The SEC is right. It's not about Bitcoin, it's about centralized shitcoins.

[d5000]

I'm tired to read all the comments in the vein of "the SEC is threatening the crypto world" or "the SEC wants Bitcoin to stay small".  

The SEC's action against Coinbase and Binance has quite clear accusations: these exchanges allowed trading of securities without being authorized to do so. And they offered services like "staking" which are quite similar to bank products and thus also need authorization.

Is any of these accusations related to Bitcoin? No. The SEC has already clarified that Bitcoin is not a security. So the accusations have nothing to do with Bitcoin.

Instead, the accusations are deeply related to the mess the altcoin world has become in the last years, mostly since the "ICO craze" of 2017/18. More than 95% of all altcoins, I would estimate 98-99%, are managed in a completely centralized way, with a team in charge of everything collecting large profits. The most notorious example are the premines. These businesses create coins out of thin air - just a "bug" of the fiat world many Bitcoiners want to "fix" - to pay for marketing, bounties and shills with tokens. These tokens and coins are ... securities.

You don't have to be even a Bitcoin maximalist - I tolerate altcoins with decentralized components and ICOs which are clearly focused on a non-crypto product - to see that these developments have nothing to do with Satoshi's ideal of a decentralized peer to peer cash.

So let's calm down. This is not against Bitcoin. It's against shady business models where companies pretend they are decentralized but aren't, and want a cheaper and less consumer-protecting way to finance their businesses (or directly run away with your money). And it's also about crypto exchanges pretending they aren't banks - but they are, as long as they offer products like so-called "staking" (which nothing has to do with real proof-of-stake).

It brings me hope that Bitcoin seems to be the least affected by the last price drop after the SEC accusations. People seem to begin to understand

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[Wiwo]

I'm tired to read all the comments in the vein of "the SEC is threatening the crypto world" or "the SEC wants Bitcoin to stay small".  

The SEC's action against Coinbase and Binance has quite clear accusations: these exchanges allowed trading of securities without being authorized to do so. And they offered services like "staking" which are quite similar to bank products and thus also need authorization.

Is any of these accusations related to Bitcoin? No. The SEC has already clarified that Bitcoin is not a security. So the accusations have nothing to do with Bitcoin.

Sec war is not against bitcoin,  but the war is against the so many manipulation that goes on in exchanges that claims to be centralized and licensed who aid and abated the development of so many shitcoin and hypes that have become a bad actors in the cryptocurrency industry today.

Some time I wonder how those exchange operates or think,  because being centralized means 100% regulatory compliance, why to operate a subsidiary of those exchange without properly getting the license from the authorities of the region you operate,

The highest effect this crisis between the exchange vs SEC will have on decentralized coin (Bitcoin ) is the short-term impact it will have on the price of Bitcoin but in the long run,  Bitcoin is going to recover in price and move ahead.

[Bitstar_coin]

And nobody cares what the sec thinks or does because at the end this is a battle they can not 100% win. You shut one down another will just come up, best thing about decentralization.
Yeah, they may say whatever is convenient to make it look btc is not the target, but suing two of the top most exchange with huge btc volume can certainly shake the very core of the market. Most likely be the end of many investors going out of the crypto space.

[Flexystar]

Nobody ever said Bitcoin is targeted directly by SEC but the problem is started with the actions of SEC. They are indirectly disturbing the Bitcoin economic workflow and in reality it's getting worst as the related products are failing to survive in the market. For example, exchanges, p2p platforms, financial institutes directly involved with BTC trades and much more are getting targeted and thus they are failing to run the business properly. The aftermath? Bitcoin that is in possession of those institutes is getting ceased and that actually belongs to the users of those platforms. Now, its big world and there are many people so we can't ask everyone to bend their minds to use decentralized platforms and that's different story so they are going to use these handy tools which ultimately fails bitcoin. Also, with the time SEC gonna put hard burden in Bitcoin's operation so it's still not entirely true what you mentioned about them. SEC does have Devils eyes.

[d5000]

They are indirectly disturbing the Bitcoin economic workflow and in reality it's getting worst as the related products are failing to survive in the market. For example, exchanges, p2p platforms, financial institutes directly involved with BTC trades and much more are getting targeted and thus they are failing to run the business properly.

That's true. However: These businesses are not monopolies. I for example do not use neither Binance nor Coinbase and it's absolutely no issue (I'm however not in the US). Consumers themselves have to be a bit wary about the services they use, and which services they offer.

The problem is that some services, like the centralized "staking" I mentioned, have become so common, and even "diehard" Bitcoiners have partly fell in love with them, because they can give them some easy profits. But even a superficial glimpse on them shows that centralized staking is 100% a product which would need an authorization as a bank in most countries (not only the US).

And until now nothing is lost - those wanting to exit these exchanges can still do it. Yes, that can lead to a problematic "bank run" with frozen withdrawals and bankrupt exchanges. But MtGox has shown us in 2014 that it's never a good idea to leave lots of funds on exchanges (Yep, and I know of the problem that professional traders need funds on exchanges. That's their inherent business risk, that's why they can make profit). The best thing would actually be people withdrawing slowly to other platforms, diversificating the market.

Now, its big world and there are many people so we can't ask everyone to bend their minds to use decentralized platforms and that's different story so they are going to use these handy tools which ultimately fails bitcoin.

I don't think all centralized exchanges will come under attack from SEC. There are still some that do not offer products like staking, and they can limit altcoin tradings to non-security coins. Or close the door definitively for US customers. We sometimes forget that the US has only 3 or 4% of the world's inhabitants

Also, with the time SEC gonna put hard burden in Bitcoin's operation so it's still not entirely true what you mentioned about them. SEC does have Devils eyes.

This is pure speculation from your side. I don't say it's impossible, but current action is not going in that direction.

[tjtonmoy]

Maybe it's a good thing or a bad thing for Bitcoin. Still yet to see it through. With this price drop, in which Bitcoin is less affected, I guess now people will realize the potential about Bitcoin. Those centralized shits are just here for their own benefits. Offering what they can't provide, and they have nothing similar or even close to Bitcoin.
I am also against staking that offers you this and that. But in reality, it's just another way to use its users and take advantage of them.

Then again, the market runs on sentiments. The effect is low, but it does hurt the Bitcoin a little NGL. So if people can understand the facts and move towards Bitcoin, then it's a good thing. SEC could also target Bitcoin in secret and in that process, if they become successful, then it's gonna hurt bad. As of now, it is still unclear to decide what is going on and what will come next

[goaldigger]

This is why we can’t blame SEC that much since its their job to protect the interest of the public from those businesses who are taking advantage the ignorance of the public. Yes, they are not targeting Bitcoin but since those centralized exchanges are big enough to influence the whole market, the price of BTC are also reacting to this while the many is panicking. Let’s see how Binance will work on this, and i think they’ll face more problems with other country as well, hope they can settle this.

[nurilham]

The SEC's action against Coinbase and Binance has quite clear accusations: these exchanges allowed trading of securities without being authorized to do so. And they offered services like "staking" which are quite similar to bank products and thus also need authorization.

Do crypto exchanges must get authorization from US government before they offer any service, program, or features? Do you think US government or SEC has the role as the regulator in crypto space? As far as I know, crypto is ideally a decentralized system, it is not regulated by any institution. If US government or SEC can regulate crypto exchanges, it means they also regulate crypto as a whole. Whatever the regulation to apply on the exchanges, it will bring a big impact on crypto space.

Anyway, I have no problem if SEC regulates Binance US. But I disagree if they are trying to intervene Binance global. Binance global is not subject to US jurisdiction, it is not located in US territory. Another thing is that what SEC accuses to Binance isn't proven yet. We can't judge SEC is on the right side while Binance is on the wrong side. Everything isn't clear enough, so I don't think we take a conclusion for now.

[panganib999]

Suppose we say you're right and SEC is really just pushing for the reform in the Altcoin world (I don't even think it's reform to me this is literally just purge all altcoins), what's going to happen to the rest of the "not shitcoins" spectrum of the altcoin industry? Are they going to be regulated? Are they going to be outright banned/sanctioned? Isn't that a little tyrannical? I need my questions answered since to me, this "targeted" attack isn't so laser-precision as they try to make it out to be, it seems to me that if they were to carry on with this move they'll endanger the future of the industry by outright limiting the altcoins that could operate. Be that as it may shitcoins still drive profit in the industry, so I say we gotta take the good with the bad you know.

Plus even if they did only intend to attack shitcoins and not bitcoins, their attempts had left bitcoin in a pretty precarious state price-wise. It's been sitting pretty nicely in the 27k mark for a while now and then they decided they'd go after binance and coinbase, cause they are selling and allowing unregulated securities to operate, which then lead to bitcoin losing value in a jiffy cause these platforms hold massive influence in the industry.

[Accardo]

The SEC is not after bitcoin and they're endeavoring to keep citizens safe from losing their money, yet some of their actions is affecting bitcoin. Does it mean the SEC is letting bitcoin be? out of the blues, SEC that wanted bitcoin regulated is indirectly saying; bitcoin is above our capabilities. Nobody solely stands for bitcoin, who will they go for if they're after bitcoin. Unlike the CEX operating like banks in mediums that seem to help bitcoin rise, but are turns in bitcoin's flesh, the SEC can easily get the CEO of any CEX and fine them over illicit actions and activities happening on the exchange. If the SEC eliminates those shitcoins bitcoin will have a breathing space and investors can invest without fear of losing money. Many investors fall for shitcoins because they want to become early adoptors of the coin, they invest so much money, hoping to hit huge profits when the price of the shitcoin turns 1 or 3 dollars. If the money thrown into shitcoins is channeled to bitcoin, they would have been a better and price of bitcoin today. Out of greed investors get ripped of their money and end up with nothing.

[bittraffic]

Centralized coins can easily be controlled by the SEC which is much like the plan of BlackRock to control the Bitcoin market. The SEC doesn't even have to distinguish them as security but why are they threatened so much as about those coins? Because despite the fact it's centralized, they still couldn't control it. They may be shitcoins but SEC still have no gloves to wear to get hold of them.

Suppose we say you're right and SEC is really just pushing for the reform in the Altcoin world (I don't even think it's reform to me this is literally just purge all altcoins), what's going to happen to the rest of the "not shitcoins" spectrum of the altcoin industry? Are they going to be regulated? Are they going to be outright banned/sanctioned? Isn't that a little tyrannical? I need my questions answered since to me, this "targeted" attack isn't so laser-precision as they try to make it out to be, it seems to me that if they were to carry on with this move they'll endanger the future of the industry by outright limiting the altcoins that could operate. Be that as it may shitcoins still drive profit in the industry, so I say we gotta take the good with the bad you know.

Plus even if they did only intend to attack shitcoins and not bitcoins, their attempts had left bitcoin in a pretty precarious state price-wise. It's been sitting pretty nicely in the 27k mark for a while now and then they decided they'd go after binance and coinbase, cause they are selling and allowing unregulated securities to operate, which then lead to bitcoin losing value in a jiffy cause these platforms hold massive influence in the industry.

SEC is up for a fight so they'd gonna have a fight that they might not win in the end because no matter what those shitcoins can just go on and move to another country. Its borderless so they'll just leave SEC for whatever they can do.

[serjent05]

I really wanted to see how SEC will go after these altcoins after they are done with exchanges.  I hope they are able to shutdown these centralized altcoins that eat up the parts that were supposedly invested in Bitcoin.  If the majority of the altcoins are shut down and people behind them are apprehended by SEC, then I can see the Bitcoin market to an uptrend to a great extent.  Also I also wanted to see an end to these developers which only prioritized the collection of money from unsuspecting investors.

[coupable]

With the beginning of the legal review on crypto services platforms of all kinds, I was one of the few who blessed it because I was convinced that it would help limit the intrusion of these companies and that none of them are decentralized services. The matter has nothing to do with Bitcoin in particular or any of the successful networks in the crypto market, and it can be summarized in two goals:
- Central trading platforms whose activities no one verifies or is able to condemn. This was evident with the FTX incident and the unexpected effects of its collapse on the digital economy in general, which was mainly caused by misconduct in the management of the platform, which was not subject to any oversight from official government institutions.
- Shitcoin projects that are controlled by a central authority that collects profits from people's stupidity and ignorance. This was evident with the collapse of the Luna network and the size of the losses it caused.

[d5000]

Do crypto exchanges must get authorization from US government before they offer any service, program, or features? Do you think US government or SEC has the role as the regulator in crypto space?

No. The SEC has the role as the regulator of the "securities" space, more precisely: it regulates exchanges which offer trading of securities.

If a company is launching a security but calling it a "cryptocurrency", and it is traded in the US (on centralized platforms) then the SEC has the right to intervene.

ICOs in almost all cases are securities, they work very similar to an European financial instrument called "participation certificates" which could be described as a share which does not give you any kind of rights - when their issuers go bankrupt you typically lose everything if you can't sell them fast enough.

As far as I know, crypto is ideally a decentralized system, it is not regulated by any institution. If US government or SEC can regulate crypto exchanges, it means they also regulate crypto as a whole.

The first sentence is correct. But the second is not. As I wrote above, Bitcoin (and a very limited set of altcoins) have no character of securities, because they lack a centralized "issuer". So the SEC has no authority over them, nor over the way they're traded.

Anyway, I have no problem if SEC regulates Binance US. But I disagree if they are trying to intervene Binance global. Binance global is not subject to US jurisdiction, it is not located in US territory. Another thing is that what SEC accuses to Binance isn't proven yet. We can't judge SEC is on the right side while Binance is on the wrong side. Everything isn't clear enough, so I don't think we take a conclusion for now.

Here I'm partly agreeing with you. The legal process is still open. But I think the probability is high that Binance US will be fined or even closed.

Suppose we say you're right and SEC is really just pushing for the reform in the Altcoin world (I don't even think it's reform to me this is literally just purge all altcoins), what's going to happen to the rest of the "not shitcoins" spectrum of the altcoin industry? Are they going to be regulated?

The SEC cannot "regulate altcoins" if they weren't issued in the US and aren't targeted to US customers. They can only regulate companies offering services with them and create their revenue/income from these services, e.g. offering trading, "staking" etc.. That's a big difference.

They can also not regulate altcoins which are not securities. But ~98% of them have the character of a security because they've a centralized issuer. One of the few coins which aren't a security is Monero, there are also smaller coins like Groestlcoin and Namecoin which are decentralized enough. Litecoin is already an edge case (due to its instamine accusation) but I think probability is high that the SEC wouldn't consider it a security, in Europe I'd be confident it would not be regulated by the upcoming MiCa crypto regulation.

Plus even if they did only intend to attack shitcoins and not bitcoins, their attempts had left bitcoin in a pretty precarious state price-wise.

That's because many traders panicked and sold, and whales made money shorting the coins because traders are dumbly dumping their precious BTC

If hodlers would understand what this SEC thingy is really about, then they wouldn't have reacted this way, and the price perhaps would be still at 27K (by the way, we're over 26K again).

(BTW: for better understanding of the OP I added a sentence which hopefully helps to clarify what I meant, in bold.)

[dothebeats]

I agree. A lot of altcoins are trying to be like banks offering a percentage of returns on the initial investments made by its investors, and a lot of fraudulent personalities became rich and duped people off of their money because there aren't anything that holds them accountable for their actions. The SEC is just trying to make some service to the public, although it looks like they are targeting bitcoin because it is mainly targeting exchanges which offers a platform for cryptos that work like securities. It isn't something that is bad, but not completely good either. However, it will basically prune out a lot of bad apples in the crypto tree as they no longer have any platform to work with.

[Darker45]

I agree, although Bitcoin will certainly be affected, its price in particular. Probably its image, too. But I fully support crypto regulations nevertheless. I even want regulations to be strict, so strict that people can't just easily create shitcoins out of thin air and use them to steal money from innocent individuals. I want regulations to be strong enough to prevent scam exchanges to simply come and go along with their users' money.

[BenCodie]

I'm tired to read all the comments in the vein of "the SEC is threatening the crypto world" or "the SEC wants Bitcoin to stay small".  

I have not seen many opinions of this, but I agree with you that these statements are incorrect due to:

The SEC has already clarified that Bitcoin is not a security. So the accusations have nothing to do with Bitcoin.

Ultimately, the SEC labeling altcoins (that aren't decentralized in terms of network or distribution) as securities is a harsh, but acceptable move. Harsh because these altcoins might be trying to innovate in their own way and crypto has enabled them to do so. Acceptable because the sad reality is that losses and scams prevail more than good innovations in the world of altcoins.

Instead, the accusations are deeply related to the mess the altcoin world has become in the last years, mostly since the "ICO craze" of 2017/18. More than 95% of all altcoins, I would estimate 98-99%, are managed in a completely centralized way, with a team in charge of everything collecting large profits. The most notorious example are the premines. These businesses create coins out of thin air - just a "bug" of the fiat world many Bitcoiners want to "fix" - to pay for marketing, bounties and shills with tokens. These tokens and coins are ... securities.

You don't have to be even a Bitcoin maximalist - I tolerate altcoins with decentralized components and ICOs which are clearly focused on a non-crypto product - to see that these developments have nothing to do with Satoshi's ideal of a decentralized peer to peer cash.

Right on. I couldn't have said it better myself. The ICO craze has stained any possible innovation that could have alternatively used a bitcoin-like beginning, being a decentralized form of distribution and a decentralized, consensus-based network with a core team of developers. Instead, projects tried to jump-start their idea with the innovation of smart-contracts, and whether they had good or bad intentions had resulted in a permanent stain on the ability to cultivate innovation via a token/altcoin.

In short - Everything going on with the SEC is good for Bitcoin. Less centralized exchange activity and their listing of new & highly speculative coins, more highlight on decentralized exchanges, and increased validation that Bitcoin is not a security.

[Yamane_Keto]

Investors get emotional because they think that Coinbase and Binance attack is an attack against their investments due to observing the falling prices of altcoins while it is wrong to sell bitcoin to buy altcoins unless you have a compelling reason and eventually try to buy more in the short term and not diversify your investments.

In addition, the proof-of-share coins have been used for financial instruments as many only buy them because they give higher APY without even thinking about these currencies. I do not think that the real target is the "ICO", but DeFi funding.

[Dimitri94]

This is why we can’t blame SEC that much since its their job to protect the interest of the public from those businesses who are taking advantage the ignorance of the public. Yes, they are not targeting Bitcoin but since those centralized exchanges are big enough to influence the whole market, the price of BTC are also reacting to this while the many is panicking. Let’s see how Binance will work on this, and i think they’ll face more problems with other country as well, hope they can settle this.

SEC is an independent agency so it can do anything but they have to prior to the general investors interest. If such a decision had been taken before the fall of FTX, many investors might not have been beggars. But the important thing is that there should be no allegations of harassment. The lawsuit against Binance has led to a major fall in the cryptocurrency market. If Binance manages their business properly we can expect them to get rid of this lawsuit soon.

[Lida93]

With the SEC attack it is now making sense and obvious to many on how most of these exchanges in a cloak work hand in hand with these so-called shit coins developers to scam people of their funds. It's due to out of emotional fear by investors thinking that the attack on Coinbase and binance may have effect on bitcoin so a good number had to panick sell which is why the bitcoin price is receding downwards but as the actual story gradual keeps on unfolding bitcoin would rise in price far beyond what it is currently as more investors returns.