On the other hand I think that the SEC’s response is straightforward and obvious:
- There absolutely are existing, reasonably clear rules about how you register securities.
- Yes, you’re right, it’s impossible for crypto tokens to follow those rules.
- Oh well! Guess that means crypto exchanges are illegal.
The position of Coinbase — and of the crypto industry more broadly — is “look, SEC, if you want to have a flourishing system of legally compliant, safe, trustworthy crypto assets, you will need to work with us a little bit to write new rules,” and the position of the SEC is “no, we don’t want that, we want all of you to go away forever.” If Bernie Madoff came to the SEC and said “if you want a higher class of more trustworthy Ponzi schemes, you will need to write a few new rules adapting the disclosure regime to Ponzi schemes,” the SEC would have said “no we absolutely do not want that, we want much less Ponzi scheming, and we certainly do not want to give our approval to Ponzi schemes by writing rules for them.” One gets the sense the attitude to crypto is similar.
‘Enforcement 40’ for 2020
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