That was from a quick Google search, so I'm sure there are many more accusations. It seems like the SEC has never been the 'first' to detect a fraud, and they've frequently ignored ones that have been pointed out to them (such as Madoff).
The average "investor" is a gambling addict or financially desperate Reddit cryptocurrency poster. They don't care beyond NUMBER GO UP and I am certain Justin Sun knows that too.
There's currently US congressional hearings going on about cryptocurrency regulation. This is admittedly from a very pro-crypto source, but great video overview of the most recent testimony: https://www.youtube.com/watch?v=xohK2W07F0Q
I'm very very glad for any consumer protection, but it does come across like the SEC is setting up a narrative of crypto risk as a reason to repress transactions between it and the traditional banking system.
The revelation that FDIC (allegedly) forced Signature's acquirer to divest of cash holdings from crypto companies is another bit of evidence that anti-crypto regulatory activism is a very real thing.
Which is quite silly because crypto is still small peanuts compared to the bank failures that happened recently.
I don't see the "anti-crypto regulatory activism" you are calling out. If FDIC is bailing out a bank and its depositors, that too well beyond its insurance limit, it absolutely has to ensure that the bank is not going to continue to gamble with customer funds.
Heck "no customer deposits going into crypto" should be a hard requirement to be eligible for FDIC insurance.
Is the FDIC going to tell Silicon Valley bank to stop taking deposits from tech companies, or make them stop purchasing long-term treasuries? My guess is no…
Being a crypto-focused bank carries most of the same risks as being a startup-focused bank (But worse), and in case anyone missed the news the other week, one of those just exploded with what could have been a much bigger hole on its balance sheet had the FDIC waited.
Setting up a narrative? Did the SEC orchestrate FTX and all the other crypto failures?
They’re finally taking steps to actively protect retail investors. This should have happened after the ICO boom of 2017. Nothing of value would have been lost if crypto had been unbanked the past five years.
The sad truth is that all the exchanges are going to steal your funds. Some of them just go about it in more sophisticated ways, like Coinbase paying out billions in stock-based compensation while losing money.
> The sad truth is that all the exchanges are going to steal your funds.
> like Coinbase paying out billions in stock-based compensation while losing money
I really wish people put more effort into arguing their side in these discussions. Your point is absurd and lazy.
[public company] pays some % of employee salary in stock >> while "losing money" >> ??? >> customer's property is stolen.
> Did the SEC orchestrate FTX and all the other crypto failures
FTX's problems were amplified by being unregulated, outside the US. The overwhelming majority were not US residents. The SEC didn't have jurisdiction over their International firm. The US version of FTX was handled very differently, but supposedly co-mingled funds. They FAILED to protect US residents by not shutting down the US version. They could have gave warnings about the international firm, instead of working so closely with FTX's founder.
As usual, lots of hand-waving from crypto detractors. You have a clear bias. Sadly, when enough people share a bias, truth and facts are irrelevant. There's a lot to criticize about in crypto. No need to make up irrelevant associations.
Coinbase executives will have enjoyed years of massive pay days selling stock pumped up with customer money. The customers who assumed the money in their accounts is protected like with a bank will be wiped out.
> When Coinbase files for bankruptcy, crypto deposits will be at the back of the line. They are unsecured creditors.
I'm aware. This has nothing to do with your point about "stealing" deposits like other exchanges (e.g. FTX), and is irrelevant to stock-based compensation. It contributes nothing to the discussion. More noise to encourage others to feel safe that their bias is well liked.
> Coinbase executives will have enjoyed years of massive pay days selling stock
More irrelevant and false points. The company has only been public since April 2021. Not even two years. You are attempting to frame them as fat cat wall street types purposefully driving the company into the ground at customers' expense.
Somehow you extrapolate this to "all exchanges" when Coinbase is the only publicly-traded exchange.
remember that Coinbase was audited by the SEC before going public, and is one of the oldest exchanges. If any exchange is safe, it's Coinbase. The problem is the SEC doesn't give clear direction.
Anybody that feels the SEC will "protect" them by forcing coinbase into bankruptcy is welcome to move their assets on-chain. Many people advocate for that.
Again, I'm highlighting how lazy and absurd your argument is.
It doesn’t seem like you know what your argument is.
> “If any exchange is safe, it's Coinbase”
Ok, so other exchanges are worse.
> “Somehow you extrapolate this to ‘all exchanges’”
You just told me the other exchanges are worse.
> “You are attempting to frame them as fat cat wall street types purposefully driving the company into the ground at customers' expense”
It doesn’t have to be purposeful. At the rate Coinbase is piling up losses, it will eventually be bankrupt, and executives will have accumulated billions while customers will lose billions. The SEC isn’t going to force a bankruptcy; Coinbase’s own poor management seems to be doing it.
> “… is welcome to move their assets on-chain. Many people advocate for that.”
Oh, I see you agree with me that nobody should use crypto exchanges in the first place. Because they will lose your money.
>> “Somehow you extrapolate this to ‘all exchanges’”
>You just told me the other exchanges are worse.
pardon me....? Other non-public companies have executives selling stock?
> At the rate Coinbase is piling up losses
Feel free to cite your source.
> Oh, so you agree with me that nobody should use crypto exchanges in the first place. Because they will lose your money.
No, I don't. You buy it on an exchange, and then move it on-chain. Done. That's the point of a centralized exchange with banking connections. You are welcome to leave it there if you'd like, but you have to accept the risks. Go ahead, try to move the goal posts again.
Every comment you make more irrelevant and false points.
Open the Q4 2022 shareholder letter. It’s printed right there: a loss of $557M on revenue of $605M.
The loss is nearly as large as their entire revenue! Is that a sign of a healthy business? It’s like selling $5 pancakes that each cost you $10 to make.
In the report ($557M) doesn't mean "expenses". It's an overall loss.
A $557M loss means they spent all that $605M in revenue and another $557M on top of that.
>The loss is nearly as large as their entire revenue
Their initial claim is "Coinbase is piling up losses, it will eventually be bankrupt, and executives will have accumulated billions while customers will lose billions." And saying this is "stealing" from customers.
I haven't been advocating for purchasing the stock. I don't own it.
Regardless, looks like they had positive net income in 2020 & 2021. Coinbase isn't the only business dealing with losses 2022. I still very much disagree with "piling up losses... eventually be bankrupt"
It’s a good idea not to own a stock if you can’t read the income statement. Fortunately that kind of boring traditional finance stuff is not a problem in crypto.
Me: "I haven't been advocating for purchasing the stock. I don't own it."
You: "It’s a good idea not to own a stock if you can’t read the income statement."
I figured it out! It's your reading comprehension! I was wondering why I had to repeat myself so much in this thread, and why you had been trailing off on tangents away from each point you attempted to pivot around. While ignoring each of your previous statements.
> > When Coinbase files for bankruptcy, crypto deposits will be at the back of the line. They are unsecured creditors.
> I'm aware. This has nothing to do with your point about "stealing" deposits like other exchanges (e.g. FTX), and is irrelevant to stock-based compensation.
If Coinbase takes money from the people furthest back in line (unsecured creditors) and gives it to people second furthest back in line (equityholders), and the unsecured creditors think they're first in line (bank depositors)… that sounds like stealing to me!
I doubt common shareholders would get anything at all in a case of bankruptcy.
> the unsecured creditors think they're first in line (bank depositors)
Coinbase isn't a bank, and customers' digital assets aren't bank deposits.
> that sounds like stealing to me!
Welp... You're wrong!
As for real banks, feel free to look up current events on "uninsured deposits" at regional banks. You might say banks are "stealing" deposits from accounts >$250k too!
> I doubt common shareholders would get anything at all in a case of bankruptcy.
They get their already-paid dividends or proceeds of what they already sold.
> As for real banks, feel free to look up current events on "uninsured deposits" at regional banks. You might say banks are "stealing" deposits from accounts >$250k too!
> They get their already-paid dividends or proceeds of what they already sold.
More irrelevant commentary.... COIN doesn't have dividends, and.... yes.... when you sell the stock.... you are no longer a shareholder.... this needed to be said?
> None of them have lost a cent.
Again.... look up the current events. Just today the Treasury secretary said that additional bank failures won't get the special treatment the big depositors got at the failed banks. They should NOT have been insured above 250k.
In your words, you might say the bank STOLE the money from depositors, and the government reimbursed special depositors for their loses. It was NOT stolen, though. The bank was mismanaged. The government should not have covered the loses above 250k per depositor. The big depositors took a risk keeping that much money there.
I must admit I was surprised to find that Coinbase doesn't create a chain address under which the coins/tokens you buy with fiat are held, then treat the key for that address as an asset held in custody for you.
The fact that they don't do that, when it would be practical for them to do so is a red flag for me.
The kind of protection people want: their in high-risk investments being protected as if they were in low-risk investments. They also want to eat cakes but still have those same cakes.
I'm often on board with this sort of criticism of populist finance regulation but it is a bit nuanced. One problem retail voices tend to highlight is that institutions that take stupid risks can get bailed out for being too big to fail, while "the little guy" taking the same risks would have little help.
They don't apply to all situations, and your criticism is somewhat valid for many crypto cases, but between crypto and traditional finance it's true that regulators can be too heavy-handed on some areas in crypto while being a lot more lenient on say people who run a company to ground in a leveraged buyout.
Yep. You can tell what someone really means by protection when you ask them whether or not it should be opt in. Other forms of supposed investor protection include various violations of privacy in the name of transparency, such as banning privacy coins and mandated transaction tracking.
If people just wanted crypto for its utility they wouldn't give their money to exchanges in the first place. But they take that risk for sparkly returns.
Too many people want to have their cake and eat it too:
- Crypto separate from banking system but still regulated in the same way anyway
- Crypto as currency but still want juicy returns
- Crypto is decentralised but give their coins to centralised exchanges
Whoa celebrity charges too. You just knew Jake Paul had his hand in so much bad crypto he was gonna get nailed eventually. I suppose Coffeezilla will struggle to suppress the glee.
Edit:
> With the exception of Cortez Way and Mahone, the celebrities charged today agreed to pay a total of more than $400,000 in disgorgement, interest, and penalties to settle the charges, without admitting or denying the SEC’s findings
The SEC cannot say you are guilty without proving it within the bounds of the legal system. This "non admission of guilt" is a way to sidestep a lengthy, costly legal process and get a result for the impacted parties sooner rather than much much later.
Saves time and money for all involved parties. It's literally like a parking ticket in this sector. Years back I had clients who were penny stock promoters and every one of their sites had to have a disclaimer which if you clicked and read listed how much and from who they were paid for each promotion. That's all it would have taken for them to avoid this fine even as grimy as the industry is.
Pretty much ends there. The SEC can say you are civilly liable, and they can assess fines in some situations and initiate civil litigation in others based on that.
But if they think you are guilty, that’s an issue they hand off to the Justice Department.
We can split hairs all day regarding exactly who brings charges or whatever - but it doesn't matter. In basic terms:
If the SEC says you are liable or guilty in any way for anything, you can contest it via the legal system. That's what the legal system is for...
Again, this "non admission of guilt" sidesteps everything and cuts straight to the end result.
In this specific case, it literally means the SEC either felt their case wasn't strong enough to guarantee an outcome, or litigating the case would become exceedingly costly and unproductive - again without a guarantee of an outcome.
"Non admission of guilt" payments guarantee a speedy outcome. That is the entire point.
> Again, this “non admission of guilt” sidesteps everything and cuts straight to the end result.
It’s a settlement agreement, and, yes, that’s the whole point – they resolve a situation subject to civil litigation without litigation, but leaving the settling party no worse off than if they had fought and had the agreement contents instead imposed as a remedy. Requiring admissions as part of a settlement would not do that, settling would then in many cases be worse than losing.
Is SEC enforcement even revenue positive/profitable? The "result for the impacted parties" is a pretext, especially if we intentionally and carefully preserve the ability to continue to reoffend in the exact same way.
Because otherwise you force the innocent to go through a lengthy (and expensive) investigation that is not necessary for the guilty (who would be ok with paying a fine)!
"I didn't do it, but I'd rather pay the fine than go to court" is a perfectly reasonable outcome.
So every civil suit filed should be forced to go through trial even if the parties arrive at a mutually acceptable resolution that both sides prefer to trial?
Presumably for the same reason it's more efficient to let people agree to pay parking fines up front rather than go to the extra time and expense of court for the sake of seeing whether they'll agree to say the word "guilty" or not. The SEC has higher priorities than sullying the name of Lindsay Lohan and Soulja Boy, and fining them substantially more than they got paid is ample deterrent.
> Respondent shall, within 20 days of the entry of this Order, pay disgorgement of
$25,019, prejudgment interest of $1,811, and a civil money penalty in the amount of $75,057 to the
Securities and Exchange Commission
Jake Paul was paid $25k for a tweet and was ordered to pay back a bit over $100k. Only other restriction is he can't be paid for anything related to crypto in the next 3 years. Paying back the original money + 3x as fine seems reasonable I guess.
It might be different if anybody believed these celebrities were actively trying to defraud and harm people.
The reality is more likely that these people are effectively human billboards. People pay them to read a script, and they read it. Each week a different product, different script, same deal.
So they got suckered into reading an illegal script. They get penalized (rightly) but it doesn’t necessarily need to be extreme.
And now the SEC gets to show off their win using the same billboards.
That said, I don’t know who Jake Paul is. If he’s a special case, fine. I was going off the other names I do recognize. I just don’t see Lohan hustling securities fraud between ads for clothing and apple jacks.
> So they got suckered into reading an illegal script.
Superrich people have agents and lawyers who should advise better. The near homeless guy I saw at the bus stop touting "crypto" I'd call a sucker. Not Logan Paul.
How many other high-paying tweets that look like fraud did he keep all the cash? Do we know? Was it none?
"Dang, turns out that one is a loser - they got me on that one." Can be a business expense in a profitable operation.
I see this kind of thing as fraud and there /needs/ to be conviction and jail, even a week in minimum security. There has to be consequences that aren't a business expense for getting in on fraud.
The "I'm a dumb celebrity so I didn't know" defence is just garbage, they should be terrified of accepting such "gigs". Utterly crapping themselves about how bad it could go.
okay, sure but that needs a criminal indictment along with subsequently being proven guilty.
that’s very different than a civil charge with a prescribed fine that can be paid to avoid the civil trial.
the SEC occasionally refers cases to the DOJ for a criminal trial. but tbh, they kind of don't want crypto defendants sweating because the SEC’s logic will get challenged, potentially leaving the nation with no regulator at all. they need civil settlements as much as you need justice for bagholding something a celebrity shilled.
I suspect the number of tweets each of those celebrities made that [likely] fell foul of SEC guidelines was one. It's not a difficult thing for the SEC to check.
A 3x fine is no deterrent if your action is easily concealed but promoting services to a public audience, by definition, is not concealed
I'm pretty sure that the last time I paid a parking ticket, I had the option to check a box that indicated that I was guilty, or the option to go to court. I did not get the option to pay the fine, but not to be recognized as guilty.
You likely also had an option to pay the fine and plead nolo contendere which has a similar flavor to the “without accepting or denying guilt” language.
It exists in the civil (but not criminal) justice system so that civil disputes can be resolved without the parties making admissions that could be used against them in separate litigation (including, especially, criminal process, with its higher standard of proof and potentially more severe personal consequences.)
Given the overlap between torts and crimes, it would be much longer and more painful to resolve tort cases if the settling part might have to admit an act that was also a crime.
I think it's exactly the other way around (SEC proceedings are criminal, not civil): You can plead no contest to criminal charges so your admission can not be used against you in civil proceedings.
In the concrete case, they settle with the SEC, but if anybody wants to sue them claiming their shilling induced them to make bad crypto investments, the settlement doesn't serve as an admission of guilt to use as evidence in that follow up lawsuit.
> I think it's exactly the other way around (SEC proceedings are criminal, not civil):
SEC proceedings are civil; criminal violations are referred to the Department of Justice for prosecution, often in parallel to civil enforcement action.
> You can plead no contest to criminal charges
You cannot generally plead “no contest” (nolo contendere) to federal criminal charges; the court may allow it, but “before accepting a plea of nolo contendere, the court must consider the parties’ views and the public interest in the effective administration of justice.” [Federal Rules of Criminal Procedute, Rule 11]
It allows one to settle a civil manner without self-incriminating if the same act is also criminal. This grants more flexibility to civil procedure without overstepping fifth amendment bounds.
Do we need that flexibility? The flexibility to extract a settlement from guilty people without an acknowledgement of guilt seems to be a worthless prize unless we're enforcing legislation for revenue's sake. I wouldn't complain about that just because it seems venal, I really find it silly because the amount of revenue is minuscule irt the budget.
> The flexibility to extract a settlement from guilty people without an acknowledgement of guilt seems to be a worthless prize unless we’re enforcing legislation for revenue’s sake.
Civil charges are about liability, not guilt, and have a different standard of proof than criminal guilt. However, in a criminal trial, and admission of facts necessary for civil liability is admissible evidence. No one benefits from a system in which it is impossible for a party to accept civil liability without admitting to facts that could be used against them in other, including criminal, litigation when the civil verdict itself could not be.
And, while in this case all of the consequences may have been monetary, in civil litigation especially involving the government, there are often other consequences (such as legally binding commitments to heightened monitoring and behavioral controls) that are attained in settlements (often, in the form of “consent decrees”) of civil litigation. Making those more expensive for all sides because the defense was incentivized to go through a kabuki-dance trial even if they fully expect to lose on the civil burden of proof just to avoid making an admission to settle does not benefit anyone. Except lawyers, lawyers would love it.
I hate it too. It allows people to engage in borderline fraud knowing that if they get caught they pay a fine and keep some of the ill-gotten gains anyway. Like a get out of jail free card. Worst comes to worse, you settle and admit no wrongdoing and pay fine. Best case scenario, you avoid the dragnet and nothing happen, so you keep scamming. Either way, you avoid jail.
The one that really gets me is where vicious bastards pay off witnesses so they cannot legally testify against them. Is that situation being reported wrong?
E.g. Rose McGowan unable to testify against Weinstein because he setlled with her for $100k. Surely in a criminal trial you can be called, take the oath and tell the truth? I don't want to follow anything in hollywood if I can avoid it so I don't care to know the details of weinstein and mcgowan at all. Just it was being reported like that and my jaw dropped. You can pay off witnesses so they can't testify now? Wow.
> Rose McGowan unable to testify against Weinstein because he setlled with her for $100k
McGowan was not able to testify because the particular offense against her was not charged and the judge didn’t allow testimony about prior acts before a certain date, not because of the settlement.
If you could, members of criminal organizations would engage in sham civil suits against each other which they would then “settle” with no-testimony agreements.
>> The SEC simultaneously charged the following eight celebrities for illegally touting TRX and/or BTT without disclosing that they were compensated for doing so and the amount of their compensation.
• Lindsay Lohan
• Jake Paul
• DeAndre Cortez Way (Soulja Boy)
• Austin Mahone
• Michele Mason (Kendra Lust)
• Miles Parks McCollum (Lil Yachty)
• Shaffer Smith (Ne-Yo)
• Aliaune Thiam (Akon)
I had to doubletake. Never did I ever think I'd see this permutation of celebrities in an SEC report.
And a perfect snapshot for what a steaming pile of BS all this crypto-hucksterism was in the first place.
I admit, I don't understand humans. I'm just trying to comprehend how anyone would think it a good idea to buy a token because any one of these celebrities hawked it.
A lot of it is young kids or college students with undeveloped brains and a lack of good guidance. Then a bunch is desperate needy or greedy folks who are thinking impulsively.
it's also just plain advertising. When the celebrities listed in these charges say that they're buying NFTs, a whole lot of people are going to see that and notice.
The number of people that buy an NFT because Soulja Boy bought one is probably pretty small. The number of people who buy NFTs because "everyone else is" is much much larger.
Yes, in advertising terms these endorsements are not tactical but strategic. You want to create an ambience where people sense that everyone successful is now getting into crypto/NFTs. That kind of diffuse group pressure is much harder to consciously analyze than “do I want to buy this thing because Soulja Boy told me to?” — and thus much more effective over time.
Crypto seems to have been particularly powerful at preying on women and minorities who felt like they’re missing out with mainstream finance. This kind of highly focused influencer marketing within communities must have been a major contributor to its uptake.
Is that really true? When I was in college some years ago I didn't fall for any scams and few of my classmates did either. Most of us barely had money for beer and textbooks, so there wasn't much to scam from us in the first place. Has the situation changed?
Do you remember those Power Balance wristbands? I think the things back then on the radars of school/college kids were a bit simpler. In the recent past, fashion was the big driver and what 15-20 year olds saw in trends. Now, social media exposes them to influencers and wealth and they figure they want to get on the crypto train, or get a GoPro because it will make adventure sports happen in their lives, or go live in a van.
Last year, a colleague was talking about his ~15 year old kid insisting he wanted to buy NFTs. Said colleague had suffered FOMO from years of the rest of us talking about Bitcoin and might've therefore been primed to acquiesce.
It's just FOMO. You surely experienced it until now. It's "irrational" because people make many irrational(emotional) decisions. Sometimes it pays off to ride the wave but we all know that most will not make it...however the potential upside is too great to "miss" it...until you lose.
FOMO has little to do with "reliability" or innovation. I believe most people see crypto coins for what they are: volatile, speculaive assets. They know it's really just a pump&dump scheme and if Akon is promoting a specific coin that means the team behind the pump is "serious" (i.e pumping money into it) so there is a higher chance to get rich before the fall compared with a random s** coin.
If you look at the stock market a big part of it didn't behave that different than the crypto market and that's due FOMO. Why did people buy stocks at insane valuations? Some of them were burned and I'm sure they though they will sell just before the market is going down.
I bet you can think of some irrational things you've done in the last few years. I'd be curious what they might be.
Let's see, for me... Well any time I got games in a steam sale recently, my backlog is huge and I don't have time anyway. Any time I spend on Twitter, I know I don't enjoy how I feel after. Plenty of times I had irrational excuses for why I didn't have to go to the gym on a given day. Made a batch of really good ice cream despite trying to lose weight. Etc.
When I was younger I made some irrational decisions in stocks, now I don't anymore, I think if you get burned enough maybe that's what it takes? I too often wonder why people seem to need to "learn the hard way." For me, if a friend gets in a car accident, I listen to how it happened and make sure to never repeat their mistake, triple for motorcycling. But maybe its domain specific in that regard? Some people are good at being more rational in some areas rather than others?
It's simple: they thought they could later sell it for more. Celebrities hawking it is "bullish" because other people (suckers) will see the hype and want to buy their bags. Unfortunately for them, they were the suckers.
Unfortunetly these type of Pyramidal schemes always have that factor: "If i just get in early i get out making money and someone else looses". There will alwasy be people ready to make that bet, that they are not late because those 10 people that were early and made a fortune make more impression to them than the thousands that lost (and maybe lost even more than they could afford too)
only in this case the chances of that are predetermined. most of these "new releases" have their winner deck already predetermined before the launch, a closed group knows when they get in on the action immediately and everyone of the public, no matter how "early" they enter they are already late.
If someone got into wine or baseball cards because their boss liked them, we might call it a smart career move. But much of the time the underlying psychology will be exactly the same. And in fact it will likely work better if it’s not done rationally: anyone who becomes too conscious of what their motivation might be risks coming off as insincere.
Wanting to connect with important members and of your community it a perfectly normal human impulse, and finding or creating things the two of you have in common is often a very reasonable strategy towards that end. It goes badly at the scale of modern celebrity, is all.
> If someone got into wine or baseball cards because their boss liked them, we might call it a smart career move. But much of the time the underlying psychology will be exactly the same.
Is the underlying psychology the same? As you mentioned, one is a smart career move. Your desire to emulate your boss may stem from your selfish desire to promote your career, not a desire to connect with important members of your community.
The ape brain doesn't have a separate category for 'people you see on TV' and 'people you work with', celebrities are stored in the same place as your friends except the nature of parasocial relations seems to polarize their status; such that these people are seen as very high or very low status.
>> Our brains treat on-screen faces the same as in-person faces, explains Bradley Bond. He is a communication researcher at the University of San Diego in California. “We assign personhood to people we see in-person and on screens,” he explains. And we “process them in a similar fashion.” We are a social species. So we crave connections to other people. “It’s human instinct,” he says, and parasocial bonds help fill that need.
It's not surprising to me that we process faces the same whether we see them in person or on a screen, that's because screens are designed to accurately display the visual qualities of their subjects. That is not even close to the same thing as saying "celebrities are stored in the same place as your friends".
Recognizing your wife's face and recognizing a cartoon character from your childhood are both done with your brain, therefore your brain doesn't have different categories for family members and cartoon characters?
I'm not sure because I've never read anything about cartoon characters in this context but it probably has to do with whether the person recognizes that the cartoon character is an animated drawing or a person.
The Wikipedia article claims we treat YouTuber like our personal friend.
The parent post claims ape don't have different caregory for boss that can advance your career and a celebrity that, at its best, can be treated as a friend ..
I am skeptical that there is any profound scientific value in the term "parasocial interaction".
To judge from the origin of the term,[0] we are calling a "parasocial relationship" the phenomenon of mass conditioning of consumers by controlled media. There is enough clear evidence of a state's ability to affect public discourse by controlling entertainment (and news) media.[1]
Although people may be inclined to credulity or at least some basic level of cooperation, most people can see when they are being duped in a tangible way.
There are extreme cases, which the article calls, "extreme parasocial behaviour".
Other terms exist to describe a person who believes things that are not real, highly improbable, or hallucinatory. And in the marketplace, there is caveat emptor, the complete phrase being,
"Let a purchaser beware, for he ought not to be ignorant of the nature of the property which he is buying from another party."[2]
[0] > Evolution of the term
> Parasocial interaction was first described from the perspective of media and communication studies. In 1956, Horton and Wohl explored the different interactions between mass media users and media figures and determined the existence of a parasocial relationship (PSR), where the user acts as though they are involved in a typical social relationship.
the SEC’s logic is that if you decided that a wine bottle or baseball card you bought was to be sold at a profit in the future, then the winery and card issuer should have registered them as securities, and the seller should have been a registered broker dealer. and the boss should have provided a whole list of disclaimer to mitigate regulatory liability.
otherwise, the winery or baseball card issuer is engaged in fraud, and the seller is too, and the boss who recommended them is as well
this is what people find to be… at best
… incomplete logic. there is a Howey test interpretation that would allow for this expansion, and crypto folks would gain power by having it applied congruently to those physical established artificial scarcity collections too, because Congress would reevaluate this inconvenience more holistically. There is another interpretation where the SEC makes no sense at all, and has to provide a clear exemption framework for crypto assets to navigate in order to be treated the same as wine bottles and baseball cards, ignoring the current parasocial relationship and reliance that crypto traders have with crypto project creators.
The SEC's logic is actually about how the items are marketed by the manufacturer. Baseball cards and wine aren't marketed by the manufacturer as items to buy as an investment.
and many crypto teams are meticulous about not doing that too
its why their discords say “no price discussion”, amongst many other communication nuances and project structuring to avoid securities issues. dont confuse celebrities and youtubers for the actual teams.
the only teams that have been sued by the SEC are ones that deviated in very predictable ways, there have been no surprises in the cases the SEC have brought, compared to the legal guidance that is given by law firms in the US
its just that the SEC then pretends as if it just hasnt gotten to other project issuers yet, and when not going after a specific project it just says “all cryptos are securities” because theyre going after an exchange, at the moment, and wont tell the exchange which ones
everything suggests the SEC’s logic is flimsy, or needs to apply even more broadly in a way that makes the SEC’s logic flimsy. The SEC is dragging this out because they understand the same thing, that all paths lead to their charter being modified even though they were just hoping that crypto went away.
This case is literally about celebrities being paid by the developers to market the product. Banning price discussions on Discord doesn’t absolve the developers of responsibility.
and the celebrities simply need to disclose what their compensation is, when the asset involved is already determined to be a security. I would actually like to see that practice extended to consumer products that aren't securities.
unfortunately here, the SEC is still relying on an ambiguous interpretation of securities, unilaterally deeming something a security and simultaneously charging people that promoted it, who are relying on assurances and a parallel set of behaviors that something is not a security.
Hmm that's not the SEC's logic though. Winery or Baseball cards have thier own intrinsic value and while their value can be pumped by promoters it does not depend only on that and they are not sold as an investment. You may decide to buy them as an investement but they are not Created for that purpose.
The same as I may invest in Property to profit in the future but the property is not a security becasue it has it's own intrinsic value and does not depend only on the promotion or market expectation or how the contructor company does afer I have bought the house.
There might be some parallels in Art and NFT but there the issue is completly different and is more of grey area of what you are actually bying than if it's an investment or not.
intrinsic value isn't the qualifier for a distinction
and many crypto issuers focus on their nonspeculative utility
everything you described is exactly the problem. The SEC is saying that because any individual may have decided to buy them as an investment, then the SEC can ignore everything to the contrary. except the SEC hasnt actually ignored everything to the contrary because they havent charge crypto teams that focus exclusively on nonspeculative utility and other nuances. they charged teams that promised the price would go up. believe it or not, very many teams focus on the nonspeculative utility exclusively, the prevailing legal opinions from law firms in the US have had this advice to crypto teams for at least 6 years, and civil charges the SEC has brought have not undermined these assumptions. in any case, the SEC then turns around and says “theyre all securities” when speaking publicly or when charging an exchange. now we’ve come full circle between yours and mine perspective: either apply the same logic to “things with intrinsic value (that you respect)” or point out exactly which way for digital asset collections to be exempt as well.
Although technically you are right that the "intrinsic value" is not explicitly stated by SEC, the whole purpose of the Howey Test it to establish whether something has intrinsic Value. At least that's my interpretation of it.
The main points of it are is it an investment and does this investment value depend only on the enterprise you investing on and promotion or does it have any other value that is independent of those factors (thus intrinsic value).
Put it another way, if you investment is completely lost when the actor who put it in the market disappears, then it is a security.
> If someone got into wine or baseball cards because their boss liked them, we might call it a smart career move.
First off, no, we wouldn’t. The boss and the other members of the team will all see that for what it is- trying to kiss ass to get ahead instead of doing your job. Particularly because (as you’re suggesting at least) the person doesn’t actually like those things and is simply trying to get ahead.
Just watch the Office. Dwight and Andy constantly try to do this to Michael and while they are occasionally successful, it hardly matters or has a lasting impact. Further, their coworkers all find them annoying (while they continue to “just do their jobs”).
> > If someone got into wine or baseball cards because their boss liked them, we might call it a smart career move.
> First off, no, we wouldn’t. The boss and the other members of the team will all see that for what it is- trying to kiss ass to get ahead instead of doing your job. Particularly because (as you’re suggesting at least) the person doesn’t actually like those things and is simply trying to get ahead.
The counter-assertion relies on the axioms of
(1) "100% of people are capable of detecting 'kiss-assery'",
(2) "100% of people don't like 'kiss-assery'", and
(3) "100% of all actions of a person copying their boss' likes are due to 'kiss-assery'".
All 3 axioms are invalid: (1) is invalid because not all people can detect it properly without false positives or negatives. (2) is invalid because of the existence of narcissism & (2)'s contribution towards the affirmation of narcissism. (3) is invalid as it excludes the possibility of taking on a new like simply because of enjoying it.
> Just watch the Office. Dwight and Andy constantly try to do this to Michael and while they are occasionally successful, it hardly matters or has a lasting impact. Further, their coworkers all find them annoying (while they continue to “just do their jobs”).
The example given cannot be considered useful as its reliant on using constructed scenarios in a semi-fictional setting, and using it as evidence. Its equivalent would be the usage of the CSI episode "Fur and Loathing" as evidence of the furry fandom always being about sex & deviancy at all times, which is not the case.
The last group of celebrities to get in trouble with the SEC started with Kim Kardashian, who endorsed Etherium Max without disclosing it was a paid endorsement.
Then there's the whole Guy Oseary/Yuga Labs/BAYC promotion scam.[1] That's in litigation. Short version: all those celebrities who announced that they'd bought Bored Ape NFT's didn't have to pay for them.
Not a lawyer, but my impression is that a lot of time such cases are decided on what a reasonable person might take away from the text rather than what the text literally says.
Not sufficient. The Sectiom 17b of the Securities and Exchange Act is clear: celebrities must disclose the types of assets AND the amount they got etc.
If you watch German youtubers you will sometimes see a very clear banner during the entire video to make it clear it contains sponsored content which isn't specifically mentioned as being an ad.
Same goes for old television. For example the German version of "the price is right" has a banner during the whole show that says "dauerwerbesendung" which means continues advertising program.
#ad in a description/tv program guide is never sufficient.
Is that odd? The regulator (the Advertising Standards Authority) is and has 'always' been pretty hot on misleading/etc. advertising in print, radio, television (pre and post digital) media. If anything I think they came quite late to non-traditional online advertising.
But Germans also tend to play it very German. They will have the "Werbevideo" notice, because they're reviewing a product that was provided to them, for example. Anyone outside of Germany probably wouldn't see that as a sponsorship, and sometimes I feel it waters down the point of the disclaimer if _every_ video is a "Werbevideo", but you don't know to what extent they are actually sponsored.
> they're reviewing a product that was provided to them, for example. Anyone outside of Germany probably wouldn't see that as a sponsorship
Depends. For example in Norway, a few years ago Norwegian tax authorities said that “influencers” need to declare items they received as income.
From the official website of Norwegian tax authorities:
> Må jeg skatte og av hva?
> […]
> Gratis eller rabatterte produkter/gaver med økonomisk verdi, som for eksempel sminke, hår- og hudpleieprodukter, bøker, klær, reiser, spill, teknologisk utstyr, barneutstyr m.m. Dette skal inntektsføres til omsetningsverdi (eventuelt omsetningsverdi fratrukket det beløp du har betalt for varen).
> Free or discounted products/gifts with financial value, such as make-up, hair and skin care products, books, clothes, travel, games, technological equipment, children's equipment, etc. This must be recognized as income at the turnover value (if any, the turnover value minus the amount you have paid for the item).
And likewise we have guidelines about marketing done by influencers
> Veiledningen er i hovedsak ment for annonsører som benytter påvirkere i markedsføringen sin. Den retter seg også mot påvirkere som får betaling eller andre fordeler for å omtale eller legge ut noe om produkter, tjenester eller næringsdrivende på sine profiler i sosiale medier.
> The guide is mainly intended for advertisers who use influencers in their marketing. It also targets influencers who receive payment or other benefits to mention or post something about products, services or businesses on their social media profiles.
I work for a streaming service and we deliver to Germany, we have pre-rolls before any ad-break which say "Werbung" to mark the entry to an ad break (and I think another marker on the exit of an ad).
Interestingly, we do sports and we don't have to have any labels during the game to cover the extensive in-game advertising/branding, just the specific ad media we insert.
I wish more YouTubers would cleanly delineate their adverts. Crowbarring sponsor messaging into every opportunity or writing the script so that it smoothly transitions into an ad seems very deceptive to me. I understand "sponsored video" is a grey area, but it doesn't have to be so messy.
They play it very German because German authorities have fined German content creators for trying to play it loose and American. For a while German advertising agencies loved using influencers because they were ignorant of advertising regulations and would let them get away with things that were blatantly illegal to do in any other medium (but also, as it turned out, the media used by those influencers). Once legal precedents were set, that stopped.
It's similar to how a lot of "disruptions" in the startup space work (gig economy, "sharing" economy, crypto, AI, etc): find a niche that lacks established legal precedents, do obviously illegal things in that niche, make a profit to cash out the investors, get fined as laws and court rulings catch up, rinse and repeat.
Can't operate a taxi without a license? They're not cabbies, they're independent contractors.
Renting residential homes out as vacation homes would violate zoning laws? They're not vacation home rentals, they're "spare guest rooms" rented out by private individuals.
Can't afford to pay delivery drivers? They're not entitled to a minimum wage because they're now independent contractors of a delivery startup with a catchy name.
Scalping tickets, parking spaces and restaurant seats is illegal? It's not scalping, it's a universal digital assistant.
Can't sell meme stocks directly to clueless retail investors? They're not stocks, they're coins and NFTs.
Can't discriminate against marginalized people? It's not discrimination when the machine learning algorithm made the decision based on prejudices in the training data.
Have to pay royalties to use a picture you like? It's no longer the same picture if you launder it through an AI image generation model that used it as training data.
FWIW the UK also has fairly strict laws about this (possibly stricter than Germany). Tom Scott once did a good video about this: https://www.youtube.com/watch?v=L-x8DYTOv7w
German streamers also ran into a separate issue with German broadcasting regulations when they tried to run a 24/7 streaming format. Turns out you need a broadcasting license for continuous scheduled programming like that.
Floyd Mayweather was also boosting Ethereum Max at Bitcoin 2021 in Miami - When he said "maybe one day there'll be a better crypto than BTC... like Ethereum Max" immediately the crowd started booing him (expected, at a BTC conf), pretty funny
Not sure why this is downvoted. I think someone put this to the test and he legit can't read.
Isn't writing like the 10th thing in the CIV Tech Tree?
Much before Computers/Mathematics
I know the "maybe he likes the tech" is a meme but if someone can't read I'm pretty sure a crypto endorsement is almost 100% necessarily a paid product endorsement
Influencers aren't required to share the amount of compensation they're receiving from sponsors/advertisers. They are required to share if they have a material connection with their sponsors/advertisers though so definitely a fine coming their way.
What is scary is the small amounts that made these celebrities start touting scam products/pyramid schemes they had no clue about. $1-40k to tweet to millions of followers.
It's not clear that the SEC has jurisdiction here; there doesn't seem to be a bright line test deciding if crypto is a security or a commodity. This behavior might be better regulated by the FTC than the SEC.
Sure there is, it's the Howey Test and the SEC has a whole publication on how to apply it to crypto. Fun fact, it's probably safe to assume that any ICO is a securities offering. [1]
This is a case of "there is a bright line but the community doesn't like where they painted it, so they pretend there isn’t one."
His argument appears to be "let's just sunk-cost our way through instead of actually doing the correct thing."
> “It’s been listed on CFTC exchanges for quite some time, and for that reason,” said Behnam, who argued that it creates a “direct jurisdictional hook” for the agency to police both ETH’s derivatives market and underlying market.
Either way they're literally only talking about ETH, which is again, clearly a security as following their framework, nothing else has a long history of being listed on a CFTC exchange. But I digress.
I feel like you’re painting good-faith disagreement as “community pretending there isn’t a bright red line” or “he would say that because he wants jurisdiction,” so I don’t think there’s more to talk about.
The Howey test would mean Nike shoes are securities.
- Investment of money: Nike charges for shoes.
- Expectation of profit: people buy limited edition expecting hoping they go up in value.
- Efforts of others: The shoes go up in value because Nike won’t issue more shoes, will promote the shoes, and will continue to make investments in its brand.
Also these all pass the Howey test and in your view would be securities:
- Breakfast cereal with toys inside
- Condos
- World of Warcraft items
And essentially anything people might sell for a profit.
The Howey test is a starting point but no matter what the SEC says, the courts don’t actually believe that everything is a security. The Howey test is not enshrined in law but is rather a heuristic starting point.
Honestly, most (if not all with the exception of bitcoin) of the 'crypto' projects function effectively like a startup with the coin as the stock. There are some differences from securities, but mostly similarities. You are buying something with the hope that the development team will deliver on promised value in the future. This will at least clarify the regulatory landscape going forward.
Except with a startup or a company's stock, you ostensibly care that what the company is building or doing could potentially have value in the future. With the crypto projects over the past few years, it's purely been about whether or not you hop in early enough in the pyramid to resell your tokens to a greater fool before it collapses.
The number of crypto projects that ever turned into a profitable enterprise for the investors by doing something outside the crypto space seems to be near zero.
Selling high isn't "a profitable enterprise". I can buy any money losing penny stock and sell it higher than I bought it and I'll pocket some money, but in no way that means I was an investor of a profitable enterprise.
Tell that to, uh, every VC fund? That business model is to invest into an early stage business, (buying low) wait for them to develop a useful product, and then sell high.
Even there the price is probably completely uncorrelated with any usage/profit metrics. If Filecoin never shipped anything, early adopters could have made a decent profit if they sold during the bubble.
I suspect that is a big reason why the price can't seem to move upwards these days as well. Chinese miners continuously dumping their early gains on the market after getting to the 180 day lockup period.
If you go to the Filecoin site, and follow the links for buying storage, you end up here.[1] That's is an onboarding B2B page with no pricing. Enter your email and phone; maybe they'll call.
They're not serious about the storage business. If they were, they'd have visible pricing and comparison tables with other cloud storage providers.
In comparison, to be honest, the AWS pricing pages aren't much better when you really want to dig into how much things are going to cost. That's a big reason why companies like Wasabi have much simpler pricing models.
Filecoin is a relatively new and complex beast that not many people understand today. It'll take time to settle into better pricing schemes. I can tell you, this is coming.
Stock gives you rights to the company. Tokens do not; there is nothing that links the value of the token to the performance of the company or group, unlike stock.
That is the ways in which they are different. Both can give yield, even if one is through equity and the other through ownership of the underlying resource. The idea is that the dev teams will deliver the computational platform of choice for future apps, and you are owning some of the fuel that allows you to use that computational platform. It's like AWS raised money through selling credits to use their servers.
No rights with tokens. It's Kickstarter. And was designed this way so maybe the scams would get in less legal trouble and avoid being securities. Didn't work out that way it seems
Is this the first example of someone getting charged for wash trading in the cryptoworld? It was my understanding it was common, but unsavory, for new tokens to do this to artificially pump their volume up.
Second, the Chinese SEC or the Egyptian SEC can very well charge Americans with whatever they want. It's just that those Americans probably don't care enough about China or especially Egypt to abide by the punishment they receive and would rather not do business with those countries and never set foot in it.
I, iLoveOncall, am hereby charging you with the crime of idiotic comment, for which you will receive the death penalty by ball slapping. Surrender yourself to the Republic of iLoveOncallandia to receive your punishment.
They can do it... it's as if Iran's government prosecutor body charged someone living in the US of "not wearing a burka" or whatever crazy law. They can definitely do it, and they can try to move strings to get to them. Their success will depend on their power to enforce it and coerce other countries to surrender the person(s).
It's like the news we have seen in the last days, of different countries committing to arrest Putin for whatever crimes.
But yeah, I agree with your overall sentiment: This is a USA legal system/government arm (SEC) playing "world police". They should just tag Tron and related cryptos as "sanctioned/illegal schemes" and prosecute anyone in their country who uses/operates them. Anything else is just meddle with other countries' citizens.
Yes they can, but a countrys law is for that country. Not for other countries. Just like you can not be prosecuted for driving as a woman in US where it is legal
It’s not even a law, it’s the SEC own agency opinion that has been successfully challenged and failed multiple times. However they can easily extract fines for SEC profits by threatening expensive and time consuming court battles which they would ultimately lose. But for most people, paying the fine is cheaper than winning in court.
There needs to be a law that if the SEC loses a case, they must pay the defendant a fine equal to what they wanted the defendant to pay the SEC.
His Excellency Justin Sun, Permanent Representative of Grenada to the World Trade Organization (WTO) in Geneva, has a long track record of tweeting outlandish claims and occasionally even doing outlandish things. If anything I'm mostly amazed it took the SEC this long.
> My last comment got "flagged" because i said the exchanges are selling ponzi schemes, hence my questions
Earlier you write "cryptocurrencies are a ponzi scheme". That doesn't make any sense.
Also if centralized crypto exchanges are ponzi's (I agree, many/all are) so are many "normal" stock brokers. Many of them take your money and give you nothing (but change some values in the GUI you see to "reflect that you bought stock"). Your order probably doesn't hit any lit exchange (doesn't ever influence stock price), In the best case you hold an IOU in street name that is maybe, maybe not taken into account by clearing houses and in the worse case your order info is sold to hedge funds who front-run your trade (aka stealing), your IOU is subsequently lent out to shorters and/or you are prevented from buying/selling at crucial moments (on purpose). See recent Robin Hood debacle with clients unable to sell winning short positions in SVB (because their "short positions" don't exist in the real world).
I can understand the wash trading aspect being a crime; it deceives investors which is akin to lying about the asset but I can't bring myself to accept 'selling unregistered securities' as a crime... Especially given that registering a security can cost $60K+ - That's simply not a fee which most small projects can afford; it's effectively locking entrepreneurs out of opportunities in a way which is against fundamental free market principles. Surely it's unconstitutional.
If the seller is honest about the asset which the investor is buying, I don't see how the government should have anything to do with that. If the investor is not capable of understanding an accurate and concise description of the asset, then that's the investor's fault; the government should not protect people from their own negligence or ignorance - The system relies on keeping capital in the hands of intelligent, knowledgeable people; this is the foundation of a functioning system.
It’s not. Free market principles are not protected by the constitution. The closest is the Commerce Clause and its mention of contracts. But that’s the idea states can’t just wipe out existing contracts (debts). The government can regulate them.
> the government should not protect people from their own negligence or ignorance
This is an extreme position to take. All governments do this.
I don't think anyone really holds this position sincerely. Where people disagree is where the line should be drawn and how to do the cost benefit analysis of regulation.
> the government should not protect people from their own negligence or ignorance - The system relies on keeping capital in the hands of intelligent, knowledgeable people
You contradict yourself, "not protecting people" means keeping capital in the hands of fraudsters, not "intelligent, knowledgeable people".
> Especially given that registering a security can cost $60K+ - That's simply not a fee which most small projects can afford; it's effectively locking entrepreneurs out of opportunities in a way which is against fundamental free market principles
They can't sell unregistered securities to the general public. They can sell them to "qualified investors" [1] or to their own board members and executives. That should give enough opportunities to small projects that are actually doing something that will be successful.
It misses the entire point of crypto. It's for entrepreneurs who have been shunned by traditional investors; who have been locked out of the mainstream funding monolith.
Big investors and VCs consistently refused to fund my startup, they refuse to talk to me. I'm nothing to them. I don't have access to that funding like some other people have. Maybe I've been blacklisted for no reason. Either way, given my excellent publicly-proven track record, I deserve an opportunity to compete in the free market just like you do.
You don't seem to understand the adversity some people are facing and how unjust and broken the system is fundamentally. It's physically impossible for me to raise funding from traditional VCs and angel investors for reasons that are both unknown to me and outside of my control. My few interactions with investors are downright weird now. It's like the whole system has conclusively locked me out and then gaslights me about it 24/7. Crypto and regular investors are my only chance.
Until you've been in this position, you can't understand. You're missing a critical piece of experience.
Now when I hear about the 'unbanked' in Africa, I hear it very differently. I can at least start to wrap my head around the incredible hardship it represents. In my case I'm not unbanked but I'm 'uninvested'; it's just one class above.
I did, but it's not sustainable. Typically, I'm good for 6 months and then I rage quit because I can't take anymore. My record staying at one company is almost 2 years. I'm just not compatible with modern bullshit jobs funded by infinite government money printing.
>the government should not protect people from their own negligence or ignorance - The system relies on keeping capital in the hands of intelligent, knowledgeable people; this is the foundation of a functioning system.
The government has a vested interest in protecting people because when those people are abused they don't just disappear; the government is the entity that picks up the pieces. Even if you removed the ability for the government to provide welfare to these people after they been taken advantage of, at worst they become vagrants in the streets. There's obviously a balance that should be taken but it's cheaper to prevent issues than it is to fix them.
For reference, back in 2017, the Chinese authority outlawed his ICO activities, and required him to hand back all the proceeds to the investors (or victims depending on your view) before letting him out of the country.
Can anyone explain the connection between Justin Sun, his companies, and the BitTorrent protocol? Wikipedia is a little light on details.
It sounds like BitTorrent Inc was renamed to Rainberry and was then sold to Justin Sun/TRON, and then at some point that company released a BitTorrent Token (BTT). Does BTT have any technical relationship with the actual BitTorrent protocol?
He bought BitTorrent Inc at one point. The token has no connection to the protocol. The whitepaper he/they put out for BTT was a plagiarised paper from some other crypto or p2p protocol, only switching out the name.
As far as I know, there are three ways stock exchanges usually make money. Listing fees, trading fees and market data feeds. Trading fees literally means that when you trade stocks, small part of that goes to the stock exchange, quite literally the same as handing money over to NYSE itself.
At least (AFAIK) most cryptocurrency exchanges don't have listing fees, where cryptocurrency projects would pay the exchange for listing their cryptocurrency.
Half million in penalties is pocket money for Jake Paul. But Kendra Lust, come on. At $5K per scene that's a lot of work wasted. Give this fine woman a break.
I hear this stuff and then think back to the charts I’ve seen of executives unloading huge positions right before bad news and my opinion, with the information I’ve gotten through the grapevine, is that the SEC is full of shit. Like the IRS they love to target celebrities because it raises the profile of the careerists working on the cases. Selective enforcement isn’t justice.
Come get me when they file a case against Jeff Bezos, the chairman of Goldman Sachs, Chuck Schumer, someone in that club.
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[ 4.1 ms ] story [ 258 ms ] thread1. How is this detected by the SEC?
2. Why isn't this something that is easily detectable by the average investor?
That was from a quick Google search, so I'm sure there are many more accusations. It seems like the SEC has never been the 'first' to detect a fraud, and they've frequently ignored ones that have been pointed out to them (such as Madoff).
https://www.coindesk.com/business/2020/02/10/inside-chainaly...
https://www.coindesk.com/markets/2019/07/12/irs-confirms-it-...
"Get your pristine 1950 silver eagle collection for 5000$ before they're all sold out!"
Because much crypto trading is just transactions within some crypto exchange, and never makes it to the blockchain.
I'm very very glad for any consumer protection, but it does come across like the SEC is setting up a narrative of crypto risk as a reason to repress transactions between it and the traditional banking system.
Which is quite silly because crypto is still small peanuts compared to the bank failures that happened recently.
I'm not sure this is quite the example you think it is...
Heck "no customer deposits going into crypto" should be a hard requirement to be eligible for FDIC insurance.
They’re finally taking steps to actively protect retail investors. This should have happened after the ICO boom of 2017. Nothing of value would have been lost if crypto had been unbanked the past five years.
The kind of "protection" regulators want: you can't buy or use crypto
> like Coinbase paying out billions in stock-based compensation while losing money
I really wish people put more effort into arguing their side in these discussions. Your point is absurd and lazy.
[public company] pays some % of employee salary in stock >> while "losing money" >> ??? >> customer's property is stolen.
> Did the SEC orchestrate FTX and all the other crypto failures
FTX's problems were amplified by being unregulated, outside the US. The overwhelming majority were not US residents. The SEC didn't have jurisdiction over their International firm. The US version of FTX was handled very differently, but supposedly co-mingled funds. They FAILED to protect US residents by not shutting down the US version. They could have gave warnings about the international firm, instead of working so closely with FTX's founder.
As usual, lots of hand-waving from crypto detractors. You have a clear bias. Sadly, when enough people share a bias, truth and facts are irrelevant. There's a lot to criticize about in crypto. No need to make up irrelevant associations.
Coinbase executives will have enjoyed years of massive pay days selling stock pumped up with customer money. The customers who assumed the money in their accounts is protected like with a bank will be wiped out.
I'm aware. This has nothing to do with your point about "stealing" deposits like other exchanges (e.g. FTX), and is irrelevant to stock-based compensation. It contributes nothing to the discussion. More noise to encourage others to feel safe that their bias is well liked.
> Coinbase executives will have enjoyed years of massive pay days selling stock
More irrelevant and false points. The company has only been public since April 2021. Not even two years. You are attempting to frame them as fat cat wall street types purposefully driving the company into the ground at customers' expense.
Somehow you extrapolate this to "all exchanges" when Coinbase is the only publicly-traded exchange.
remember that Coinbase was audited by the SEC before going public, and is one of the oldest exchanges. If any exchange is safe, it's Coinbase. The problem is the SEC doesn't give clear direction.
Anybody that feels the SEC will "protect" them by forcing coinbase into bankruptcy is welcome to move their assets on-chain. Many people advocate for that.
Again, I'm highlighting how lazy and absurd your argument is.
> “If any exchange is safe, it's Coinbase”
Ok, so other exchanges are worse.
> “Somehow you extrapolate this to ‘all exchanges’”
You just told me the other exchanges are worse.
> “You are attempting to frame them as fat cat wall street types purposefully driving the company into the ground at customers' expense”
It doesn’t have to be purposeful. At the rate Coinbase is piling up losses, it will eventually be bankrupt, and executives will have accumulated billions while customers will lose billions. The SEC isn’t going to force a bankruptcy; Coinbase’s own poor management seems to be doing it.
> “… is welcome to move their assets on-chain. Many people advocate for that.”
Oh, I see you agree with me that nobody should use crypto exchanges in the first place. Because they will lose your money.
>Ok, so other exchanges are worse.
Oof... You are really reaching...
>> “Somehow you extrapolate this to ‘all exchanges’”
>You just told me the other exchanges are worse.
pardon me....? Other non-public companies have executives selling stock?
> At the rate Coinbase is piling up losses
Feel free to cite your source.
> Oh, so you agree with me that nobody should use crypto exchanges in the first place. Because they will lose your money.
No, I don't. You buy it on an exchange, and then move it on-chain. Done. That's the point of a centralized exchange with banking connections. You are welcome to leave it there if you'd like, but you have to accept the risks. Go ahead, try to move the goal posts again.
Every comment you make more irrelevant and false points.
You don’t think Coinbase is losing money?
Go to their investor relations page:
https://investor.coinbase.com/home/default.aspx
Open the Q4 2022 shareholder letter. It’s printed right there: a loss of $557M on revenue of $605M.
The loss is nearly as large as their entire revenue! Is that a sign of a healthy business? It’s like selling $5 pancakes that each cost you $10 to make.
> ...a loss of $557M on revenue of $605M.
> It’s like selling $5 pancakes that each cost you $10 to make.
$605m - $557m = $48m (7.9% gain)
$5 - $10 = -$5 (100% loss)
Yup... Exactly the same. More false and irrelevant info. At least you're consistent! Keep the FUD flowing!
In the report ($557M) doesn't mean "expenses". It's an overall loss. A $557M loss means they spent all that $605M in revenue and another $557M on top of that.
Their previous statement was not clear:
>The loss is nearly as large as their entire revenue
Their initial claim is "Coinbase is piling up losses, it will eventually be bankrupt, and executives will have accumulated billions while customers will lose billions." And saying this is "stealing" from customers.
I haven't been advocating for purchasing the stock. I don't own it.
Regardless, looks like they had positive net income in 2020 & 2021. Coinbase isn't the only business dealing with losses 2022. I still very much disagree with "piling up losses... eventually be bankrupt"
You: "It’s a good idea not to own a stock if you can’t read the income statement."
I figured it out! It's your reading comprehension! I was wondering why I had to repeat myself so much in this thread, and why you had been trailing off on tangents away from each point you attempted to pivot around. While ignoring each of your previous statements.
I hope you can sort that out. Wish you the best.
So the Silicon Valley business model?
That is something like 1% of their business. Great, that's one use case where they might not lose all of your money in the event of a bankruptcy.
Anyone actually using it to actively trade will not be so lucky.
If Coinbase takes money from the people furthest back in line (unsecured creditors) and gives it to people second furthest back in line (equityholders), and the unsecured creditors think they're first in line (bank depositors)… that sounds like stealing to me!
> the unsecured creditors think they're first in line (bank depositors)
Coinbase isn't a bank, and customers' digital assets aren't bank deposits.
> that sounds like stealing to me!
Welp... You're wrong!
As for real banks, feel free to look up current events on "uninsured deposits" at regional banks. You might say banks are "stealing" deposits from accounts >$250k too!
They get their already-paid dividends or proceeds of what they already sold.
> As for real banks, feel free to look up current events on "uninsured deposits" at regional banks. You might say banks are "stealing" deposits from accounts >$250k too!
None of them have lost a cent.
More irrelevant commentary.... COIN doesn't have dividends, and.... yes.... when you sell the stock.... you are no longer a shareholder.... this needed to be said?
> None of them have lost a cent.
Again.... look up the current events. Just today the Treasury secretary said that additional bank failures won't get the special treatment the big depositors got at the failed banks. They should NOT have been insured above 250k.
In your words, you might say the bank STOLE the money from depositors, and the government reimbursed special depositors for their loses. It was NOT stolen, though. The bank was mismanaged. The government should not have covered the loses above 250k per depositor. The big depositors took a risk keeping that much money there.
The fact that they don't do that, when it would be practical for them to do so is a red flag for me.
https://www.reuters.com/legal/coinbase-issued-wells-notice-b...
https://news.ycombinator.com/item?id=35267692
https://news.ycombinator.com/item?id=35267407
They don't apply to all situations, and your criticism is somewhat valid for many crypto cases, but between crypto and traditional finance it's true that regulators can be too heavy-handed on some areas in crypto while being a lot more lenient on say people who run a company to ground in a leveraged buyout.
Too many people want to have their cake and eat it too:
- Crypto separate from banking system but still regulated in the same way anyway
- Crypto as currency but still want juicy returns
- Crypto is decentralised but give their coins to centralised exchanges
Edit:
> With the exception of Cortez Way and Mahone, the celebrities charged today agreed to pay a total of more than $400,000 in disgorgement, interest, and penalties to settle the charges, without admitting or denying the SEC’s findings
Meh ok pfft
I’ve never understood why this loophole of “non admission of guilt” exists in our legal systems.
Pay a small fine that represents a tiny portion of your ill-gotten gains and move on without any repercussions.
Hardly.
The SEC cannot say you are guilty without proving it within the bounds of the legal system. This "non admission of guilt" is a way to sidestep a lengthy, costly legal process and get a result for the impacted parties sooner rather than much much later.
Pretty much ends there. The SEC can say you are civilly liable, and they can assess fines in some situations and initiate civil litigation in others based on that.
But if they think you are guilty, that’s an issue they hand off to the Justice Department.
If the SEC says you are liable or guilty in any way for anything, you can contest it via the legal system. That's what the legal system is for...
Again, this "non admission of guilt" sidesteps everything and cuts straight to the end result.
In this specific case, it literally means the SEC either felt their case wasn't strong enough to guarantee an outcome, or litigating the case would become exceedingly costly and unproductive - again without a guarantee of an outcome.
"Non admission of guilt" payments guarantee a speedy outcome. That is the entire point.
It’s a settlement agreement, and, yes, that’s the whole point – they resolve a situation subject to civil litigation without litigation, but leaving the settling party no worse off than if they had fought and had the agreement contents instead imposed as a remedy. Requiring admissions as part of a settlement would not do that, settling would then in many cases be worse than losing.
"I didn't do it, but I'd rather pay the fine than go to court" is a perfectly reasonable outcome.
its miscarriage of justice
So every civil suit filed should be forced to go through trial even if the parties arrive at a mutually acceptable resolution that both sides prefer to trial?
I was curious, so I checked Jake Paul:
> Respondent shall, within 20 days of the entry of this Order, pay disgorgement of $25,019, prejudgment interest of $1,811, and a civil money penalty in the amount of $75,057 to the Securities and Exchange Commission
Jake Paul was paid $25k for a tweet and was ordered to pay back a bit over $100k. Only other restriction is he can't be paid for anything related to crypto in the next 3 years. Paying back the original money + 3x as fine seems reasonable I guess.
It might be different if anybody believed these celebrities were actively trying to defraud and harm people.
The reality is more likely that these people are effectively human billboards. People pay them to read a script, and they read it. Each week a different product, different script, same deal.
So they got suckered into reading an illegal script. They get penalized (rightly) but it doesn’t necessarily need to be extreme.
And now the SEC gets to show off their win using the same billboards.
> Hey, I'm Jake Paul and you should buy crypto X because it's great and I have it
vs
> Hey, I'm Jake Paul and you should buy crypto X because it's great and I was paid for this advertisement.
That said, I don’t know who Jake Paul is. If he’s a special case, fine. I was going off the other names I do recognize. I just don’t see Lohan hustling securities fraud between ads for clothing and apple jacks.
And yeah, Logan was a special case because he shilled quite a few coins including a few he was "involved" with.
Superrich people have agents and lawyers who should advise better. The near homeless guy I saw at the bus stop touting "crypto" I'd call a sucker. Not Logan Paul.
How many other high-paying tweets that look like fraud did he keep all the cash? Do we know? Was it none?
"Dang, turns out that one is a loser - they got me on that one." Can be a business expense in a profitable operation.
I see this kind of thing as fraud and there /needs/ to be conviction and jail, even a week in minimum security. There has to be consequences that aren't a business expense for getting in on fraud.
The "I'm a dumb celebrity so I didn't know" defence is just garbage, they should be terrified of accepting such "gigs". Utterly crapping themselves about how bad it could go.
that’s very different than a civil charge with a prescribed fine that can be paid to avoid the civil trial.
the SEC occasionally refers cases to the DOJ for a criminal trial. but tbh, they kind of don't want crypto defendants sweating because the SEC’s logic will get challenged, potentially leaving the nation with no regulator at all. they need civil settlements as much as you need justice for bagholding something a celebrity shilled.
A 3x fine is no deterrent if your action is easily concealed but promoting services to a public audience, by definition, is not concealed
Given the overlap between torts and crimes, it would be much longer and more painful to resolve tort cases if the settling part might have to admit an act that was also a crime.
https://en.wikipedia.org/wiki/Nolo_contendere
In the concrete case, they settle with the SEC, but if anybody wants to sue them claiming their shilling induced them to make bad crypto investments, the settlement doesn't serve as an admission of guilt to use as evidence in that follow up lawsuit.
https://www.sec.gov/enforcement/how-investigations-work
often times they are announced but under separate headlines on separate websites, you have to check. Other times there is not a criminal case at all.
SEC proceedings are civil; criminal violations are referred to the Department of Justice for prosecution, often in parallel to civil enforcement action.
> You can plead no contest to criminal charges
You cannot generally plead “no contest” (nolo contendere) to federal criminal charges; the court may allow it, but “before accepting a plea of nolo contendere, the court must consider the parties’ views and the public interest in the effective administration of justice.” [Federal Rules of Criminal Procedute, Rule 11]
Do we need that flexibility? The flexibility to extract a settlement from guilty people without an acknowledgement of guilt seems to be a worthless prize unless we're enforcing legislation for revenue's sake. I wouldn't complain about that just because it seems venal, I really find it silly because the amount of revenue is minuscule irt the budget.
Yes.
> The flexibility to extract a settlement from guilty people without an acknowledgement of guilt seems to be a worthless prize unless we’re enforcing legislation for revenue’s sake.
Civil charges are about liability, not guilt, and have a different standard of proof than criminal guilt. However, in a criminal trial, and admission of facts necessary for civil liability is admissible evidence. No one benefits from a system in which it is impossible for a party to accept civil liability without admitting to facts that could be used against them in other, including criminal, litigation when the civil verdict itself could not be.
And, while in this case all of the consequences may have been monetary, in civil litigation especially involving the government, there are often other consequences (such as legally binding commitments to heightened monitoring and behavioral controls) that are attained in settlements (often, in the form of “consent decrees”) of civil litigation. Making those more expensive for all sides because the defense was incentivized to go through a kabuki-dance trial even if they fully expect to lose on the civil burden of proof just to avoid making an admission to settle does not benefit anyone. Except lawyers, lawyers would love it.
I doubt it
E.g. Rose McGowan unable to testify against Weinstein because he setlled with her for $100k. Surely in a criminal trial you can be called, take the oath and tell the truth? I don't want to follow anything in hollywood if I can avoid it so I don't care to know the details of weinstein and mcgowan at all. Just it was being reported like that and my jaw dropped. You can pay off witnesses so they can't testify now? Wow.
McGowan was not able to testify because the particular offense against her was not charged and the judge didn’t allow testimony about prior acts before a certain date, not because of the settlement.
• Lindsay Lohan
• Jake Paul
• DeAndre Cortez Way (Soulja Boy)
• Austin Mahone
• Michele Mason (Kendra Lust)
• Miles Parks McCollum (Lil Yachty)
• Shaffer Smith (Ne-Yo)
• Aliaune Thiam (Akon)
I had to doubletake. Never did I ever think I'd see this permutation of celebrities in an SEC report.
I admit, I don't understand humans. I'm just trying to comprehend how anyone would think it a good idea to buy a token because any one of these celebrities hawked it.
The number of people that buy an NFT because Soulja Boy bought one is probably pretty small. The number of people who buy NFTs because "everyone else is" is much much larger.
Crypto seems to have been particularly powerful at preying on women and minorities who felt like they’re missing out with mainstream finance. This kind of highly focused influencer marketing within communities must have been a major contributor to its uptake.
Last year, a colleague was talking about his ~15 year old kid insisting he wanted to buy NFTs. Said colleague had suffered FOMO from years of the rest of us talking about Bitcoin and might've therefore been primed to acquiesce.
I mean yeah. For years I’ve looked up to Akon and Kendra Lust for innovative and reliable financial products
If you look at the stock market a big part of it didn't behave that different than the crypto market and that's due FOMO. Why did people buy stocks at insane valuations? Some of them were burned and I'm sure they though they will sell just before the market is going down.
Let's see, for me... Well any time I got games in a steam sale recently, my backlog is huge and I don't have time anyway. Any time I spend on Twitter, I know I don't enjoy how I feel after. Plenty of times I had irrational excuses for why I didn't have to go to the gym on a given day. Made a batch of really good ice cream despite trying to lose weight. Etc.
When I was younger I made some irrational decisions in stocks, now I don't anymore, I think if you get burned enough maybe that's what it takes? I too often wonder why people seem to need to "learn the hard way." For me, if a friend gets in a car accident, I listen to how it happened and make sure to never repeat their mistake, triple for motorcycling. But maybe its domain specific in that regard? Some people are good at being more rational in some areas rather than others?
"If it sounds too good to be true" vs "but everyone else is doing it"
Wanting to connect with important members and of your community it a perfectly normal human impulse, and finding or creating things the two of you have in common is often a very reasonable strategy towards that end. It goes badly at the scale of modern celebrity, is all.
Is the underlying psychology the same? As you mentioned, one is a smart career move. Your desire to emulate your boss may stem from your selfish desire to promote your career, not a desire to connect with important members of your community.
https://www.snexplores.org/article/imagine-friends-parasocia...
Will wikipedia work?
The Wikipedia article claims we treat YouTuber like our personal friend.
The parent post claims ape don't have different caregory for boss that can advance your career and a celebrity that, at its best, can be treated as a friend ..
To judge from the origin of the term,[0] we are calling a "parasocial relationship" the phenomenon of mass conditioning of consumers by controlled media. There is enough clear evidence of a state's ability to affect public discourse by controlling entertainment (and news) media.[1]
Although people may be inclined to credulity or at least some basic level of cooperation, most people can see when they are being duped in a tangible way.
There are extreme cases, which the article calls, "extreme parasocial behaviour".
Other terms exist to describe a person who believes things that are not real, highly improbable, or hallucinatory. And in the marketplace, there is caveat emptor, the complete phrase being,
"Let a purchaser beware, for he ought not to be ignorant of the nature of the property which he is buying from another party."[2]
[0] > Evolution of the term > Parasocial interaction was first described from the perspective of media and communication studies. In 1956, Horton and Wohl explored the different interactions between mass media users and media figures and determined the existence of a parasocial relationship (PSR), where the user acts as though they are involved in a typical social relationship.
[1] https://en.wikipedia.org/wiki/Manufacturing_Consent
[2] https://en.wikipedia.org/wiki/Caveat_emptor
otherwise, the winery or baseball card issuer is engaged in fraud, and the seller is too, and the boss who recommended them is as well
this is what people find to be… at best … incomplete logic. there is a Howey test interpretation that would allow for this expansion, and crypto folks would gain power by having it applied congruently to those physical established artificial scarcity collections too, because Congress would reevaluate this inconvenience more holistically. There is another interpretation where the SEC makes no sense at all, and has to provide a clear exemption framework for crypto assets to navigate in order to be treated the same as wine bottles and baseball cards, ignoring the current parasocial relationship and reliance that crypto traders have with crypto project creators.
its why their discords say “no price discussion”, amongst many other communication nuances and project structuring to avoid securities issues. dont confuse celebrities and youtubers for the actual teams.
the only teams that have been sued by the SEC are ones that deviated in very predictable ways, there have been no surprises in the cases the SEC have brought, compared to the legal guidance that is given by law firms in the US
its just that the SEC then pretends as if it just hasnt gotten to other project issuers yet, and when not going after a specific project it just says “all cryptos are securities” because theyre going after an exchange, at the moment, and wont tell the exchange which ones
everything suggests the SEC’s logic is flimsy, or needs to apply even more broadly in a way that makes the SEC’s logic flimsy. The SEC is dragging this out because they understand the same thing, that all paths lead to their charter being modified even though they were just hoping that crypto went away.
unfortunately here, the SEC is still relying on an ambiguous interpretation of securities, unilaterally deeming something a security and simultaneously charging people that promoted it, who are relying on assurances and a parallel set of behaviors that something is not a security.
There might be some parallels in Art and NFT but there the issue is completly different and is more of grey area of what you are actually bying than if it's an investment or not.
and many crypto issuers focus on their nonspeculative utility
everything you described is exactly the problem. The SEC is saying that because any individual may have decided to buy them as an investment, then the SEC can ignore everything to the contrary. except the SEC hasnt actually ignored everything to the contrary because they havent charge crypto teams that focus exclusively on nonspeculative utility and other nuances. they charged teams that promised the price would go up. believe it or not, very many teams focus on the nonspeculative utility exclusively, the prevailing legal opinions from law firms in the US have had this advice to crypto teams for at least 6 years, and civil charges the SEC has brought have not undermined these assumptions. in any case, the SEC then turns around and says “theyre all securities” when speaking publicly or when charging an exchange. now we’ve come full circle between yours and mine perspective: either apply the same logic to “things with intrinsic value (that you respect)” or point out exactly which way for digital asset collections to be exempt as well.
First off, no, we wouldn’t. The boss and the other members of the team will all see that for what it is- trying to kiss ass to get ahead instead of doing your job. Particularly because (as you’re suggesting at least) the person doesn’t actually like those things and is simply trying to get ahead.
Just watch the Office. Dwight and Andy constantly try to do this to Michael and while they are occasionally successful, it hardly matters or has a lasting impact. Further, their coworkers all find them annoying (while they continue to “just do their jobs”).
> First off, no, we wouldn’t. The boss and the other members of the team will all see that for what it is- trying to kiss ass to get ahead instead of doing your job. Particularly because (as you’re suggesting at least) the person doesn’t actually like those things and is simply trying to get ahead.
The counter-assertion relies on the axioms of
(1) "100% of people are capable of detecting 'kiss-assery'",
(2) "100% of people don't like 'kiss-assery'", and
(3) "100% of all actions of a person copying their boss' likes are due to 'kiss-assery'".
All 3 axioms are invalid: (1) is invalid because not all people can detect it properly without false positives or negatives. (2) is invalid because of the existence of narcissism & (2)'s contribution towards the affirmation of narcissism. (3) is invalid as it excludes the possibility of taking on a new like simply because of enjoying it.
> Just watch the Office. Dwight and Andy constantly try to do this to Michael and while they are occasionally successful, it hardly matters or has a lasting impact. Further, their coworkers all find them annoying (while they continue to “just do their jobs”).
The example given cannot be considered useful as its reliant on using constructed scenarios in a semi-fictional setting, and using it as evidence. Its equivalent would be the usage of the CSI episode "Fur and Loathing" as evidence of the furry fandom always being about sex & deviancy at all times, which is not the case.
"Web3 is a flaming pile of feces orbiting a giant dripping hairball."[0]
–Grady Booch
[0] https://www.infoworld.com/article/3689914/the-philosopher-a-...
Then there's the whole Guy Oseary/Yuga Labs/BAYC promotion scam.[1] That's in litigation. Short version: all those celebrities who announced that they'd bought Bored Ape NFT's didn't have to pay for them.
[1] https://variety.com/2022/digital/news/bored-ape-yacht-club-c...
https://cloudfront-us-east-1.images.arcpublishing.com/coinde...
Would the SEC claim that she was not good enough friends with the people who told her that to call them friends?
They kept warning this as far back as 2017 btw:
https://www.sec.gov/news/public-statement/statement-potentia...
"I think Pepsi is great!" - X was paid $20 million to film this ad
Same goes for old television. For example the German version of "the price is right" has a banner during the whole show that says "dauerwerbesendung" which means continues advertising program.
#ad in a description/tv program guide is never sufficient.
It's the bare minimum, but its compliant.
And the UK has (oddly) some of the stronger legislation/regulation around marking advertisements.
YMMV when it comes to advertising finserv tho, the other regulators might fuck you even if the ad disclosure is done correctly.
Depends. For example in Norway, a few years ago Norwegian tax authorities said that “influencers” need to declare items they received as income.
From the official website of Norwegian tax authorities:
> Må jeg skatte og av hva?
> […]
> Gratis eller rabatterte produkter/gaver med økonomisk verdi, som for eksempel sminke, hår- og hudpleieprodukter, bøker, klær, reiser, spill, teknologisk utstyr, barneutstyr m.m. Dette skal inntektsføres til omsetningsverdi (eventuelt omsetningsverdi fratrukket det beløp du har betalt for varen).
https://www.skatteetaten.no/bedrift-og-organisasjon/rapporte....
Translated to English with Google Translate:
> Do I have to pay tax and from what?
> […]
> Free or discounted products/gifts with financial value, such as make-up, hair and skin care products, books, clothes, travel, games, technological equipment, children's equipment, etc. This must be recognized as income at the turnover value (if any, the turnover value minus the amount you have paid for the item).
And likewise we have guidelines about marketing done by influencers
> Veiledningen er i hovedsak ment for annonsører som benytter påvirkere i markedsføringen sin. Den retter seg også mot påvirkere som får betaling eller andre fordeler for å omtale eller legge ut noe om produkter, tjenester eller næringsdrivende på sine profiler i sosiale medier.
https://www.forbrukertilsynet.no/lov-og-rett/veiledninger-og...
Translated with Google Translate:
> The guide is mainly intended for advertisers who use influencers in their marketing. It also targets influencers who receive payment or other benefits to mention or post something about products, services or businesses on their social media profiles.
Interestingly, we do sports and we don't have to have any labels during the game to cover the extensive in-game advertising/branding, just the specific ad media we insert.
I wish more YouTubers would cleanly delineate their adverts. Crowbarring sponsor messaging into every opportunity or writing the script so that it smoothly transitions into an ad seems very deceptive to me. I understand "sponsored video" is a grey area, but it doesn't have to be so messy.
It's similar to how a lot of "disruptions" in the startup space work (gig economy, "sharing" economy, crypto, AI, etc): find a niche that lacks established legal precedents, do obviously illegal things in that niche, make a profit to cash out the investors, get fined as laws and court rulings catch up, rinse and repeat.
Can't operate a taxi without a license? They're not cabbies, they're independent contractors.
Renting residential homes out as vacation homes would violate zoning laws? They're not vacation home rentals, they're "spare guest rooms" rented out by private individuals.
Can't afford to pay delivery drivers? They're not entitled to a minimum wage because they're now independent contractors of a delivery startup with a catchy name.
Scalping tickets, parking spaces and restaurant seats is illegal? It's not scalping, it's a universal digital assistant.
Can't sell meme stocks directly to clueless retail investors? They're not stocks, they're coins and NFTs.
Can't discriminate against marginalized people? It's not discrimination when the machine learning algorithm made the decision based on prejudices in the training data.
Have to pay royalties to use a picture you like? It's no longer the same picture if you launder it through an AI image generation model that used it as training data.
German streamers also ran into a separate issue with German broadcasting regulations when they tried to run a 24/7 streaming format. Turns out you need a broadcasting license for continuous scheduled programming like that.
I wonder how he managed to slip through!
Isn't writing like the 10th thing in the CIV Tech Tree?
Much before Computers/Mathematics
I know the "maybe he likes the tech" is a meme but if someone can't read I'm pretty sure a crypto endorsement is almost 100% necessarily a paid product endorsement
This is a case of "there is a bright line but the community doesn't like where they painted it, so they pretend there isn’t one."
[1] https://www.sec.gov/corpfin/framework-investment-contract-an...
[1]: https://decrypt.co/123032/cftc-chair-says-ethereum-is-a-comm...
His argument appears to be "let's just sunk-cost our way through instead of actually doing the correct thing."
> “It’s been listed on CFTC exchanges for quite some time, and for that reason,” said Behnam, who argued that it creates a “direct jurisdictional hook” for the agency to police both ETH’s derivatives market and underlying market.
Either way they're literally only talking about ETH, which is again, clearly a security as following their framework, nothing else has a long history of being listed on a CFTC exchange. But I digress.
You can make the same argument about the SEC.
- Investment of money: Nike charges for shoes.
- Expectation of profit: people buy limited edition expecting hoping they go up in value.
- Efforts of others: The shoes go up in value because Nike won’t issue more shoes, will promote the shoes, and will continue to make investments in its brand.
Also these all pass the Howey test and in your view would be securities:
- Breakfast cereal with toys inside
- Condos
- World of Warcraft items
And essentially anything people might sell for a profit.
The Howey test is a starting point but no matter what the SEC says, the courts don’t actually believe that everything is a security. The Howey test is not enshrined in law but is rather a heuristic starting point.
That's, in theory, a non-trivial product, given how much IPO underwriters tend to charge.
The number of crypto projects that ever turned into a profitable enterprise for the investors by doing something outside the crypto space seems to be near zero.
They're not serious about the storage business. If they were, they'd have visible pricing and comparison tables with other cloud storage providers.
[1] https://hub.filecoin.io/form-data-client-onboarding
Filecoin is a relatively new and complex beast that not many people understand today. It'll take time to settle into better pricing schemes. I can tell you, this is coming.
imagine chinese SEC or egyptian SEC doing that to americans
Second, the Chinese SEC or the Egyptian SEC can very well charge Americans with whatever they want. It's just that those Americans probably don't care enough about China or especially Egypt to abide by the punishment they receive and would rather not do business with those countries and never set foot in it.
I, iLoveOncall, am hereby charging you with the crime of idiotic comment, for which you will receive the death penalty by ball slapping. Surrender yourself to the Republic of iLoveOncallandia to receive your punishment.
It's literally the same thing.
It's like the news we have seen in the last days, of different countries committing to arrest Putin for whatever crimes.
But yeah, I agree with your overall sentiment: This is a USA legal system/government arm (SEC) playing "world police". They should just tag Tron and related cryptos as "sanctioned/illegal schemes" and prosecute anyone in their country who uses/operates them. Anything else is just meddle with other countries' citizens.
Here's a starting point on the topic, with plenty of references and examples: https://en.wikipedia.org/wiki/Extraterritorial_jurisdiction
There needs to be a law that if the SEC loses a case, they must pay the defendant a fine equal to what they wanted the defendant to pay the SEC.
https://www.theverge.com/22872133/signal-cryptocurrency-paym...
Cryptocurrencies are ponzi schemes, and for some reasons institutions are protecting some of them, why is that?
Is it because they depend on it?
https://www.mckinsey.com/featured-insights/mckinsey-explaine...
Why would they depend on fraud?
My last comment got "flagged" because i said the exchanges are selling ponzi schemes, hence my questions
Are they trying to create a giant world wide financial crash? because that's what's going to happen if none of that is regulated/banned (see FTX)
Earlier you write "cryptocurrencies are a ponzi scheme". That doesn't make any sense.
Also if centralized crypto exchanges are ponzi's (I agree, many/all are) so are many "normal" stock brokers. Many of them take your money and give you nothing (but change some values in the GUI you see to "reflect that you bought stock"). Your order probably doesn't hit any lit exchange (doesn't ever influence stock price), In the best case you hold an IOU in street name that is maybe, maybe not taken into account by clearing houses and in the worse case your order info is sold to hedge funds who front-run your trade (aka stealing), your IOU is subsequently lent out to shorters and/or you are prevented from buying/selling at crucial moments (on purpose). See recent Robin Hood debacle with clients unable to sell winning short positions in SVB (because their "short positions" don't exist in the real world).
If the seller is honest about the asset which the investor is buying, I don't see how the government should have anything to do with that. If the investor is not capable of understanding an accurate and concise description of the asset, then that's the investor's fault; the government should not protect people from their own negligence or ignorance - The system relies on keeping capital in the hands of intelligent, knowledgeable people; this is the foundation of a functioning system.
That "if" is doing some olympic heavy lifting since we're talking about cryptocurrencies.
It’s not. Free market principles are not protected by the constitution. The closest is the Commerce Clause and its mention of contracts. But that’s the idea states can’t just wipe out existing contracts (debts). The government can regulate them.
> the government should not protect people from their own negligence or ignorance
This is an extreme position to take. All governments do this.
Oh sweet summer child how I wish this were the Zeitgeist of our time.
You contradict yourself, "not protecting people" means keeping capital in the hands of fraudsters, not "intelligent, knowledgeable people".
They can't sell unregistered securities to the general public. They can sell them to "qualified investors" [1] or to their own board members and executives. That should give enough opportunities to small projects that are actually doing something that will be successful.
[1] https://www.investopedia.com/ask/answers/08/unregistered-sec...
Big investors and VCs consistently refused to fund my startup, they refuse to talk to me. I'm nothing to them. I don't have access to that funding like some other people have. Maybe I've been blacklisted for no reason. Either way, given my excellent publicly-proven track record, I deserve an opportunity to compete in the free market just like you do.
You don't seem to understand the adversity some people are facing and how unjust and broken the system is fundamentally. It's physically impossible for me to raise funding from traditional VCs and angel investors for reasons that are both unknown to me and outside of my control. My few interactions with investors are downright weird now. It's like the whole system has conclusively locked me out and then gaslights me about it 24/7. Crypto and regular investors are my only chance.
Until you've been in this position, you can't understand. You're missing a critical piece of experience.
Now when I hear about the 'unbanked' in Africa, I hear it very differently. I can at least start to wrap my head around the incredible hardship it represents. In my case I'm not unbanked but I'm 'uninvested'; it's just one class above.
The government has a vested interest in protecting people because when those people are abused they don't just disappear; the government is the entity that picks up the pieces. Even if you removed the ability for the government to provide welfare to these people after they been taken advantage of, at worst they become vagrants in the streets. There's obviously a balance that should be taken but it's cheaper to prevent issues than it is to fix them.
It sounds like BitTorrent Inc was renamed to Rainberry and was then sold to Justin Sun/TRON, and then at some point that company released a BitTorrent Token (BTT). Does BTT have any technical relationship with the actual BitTorrent protocol?
At least (AFAIK) most cryptocurrency exchanges don't have listing fees, where cryptocurrency projects would pay the exchange for listing their cryptocurrency.
Chinese Gov exiled Mr. Sun, and SEC now declared hostility to him as well; guess fraudster indeed are hated universally.
Similar example is Wengui Guo.
- MacBooks are purchased with the intent to generate profits;
- Require an investment of money; and
- Have an expectation that Apple will perform work on behalf of the purchaser including updates, maintainable, and promotion.
Clearly, MacBooks are an unregistered security and promoters are committing fraud. We must take action to protect the innocent investors! /s
Come get me when they file a case against Jeff Bezos, the chairman of Goldman Sachs, Chuck Schumer, someone in that club.
Now look at the SPY.