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Author Topic: [2019-04-13] The SEC will turn the cryptospace into the the elite's playground  (Read 106 times)
bbc.reporter
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April 13, 2019, 02:23:54 AM
Last edit: April 13, 2019, 02:50:21 AM by bbc.reporter
 #1

The elite have a club where they talk about investing and how to make more money for the enjoyment of their lives and their families. You are not in it.

I reckon we in the cryptospace should stop using the word scam so easily. Some ICO projects might not be scams. The people calling some of them scams are the people who hold the coin of another project. We should stop doing what the SEC is manipulating us to do and encourage the growth of the cryptospace to become something big that no government can stop anymore.

I predict that the SEC or a government organization might secretly support someone to organize a big ICO to scam and fail similar to Bitconnect and use that to begin a hunt to bring down all ICOs.



It has been reported by Invest In Blockchain that notable Economist John Berlau recently wrote a paper in which he was fairly critical of how the United States' Security and Exchange Commission (SEC) has handled, or failed to handle, cryptocurrencies. He warns that if crypto gets labelled as securities, it could severely hurt the middle class' exposure to the asset, and by extension hurt crypto itself.

The paper, which is titled "Cryptocurrencyand the SEC’s LimitlessPower Grab," focuses both on the history of the SEC's approach to crypto, as well as the concerns many have over the regulatory body labelling cryptocurrencies as securities.

From the paper:

"Deeming cryptocurrency as a ‘security’ could put cryptocurrency out of the reach of middle-class investors because of the same red tape — both from SEC regulations and from financial regulation laws such as the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Act of 2010 — that has hindered small investors’ access to stock in early stage growth companies."

Berlau takes issue with the fact that the SEC has in the past been overly aggressive in labelling things as securities, which effectively chokes out growth for many small companies as well as middle class investors. In Berlau's own words:

"Even before cryptocurrency came on the scene, the increasingly heavy hand of SEC regulation has come under scrutiny for stifling opportunities for startup entrepreneurs to raise capital and for middle class investors to get better returns on their investments. The SEC, as well as the securities lawsit enforces, have come under bipartisan criticism from academics, entrepreneurs, investors, and members of Congress for creating red tape that makes it difficult both for entrepreneurs to raise capital in the public marketsand for investors to find wealth-building opportunities"


Read in full https://www.chepicap.com/en/news/8869/economist-john-berlau-criticizes-sec-over-its-handling-of-cryptocurrencies.html

SEC limitless powergrab paper https://cei.org/sites/default/files/John_Berlau_-_Cryptocurrency_and_the_SEC_s_Limitless_Power_Grab.pdf

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April 13, 2019, 05:03:31 AM
Merited by Foxpup (4), ETFbitcoin (1)
 #2

The SEC's security regulation applies, as far as I know, only to ICOs and similar mechanisms where a centralized entity intends to raise funds with a financial instrument.

This is a part of the crypto-space, yes. But it's not the whole one. Bitcoin and other mined coins without premine are not affected. From altcoins, only the pre-mined ones (which are questionable because they have centralized elements).

There are also fundraising methods via cryptocurrencies which are not securities at all (e.g. traditional crowdfunding meant as a pre-sale of the products the company wants to achieve - the "Kickstarter" way but also the way "utility tokens" do it). Securities have a clear definition: you buy a token and your return on investment is mainly defined by the price increase of that token. For these cases, regulation isn't that bad because otherwise there was no obligation for the company to actually develop a product.

That does not mean that I approve the SEC's policy, in my opinion, it's too strict (some utility tokens fall under security regulation as well, afaik). But it's also somewhat understandable, and there is plenty of "playground" for non-elite-members left in the "crypto-space".

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April 13, 2019, 06:43:59 AM
 #3

Securities have a clear definition: you buy a token and your return on investment is mainly defined by the price increase of that token. For these cases, regulation isn't that bad because otherwise there was no obligation for the company to actually develop a product.

It was quite ironic that the government is needed to make sure those ICO teams develop a real product. Another solution is to use another method of fundraising which might have been proposed by one of the ICO projects out there: escrowed funds where 'investors' can release the funds after they achieve several milestones. But it requires investors to be known in order to make sure the features were not abused by the team itself.

Anyway, regulations would likely take place sooner or later if this ICO frenzy continues. Like it or not the government will enter the space.




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April 13, 2019, 09:16:28 AM
 #4

This is another argument, for me, for Bitcoin maximalism. The "cryptospace" is largely far away from the precepts of Bitcoin. Today, maybe Bitcoin still speaks for crypto, but crypto will never speak for Bitcoin. Separate from discussions about blockchain technology and decentralised tech, you can see states starting already to talk about digital money, digital assets and "Crypto" as completely different from Bitcoin. Remember that Bitcoin was and is a threat to the status quo. They will do what they can to ensure they can exert as much influence as possible on anything other than Bitcoin.

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April 13, 2019, 11:38:49 AM
Merited by Foxpup (2)
 #5

I really doubt that there are some huge government agenda that wants to stop all ICOs. They only want to identify the people behind these projects and hold them accountable for the losses, if and when it happens.

The ICO scene was riddled with scammers and innocent consumers and citizens were losing their life savings on these scams. The SEC has a mandate to protect the consumers from projects like this, so they had to introduce better regulations to protect the consumers.  Roll Eyes

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April 13, 2019, 02:50:17 PM
Merited by hatshepsut93 (1)
 #6

This is another argument, for me, for Bitcoin maximalism. The "cryptospace" is largely far away from the precepts of Bitcoin. Today, maybe Bitcoin still speaks for crypto, but crypto will never speak for Bitcoin. Separate from discussions about blockchain technology and decentralised tech, you can see states starting already to talk about digital money, digital assets and "Crypto" as completely different from Bitcoin. Remember that Bitcoin was and is a threat to the status quo. They will do what they can to ensure they can exert as much influence as possible on anything other than Bitcoin.

The thing that the majority of the Bitcoin maximalists ignore is how neutral most of the new entrants are. They haven't been here long enough to actually know what it means to have Bitcoin be that superior currency, to be the most secure network, to have the network effect play a massive role, etc.

Most people see crypto currencies as a new piece of tech they put in the same category as every flashy tech company trying to solve a problem, and they genuinely believe that they may succeed, while we know that most ICO's and altcoins are utter garbage and will fail hard. I don't really mind it because I know it's only a matter of time for them to be proven wrong and appreciate Bitcoin for what it is.

Bitcoiners are too sensitive and believe that everything governments do is being done to push back Bitcoin, while I don't think that's the case at all. It's mainly just ignorance from their side, and I can't blame them for that. It's easy for average joes to forget what this space is about when all they see the media report about is related to pumps and dumps.

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April 14, 2019, 09:44:46 PM
 #7

I really doubt that "elite" would touch any ICO with ten foot pole, those people don't throw their money at some forum posts with technobabble whitepapers and "teams" composed from pictures of people stolen from the Internet. ICO investors are generally the middle class, the poor and people who suddenly became rich thanks to BTC and now want to risk more. Retail investors and pro investors have quite different mindsets, so the idea that some "elite" wants to takeover the ICO space is just a conspiracy theory.

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April 14, 2019, 10:47:34 PM
 #8

Quote
The elite have a club where they talk about investing and how to make more money for the enjoyment of their lives and their families. You are not in it.

I reckon we in the cryptospace should stop using the word scam so easily. Some ICO projects might not be scams. The people calling some of them scams are the people who hold the coin of another project. We should stop doing what the SEC is manipulating us to do and encourage the growth of the cryptospace to become something big that no government can stop anymore.

I predict that the SEC or a government organization might secretly support someone to organize a big ICO to scam and fail similar to Bitconnect and use that to begin a hunt to bring down all ICOs.

I think this is partly the reason why the market no longer cares much about what the SEC does with approving ETFs or whatnot. Because the market is starting to realise that regardless of what happens to the decision, the ultimate benefactors aren't going to be bitcoin users - but rather, institutions.

The same thing can be said with any other type of crypto regulation or legislation, and not necessarily limited to the SEC either. Their best interests aren't going to always be what's best for users, but rather, how institutions can benefit from the market as well.

I wouldn't go to the lengths to say that they will be somehow involved in a scam or anything, since there is no proof of that. But at any given time, they may put the interests of certain lobby groups and established financial institutions ahead of the rest.
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April 15, 2019, 03:34:10 AM
 #9

I really doubt that there are some huge government agenda that wants to stop all ICOs. They only want to identify the people behind these projects and hold them accountable for the losses, if and when it happens.

The ICO scene was riddled with scammers and innocent consumers and citizens were losing their life savings on these scams. The SEC has a mandate to protect the consumers from projects like this, so they had to introduce better regulations to protect the consumers.  Roll Eyes

There is always a government agenda, however. The people behind the government do not want the common people to be together and be democratized politically, financially and socially.

It is true that a democratized way of funding projects will be riddled with scams, however, regulating it will only filter the scammers that the government do not want and let the scammers that they want to continue scamming us. They want control over the cryptospace.

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April 17, 2019, 02:23:17 AM
 #10

This is the beginning of another government agenda to turn the cryptospace into something where only the elite can play. I would rather have the ICO scammers run around in a democratized playground where everyne can participate than the biggest scammers from business and government controlling everything.



According to proposed regulations, the government wants to restrict Russian traders to local crypto exchanges and also only allow “qualified” investors – e.g., those with a degree in economics and a certificate from the government – to trade Bitcoin and other cryptocurrency.

Read in full https://www.ccn.com/what-russias-digital-iron-curtain-means-for-bitcoin-users

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