Why Most Cryptocurrency Policy Issues are Complicated by How Fast the Tech is grows?

Jake Cervinsky shared: Most crypto policy issues are complicated by how fast the tech is growing & changing. It’s hard to craft specific solutions with any confidence they’ll make sense in a few years. The best thing regulators can do now is go after the *actual* bad actors: the frauds & scammers.

Community Response:

The amazing thing about crypto, unlike the traditional financial system, is that frauds & scams are transparent & observable by everyone. We see them happening in real-time. Within hours, the crypto community does investigations for free that would take law enforcement years.

Nobody hates crypto scammers more than us. Nobody who cares about this tech wants to see criminals use it to get away with defrauding victims. There’s nothing we’d like more than for regulators to protect investors by getting the bad guys. I wish more resources went to this.

You do realize Ethereum Joseph is on tape talking about helping disguise whale purchases in the Ethereum ICO?

Watch and then the SEC has the guts to go after Ripple who didn’t commit any fraud or ICO. That’s why our government is disgusting. Because the bad ones get prizes and the good ones get enforcement actions.

I wholeheartedly agree! And why does it take 2 Judges more than a year to figure out something so obvious?

I’m not a legal expert, but I know that here the legal process is extremely slow.

Agree, been on this bandwagon for years: 1: eliminate the accredited investor rules (which prevent the middle class from investing until a lot of the major gains have passed them) 2: beef up fraud punishments.

How to govern Cryptocurrencies for the future: Independent Regulatory Advisory Board W/ oversight by Crypto Czar Taxed as capital gains if sold on an exchange (Security) not taxed if used for daily expenses (Currency).

But instead, SEC go after Ripple after a 3-year investigation they could find no evidence of fraud. Then try to frame a case as if there is fraud. Meanwhile, allow ETH a free pass while there are open confessions of illegality by its founders & lawyers. SEC corruption is rife.

The speed of technology change should be a catalyst for a change in SEC’s approach regulation. It should be consultative and engaged with participants to craft guidance rather than waiting for an opportunity to define guidance via enforcement actions. Proactive v reactive.

Transparency of public chains makes catching the bad actors significantly more likely too. Way more benefits than disadvantages to this tech from a consumer protection and mitigation of illicit activities perspective.

Fair, but couldn’t a modern law that needs revision in a few years be better than relying on legacy law /precedent serves older markets only? It seems like certain aspects of the law are going to need to learn to adapt and iterate quicker than others.

So instead of crafting specific solutions today because in a few years they won’t make sense. The regulators will use specific laws crafted over 70 years ago because they make perfect sense today, like the Howey test. Crazy town.

There is not one law on the books governing crypto. The regulators/SEC take upon themselves authorities they do not have. SEC does not have blanket authority over all things asset exchange. NOT having clear laws IS what leads to judges writing from the bench and regs via suits.

When’s the last time the regulators were concerned with doing what’s “best” for the space?

The problem is we have peaked as a superpower and everything going forward will lean totalitarian because we (allegedly) have to main geopolitical dominance, which means we’re not allowed to deflate, and the money has to go into the US Finsys, not the crypto and other side-systems.

EXACTLY. HUGE penalties for fraud. Leave the rest alone.

Remains to say this is not how TradeFi regulation works. All kinds of laws but once a bank is caught the fine is TINY compared to what they earned by the fraud. We want fewer laws but HUGE penalties.

Crypto needs a gatekeeping system to root out scams and the people involved in them before new projects are allowed to list. Too many invest with zero due diligence. Most don’t know what that means. There should be legal/financial requirements. Not a popular idea? Don’t care.

I’m not sure policymakers are interested in creating a policy that’s fair to all participants. They’re paid to protect the interests of the current system. They don’t need to know where the tech is headed to throw a wrench in the works.

Good enough is, by definition, good enough. I think it’s more like “hard to craft policies now, not knowing how they will be able to manipulate it later”, it’s all about getting hands in the cookie jar.