There are a TON of influencers pump and dumping crypto. Where’s the SEC?
There have been ICOs which definitely have been represented as securities and have been regulated/quashed/fined.
But when not used as a representation of ownership of currencies or assets... what is a cryptocurrency and does it fit into existing law about securities fraud?
Another way to ask the question: should the SEC regulate pump and dump schemes with collectables? (I'd say beanie babies and pokemon cards to date myself, I don't know what people are speculating on these days)
The tax guidance in Canada says yes, they are.
I don’t think they’re being advertised like collectibles. They’re advertised like investments. This is the first time I’ve actually heard them compared to collectibles.
My personal experience makes me believe there’s not much liquidity. Also, as a class of currency the crypto scene is printing money faster than anything we’ve ever seen in history IMO.
A security is very specifically an instrument which represents the value of something else.
And tax guidance isn't the same as general classification of something (there are lots of really weird tax rules. For example: the US supreme court decided that a tomato was a vegetable, not a fruit for tax purposes while it is without any question actually a fruit.
The SEC regulates how companies represent themselves to investors and how certain things representing ownership are traded and represented. The exact surface that fits inside the SEC I don't know exactly and one has to be an expert to know (and the SEC doesn't necessarily know itself).
Cryptocurrencies went from being completely outside regulation to somewhat inside, but the laws, courts, and regulations are starting to slowly catch up. Everyone is still figuring out things as they go along.
When cryptos are used to represent a piece of ownership though, it is cut and dry, they are securities and subject to existing regulations.
When cryptos don't correspond to the value of something external though, they are somewhat new and just don't yet fit into the existing regulatory framework and the attitude of regulators is generally wait and see while going after the most clear abuses and easy cases first to build up a framework for whatever the future will hold.
"common sense" of what cryptos are or aren't doesn't work, whatever regulators do, there will be high profile lawsuits for the courts to decide what they are and aren't, shaping this process and doing things which are clearly legal or illegal first in the best interests of the regulator is what happens. (in other words, they don't want to go out on a limb right away in tricky edge cases, they want to get things in a pattern and decided with the easy cases first)
So then it would be more accurate for me to have said that in Canada all crypto gains and losses are considered income or capital gains/losses for tax purposes. IE: You have to track your gains/losses like you do for stocks.
I only considered my side of the view where there’s not much difference. I’m guessing you’re talking about the side that creates coins where the technicalities of whether or not they’re securities makes a huge difference for regulatory requirements.
Thanks for explaining.
In the case of the Web, the answer clearly turned out to be a deafening No. Years ago, I had higher hopes for Bitcoin in this regard. Same for so called “censorship resistant decentralized platforms”. I spent years pondering how such a thing might work, before I realized that no technology, no matter how advanced, cannot be struck down by a single act of Congress. Save for cases of crystal clear constitutional protection, if any technology becomes a big enough problem, or a problem for the right people, it will have its day, and then it will be kneecapped.
Once something becomes the lowest-common-denominator populist solution or the solution for the privileged, those use cases become "bad" because of value judgements of the people using them.
It's a kind of romanticism for rebellion, and with cryptos usually a broad misunderstanding of what money is, what it does, and how it works.
Indeed nothing can be the growing rebellious trend forever. It either wins and becomes the standard or dies failing to live up to whatever ideals it didn't actually have.
>can smart people create anything ingenious that escapes being coopted / subsumed by the establishment? Or, can such a thing survive popularity on its own terms?
No, everything has vulnerabilities that will be eventually exploited.
The American constitution and the many governments around the world inspired by it have done a pretty good job of avoiding a complete consumption (in ways that, for example, communism did not), in part by specifically designing not just to handle or avoid greed and control, but to use those characteristics of societies as a feature.
I can plant tobacco and make "unregulated cigarretes" with the goal of not being regulated by any government. The goal is that you can smoke it anywhere, no regulations on its composition, and I can advertise it anywhere.
That does not matter, it is still regulated and I cannot unilaterally opt-out of government regulations. (Or I can, but that is a crime and is what crime organizations do).