I don't know - I have a lot of sympathy for your points but your experiences are so generally described that I can't really evaluate whether I agree with you.
You are leaving out the vacuum created by the regulators. They've been massively absent and unclear. The legislators are afraid of scaring off $ and the agencies won't issue relevant guidelines. I don't blame (non fraud) entrepreneurs for trying to enter the space.
One phase I’ve heard in other situations is that “bad cases make bad law”[0]. IANAL, but my understanding of this is that because the US is a common law system where precedent influences future outcomes, legal and regulatory bodies are hesitant to take legal action unless the outcome is likely to be in their favor. Loosing cases end up creating legal precedent against the power of the regulatory body.
In a greenfield areas where there there is no precedent to point to regulatory agencies end up being served to wait until there is a clear and obvious case to be made to cement their authority. If the SEC were to have taken aggressive action again kinda scammy ICOs early on, it’s possible they could have lost legal action, and hamper their ability to regulate in the future. Waiting for a scam obvious enough for them to win in court gives them legal precedent to successfully pursue more actions in the future.
[0] This came up a often on the podcast “All the Presidents’ Lawyers” with Ken White, generally when discussing how and why the DOJ does things.
The SEC is mostly complaint driven. Someone complains they lost money in a scam, and the SEC takes a look. So they get involved in the aftermath, not the runup.
Recently, the SEC just doubled its "cyber" enforcement staff. So enforcement actions should pick up. Just in time for the flakier NFTs that promised something would happen in the future.
[1] https://www.sec.gov/spotlight/cybersecurity-enforcement-acti...
As fellow counsel, I'm sure you get why the post had to be general. I earnestly believe that none of the clients I had did anything I thought illegal when I represented them. But I can't ethically blog details of their compliance postures, or of their private negotiations. I can't name names, of clients or of counterparties.
I did not then and do not now perceive any great regulatory "vacuum" as concerns securities regulation. Having learned the 33 Act from law school and in practice, rather than Coin Center and blogs, I didn't see uncertainty demanding regulator clarification. I saw Coin Center and friends trying to manufacture a perception of such uncertainty. Even so, the SEC Report on Investigation on the DAO came right out and said "security", under both '33 and '34 acts, five years ago. And hammered the point that existing analysis fully applied.
Absent regulation, rules are defined by those in power for their convenience rather than for the public's benefit.
I am not a fan, nor making excuses, but its not constructive to oversimplify important, multi-step mechanisms
Source? In the global north, most regulatory bodies are understaffed and underbudget and cannot possibly even try to protect the public from vicious corporations. With the neoliberal wave of the 80s, there's been a merger of State and Corporations interests (what Mussolini called "corporatism") and millions of people have died as a result: from poverty, from work "accidents", from harmful chemicals advertised as medication, from industry pollution...
The people in the regulatory bodies are friendly with the corporate people. It's not uncommon for these bloodsuckers to jump from one field to the other and back again in about a decade.
To give one small example that's familiar with HN people: all of silicon valley hosts (GAFAM) were illegal by french privacy law (passed in 1978) yet they were all operating luxury offices in Paris and bribing engineers to come deceive/exploit the public.
I'm not a fan of defending defeatist worldview, but to believe that the State is here to protect people from corporations is an oversimplification. The regulation, corporate, and State people all come from the same higher classes, all went to the same schools, and eat in the same fancy restaurants in the same bourgeois districts. We lower people don't have the same interests as them, and they are well aware of that... are we?
human nature has developed over thousands of years at least, so is this still true? partly of course. So, make the world you want to live in.. speak in public, write, participate in civil society.. When money is involved of course there is insider dealing.. and there is legal enforcement everyday .. pick an example, the female South Asian lead Attorney for New York somewhere, a Wall Street enforcer.. look for it, easy to find.
I am all for engagement, much less for repeating stories of old problems as if nothing has changed, right?
It's totally not bribery though, just good business.
And of course, as someone else pointed out, you don't necessarily need to take a bribe right now when you know you can quit your job as a regulator to earn 6 digits working for industry. That's a common bargain with regulators, but it's not even just them. You could say the same about journalists, who at least here in France, often refrain from criticizing private propaganda machines (Lagardère/Bolloré/Bouygues/LVMH empires who control >50% of media) because they don't want to compromise their chances of getting a job with them later.