Hacker News Reader

Comment by hackingforfun | Hacker News Reader

If you miss that some of the laws are literally so the elite can stay in power, and the common folks have restrictions on what they can invest in, then I just can't take the rest of what you say about this subject seriously.

FWIW, I also invest in an S&P 500 index, so I'm not totally anti traditional finance.

View on HN

Right, we generally assume that if you hold a certain amount of money you can opt-out from protections both because the risk of you losing money is lower (you presumably are a bit more savvy) and the cost of damages is relatively lower.

That isn't some great scheme to keep the common man down. It's to protect the average consumers from the kinds of crypto scams that are advertised daily, even on little cardboard signs around my own neighborhood.

An accredited investor can bet it all.

The assumption that they are a bit more savvy is exactly what I'm talking about.

That's just a conspiracy theory. I mean, yes, Protection of Entrenched Interests is a real thing, Regulatory Capture is a real thing. There are real issues to discuss there.

But to argue that the purpose behind the SEC et. al. is to ensure "the elite can stay in power" or that "common folks are restricted" is just ridiculous tinfoil hattery, sorry.

Outrageous scams in crypto are a real and significant threat. Everyone can see that. That they aren't traditional finance is quite clearly because of the regulatory regimes that control them.

Some investments would turn out to be scams and the cheated would decry the lack of oversight, so rigorous oversight is what they got —- since you’re not rich enough to handle risk, we’re going to prevent you from taking any at all. So yeah, the rich get rich and remain unchallanged, while the common folk is protected from scams. Perhaps not a conspiracy per se, but the good ol bureaucratic status quo.

Nobody is stopping you from taking risks. What are you talking about?

I think they are referring to accredited investor laws.

Correct. I’m not American and not subject to them, but I believe people should make their own decisions, while the protection offered by the state should come in the form of education and catching bad actors. Restricting access is a form of throwing one’s hands in the air and deciding the issue is too complicated so we’ll just hide it under the rug. This goes beyond accredited investor status. All too often laws and regulations hide issues under the rug rather than actually addressing them, perhaps because the systemic changes required to fit a framework around the world are too difficult to achieve vs fitting the world inside the framework. We’re trapped in legacy code.

> I believe people should make their own decisions, while the protection offered by the state should come in the form of education and catching bad actors.

I agree with this. I think education and prosecuting scam projects are both good.

Although I suppose one could also argue that to catch bad actors ahead of time, there needs to be a way for new cryptos to file with the SEC, to then be audited to see if they are legit. However, I just don't see the SEC being capable of that, at least not yet. Crypto technology is moving too fast for them to keep up. We also still don't have clarity on some basic questions like if Bitcoin or Ethereum are securities or not. Former members of the SEC have alluded that they are not [1], but there are no clear statements on this yet from the SEC. Maybe there need to be more legal precedents set, like from the Ripple case currently going on [2], in order more clarity to be provided and for the path forward to become more clear.

[1] https://www.cnbc.com/2018/06/14/bitcoin-and-ethereum-are-not...

[2] https://www.sec.gov/news/press-release/2020-338

Have you heard of Robinhood? They say the same thing that I'm saying here. It was one of the main reasons they started their company.

> That's just a conspiracy theory. I mean, yes, Protection of Entrenched Interests is a real thing, Regulatory Capture is a real thing. There are real issues to discuss there.

> But to argue that the purpose behind the SEC et. al. is to ensure "the elite can stay in power" or that "common folks are restricted" is just ridiculous tinfoil hattery, sorry.

Thanks for this. Your argument is really simple (in a positive, elegant way) that it functions as a framework to rebuke most conspiracy theories people spew out nowadays. I've just never been able to present it so cleanly.

Reply on news.ycombinator.com