Can you point to any other security where there was no contract signed and the issuer promised no profits or dividends or upside or equity whatsoever? The Coinbase vs. SEC lawsuit makes these arguments. I am describing something that sounds like a commodity.
Gotta love the business model of FTX, Coinbase, Binance (and all US retail brokers): receive money from clients for the purchase of securities, deliver nothing in return unless you feel like it.
When your fraud moves against you, you can just restrict buying or selling or all trading until you're solvent again. All good. No biggy.
1 guy at FTX went to jail, I hope (for the future of the US) that there are many to follow.
I would argue they are purchasing commodities given the reality of what these assets are. The securities argument has been very suspect and with congress punting to the courts, we are starting to see it sorted out the long, expensive way.
Ethereum has "difficulty bombs" about once a year which effectively force the network to follow along with protocol changes made by the Ethereum Foundation. They could conceivably use that same mechanism to exponentially slow the network below the point of usability by waiting for the hardcoded block and then... doing nothing.
So that's the rub, right? You want more regulation for these companies so that individuals don't run off with all of your hard earned money.
The issue is that the SEC isn't doing that. They are simply saying that crypto is bad and we aren't going to do anything about it other than try to ban it. Don't forget that Gensler met personally with that "1 guy at FTX", multiple times.
Are you telling me that these instruments, designed specifically to skirt grey areas in existing legal interpretation, are skirting grey areas in legal interpretations?
Fortunately laws are interpreted and reinterpreted constantly to address this obvious, perennial technique of hucksters and conmen.
I’m not “mad” about anything? I’m saying, “no no no, this was designed to be ambiguous ergo can’t touch it” is a clear misunderstanding of how laws work, how they get their teeth, and why we have them.
We are debating legal definitions and the court said you are wrong. We can debate philosophy but you are not speaking about reality because the court already said you are incorrect.
It’s not quite that simple, even in XRP’s case specifically. The court said that secondary algorithmic sales of XRP did not constitute trading investment contracts, however they also ruled that Ripple sold an unregistered security in their initial offer of XRP. What was that security? XRP!
> Can you point to any other security where there was no contract signed and the issuer promised no profits or dividends or upside or equity whatsoever?
Isn't that every security? You hope that the companies in which take an equity stake does will, but who is promising (guaranteeing?) such a thing. That's why investors ask for returns: they are risking their money and want to be rewarded. The riskier the investment, generally the more reward is asked for.
And as a technicality: in the US, per the Commodity Exchange Act, cryptocurrencies (e.g., Bitcoin) are commodities (like oil, wheat, frozen concentrated orange juice, etc):
Part of the goal of regulation is to force companies to publish information regarding the securities you’re investing in so that you can make smart decisions.
When something is unregulated with no requirement to publish the risks of investing, it actively prevents you from having all the information a seasoned investor would want before making an informed investment decision.
(In other words, smart people can easily be conned if they don’t have access to information — which is also the primary reason people were against SPACs… they allowed companies to IPO without publishing regulatory documents intended to help investors make informed decisions)
Cryptocurrencies turn every investor into an evangelist for their investment. On some level, it’s a multi-level marketing scheme.
Many (most?) people bemoaning any safety barriers to investors are talking their book.
I’ve wanted to invest $10k. Not stellar, but not nothing. YC started with $20k per investment.
The accreditation requirement is the blocker. I should be able to risk $10k for a mission I believe in.
I am an outlier, but in general I don’t believe in hampering outliers in the name of safety. It’s an approach that tends to dampen the high notes while being of dubious value for the low notes.
Crypto and WSB shows that people will lose money if they so choose. Not being able to make investments merely shuts everyone out of the Silicon Valley reward market beyond a select few. It’s worth asking yourself if removing these protections would really cause as many problems as the theory predicts.
Net worth with spouse or partner over $1 million excluding primary residence or pre-tax income of $200k individually or $300k with spouse or partner over the last two years. That is very low, and the net worth threshold in particular includes plenty of retired seniors who shouldn't be making risky investments.
What I find somewhat strange is that you are allowed to risk the $10k... if you play the role of a mostly-client or donor and participate in pre-ordering or crowdfunding. But if you're to get back money or equity only then you get all those rules.
It’s not so strange at least under my mental model. The way I see it is accreditation is less about you burning your own money. After all you can go spend it on anything, you could go buy options, some otc stocks.
Where it steps in is investments where the language is not clear. Perhaps a PE fund, special debt agreements something where the legal language in the investor documents requiring lawyers and investors that hopefully have the experience to touch it. Wealth is a pretty decent measure without going into certifications. It’s far from perfect but decent for the masses.
It feels unreasonable but look at the history from the 1910s, 20s and 30s to see why and how those “widows and orphans” rules were put in place.
A lot of ppl think “are they saying I’m too dumb to be an investor?” But actually they are saying “there are lots of scams, so we restrict it to people who won’t be impoverished when they are fleeced by a scam”. You don’t need to be an accredited investor to invest when the info is as transparent as the govt can make it (mainly: publicly traded securities). They don’t get involved if you lend money to your brother in law for his car repair shop (but your BIL can’t put an ad in the paper to raise money without following disclosure rules).
You also can’t just sell any old vehicle for driving on the road either; instead of “accredited buyer” they push all the rules (seatbelts, wheels a certain size…) onto the mfr. When you open an account at Schwab it’s the same thing.
In the end the government is the insurer of last resort (welfare) so like other insurers puts protective covenants in place (banks have to have safes and security guards to get insurance).
appeal to authority. here are the missing parts of your argument:
1) accredited investor laws were not always wealth tests. they are wealth tests now for pretty embarrassing reasons: it was the only way a racist industry could be convinced to consider persons accredited more equally. Now, additional ways of accreditation are being experimented with, where certain degrees and exams automatically come with accreditation.
2) poor people are already able to blow their money on negative expected value financial games. It is pure happenstance that those see regulated at the state level while securities are regulated at the federal level, from the individual perspective this distinction is irrelevant: the things that are supposed to be responsible financial games are shut off for their protection, while the irresponsible ones are readily available.
3) this becomes more important because companies stopped doing IPOs at lower valuations. there are no Microsofts and Amazons to buy at $30mm and ride to $50bn. They just IPO at the $50bn valuation and dump shares on everyone that bought in at the top.
It also feels unreasonable to point to a generation long dead as proof of why we need financial protections today. I could see it if it was for criminal protections, but this particular protection has a risk/reward tradeoff way out of proportion.
If someone wants to risk $10k on a startup, they should be able to. It’s arguably a core American value that somehow got lost.
These are not folks who would be trying to get rich quick — crypto proved that they make for easy prey anyway. These are people who know that the way to get rich is to hold equity that rises in value dramatically over ten years, which the public markets rarely achieve. You’re competing against firms that do it full time, whereas those same firms would dismiss a promising startup whose founders you happen to know.
> > You know what I'm tired of? Not being able to investments because I'm not a "accredited investor", therefore I must be dumb or something.
There are billions of plays similar to crypto or startups or whatever you have in mind as far as risk reward when you lament the fact that you are not an accredited investor.
However you won't be seeing them go up and down by the minute and won't read about it in the financial press, you won't have a crew of similarly passionate people to discuss about it, won't see anybody go on CNBC, Bloomberg etc to shill, it's gonna be just you and the thing you own.
Picking a piece of art and making a 20,000% gain on that is about as likely as making the same gain on a startup or a crypto token, and the lottery is also very similar.
When people lament the fact of not being an accredited investor in my mind I think they lament on missing out on the social scene and political action that goes on in and around the investment itself, and the thing they own being constantly in the news.
In the US, you only need $1million assets (excluding primary residence) or $200 annual income. And that can be joint with spouse ($300k limit for that). Most FAANG employees should be capable of meeting that bar if they put some effort into it. Heck, most white-collar couples in high income areas will be there without being super-high relative income.
100%. They've set up a blatant 2-class system where only the rich are allowed a chance to get richer and at the same time they gaslight us about it being for our own good. It's infuriating. They suggest that because you're not already rich, you're not qualified to invest. Just because we happen to be unfortunate enough to be born during the most unjust economic period in history where rewards have become inversely proportional to value creation. I feel like if the government banned rich people from investing in anything, that would lead to better economic and social outcomes in the long run. It could be argued that possessing wealth today is proof that you're either a monopolist or a crook so that should disqualify you from investing and causing harm.
Especially ironic since a lot of them grew up on the mean streets of Silicon Valley and Westchester, not exactly an everyone for themselves Serengeti where you would develop such "don't trust the safety net" attitudes.
the existing protections are just window dressing for a class system where the wealthy don’t know these freedoms are restricted for the rest of the population, and the poor are also sheltered from knowing about it because they tell companies not to even talk to the poor, or face sanctions to their entire securities offerings.
I remember Coinbase initially refused to list Ripple (XRP) on its platform due to its largely owned (printed) by the company, thus not "decentralised". It seems that have changed now.
It's unfortunately that crypto most appealed to some of the least financially savvy "don't trust the system" types who would be most protected by the modern regulatory regime they eschewed. Instead they ended up in a downward spiral of snake oil 1800s era wild Wild West financial system that we learned was bad 100 years ago.
Tech people might find the underlying concepts interesting, but a lot of the "small investors" in the crypto space were sports gamblers bored during covid, kids blowing their stimulus checks, and conspiracy theory adjacent types.
I think “kids” here means not literal children (under the age of 18), but more like fresh out of HS college students and recent grads. And they got stimulus checks distributed directly to them, yeah.
Bored sports gamblers needed more information about the business operations and financial health of Ripple to make sound investment decisions? I think we need to be clear on what we’re trying to accomplish.
The goal of the SEC used to be to ensure that companies could not lie to and mislead investors. The goal wasn't to ban investment in snakeoil, it was to ensure there was some grounding in truth for the financials of businesses.
Instead, it has become the goal of the modern regulatory regime to put guardrails around possible investments.
If people want to blow their stimmy check on a gamble there are many ways to do so. Is that really something we want the SEC 'protecting' against? Just remember all the people that were called fools for investing in the Google bubble stock, Netflix when they shuttered the mailorder business, or Facebook when there was no clear path to monetization. Investing in high-risk high-reward ideas is actually best when young.
Of course the government should regulate financial products.
There is no end to complicated weapons of mass destruction financial products that bankers and lawyers can cook up.
You think the average joe stands a chance interpreting them vs banks?
This is why some products require you to be an accredited investors. Or in retail for example ARMs require plain language one-pagers and disallow bad features like balloon payments that caused harm during GFC.
Banks do not choose to limit themselves altruistically in the absence of regulation.
I have smart friends who continue to pursue distributed blockchain (to use neutral language) and we talk a lot about why it’s “great.” In the end the only justification boils down to “it’s decentralized” (annd I’m only looking for upsides; forget talking about the downsides).
I’ve been a huge fan of end-to-end decentralization for decades but I also recognize its limits. There are lots of chip vendors and board manufacturers and anybody can make their own computer if they want, but in the end there are only a few ppl who make laptops. And they are dethroned from time to time, which is good.
Another problem is non-repudiation. The great thing about studying computer science (or math) is that if you want you can ignore I/O which is messy. But the reality is that if you send a wire to the wrong person, or execute a trade of the wrong number of bonds, the bank can often quickly call the counterparty and unwind it. Because humans make mistakes.
In short, the math is interesting, but it all ends there.
BTW there’s nothing wrong with Merkel trees; the system we’re building has every sensor sight it’s data before uploading; every upload is signed as it arrives, making data forgery impossibly difficult. But that conventional blockchain use case doesn’t need all the rest of the encrustation of “crypto”, but we have to avoid using the polluted term “blockchain” — it excites the wrong people and turns away the right ones.
(For the same reason we say “we don’t use any AI at all, just plain old machine learning”).
> distributed blockchain (to use neutral language)
Personally I tend to use "distributed ledger" when I want to talk about the exceedingly few actually interesting use cases / technical innovations in the general area
I don’t get it. These guys got caught red handed manipulating the market for a token they created yet you will see commenters go out of their way to defend them.
We know from their exposed emails they were paying (in xrp) social media influencers.
I have a hard time believing anyone supporting xrp in 2023 is not being paid by brad and gang.
as usual, hackernews’ most vocal audience is too cynical to look at the merits of the case or statement itself, simply because the topic is crypto
the merit of the statement is that the SEC has no tool to protect investors here. just like you, they’d wish “crypto” to go away. also just like you, they are not the authority to accomplish that. unlike you, they thought they were and the courts are clarifying what was unclarified, but predictable if you ever looked: the SEC has a limited way of designating everything as securities or curbing any specific transaction from occurring.
their charter includes a mission to protect investors, in this case they don’t have the ability to do that. going after a token’s issuer doesn't help investors. investors also learn it doesnt affect the secondary markets whatsoever. but if it did, that would only hurt investors too as the assets becomes illiquid and lower valued, either way thats not actually the case as crypto infrastructure improved to not require exchange companies for most digital assets, autonomous applications facilitate trading now, until going to a primary crypto asset that can be exchanged for government currency on a company run exchange.
“crypto” as an amorphous industry and technology is capable of providing transparency to investors/consumers far beyond what the SEC mandates, and it is up to those purchasers to discern and be discerning. The SEC has no bearing on that either way.
another part of their charter includes a mission to facilitate capital formation. they could choose to engage that way and do not. instead, the crypto industry becomes more resilient upon every SEC enforcement action, each action publicly disclosing how to operate outside the already limited SEC purview.
on designation as securities, its reached its natural peak: either all collectibles like trading cards and limited run sneakers are securities or neither those or crypto tokens are.
its also natural to want to play devil’s advocate but the arguments have all been made over the last decade, the courts have sided with the crypto proponents and said they were correct, and crypto cynics were incorrect. or at the very least the SEC should be able to make a cohesive argument about why it hasnt gone after Magic the Gathering trading cards and Nike shoes, and has been unable to explain that in their laser focus on crypto tokens, or how a crypto token could be issued just as compliantly as trading card issuers and sneakerhead drops. The SEC stumbles over itself and has been unable to explain, simply losing the few cases that reach the courts and losing all sympathy in their senate hearings on this topic.
Why the court cases now? Well crypto capital formation was successful within 5 years of crypto existing, 5 years after that the SEC targeted some of the ones that were wealthy enough not to settle, and now those are getting opinions of judges that mostly match the crypto company’s lawyers rationale. The only people that looked at the environment with a fresh lens.
Fortunately, there are also other regulator bodies that are a better fit and are active in the crypto space. Such as the FTC, which regulates products. And the CFTC which regulates commodity derivatives and when the spot commodity influences those derivatives. Those regulators have not lost sight of their missions and engage in the crypto space in a way that the SEC can take a note from. Those approaches don’t involve crypto going away, and so the SEC just keeps embarrassing itself. The SEC could change its tune, but right now that just bruises its ego, although there are some commissioners that have flipped based on their own enthusiasm about the technology. Congress and the White House are watching the agency’s trainwreck and are also not amused.
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[ 3.9 ms ] story [ 157 ms ] threadWhen your fraud moves against you, you can just restrict buying or selling or all trading until you're solvent again. All good. No biggy.
1 guy at FTX went to jail, I hope (for the future of the US) that there are many to follow.
Afaik bitcoin doesn't have anything like that.
The issue is that the SEC isn't doing that. They are simply saying that crypto is bad and we aren't going to do anything about it other than try to ban it. Don't forget that Gensler met personally with that "1 guy at FTX", multiple times.
The same congress whose dysfunction and craven corruption is such that they cannot agree to borrow money to fund the budget they approved in law.
Fortunately laws are interpreted and reinterpreted constantly to address this obvious, perennial technique of hucksters and conmen.
Look, we found a grey area again.
Isn't that every security? You hope that the companies in which take an equity stake does will, but who is promising (guaranteeing?) such a thing. That's why investors ask for returns: they are risking their money and want to be rewarded. The riskier the investment, generally the more reward is asked for.
And as a technicality: in the US, per the Commodity Exchange Act, cryptocurrencies (e.g., Bitcoin) are commodities (like oil, wheat, frozen concentrated orange juice, etc):
* https://www.cftc.gov/sites/default/files/2019-12/oceo_bitcoi...
* https://en.wikipedia.org/wiki/Commodity_Exchange_Act
Do you expect profits, dividends, etc on eggs, potatoes, onions, cheese, wheat, corn, soybeans, lean hogs, gold, silver, aluminium, iron?
* https://en.wikipedia.org/wiki/Chicago_Mercantile_Exchange
* https://www.cmegroup.com/markets.html
You buy on one price and sell on another, and there are futures and derivative markets as well. Soybeans have no dividends.
ETH generates yield for holders who stake it. It is also deflationary.
Part of the goal of regulation is to force companies to publish information regarding the securities you’re investing in so that you can make smart decisions.
When something is unregulated with no requirement to publish the risks of investing, it actively prevents you from having all the information a seasoned investor would want before making an informed investment decision.
(In other words, smart people can easily be conned if they don’t have access to information — which is also the primary reason people were against SPACs… they allowed companies to IPO without publishing regulatory documents intended to help investors make informed decisions)
Edit: after some googling, is the GP talking about accreditation for buying Ripple IPO stock?
Anyone looking for a way to split hairs will continue the controversy that’s not controversial.
The accreditation requirement is the blocker. I should be able to risk $10k for a mission I believe in.
I am an outlier, but in general I don’t believe in hampering outliers in the name of safety. It’s an approach that tends to dampen the high notes while being of dubious value for the low notes.
Crypto and WSB shows that people will lose money if they so choose. Not being able to make investments merely shuts everyone out of the Silicon Valley reward market beyond a select few. It’s worth asking yourself if removing these protections would really cause as many problems as the theory predicts.
Then a new class of investors starts the cycle all over again.
“It’s all just a little bit of History Repeating.” -The Propellerheads featuring Shirley Bassey
Where it steps in is investments where the language is not clear. Perhaps a PE fund, special debt agreements something where the legal language in the investor documents requiring lawyers and investors that hopefully have the experience to touch it. Wealth is a pretty decent measure without going into certifications. It’s far from perfect but decent for the masses.
A lot of ppl think “are they saying I’m too dumb to be an investor?” But actually they are saying “there are lots of scams, so we restrict it to people who won’t be impoverished when they are fleeced by a scam”. You don’t need to be an accredited investor to invest when the info is as transparent as the govt can make it (mainly: publicly traded securities). They don’t get involved if you lend money to your brother in law for his car repair shop (but your BIL can’t put an ad in the paper to raise money without following disclosure rules).
You also can’t just sell any old vehicle for driving on the road either; instead of “accredited buyer” they push all the rules (seatbelts, wheels a certain size…) onto the mfr. When you open an account at Schwab it’s the same thing.
In the end the government is the insurer of last resort (welfare) so like other insurers puts protective covenants in place (banks have to have safes and security guards to get insurance).
1) accredited investor laws were not always wealth tests. they are wealth tests now for pretty embarrassing reasons: it was the only way a racist industry could be convinced to consider persons accredited more equally. Now, additional ways of accreditation are being experimented with, where certain degrees and exams automatically come with accreditation.
2) poor people are already able to blow their money on negative expected value financial games. It is pure happenstance that those see regulated at the state level while securities are regulated at the federal level, from the individual perspective this distinction is irrelevant: the things that are supposed to be responsible financial games are shut off for their protection, while the irresponsible ones are readily available.
3) this becomes more important because companies stopped doing IPOs at lower valuations. there are no Microsofts and Amazons to buy at $30mm and ride to $50bn. They just IPO at the $50bn valuation and dump shares on everyone that bought in at the top.
If someone wants to risk $10k on a startup, they should be able to. It’s arguably a core American value that somehow got lost.
These are not folks who would be trying to get rich quick — crypto proved that they make for easy prey anyway. These are people who know that the way to get rich is to hold equity that rises in value dramatically over ten years, which the public markets rarely achieve. You’re competing against firms that do it full time, whereas those same firms would dismiss a promising startup whose founders you happen to know.
/r/wallstreetbets enters the chat
:)
There are billions of plays similar to crypto or startups or whatever you have in mind as far as risk reward when you lament the fact that you are not an accredited investor.
However you won't be seeing them go up and down by the minute and won't read about it in the financial press, you won't have a crew of similarly passionate people to discuss about it, won't see anybody go on CNBC, Bloomberg etc to shill, it's gonna be just you and the thing you own.
Picking a piece of art and making a 20,000% gain on that is about as likely as making the same gain on a startup or a crypto token, and the lottery is also very similar.
When people lament the fact of not being an accredited investor in my mind I think they lament on missing out on the social scene and political action that goes on in and around the investment itself, and the thing they own being constantly in the news.
https://www.sec.gov/education/capitalraising/building-blocks...
Choice should be for rich people and small investors are mean stinky crypto bros if they think otherwise.
Amazing what “pro choice” ppl come up with
Really?!?!
SMH
Regulation is, in the vast majority of cases, good.
Once the SEC lost the case, they added it back.
In order of events:
https://www.coinbase.com/blog/coinbase-will-suspend-trading-...
https://www.reuters.com/markets/us/sec-dropping-claims-again...
https://www.coindesk.com/markets/2023/07/13/crypto-exchange-...
Tech people might find the underlying concepts interesting, but a lot of the "small investors" in the crypto space were sports gamblers bored during covid, kids blowing their stimulus checks, and conspiracy theory adjacent types.
Instead, it has become the goal of the modern regulatory regime to put guardrails around possible investments.
If people want to blow their stimmy check on a gamble there are many ways to do so. Is that really something we want the SEC 'protecting' against? Just remember all the people that were called fools for investing in the Google bubble stock, Netflix when they shuttered the mailorder business, or Facebook when there was no clear path to monetization. Investing in high-risk high-reward ideas is actually best when young.
There is no end to complicated weapons of mass destruction financial products that bankers and lawyers can cook up.
You think the average joe stands a chance interpreting them vs banks?
This is why some products require you to be an accredited investors. Or in retail for example ARMs require plain language one-pagers and disallow bad features like balloon payments that caused harm during GFC.
Banks do not choose to limit themselves altruistically in the absence of regulation.
This is the problem with retail crypto.
I have smart friends who continue to pursue distributed blockchain (to use neutral language) and we talk a lot about why it’s “great.” In the end the only justification boils down to “it’s decentralized” (annd I’m only looking for upsides; forget talking about the downsides).
I’ve been a huge fan of end-to-end decentralization for decades but I also recognize its limits. There are lots of chip vendors and board manufacturers and anybody can make their own computer if they want, but in the end there are only a few ppl who make laptops. And they are dethroned from time to time, which is good.
Another problem is non-repudiation. The great thing about studying computer science (or math) is that if you want you can ignore I/O which is messy. But the reality is that if you send a wire to the wrong person, or execute a trade of the wrong number of bonds, the bank can often quickly call the counterparty and unwind it. Because humans make mistakes.
In short, the math is interesting, but it all ends there.
BTW there’s nothing wrong with Merkel trees; the system we’re building has every sensor sight it’s data before uploading; every upload is signed as it arrives, making data forgery impossibly difficult. But that conventional blockchain use case doesn’t need all the rest of the encrustation of “crypto”, but we have to avoid using the polluted term “blockchain” — it excites the wrong people and turns away the right ones.
(For the same reason we say “we don’t use any AI at all, just plain old machine learning”).
Personally I tend to use "distributed ledger" when I want to talk about the exceedingly few actually interesting use cases / technical innovations in the general area
https://www.sciencedirect.com/science/article/abs/pii/S15446...
https://www.gbgplc.com/en/blog/bitpesa-evolution-of-payments...
https://news.ycombinator.com/item?id=26238410
We know from their exposed emails they were paying (in xrp) social media influencers.
I have a hard time believing anyone supporting xrp in 2023 is not being paid by brad and gang.
the merit of the statement is that the SEC has no tool to protect investors here. just like you, they’d wish “crypto” to go away. also just like you, they are not the authority to accomplish that. unlike you, they thought they were and the courts are clarifying what was unclarified, but predictable if you ever looked: the SEC has a limited way of designating everything as securities or curbing any specific transaction from occurring.
their charter includes a mission to protect investors, in this case they don’t have the ability to do that. going after a token’s issuer doesn't help investors. investors also learn it doesnt affect the secondary markets whatsoever. but if it did, that would only hurt investors too as the assets becomes illiquid and lower valued, either way thats not actually the case as crypto infrastructure improved to not require exchange companies for most digital assets, autonomous applications facilitate trading now, until going to a primary crypto asset that can be exchanged for government currency on a company run exchange.
“crypto” as an amorphous industry and technology is capable of providing transparency to investors/consumers far beyond what the SEC mandates, and it is up to those purchasers to discern and be discerning. The SEC has no bearing on that either way.
another part of their charter includes a mission to facilitate capital formation. they could choose to engage that way and do not. instead, the crypto industry becomes more resilient upon every SEC enforcement action, each action publicly disclosing how to operate outside the already limited SEC purview.
on designation as securities, its reached its natural peak: either all collectibles like trading cards and limited run sneakers are securities or neither those or crypto tokens are.
its also natural to want to play devil’s advocate but the arguments have all been made over the last decade, the courts have sided with the crypto proponents and said they were correct, and crypto cynics were incorrect. or at the very least the SEC should be able to make a cohesive argument about why it hasnt gone after Magic the Gathering trading cards and Nike shoes, and has been unable to explain that in their laser focus on crypto tokens, or how a crypto token could be issued just as compliantly as trading card issuers and sneakerhead drops. The SEC stumbles over itself and has been unable to explain, simply losing the few cases that reach the courts and losing all sympathy in their senate hearings on this topic.
Why the court cases now? Well crypto capital formation was successful within 5 years of crypto existing, 5 years after that the SEC targeted some of the ones that were wealthy enough not to settle, and now those are getting opinions of judges that mostly match the crypto company’s lawyers rationale. The only people that looked at the environment with a fresh lens.
Fortunately, there are also other regulator bodies that are a better fit and are active in the crypto space. Such as the FTC, which regulates products. And the CFTC which regulates commodity derivatives and when the spot commodity influences those derivatives. Those regulators have not lost sight of their missions and engage in the crypto space in a way that the SEC can take a note from. Those approaches don’t involve crypto going away, and so the SEC just keeps embarrassing itself. The SEC could change its tune, but right now that just bruises its ego, although there are some commissioners that have flipped based on their own enthusiasm about the technology. Congress and the White House are watching the agency’s trainwreck and are also not amused.