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U.S. SEC sees decentralized crypto platforms as exchanges

73 points| mfiguiere | 3 years ago |reuters.com | reply

77 comments

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[+] 3dfan|3 years ago|reply
Can't decentralized exchanges be completely anonymous?

If a user sends some ETH to an adress and on some Bitcoin address a balance shows up - how would the SEC want to regulate that?

Let alone exchanges that are just a contract on Ethereum and only exchange tokens on the Etherum blockchain. What is the SEC going to do about those?

And what would happen if some country in the world tokenizes their property. Say a certain token on the Ethereum blockchain means ownership in a company in Sweden. What if a US citizen buys such a token by sending ETH to a smart contract?

So many questions.

Shouldn't these have been kinda answered already in regards to international exchanges? What if a US citizen buys stock on the Euronext Paris, the French stock exchange? Would the Euronext Paris have to be registered with the SEC? What if they are not? Are they committing a crime in the eyes of the SEC?

[+] LapsangGuzzler|3 years ago|reply
Not really, because the major service that exchanges provide is to convert between crypto and cash. The tremendous growth seen in the industry over the last few years was fueled by an influx of cash into the crypto markets by way of exchanges.

Dealing in cash means managing some sort of bank or brokerage account, which falls under federal purview.

[+] adrr|3 years ago|reply
SEC can force all the exchanges that have US customers to blacklist any crypto that touches those addresses.
[+] monero-xmr|3 years ago|reply
Meanwhile Hong Kong is rolling out the the red carpet https://www.wsj.com/articles/hong-kong-banks-are-netting-cry...

The crypto industry is extremely adept at moving across borders, and as power politics between nations dictate different priorities, crypto will make its home base where ever the doors open. Right now China and Russia are in a West vs. East struggle, and anything they can do to reduce the power of the US Dollar and banking system will be supported.

[+] LapsangGuzzler|3 years ago|reply
After the collapse of Silvergate and Signature, I say “let them have it”.

The crypto industry may be adept at moving across borders, but so are seasoned criminals. That shouldn’t automatically qualify them to operate with impunity. Millions of people lost savings in the wake of FTX, and we’re all just supposed to pretend that it was some singular, isolated incident?

Their name was on an NBA arena, they spent millions on celebrity endorsements and ads, and were touted among what many consider to be one of the top tier venture firms in the world. The SEC had every right do this.

[+] jjtheblunt|3 years ago|reply
Since Russia has lots of energy, maybe they can use it to settle transactions?

Meanwhile Visa keeps on clearing incomparably more (by “several orders of magnitude”) encrypted transactions per second globally for miniscule energy?

[+] bobthepanda|3 years ago|reply
Hong Kong may not be a great place to invest long term given that China has a far more precarious legal system and is willing to override Hong Kong’s on a whim.
[+] VWWHFSfQ|3 years ago|reply
Hasn't the CCP been pretty adversarial to cryptocurrency?
[+] Gigachad|3 years ago|reply
Not sure why the SEC would care if people from other countries are being scammed. As long as the local citizens are protected.
[+] rkagerer|3 years ago|reply
Let alone exchanges that are just a contract on Ethereum and only exchange tokens on the Etherum blockchain. What is the SEC going to do about those?

EthetDelta was exactly this, and they went after the guy that maintained the contract (plus in this case some ancillary order book matching servers).

You need fully decentralized right up to governance. Those aren't viewed as favorably by regulators.

[+] charcircuit|3 years ago|reply
What do they mean?

Is Ethereum itself an exchange or would a website like https://app.1inch.io be considered the exchange? Or would 1inch itself be the exchange and holders of 1INCH be responsible for it?

It makes little sense.

[+] HPsquared|3 years ago|reply
I wonder what side effects this decision will bring.
[+] Cypher|3 years ago|reply
Everything is an exchange a security and rules are for our safety, eat ya bugs, stay in doors and take your vax