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Comment by CPLX | Hacker News Reader

The problem is their business model is illegal.

The idea that they need “guidance” is another way of saying if we follow the clear law what we want to do is impossible so can you help us with that.

The SEC answer has been yeah no we can’t solve that problem for you.

It’s all on the first few pages of the linked complaint, they didn’t register as a dealer, broker, clearing house, and so on, because the would instantly be on the wrong side of all sorts of regulations for what those institutions are allowed to do.

They don’t want clarity. They wanted waivers. They wanted the SEC to say crypto is different so you don’t have to do XYZ.

The SEC said no.

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Yes, it would be like a married man asking his wife for a list of things that count as cheating so that he can be sure to avoid doing anything she wouldn't approve of.

Very few women would respond, "here is the list, if I forgot anything it is totally my fault and not your fault for doing something that is technically not on the list"

That metaphor is a start.

More accurately it would be like a married man asking his wife for a list of things that count as cheating while openly fucking prostitutes and fathering multiple children and bragging about it.

Except that marriage is a voluntary relationship of mutual cooperation and trust. Regulation is an involuntary relationship of coercion and enforcement. The least the coerced party may as for is to know what it is going to be punished for, what are the rules of the game. And if us, and always have been, the "fault" of the legislature and law enforcement if somebody does something lawful but they didn't like it. That's how law works in a legal culture we used to have - whatever is "technically" on the list, is not legal, all the rest is legal, and ghe burden oc proof is on the state. You would not like the alternative.

Except the USA is a democracy. If a Orange reality tv star can be elected president, a crypto person could be as well. But most people don't want "code is law".

I guess this is a five-star effort in the category of "make any discussion about Trump because I can't talk about anything else". Any on topic comments to follow?

No, this is the same point I've been making since 2010. Having libertarian ideas like "code is law" and "money should be decentralized and permissionless" sound nice in theory, but in the real world they don't work very well.

You are seeing this now with the fact that we have not elected anti-regulation people over the past 13 years. And people have preferred to stay with more traditional financial products. So crypto isn't working out in the real world.

Well, if US regulators can destroy any company in crypto space in a couple of days, and are willing to do so, then it's hard for it to "work out in a real world". If the regulations are "just don't do anything bad, and we'll tell you what's bad after you do it and invest billions in it" then it's hard for it to "work out". If the users are asked to invest into assets that can be wiped out of existence by regulators at any minute, then it's hard for it to "work out".

Yes, the government is part of the real world.

If you created a nuclear power plant in your basement that you feel is totally safe, that is great, but a good chunk of the rest of the country wouldn't be comfortable with that and they would expect the government to shut down your nuclear power plant.

You could disagree with them and the government, but it wouldn't work out well for you to invest all your money into your basement nuclear reactor.

That would not mean "nuclear power does not work". That would mean "people do not want it, whether it works or not". Except here it's not "the rest of the country" but a bunch of unelected bureaucrats which 99% of the country doesn't even know exist, and certainly didn't ask them to do anything.

You started with claiming it "does not work", but ended with "it's bad investment because the government would destroy you". These are wildly different claims.

Bitcoin was created specifically to prevent the government from controlling money supply, by creating an alternate form of money. The idea that it isn't succeeding because unnamed bureaucrats is misleading. The SEC and other regulatory frameworks exist today because of laws created over decades. Those laws were created to protect people, after many people were scammed.

https://en.wikipedia.org/wiki/Blue_sky_law https://en.wikipedia.org/wiki/U.S._Securities_and_Exchange_C...

People generally don't want to get scammed, which is why crypto is failing. Obviously we are not talking about the software here. I'm sure plenty of Web3 "software" works just fine, what doesn't work is selling unregulated securities to investors who lose all the money.

> The idea that it isn't succeeding because unnamed bureaucrats is misleading.

You use two distinct definitions of success here. As a means to transfer value beyond governmental control, Bitcoin has succeeded. You can do it any time, provided you are fine with your value stored in Bitcoins.

The other definition is "anybody can use it without the fear of ever being scammed and the regulators can not make using it inconvenient or legally dangerous". This is obviously impossible - the regulators can declare anything they want to be illegal (even the Constitution is only a weak impediment, and it does not have any barriers preventing financial regulation, and as long as people do transactions, they could scam each other. This is absolutely unrealistic and non-sensical definition of "success" - nobody ever could deliver on this, including every existing payment system, where people get absolutely scammed all the time.

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