspect anyone trying to formulate one would pretty rapidly run into the wall of reality not agreeing with their existing stance.

Joeboy• 3 years ago

"Get out of crypto trading platforms" is entirely aligned with the "idealogical" crypto people, isn't it? "Not your keys, not your coins" and that.

apercu• 3 years ago

One side says "Bitcoin good!"

I assume they all still hold bitcoin or dream of doing so.

One side says "Bitcoin bad!"

I assume they don't hold bitcoin.

I think the idea is sexy, and it definitely harkens back to the earlier hacker/counterculture days of the interwebs.

But I guess I will just sit on the sidelines. I don't even lament selling bitcoin at $300 any more. :)

skyyler2• 3 years ago

I sold a bunch of BTC for $1 and bought a car with it. I used to regret that, the most expensive Ford Escort ever purchased.

But now I feel like I dodged a bullet, I could have been one of those zealots that spent all day every day thinking about crypto, and I'm very glad I'm not.

Animats• 3 years ago

The Twitter replies are worse.

The original poster makes the key point - the institutions running crypto are unregulated and are doing unverifiable things with customer assets and trades. That rarely ends well. Most of the scams are classic ones. Most of them are in this book from 1841.[1] They've been done before, for other kinds of investments. If you know about John Law's bank, and the Mississippi Bubble, and the South Seas bubble, and tulipomania, and the original Charles Ponzi, you'll recognize all those scams in the crypto industry.

They come back whenever regulation is weak.

- FTX was a bucket shop - a broker not really doing trades, just stealing the customer money.

- NFTs were tulipomania - hype and enthusiasm with no value behind the asset.

- Axie Infinity was a Ponzi scheme - early adopters paid off with deposits of later adopters, until the supply of suckers ran out.

If you know the list of standard financial scams, you can easily slot most crypto schemes into a standard category.

[1] https://en.wikipedia.org/wiki/Extraordinary_Popular_Delusion...

__loam6• 3 years ago

Crypto people are not rational actors.

pixelpoet• 3 years ago

Here's a decent rebuttal from Bloomberg: https://news.ycombinator.com/item?id=36411751

gcoakes• 3 years ago

I find it funny that the guy wrote a long, seemingly thoughtful post. Then, he responds to all the top replies with memes and maybe a phrase. The pro-crypto people there also seem to be talking past his statement, trying to convince him of the utility of crypto rather than the SEC's justification for regulation.

yieldcrv• 3 years ago

A rebuttal:

John points out how any custodial institution gets to operate if they are not trading securities, but any other asset, while using this mere observation to bolster an alarmist view about custodial institutions that trade crypto, as if there is something unique about crypto exchanges, without considering that all spot markets currently can function in the absence of any regulatory framework.

John then amplifies the (unresolved) SEC stance about why the SEC is the most accurate regulatory authority to enact this crusade of getting exchanges into [SEC] compliance or nonexistence. In theory there are also some crypto assets that can be traded on a custodial spot exchange without SEC involvement, such as a Bitcoin-only exchange, alongside…. which other cryptos? Nobody knows but the SEC says its clear!

John hides behind the idea that its the beginning of a broader enforcement gauntlet, while talking exclusively about the SEC enforcement and not any other possibility.

The crux of his alarm is that there is no survivability path, which is also not an absolute. Even in a world where all crypto exchanges must be registered securities exchanges only trading registered crypto securities, the incumbent crypto native operators can participate in that, and establishment investment banking players are already positioning themselves to participate in that world. So custodial crypto exchanges dont go away in any of those scenarios, they just get bigger and more robust for even larger establishment beholden pools of capital.

rohith2506• 3 years ago

I am absolutely baffled by how much negative criticism the whole blockchain industry gets here and I would like to understand the reasoning behind it. Most of the arguments fall into these following buckets concluding to "IT MUST DIE"

1. The whole crypto is a get rich quick scheme with predatory practices everywhere. It's a wild wild west with no sort of regulations. Well, guess what, regulated industry is no different either. If people wants to commit crime, they will commit crime. The whole pyramid and MLM schemes have originated from traditional routes. it's nothing new. And regarding fraud, Did everyone actually forgot about Enron, Bernie Madoff and of course 2008 financial crisis where the almight SEC played a key role handing over billions and billions to these investment banks who knowingly committed fraud and pushed some of the pension funds into bankruptcy and pushed the whole world into recession. What's this fascination towards the old methods even though they repeatedly showed us that they are inadequate

2. I haven't seen a single use case of blockchain in the world yet. This is a valid critic and I do understand. Any decent distributed system engineer will understand that decentralisation is hard. consensus is hard. You know what was hard for almost 25 - 30 years and everyone's losing their shit right now and drinking the cool-aid? The good old AI. No one cared about neural networks until the compute caught upto speed.

Like it or not, we are entering a new phase in the technology where two things will definitely rise to prominence

1. Data is / will become the most essential commodity and I am terrified by the idea that few monopolies with their "don't be evil" facade will control them and become trillion dollar firms. We need to switch the model and reimagine how the internet should work. If anyone calls this paranoid,I am happy to place a bet that in ten years, if nothing is done, we will be living through orwellian future

2. A massive decoupling from US economy. I wonder what people call US economy if they call crypto pyramid scheme. Sitting on trillions and trillions of debt, printing money according to their will completely ignoring the effect of their childish actions on the global economy

When you think hard about 1&2 and come up with solutions, congratulations, you just reinvented the blockchain. If not, I am happy to hear how would you solve. In a nutshell, for god's sake , try to understand the reasoning and motivation behind why new ideas originate, gather a community and attract smart people to work on them

toomuchtodo• 3 years ago

Blockchains are unnecessary in a world with trusted entities and functional legal frameworks. In places that require a blockchain, you're still going to be at the whim of whomever has a monopoly on force. Sure, your key passphrase may be in your head. You'll end up getting beat with a rubber hose. It was never your crypto so long as someone has the guns (wrt "Not your keys, not your crypto").

https://xkcd.com/538/

A massive decoupling from US economy. I wonder what people call US economy if they call crypto pyramid scheme. Sitting on trillions and trillions of debt, printing money according to their will completely ignoring the effect of their childish actions on the global economy

US Treasuries would like a word (they are the safest financial asset in the world, "full faith and credit"). There is no safer capital market than the US. Sure, there will be some de-dollarization, but that won't fix a rapidly aging China, a "teetering near the cliff" Russia, a Central and South America that is slow steady state, etc. And Africa? Very young still but a hard sell for investing.

Sitting on trillions and trillions of debt, printing money according to their will completely ignoring the effect of their childish actions on the global economy

Debt backed by future productivity, but also debt that can also always take a haircut during legal proceedings. Laws and courts > smart contracts, broadly speaking.

wilg• 3 years ago

It’s worse, in many (most? all?) cases a legal backing is superior!

saurik• 3 years ago

Blockchains are unnecessary in a world with trusted entities and functional legal frameworks.

This is also an argument against end-to-end encryption and against federated protocols. The reality is that we, in fact, do not have and have never managed to maintain trusted entities and functional legal frameworks for much else... why do you think this is so different?

koonsolo2• 3 years ago

Blockchains are unnecessary in a world with trusted entities and functional legal frameworks.

This is such bullshit. In practice the banking system is a messed up piece of old crap.

Let me illustrate my point from my experience a few weeks ago: Had to transfer 20 euro's from my account to my sons account, same European bank. In fact, my sons account is also under my supervision. It was on a Saturday, so guess what: no transfers in the weekend! Had to wait until Monday for the money to go through. Yeah, if Monday was a Holiday, we had to wait until Tuesday.

Is that the efficiency your "trusted entities" can come up with? Don't get me started on "instant cross border transfers". If a well known bank can't handle 20 euro's from one account to another, then what do you expect cross-bank, cross-border does?

In contrast, look at the Nano cryptocurrency: 0 fees, sub second transfers, any amount, anywhere in the world.

Your theory of "trusted entities" all sounds nice, but in practice it's old bureaucratic bullshit. Thanks to blockchain the technology has a solution. Only now is still proper adoption.

ttpphd• 3 years ago

"2. I haven't seen a single use case of blockchain in the world yet. This is a valid critic and I do understand."

Hmmm, it doesn't exactly sound like you are "absolutely baffled". You acknowledge that there are astoundingly few good use cases for blockchain.

jadbox• 3 years ago

Filecoin is probably one of the best examples of a decentralized storage rewarded via crypto. There's also several Defi lending platforms that have helped students paying off debt, although I don't know enough about which networks are the best there.

jcranmer• 3 years ago

When you think hard about 1&2 and come up with solutions, congratulations, you just reinvented the blockchain. If not, I am happy to hear how would you solve.

Well, I've been thinking about it some, and I don't see how blockchain is even a solution to #1 in the first place, much less presumably the only solution. For data collection concerns, the most natural solution is of course to simply see that data is never collected in the first place, and this can happen via legal means (e.g., GDPR) or technological means (don't include unnecessary sensors).

lbwtaylor• 3 years ago

1. ... Well, guess what, regulated industry is no different either.

I disagree, I think the systematic failures and fraud in the crypto industry is much more common than the regulated industry. Madoff is an outlier, not an expectation, and the majority of funds were retrieved. How's that looking for crypto?

As for 2008, my bet is that if crypto was being widely used for mortgage lending at that time, it would have been just as bad as banks. I don't see anything about crypto that would be making safer mortgage loan. In fact, what I see in crypto is very risky loans.

2. ... Use case..

I still don't see a convincing use case there.

1. Data ... essential commodity ... We need to switch the model and reimagine how the internet should work... bet that in ten years, if nothing is done, we will be living through orwellian future

I don't think banks/brokers are big controllers of data. I am more optimistic and would prefer to use Fidelity or Schwab than defi.

2. I wonder what people call US economy if they call crypto pyramid scheme.

I'm not really going to address this deeply, this is really a political view -- that I don't agree with. For decades folks have said the US will implode. When I look around, the US is where I want to put my investments.

burnished2• 3 years ago

Crypto solves a very specific problem; how to have a public ledger when none of the participants can trust each other and dishonest behavior is naturally incentivized.

But every defense is about how crypto will purchase this moral good of decentralization or freedom from the US economy, in some unclear and unspecified fashion.

There also seems to be an unresolve-able tension between the premise of an immutable ledger and human nature as seen through the various mechanisms to undo mistakes (ie regaining access to an account, reversing charges for a variety of reasona). That capability sort of requires trust and centralization.

drngdds• 3 years ago

You know what was hard for almost 25 - 30 years and everyone's losing their shit right now and drinking the cool-aid? The good old AI.

This is survivorship bias, unless you own a Segway and a 3D TV

TimJRobinson• 3 years ago

For those that haven't looked at crypto lately and still think there are few uses, take a look at this: https://thevalueprop.io/

Cryptocurrency is a bad term, they actually make for terrible currencies, but many think they only have value when you can buy coffee with them because of the name.

What they are good at is making finance, ownership, and coordination, especially internationally, much more efficient. Which is far more niche and why the actual usage is rarely covered in mainstream media.

krrishd• 3 years ago

Would be curious to see HN crypto critics mount their arguments against:

1. Physical cash / gold (ie. bearer instrument moneys that are non-trivial to seize or control at scale)

2. The digitization of the above, retaining the same "non-trivial to seize or control at scale" property in a digital medium

tlogan• 3 years ago

Why do you need crypto platforms? Isn’t the whole point of crypto that you do need “platforms” to use it or store it?

yazaddaruvala3• 3 years ago

I'm not pro crypto exchanges, but does the SEC really live up to this guy's promises?

SEC registration establishes critical requirements that protect investors from individual risk and protect capital markets from global systemic risk. The requirements also make U.S. markets among the safest, most robust, most vibrant and most desirable marketplaces in the world.

Does he mean the requirements that continue to allow dark pools[0]?

or the ones that allow arbitrage (theft?) through low-latency order flow[1], prior to high-latency trade execution?

[0] https://en.wikipedia.org/wiki/Dark_pool

[1] https://en.wikipedia.org/wiki/Payment_for_order_flow

Eisenstein2• 3 years ago

The requirements also make U.S. markets among the safest, most robust, most vibrant and most desirable marketplaces in the world.

...

Does he mean the requirements that continue to allow dark pools[0]?
or the ones that allow arbitrage (theft?) through low-latency order flow[1], prior to high-latency trade execution?

Which markets don't have those?

yazaddaruvala3• 3 years ago

In Canada, PFOF is not allowed on Canadian listed securities,[5] so Canadian brokers charge commissions,[8] however, according to the current Canadian securities regulations, brokers can accept PFOF on non-Canadian listed securities.[9] It is also banned in the United Kingdom.[5][10] According to Euronext, European authorities have regulated payment for order flow, and the practice is allowed in a number of national jurisdictions across Europe.[11]

On the wiki page for PFOF

jfghi• 3 years ago

To me this reads as an off topic whataboutism. Perhaps [0] and [1] deserve their own articles, but neither detract from the overall point of what the tweet is saying and provide any demonstration as to why crypto platforms should continue breaking the law.

erredois• 3 years ago

Don't forget about SPACs that are no better than a lot of shitcoins.

rurp• 3 years ago

I wouldn't say that this is a counterpoint to the SEC side. The SEC dislikes SPACs almost as much as crypto and has (slowly) been taking steps to limit them.

rossdavidh2• 3 years ago

One of the most valuable things that has come out of the cryptocurrency industry, is a better understanding of just how much worse our fiat currency regulatory environment could be. It's, by all means, not all that we might wish for. It's way better than crypto.

neilparikh• 3 years ago

I don't think it's clear that PFOF is bad for retail investors. Many people argue (see Analysis section of the article you posted, and also Matt Levine's writing about it on Money Stuff) that PFOF is actually a net good for retail investors, getting them both price improvement and lower commissions.

Also:

In the United States, accepting PFOF is allowed only if no other exchange is quoting a better price on the National Market System. ... Transactions must be executed at the best execution, which could mean the best price available or the speediest execution available.

yazaddaruvala3• 3 years ago

Yeah... so Citadel receives the PFOF from Robinhood before my trade, then Citadel gets access to close my trade at a later millisecond.

Why is that the order it happens in? Maybe, there is no fraud... but really?

pazimzadeh• 3 years ago

I am 100% objective, independent and neutral

Show, don't tell

fwungy7• 3 years ago

There are $5T of foreign exchange transactions per day.

Btc is already getting traction in the developing world as a reliable currency and that is likely to grow under de-dollarization.

The entire crypto market is about $1T right now of which btc is about half.

There is so much space for Btc to grow as an option for international settlement, it's already working and trusted as much or more than many sovereign currencies. As it becomes more trusted it will increase in price which will decrease its volatility.

If Btc just takes a little slice of the FX market it's an easy 5-10x. I wouldn't bet everything on it, but it does seem rational to have a corner of your portfolio in it.

The Feds and the bankers hate it because it's a direct threat to their business model. There's no room for a middle man to fugazi in btc.

jayd162• 3 years ago

Do you think crypto will remain dominant over a more traditional digital banking solution once established players recognize there's a market? If so, why?

johngladtj• 3 years ago

The established players already know there's a market.

The reasons they don't service it are regulatory, not technological, and so an unregulatable Option will eat their lunch.

jbverschoor2• 3 years ago

You obviously haven’t dealt with banks in the eu lately.

fwungy7• 3 years ago

It doesn't need to be dominant. It's such a small sliver right now that it could go 10x and still not be anywhere near dominant.

There are a lot of places where the government is not strong enough to maintain a reliable currency on its own. The USA was the global currency up till now because it was universally trusted, but that's changing. The people who have profited from the international dollar are maneuvering to keep their monopoly.

themagician• 3 years ago

The crypto market was almost 3T two years ago. That’s a 65% decline from ATH two year ago.

And it has so much lower to go after Tether, Binance, and Coinbase collapse.

Crypto eats itself. Bitcoin will never reach its true potential because every centralized exchange is a scam.

rossdavidh2• 3 years ago

"The entire crypto market is about $1T right now of which btc is about half."

How much of that do you think is Tether-related? If Tether were to, say, turn out to mostly own Chinese real estate bonds that are worthless (no idea if this is true, it's just one suggestion we've heard), and that portion of BTC volume which is related to Tether purchases goes away, how much impact do you think that would have on the price of BTC?

fwungy7• 3 years ago

Tether is a problem. It's one of the reasons I would not go all-in on btc, but it's not insurmountable. There are plenty of use cases that do not involve USDT.

LexiMax3• 3 years ago

The Feds and the bankers hate it because it's a direct threat to their business model. There's no room for a middle man to fugazi in btc.

Crypto has spawned their own classes of middle-men.

At best, you have a changing of the guard - new boss, same as the old boss. At worst, you have traditional finance buying a stake in crypto and ending up in the exact dominant same spot they were before. And of course, all of these people have to do business on the terms of their host countries.

Crypto does not herald a new set of rules, it merely aims to be a new mechanism by which value is transferred, which by most objective measures it's very bad at doing.

fwungy7• 3 years ago

Yes, but the blockchain can be publically audited, unlike the current regime.

everfree2• 3 years ago

At best, you have a changing of the guard - new boss, same as the old boss.

At best you send some of it directly to someone else with no trusted middleman, which is impossible to do over the internet with any other kind of system.

At worst you have a changing of the guard.

jsutton• 3 years ago

it merely aims to be a new mechanism by which value is transferred, which by most objective measures it's very bad at doing.

What objective measures are you using? Over $3 Billion in value is transferred over the Bitcoin network every day. There has never been any downtime, nor has it ever been hacked, and fees are flat and transparent (just a few bucks to transfer unlimited value across the world).

stainablesteel• 3 years ago

that list of concerns read like selling points to me

i suppose its just a religious difference

vore2• 3 years ago

It's all well and good until you're unlucky enough to find yourself at the wrong end of it all.

jbverschoor2• 3 years ago

Meanwhile, https://edxmarkets.com/about/ just launched

softbt• 3 years ago

The comments are so funny, made my day

raydiatian• 3 years ago

People who defend crypto on Twitter make my skin crawl.

pwndByDeath• 3 years ago

I'm waiting for Putin to put a BTC price for oil.

BTC isn't optimal for small transactions, but it is useful for exchange among peers who have no trust in a 3rd party to fairly regulate trade (e.g. Sanctions)

If two nations bypassed banks with a system like BTC, then we would see what the point of BTC is.

StopHammoTime• 3 years ago

A large economy would never do that because it devalues their own currency. He’s currently making people buy Rubles with Euros AND there’s no transaction fee. Europe might be working toward energy independence from Russia but that’s still a while away.

Plus, what point does BTC have to Russia? They can’t exchange it for Fiat and no one accepts it for anything of useful value. At best It’s just an extra step between them getting their Fiat currency. He could convince other nations to use BTC, but he would be better off convincing them to use the Ruble. Nation States don’t want un-sanctionable assets - they just don’t want to be victims of those sanctions.

Even if Putin did do any of that, it just proves the SECs point. The US Government does not want people transacting with sanctioned nations and individuals. They would rather make it illegal than lose the financial power they currently have. For better or worse, governments don’t want crime (or more specifically their definition of it) to be supported by their citizens. This is why the SEC (and soon, Congress too, I’m sure) won’t stop. The existence of Cryptocurrencies are antithetical to their own existences.

TX81Z2• 3 years ago

I’m Torn: his credentials are impressive so I should listen to what he has to say, but he also paid for Twitter Blue so I assume he’s an utter moron.

olalonde• 3 years ago

If all that is true and SEC registration is so great for investors, why isn't any exchange satisfying that market demand and registering with the SEC? Seems like a no-brainer.

oxley• 3 years ago

There are two problems:

1. It's not clear whether exchanges like Coinbase could technically comply with the rules for running a securities exchange, because the fine print of "what to do" doesn't fit well at all with the technical reality of "what does it mean to hold a cryptoasset" [1]

2. The SEC want token "creators" to register them as securities. Which they could do, but they would then be subject to SEC oversight, which is precisely what they're trying to avoid. ICOs are really a way of raising money from retail investors like a public company, without following any of the regulation around public companies.

So even if we solved 1., there might not be many tokens left to legally trade on a registered securities exchange.

[1] From a nonpartisan research organization: https://capmktsreg.org/wp-content/uploads/2023/06/CCMR-Crypt...

dontupvoteme• 3 years ago

Wouldn't surprise me in the slightest if we find out decades from now this was part of a response to the threat of dedollarisation.

slavboj• 3 years ago

"With traditional SEC-registered financial firms, the SEC has unlimited and instantaneous visibility into every aspect of operations."

That is obvious horseshit.

lukeasrodgers• 3 years ago

Yes, this claim along with "I am 100% objective, independent and neutral" are bombastic and serve only to undermine his argument. He seems like a smart and reasonable person, and some of his other writing that I've just come across, e.g. https://www.linkedin.com/pulse/why-sec-regulation-enforcemen..., is free of that type of extravagance, so it's unclear why he would make the claim you cite. Perhaps just the "Twitter tends to lower the quality of all discourse" factor.

mavu• 3 years ago

Ahh, always a nice pass time to go to those tweets and block the first 30 accounts that reply.

feels good man.

glerk2• 3 years ago

This is hilarious. So crypto exchanges selling “securities” will be driven out of the US. Ok. US users will have to first buy “approved” cryptocurrencies like Bitcoin, transfer them to a non-US exchange or p2p exchange like Bisq and use a VPN to buy whatever they want. The real winners here are these lawyers and apparatchiks who have never created anything of value in their entire life.

mehlmao• 3 years ago

As opposed to all the valuable things being crated with cryptocurrencies?

glerk2• 3 years ago

Correct. And if you personally don't see anything of value being created by cryptocurrencies, nobody is forcing you to invest or work in this field. It's the beauty of free markets when they're allowed to operate properly.

Btw ever wondered why in the year of our lord 2023 you can't trade stocks on the NASDAQ after 4pm EST, and why an ACH transfer takes 3 days to settle? I guess it's easier to piss away billions in lawyers and lobbyists to gatekeep the competition instead of R&D to improve your products.

jsdeveloper• 3 years ago

yes its all that, but people invest in crypto as they don't want to be regulated any more. government control people using money, all these people are more worried about loosing this control , rather than securing financial security of people.

simple-thoughts3• 3 years ago

It doesn’t really matter to actual blockchains what the sec does or doesn’t do. It does matter to the centralized bandits like coinbase who tell people they are “buying crypto” when in fact they are buying a liability that may or may not be worth anything in bankruptcy court.

I’ve never held any crypto in a exchange since mt gox, and a new cohort has learned the same lesson from ftx and the fake “defi” platforms.

schoen2• 3 years ago

Sure, but it's still a tough scenario if the vast majority of people don't have a reliable way to convert fiat currency to or from cryptocurrencies (or to or from cryptocurrencies that regulators don't approve of). That would likely mean less liquidity, less broad appeal and application of applications using cryptocurrency, and potentially more stigma.

simple-thoughts3• 3 years ago

Less liquidity between the fiat and crypto ecosystem cuts both ways - it makes fiat less valuable since low liquidity creates a class of products and services that cannot be purchased with fiat. If people still want those services, they will barter for them instead using p2p platforms. Examples that already exist include - sending Amazon packages for crypto, providing free or discounted rent for crypto, food delivery services for crypto, etc. This creates a situation where more goods and services can be purchased with crypto than without it, meaning crypto is better money than fiat.

Liquidity between fiat and crypto privileges centralized insiders who have the connections to fit into regulators molds and thus leak compliance into the wider crypto ecosystem. Thankfully regulators are too dumb to understand this and are shutting down the main threat to crypto, which is coinbase and it’s kind.

dan-rocks• 3 years ago

2024 is the year of the Bitcoin on the desktop. /s

heeebeeejeebees• 3 years ago

trash article

crtified• 3 years ago

Curious: what exactly are the mechanics of this seeming dire prediction?

Is it being implied, or threatened, that forthcoming actions will lead to the insolvency (and resultant loss of customer funds) of the worlds major crypto 'exchanges' ? Again, by what particular mechanism(s) is this to occur ?

I don't outright disbelieve it, but nor is this the first rodeo we've seen.

kgilpin• 3 years ago

What was interesting about cryptocurrency was the idea of holding your own private keys and conducting transactions directly on the blockchain. In that scenario, everyone is their own “exchange” (kinda) and the SEC might let it roll. Cryptocurrency exchanges really have almost nothing to do with actual cryptocurrency. They just use the terminology (and the hype) as levers to try and build an unregulated exchange. Centralized exchanges are regulated - so here comes that process.

__loam6• 3 years ago

Crypto can't pump without the exchanges because it's too inconvenient and risky to use for most people. It has value because of the exchanges bringing in retail pumping them.

nathias• 3 years ago

regulatory capture well on the way

nootropicat2• 3 years ago

I used to be optimistic, but it's 2023 and the only non-ponzi use case of crypto are stablecoins. What people actually want is to easily trade and transfer US dollars.

Some tokens are pure ponzi schemes (like shib, btc) some are ownership in something that could have productive use (eth, some other smart contract platforms tokens). Yet that use isn't actually happening, so from a general pov it's all a ponzi. The most likely outcome is that nothing productive happens at all.

For an average buyer (esp. btc) mark-to-market returns are already underperforming stocks for years when looking even at previous ATH. So many people own some crypto there's no possible separate source of greater fools elsewhere - most current crypto owners will end up at a massive loss. The long-term underperformance compared to other assets will get even worse.

From the pure hype perspective, I think there's room for one last bubble. There's an army of bagholders (of every token) that will throw good money after bad when prices are sufficiently high again, giving up real wealth (again) in exchange for virtual tokens of either zero or much lower value. They still hold hope of at least going back to 0, or maybe even making money. After the next one, they won't. It will get really depressing.

notfed• 3 years ago

non-ponzi ... stablecoins

Erm... https://youtu.be/-whuXHSL1Pg

jasfi• 3 years ago

He's pointing out lack of regulation. That typically means more regulation is needed, and is likely on the way. Not that crypto platforms will be banned and die.

jaimex2• 3 years ago

Is he talking to American citizens only?

None of what he is saying applies to me.

TrapLord_Rhodo• 3 years ago

Interesting development...

Why exclude Bitcoin in all of this? is it unlike other cryptos in it's 'unknown ICO'? What makes bitcoin a commodity, vs. Solana, Cardano and Polygon being securtys. Is it the distribution of tokens, method of ICO, tech stack?

Snowden showed us the US gov has complete worldwide monitoring, so there's no way they don't know who satoshi is/ was/ were... There's some unknown POI, with $56B and you don't think the CIA and FBI aren't extremely concerned about that person. People always pointed towards bitcoin as being used for 'Money laundering' but its the perfect honey-pot. It's not private, it's completely public and i can tell exactly where and how you interact with the chain. So many idiots think, 'bitcoin's private! let's launder money through it in a super stupid way that still hits all the KYC flags. Oh, your wallet uses tornado cash wash? all incoming and outcoming wallets are now flagged.

Why didn't the US ban Bitcoin out the gate?

It's not like they US doesn't have presidence here. They shut down and put in jail previous creators of 'internet money'.

China (Who also has world-wide monitoring) was also extremely fast in noticing it. in 2013 with a market cap of 1.3b, they banned it while the US was completely apathetic.

BTC was created by the CIA. There, i said it.

Former US SEC attorney: 'Get out of crypto platforms now'

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