Regulators are on next level desperate on Bitcoin and the cryptospace

[bbc.reporter]

This appears to me as a statement given by a person who is going through the 5 stages of grief and he is presently in the stage of bargaining hehehe. This is the 3rd stage before depression and then the last stage, acceptance.

The SEC chairman knows the government has no power over the internet in this age of VPNs, TOR and other privacy tools. Also, no government regulations can enforce the law on a brave group of developers to break the law and have a community of progressive users who are motivated by profit.



SEC Chairman: Cryptocurrency Won't Reach Its Potential if It Tries to Stay Outside Our Laws

SEC Chairman Gary Gensler talked about cryptocurrency regulation on Fox Business Thursday. Emphasizing that the SEC is focusing on investor protection, he said, “We are neutral about technology, bitcoin, and the other crypto tokens.” However, the chairman clarified that the SEC is “not neutral about investor protection.”

He added that any platforms offering securities must be registered with the SEC, noting that many of the so-called decentralized finance (defi) platforms “actually have a lot of centralization” and they need to be registered with the SEC.

He elaborated that these laws include money laundering laws, tax compliance laws, and “what we focus on at the SEC — investor protection.”

Read in full https://news.bitcoin.com/sec-chairman-cryptocurrency-potential-outside-our-laws/

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[Bttzed03]

SEC Chairman: Cryptocurrency Won't Reach Its Potential if It Tries to Stay Outside Our Laws

Maybe the Chairman is right but only when we're talking about price. About 3 or 4 years ago, I encountered people who were hesitant to invest in BTC because they thought a SEC/Central Bank approval/recognition is necessary. They softened up when CEX and other custodial services were given licenses to operate legally in the country. I see more people from traditional markets transitioning now because our very own Phlippine Stock Exchange plans to offer crypto trading facility too (still awaiting approval from regulators).

[tbct_mt2]

Regulators are more seriously in bull market. In bear market, we only see FUD or plans for future regulations but in big bull market, regulators actually launch new regulations. They are challenged by bull market and feel their power will be damaged more or disappear if they don't response seriously with crypto market.

Consequently they response more seriously than they usually do, at governmental levels and globally.

[big kid]

They always want to regulate and get their piece of a cake when they see bull market. But when crypto goes down they losing their interest and spreading more FUD to make people stay away from crypto. I bet they actually buying it in that times and don't want regular folks to do the same.

[DooMAD]

He added that any platforms offering securities must be registered with the SEC, noting that many of the so-called decentralized finance (defi) platforms “actually have a lot of centralization” and they need to be registered with the SEC.

This might be one of those rare occasions where the regulators actually have a better understanding than most of the users. 

It sounds like lots of people think these defi schemes are safe, but so many of them are going to get burned.  As I mentioned yesterday in this topic, interest doesn't magically come from nowhere.  It is almost certainly either centralised or an outright scam.  Whatever it is, it isn't truly decentralised finance.  Just a bunch of people jumping on a bandwagon to make a quick buck and being ignorant of the consequences.

[Lucius]

The fact is that cryptocurrencies cannot be on the other side of the law if they want to fit into today’s society, it is simply impossible. If we just talk about the price aspect, we can ask ourselves how much 1 BTC would be worth today if there were no big crypto exchanges or if big companies didn’t invest billions of $ in it? All this would not be possible without regulation, whether someone likes it or not, it is true.

The SEC talks all the time about investor protection, but I guess it's clear to everyone that there's a lot more to it than that, and that there's someone above them who suggests what to approve and what not, in what they like to say to protect national interests.

I still see too much centralization in all this with the SEC and the US, because we have come to a situation where a lot of important things for Bitcoin are in one place - and the impression is that one institution decides whether something will work or not. Therefore, I do not think that anyone is desperate about cryptocurrencies when it comes to regulators, because they have quite good mechanisms to do what they want and when they want it.

[avikz]

Regulation is inevitable. Mark my words! If not today or tomorrow, but day after tomorrow we are definitely going to have crypto regulations in place. It's not just for US but for the other countries too. And I support a regulatory framework around cryptos because crypto market is now filled with scammers and fraudsters. Millions of people have lost millions of dollars in ICOs or IEOs and in other type of frauds. So it's high time that a regulatory framework is provided.

Did US people forgot the pipeline hack happened few months back? Do you want to see the same with your electricity network too?

[bbc.reporter]

He added that any platforms offering securities must be registered with the SEC, noting that many of the so-called decentralized finance (defi) platforms “actually have a lot of centralization” and they need to be registered with the SEC.

This might be one of those rare occasions where the regulators actually have a better understanding than most of the users. 

It sounds like lots of people think these defi schemes are safe, but so many of them are going to get burned.  As I mentioned yesterday in this topic, interest doesn't magically come from nowhere.  It is almost certainly either centralised or an outright scam.  Whatever it is, it isn't truly decentralised finance.  Just a bunch of people jumping on a bandwagon to make a quick buck and being ignorant of the consequences.

Correct or not, Gary Gensler’s argument that the cryptospace will not reach its potential outside their laws is funny.

@avikz. We have existing laws already if scammers and fraudsters are what really the government is chasing. However, if you are talking about real regulatory framework, I reckon it would classify many coins as illegal securities. These projects are in the top 10 in coinmarketcap.com, have organized a presale or a coin offering and have never registered with the SEC. Ethereum, Ripple, Cardano, Binance chain, Polkadot and Solana.

[Darker45]

Correct or not, Gary Gensler’s argument that the cryptospace will not reach its potential outside their laws is funny.

It may be funny but probably correct. Cryptocurrency and all cryptocurrency-related products and services cannot thrive if they are declared illegal. If the law prohibits all of them, their potentials couldn't be reached. I am not saying they will cease to exist and even function, but probably minimally, underground, and definitely less attractive as its use would entail penalties.

[cabron]

Correct or not, Gary Gensler’s argument that the cryptospace will not reach its potential outside their laws is funny.

It may be funny but probably correct. Cryptocurrency and all cryptocurrency-related products and services cannot thrive if they are declared illegal. If the law prohibits all of them, their potentials couldn't be reached. I am not saying they will cease to exist and even function, but probably minimally, underground, and definitely less attractive as its use would entail penalties.

Just in US though.

If other countries' laws are open for cryptocurrencies and not regulating them tightly, the companies will just leave US jurisdiction, and there goes their plans. As Ted Cruz said, he may not be the likable senator of all time but SEC should not try to kill the industry that could potentially make more money for the people in the country

[DooMAD]

This might be one of those rare occasions where the regulators actually have a better understanding than most of the users. 

It sounds like lots of people think these defi schemes are safe, but so many of them are going to get burned.  As I mentioned yesterday in this topic, interest doesn't magically come from nowhere.  It is almost certainly either centralised or an outright scam.  Whatever it is, it isn't truly decentralised finance.  Just a bunch of people jumping on a bandwagon to make a quick buck and being ignorant of the consequences.

Correct or not, Gary Gensler’s argument that the cryptospace will not reach its potential outside their laws is funny.

Bitcoin itself has enough impetus to thrive regardless.  Arguably the wider cryptospace does need a boost to its legitimacy.  I don't a great deal of potential (unless you count the potential to rip people off) in the current interpretation of defi.  Although it's a struggle to see how the SEC think they could provide any extra legitimacy there.  More KYC isn't going to cut it.  There's so little they could practically enforce that I think they'd bite off more than they can chew if they tried.  With so many hundreds, or possibly thousands of random crappy tokens, they can't possibly have the manpower to keep an eye on all of it.

[bbc.reporter]

Correct or not, Gary Gensler’s argument that the cryptospace will not reach its potential outside their laws is funny.

It may be funny but probably correct. Cryptocurrency and all cryptocurrency-related products and services cannot thrive if they are declared illegal. If the law prohibits all of them, their potentials couldn't be reached. I am not saying they will cease to exist and even function, but probably minimally, underground, and definitely less attractive as its use would entail penalties.

If the government wanted the cryptospace to reach its real potential, why not leave it alone and only use existing laws to go after the scammers to protect the consumers? We were okay without regulations with the whole cryptospace market capitalization going to more than $1 trillion.

In any case, wait for those regulations and witness those who support it shake their heads because of trusting the government.

@DooMAD. Arguably leave the development alone or everything will move to where they cannot monitor and regulate it. However, these systems are decentralized enough and designed to continue working if they are classified legal or illegal by the government. Chinese citizens can still pay in cryptocoins, use Defi and trade with the use of an internet connection and privacy tools.

[amishmanish]

Correct or not, Gary Gensler’s argument that the cryptospace will not reach its potential outside their laws is funny.

Bitcoin itself has enough impetus to thrive regardless.  Arguably the wider cryptospace does need a boost to its legitimacy.  I don't a great deal of potential (unless you count the potential to rip people off) in the current interpretation of defi.  Although it's a struggle to see how the SEC think they could provide any extra legitimacy there.  More KYC isn't going to cut it.  There's so little they could practically enforce that I think they'd bite off more than they can chew if they tried.  With so many hundreds, or possibly thousands of random crappy tokens, they can't possibly have the manpower to keep an eye on all of it.

What we call the wider cryptospace is what SEC is probably concerned about. Not so much from "investor protection" point of view but from how the general markets can get poisoned if some really big exploits happen. The example of Mark Cuban losing a few millions in one of these tokens may be of interest.

When it comes to BTC, there really isn't much that can be done and nothing much that SEC should do, in good faith. Bitcoin has forced central banks to contemplate CBDCs, which won't pass the basic checks of a democratic society. Though if we now want to project China as the shining example of liberty and free markets, that may very well be the case.

The way that CBDCs and Bitcoin ends up being treated will be a lot more political and ideological than merely depending on what the SEC thinks.

[BrianH]

Did US people forgot the pipeline hack happened few months back? Do you want to see the same with your electricity network too?

Regulation won't change that at all. Also, I fully believe the pipeline hack was done by the US government to magnify people's fear of crypto. Did you know the hackers were allegedly hacked back by the US Naval Cyber Defense? Why would they use traceable Bitcoin instead of untraceable XMR, like other hackers have? Sounds like a setup to me to make the US look like the good guys. There was a constant stream of FUD around that time that tanked crypto, while the elite, institutional investors bought in. People are being manipulated.

All of those "pro regulation" people better wake up and realize what the latest infrastructure bill in the US will do, if it is passed unamended. Privacy will be gone. Development and mining will be banned. Do not believe the assurances by the Treasury that they will not prosecute people - lies. The wording of the law is all that matters. Are people willing to break the law to continue mining and development?

Contact your US House representative to get the bill changed ASAP. They are meeting this week to potentially wreck crypto in the US.

[Fundamentals Of]

Regulation is inevitable. Mark my words! If not today or tomorrow, but day after tomorrow we are definitely going to have crypto regulations in place. It's not just for US but for the other countries too. And I support a regulatory framework around cryptos because crypto market is now filled with scammers and fraudsters. Millions of people have lost millions of dollars in ICOs or IEOs and in other type of frauds. So it's high time that a regulatory framework is provided.

They are inevitable as they are necessary. The government regulators cannot just stay helpless in the face of billions of money being siphoned off by scammers and unregulated projects from innocent individuals and even institutions who have got no protection from the law whatsoever.

With adoption comes regulation and even vice versa for those who are waiting for the market to be complete with consumer protection mechanisms. 

[BrianH]

Regulation is inevitable. Mark my words! If not today or tomorrow, but day after tomorrow we are definitely going to have crypto regulations in place. It's not just for US but for the other countries too. And I support a regulatory framework around cryptos because crypto market is now filled with scammers and fraudsters. Millions of people have lost millions of dollars in ICOs or IEOs and in other type of frauds. So it's high time that a regulatory framework is provided.

They are inevitable as they are necessary. The government regulators cannot just stay helpless in the face of billions of money being siphoned off by scammers and unregulated projects from innocent individuals and even institutions who have got no protection from the law whatsoever.

Crypto regulations are certainly not necessary and government regulators will still be helpless against a smart attacker.

The SEC chairman knows the government has no power over the internet in this age of VPNs, TOR and other privacy tools. Also, no government regulations can enforce the law on a brave group of developers to break the law and have a community of progressive users who are motivated by profit.

VPNs can be banned, TOR may have a backdoor and fiat onramp/offramps will always be a barrier to privacy for large transactions. Yes, government regulations can enforce the law on developers. Developers may move to other countries, but the new world order will do everything they can to prevent themselves from losing the power they have through the banks.

[leea-1334]

The sad thing about this is probably also that a lot of businesses fully agree with him:) Hence the push for most crypto businesses to absolutely go regulation friendly and implement KYC from the beginning even though they know they did not do it well or even care properly about AML and privacy truly. Blind regulation.

[Lucius]

However, if you are talking about real regulatory framework, I reckon it would classify many coins as illegal securities. These projects are in the top 10 in coinmarketcap.com, have organized a presale or a coin offering and have never registered with the SEC. Ethereum, Ripple, Cardano, Binance chain, Polkadot and Solana.

I don’t care about all those shitcoins at all, because except for ETH which still makes some sense, everything else benefits nothing but getting a narrow circle of people rich. It has literally become a wild west where everyone does what they want without having to ask for any permission at all, and everyone is competing with Bitcoin even though no crypto project has managed to get close to it all these years.

All of those "pro regulation" people better wake up and realize what the latest infrastructure bill in the US will do, if it is passed unamended. Privacy will be gone. Development and mining will be banned. Do not believe the assurances by the Treasury that they will not prosecute people - lies. The wording of the law is all that matters. Are people willing to break the law to continue mining and development?

I am not against regulation if it makes sense, but what is happening in the US actually looks like a ban on cryptocurrencies, only much nicer packaged than was the case in China. People do not seem to understand the consequences of this law, and apparently, the market does not yet recognize it - perhaps only because it will not enter into force until early 2023.

[Fundamentals Of]

Regulation is inevitable. Mark my words! If not today or tomorrow, but day after tomorrow we are definitely going to have crypto regulations in place. It's not just for US but for the other countries too. And I support a regulatory framework around cryptos because crypto market is now filled with scammers and fraudsters. Millions of people have lost millions of dollars in ICOs or IEOs and in other type of frauds. So it's high time that a regulatory framework is provided.

They are inevitable as they are necessary. The government regulators cannot just stay helpless in the face of billions of money being siphoned off by scammers and unregulated projects from innocent individuals and even institutions who have got no protection from the law whatsoever.

Crypto regulations are certainly not necessary and government regulators will still be helpless against a smart attacker.

If they are in a state of helplessness today in the face of a smart attacker, then the more reason that they have to find a way to prevent such attacks in the future. We cannot expect that a government body would just admit that they are helpless and therefore it is pointless for them to put up security features against scammers and hackers. They are there to serve a purpose.

Crypto regulations are necessary precisely because they mean legalization.

[ChiBitCTy]

I am not so sure is he all that off base with what he is saying here. First of all DeFi is a joke right now.  There is no way that it will remain viable long term as it's model is completely unsustainable.  That being said when it comes to bitcoin and other cryptocurrencies I think Regulation is a smart thing and something that is very much so needed. So I really am with him for the most part here.