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October 07, 2012, 04:29:21 AM |
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I feel a need to post today. I don't know the history of FSA/UK...
The SEC has a broad authority to regulate any financial related contract in the US. I was very specific, I did not mention currency, so don't confuse the two. On it's own bitcoin is fine...it's when folks decided to use contracts that outline stocks, bonds, exchange of securities, dealing in securities, etc that things went wonky in bitcoin. Banks, lending & deposits are usually covered by other regulators. Agree or disagree with me, but I am not the one who is going to decide to call you in. If you don't know, go ask a securities lawyer instead of asking the question here...
Anyone who thinks they are investing when they buy a "security" in the bitcoin world on an un-audit-able unlicensed exchange lacking the benefit of a co-op/third-party holder of the securities didn't pay attention to the history of the US financial regulations. Do you know why exchanges are regulated? Do you know why you can't directly interact with the exchange without a license? Why brokers are licensed? Do you know why FINRA is an insurance co-op & industry self-regulator? Why do companies use auditors? Why do companies pay to get their credit rated? (yea the credit part not perfect...but you get the point...there is a reason for all this) Do you know why these firms have compliance officers?
FRAUD, and the rules to prevent it
Money makes fools of the greedy, and tempts the corrupt into thinking they are above the rules...
Even the US rules don't change fast enough to protect a dynamic system, and ever more interconnected system...someone always seems to outsmart the system and bring it down just a bit. So, after the mess, the rules get changed...
I would say anyone who thinks that any of these things could be sold or issued to a US entity without following the rules is pretty much risking every single US real-world right he/she has - so don't do it in the US, and if you did don't come to the US or any place extradition to the US is possible. Well, I hope that scared you, but realistically, this mess is too small to nab everyone.
There is a bigger picture here...1) the bitcoin economy is really very thin 2) without the rules Fraud the amount of will exist in vast vast numbers. 3) uninformed, uneducated CEO's can cause a good idea, to become an insolvent nightmare very fast 4) unlicensed, unregulated business will leave without a trace
I think the best analogy is an California gold rush...mining makes the money, and other people figure ways to part the gold from you. You can disagree, but right now, the only other useful purpose is Intl Exchange...which is subject to rules and regulations, and can disappear at any time. Maybe one day, other enterprises will replace mining...but that is to be determined. Just keep this in mind, bitcoin is an ideal...it is not yet an economy, in some ways it's still looking for a purpose. It's only wishful thinking to label a forum economy.
At a minimum, without AML/KYC info, you are subject to any US LEO's whim. The rest is up to the SEC's final workout plan...(if any)
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