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Comment by bboygravity | Hacker News Reader

Gotta love the business model of FTX, Coinbase, Binance (and all US retail brokers): receive money from clients for the purchase of securities, deliver nothing in return unless you feel like it.

When your fraud moves against you, you can just restrict buying or selling or all trading until you're solvent again. All good. No biggy.

1 guy at FTX went to jail, I hope (for the future of the US) that there are many to follow.

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So that's the rub, right? You want more regulation for these companies so that individuals don't run off with all of your hard earned money.

The issue is that the SEC isn't doing that. They are simply saying that crypto is bad and we aren't going to do anything about it other than try to ban it. Don't forget that Gensler met personally with that "1 guy at FTX", multiple times.

The SEC isn’t some medieval inquisitor. They are limited to acting within the legal walls provided by congress.

The same congress whose dysfunction and craven corruption is such that they cannot agree to borrow money to fund the budget they approved in law.

I would argue they are purchasing commodities given the reality of what these assets are. The securities argument has been very suspect and with congress punting to the courts, we are starting to see it sorted out the long, expensive way.

commodities don't come with an "off switch" that the "original owner" can flip if they don't like the things you're purchasing with them.

That’s why we should have rules defining what a digital asset commodity is. Where is the off switch for Bitcoin or Ethereum?

Ethereum has "difficulty bombs" about once a year which effectively force the network to follow along with protocol changes made by the Ethereum Foundation. They could conceivably use that same mechanism to exponentially slow the network below the point of usability by waiting for the hardcoded block and then... doing nothing.

Afaik bitcoin doesn't have anything like that.

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