You asked five questions.

1.
The SEC believes it should regulate certain things that Binance currently does outside of its regulation. This legal action will force the courts to decide whether or not the SEC can really do what they want to here. That's why the SEC is doing this: to try to get the courts to tell everyone that the SEC gets to regulate Binance (and others) the way it wants to.

2.
CZ can make arguments about why he shouldn't have to appear, but at the end of the day the court gets to decide who's right and who's wrong. CZ could lose a court case by default, just like a football team could lose a game by default if they don't show up and play.

3.
You're repeating question #1, we've already discussed the SEC's motive here.

4.
Binance leaving the US would have a huge impact on Binance. Bitcoin would also be affected, one can only assume. The US is a much larger entity then both, so the impact on the US wouldn't be as great.

5.
The SEC is not doing this to send a message to foreign jurisdictions. The SEC is attempting to establish precedents in the US court system, as previously mentioned.


Of course there's much more I could say on this subject, but a stupid five-year-old like you wouldn't understand.

1.a: lightning network is not the bitcoin network.
Earlier in this thread you expressed the opinion that the LN as it pertains to BTC transactions should be considered identical to the LN as it pertains to LTC transactions, on the basis that a) nodes communicate between each other using the same basic protocol, regardless of which cryptocurrency a given channel is funded with, b) one single node can participate in transactions involving both BTC and LTC, and c) the LN protocol is capable of interacting with multiple blockchains. By this definition, the LN is definitely not the bitcoin network. This is because LN nodes and BTC nodes do not use the same protocol.

1.b: lightning network is the bitcoin network.
Well, I could certainly come with my own argument as to why LN is part of a larger network which encompasses all of the layers involved, including bitcoin. For example, I could refer to economic actors as the nodes in the network, rather than the more technical protocol-subservient nodes you are discussing.

2.a: lightning network is a separate network that does different things than bitcoin
Does LN do different things than bitcoin? Yes.

2.b: lightning network is always linked to the bitcoin network that does what bitcoin does
No, because it is plausible that at some point in the future the LN will cease to exist (or, less plausibly, the bitcoin network). In this event the two networks would not be permanently linked. If you want to get into more details, I'm afraid we will need to do a semantic detour and figure out what we mean by "always linked". On a practical real-world level, I believe that widespread adoption of LN would be very unlikely if LN did not interoperate with the bitcoin blockchain. But I don't think that's the kind of "link" you're talking about.

3.a: LN "payments" (inside LN code) are denominated in picocoin-1 (11decimal) also known as msat/millisat
3.b: LN "payments" (inside LN code) are denominated in btc
4.a: LN "payments" (inside LN) are different contracts/transactions/promises/lengths of data, to a bitcoin transaction
4.b: LN "payments" (inside LN) are same format, to a bitcoin transaction
Seeing as I was the one who asked for a definition in the first place, I'm happy to accept whatever combination of 3.a-4.b you feel is correct (unless such combination results in logical inconsistencies).

5.a: bitcoin network does not understand the format of these LN message formats(payments) in 11decimal valued format
Correct. Incidentally, why are you so hung up on this issue of decimal rounding? The basic point that the protocol LN nodes use to communicate with other LN nodes may not be directly implemented within the bitcoin network is enough. You don't need to invoke decimals to make this point.

5.b: bitcoin network does understand the format of these LN message formats(payments) in 11decimal valued format
See above.

6.a: LN is not tethered to only function on the bitcoin network
I'm not exactly sure what you mean by "tethered to only function", but I do agree with the basic point that we can conceive of a LN which does not include any channels funded by BTC.

6.b: LN is tethered to only function on the bitcoin network
See above.

7.a: LN wont work without bitcoin
Is this question any different than 6.b?

7.b: LN will work without bitcoin
Is this question any different than 6.a?

Okay, I'll take a bite at the apple:

4a. define "payment"

4b. define "payment"

5a. define "peg"

5b. define "peg"

5c. no

6a. define "payment"

6b. define "payment"

6a. define "payment"

7a. no

7b. redundant

7a. (yes, you screwed up your numbering) define "peg", and immaterial *

7b. redundant, and immaterial *

7c. yes, and immaterial

8a. question is directed at a third party

8b. vague ("involve"/"certain situations"), but to the extend the question is cognizable the answer is no (because amicability is not required)

8c. no (again, amicability is not required), and immaterial (everything "involves a level of trust in certain situations", including bitcoin)


You are using the word "peg" in a different way than it's typically used in the cryptocurrency and legacy finance world, so your comments in this vein are largely incoherent.

As for the word "payment", I'm sure I triggered you by questioning your usage of this word, but before you respond please do yourself the favor of going to your local library, taking out a dictionary (Merriam Webster is my go-to), and looking up the definition of the English word "payment". You might be surprised to learn that literally none of the many definitions of the word "payment" make any reference to the notion of currency.

As for immateriality, this debate is not about turbo features, it's about LN. Yes, turbo is an optional feature of LN. Optional. It is not required to participate in the network.

* When you say "LN channels" in these questions what you actually mean is "LN nodes". Based on the rest of this thread, you appear to have some confusion surrounding this distinction between nodes and channels.

Source: https://www.bloomberg.com/news/articles/2021-10-08/white-house-weighs-wide-ranging-push-for-crypto-oversight

Also, here's a podcast with some big government and elite academia folks (who are naturally anti-bitcoin), if you are curious what they're saying about it... listen to 16:04 through 19:56
https://www.lawfareblog.com/cyberlaw-podcast-federal-government-getting-creative-regulating-technology

Curious if anyone has thoughts on this? [Also apologize if someone posted this already, I couldn't find any related discussions.]

Wow. I've never heard such a sympathetic explication of a conspiracy.

Let me assure adherents that the Illuminati is nothing more than a confluence of ideas which certain parties have conspired to manipulate for personal gain. Anyone who wishes to invest in this confluence should purchase "IlluminatiCoins" at the first possible opportunity.

I suspect that you are absolutely correct, despite every other reply to your post here. Not only is the policy of many governments across the world antithetical to Bitcoin as envisaged by Satoshi Nakamoto, such policies complicate Bitcoin transactions in any event.

That no other poster on this forum has recognized OP's concerns is a matter of public record and should be noted.

Don't buy Bitcoin or any cryptocurrency. Buy something useful and use that useful thing. Sell the results and proceeds of that useful thing on whichever market is most favorable to you at the time of sale.

I would generally trust a piece of paper more than a string of numbers and letters associated with an otherwise anonymous cryptocurrency transaction. Why? Because a judge in a courtroom in my jurisdiction would also trust that piece of paper more than a complicated series of hash values. Capisce?

Consider that the imagined "piece of paper" will include information which identifies your purported counterparty. Just like your identity is established in the blockchain when you... oh wait, no it's not. So by default, you are in a more legally favorable position as compared with a seller when the transaction is recorded on the blockchain. Given this asymmetry, any rational seller will charge a premium in exchange for your anonymity (as any rational economist would agree), and in recognition of the non-reversible nature of your trade. In accordance with this, the seller will endeavor to limit your rights as much as possible given the risks associated with trading with an anonymous actor on a given blockchain. Your ability to contest such limitations is contingent on your ability to legally contradict representations made by the seller. The seller is not legally required to affirmatively explain to you in full detail any rights which may or may not accrue to you in the event of a sale.

The piece of paper, on the other hand, is a bona fide legal instrument which grants its holder specific rights which do not require any special adjudication. The entailed rights and responsibilities are by definition explained within the "piece of paper".

Note that while you may claim that the piece of paper described above is not confirmably geniune, you must similarly acknowledge that the concordant NFT you hold may not be genuine. (If you are not aware that NFTs may be forged, then you should immediately stop trading NFTs until you have acquired a genuine understanding of the mechanisms which underlie NFTs). You should similarly note that the "store of value" you appear to believe to be inherent in a given instrument is in fact not present, except in the eyes of a prospective buyer. Consider that this buyer might be aware of the controlling dynamics described herein and may be more interested in the "piece of paper" than the less legally secure NFT.

We are all interested in a tax outcome which reduces our wealth by the least amount legally possible. This much I grant you, and in accordance with this you are responsible for doing your own personal research concerning the applicable tax code.

You hold cryptocurrency which has appreciated in value, and you wish to sell that cryptocurrency. You purchased it in a particular jurisdiction, and you expect to sell it in that same jurisdiction. The tax authorities of that jurisdiction prove that they are entitled to a 33% tax as a result your capital gain in accordance with applicable laws, which calculation is based on the amount of profit rather than the amount of sale. Note that this is not exactly unfair, given that you did nothing more than purchase a digital currency which appreciated in value in a manner unrelated to your actions, and that your purchase and sale of that currency was protected by the applicable laws of that tax jurisdiction.

You appear to be under the misimpression that by squinting hard enough at the tax code, you might find some clause which says "notwithstanding anything contained herein, Recipient may waive any and all tax liability associated with this transaction by standing naked in the middle of a large wheat field at midnight and shouting to the heavens, 'I hereby waive all tax liability!'". Sadly, such evasions are not available. If you attempt to evade taxes that you unambiguously owe, you will be liable to criminal penalties.

That said, while you can't change your tax liabilities retroactively (which is what you appear to be trying to do here), you can make decisions which will have an effect on your tax liabilities going forward.

Here's the first and most obvious point: What if you don't sell any crypto? If you need cash, you don't need to sell. You only need to take out a cash loan, collateralized by your crypto holdings. I'm not saying this solves everything, but it will change the tax analysis. I am unclear as to why the others in this thread haven't suggested this already.

If that simple and obvious solution does not appeal to you, be aware of the following caveats:

Changing your residency to a different jurisdiction may have the effect of changing your tax liabilities *going forward*. However, this change of jurisdiction will only apply if you can prove that your residency actually changed. Thus, you must consider all aspects of moving to a different jurisdiction before making the move, not just the tax consequences. If you move to Malaysia, you might incur fewer taxes in connection with your crypto-trading, but you may also have to pay for private security forces (instead of the free police protection you are accustomed to), among other novel expenses.

On the other hand, the suggestion has been made in this thread that you may be able to take advantage of a foreign jurisdiction's tax policies while neither residing there nor conducting business there, by way of a "shell" corporation. To the extent such (shell) corporation may be legally recognized (not something I would guarantee), prior posters on this thread have been extremely unclear as to how you may be expected to recover funds from this (shell) corporation. Hint: such recovery will involve bringing the assets or currency back to your resident jurisdiction, at which point the tax liability of your current jurisdiction goes into effect as usual. While offshoring may provide some benefits to some legitimate domestic corporations (by virtue of their ability to legitimately confine certain aspects of their supply chain to particular tax jurisdictions), the shenanigans suggested in this thread will not.

Oh, and if you're still considering using "shell" or similar corporations for the purpose of avoiding taxes, read up on the concept of "piercing the corporate veil". You might be surprised by what you learn.