Elizabeth Warren Gives SEC July 28 Deadline to Figure Out Crypto Regulation | Hacker News Reader

Elizabeth Warren Gives SEC July 28 Deadline to Figure Out Crypto Regulation

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The headline is a bit misleading. They aren’t being asked to “figure out crypto regulation” but to provide SEC’s view on whether they have sufficient authority and tools. It seems like Warren is tired of waiting for the SEC to do something and this is a good way to move them forward.

I wish we would stop referring to cryptocurrency as "crypto", when that has already meant cryptography for decades.

This is the battle you choose to fight?

Yes, it's quite annoying that the term was co-opted.

From the article: The senator, who chairs the Senate Banking Committee’s Subcommittee on Economic Policy, said in a letter to SEC Chair Gary Gensler that she needs answers by July 28.

Or what? Congress makes the same request again?

Exactly my question.

Usually these folks (SEC etc) are already showing up somewhat frequently for various hearings and so can be asked about things like this. Or letters can be sent privately.

The SEC’s budget requires Congressional approval.

At some point, I would think you at least need some kind of regulation with stable coins.

You don't need that big of a correction from here for the sum of Tether/USD Coin/Binance USD to overtake ETH even.

If that happens then what is this space even about? Why would the second biggest coin basically be USD? What fits the crypto narrative less than that?

Ultimately, the stock market was not better in the 20s with bucket shops, syndicates, wash trading, all kinds of nonsense.

I am a big crypto fan long term but I need less bullshit that I have read about in market history books.

IANAL: Could the government actually regulate crypto? I understand every transaction is public, but I thought one of the driving forces was that it could not be regulated or controlled by governments. Would the regulation be on how you buy, sell, and receive cash?

Governments could ban the fiat banks from interacting with crypto. That would very effectively kill crypto since there is no independent crypto monetised economy to speak of.

Very few people legitimately use cryptocurrencies for their daily transactions. It's not really feasible. Getting money in, and getting money out to dollars, is where they can regulate it.

Visa just surpassed $1 billion in transaction value with their crypto related cards last quarter. Things are slowly picking up steam.

That’s basically crypto cashing out service, not a transaction with crypto.

Details for anyone interested: https://www.cnbc.com/2021/07/07/visa-says-crypto-linked-card...

The regulation that is most likely to happen is regulating US firms (banks, hedge funds, etc.) to disclose positions (treating crypto more like a stock than a currency) over a certain percentage much like they do with stocks and other securities. This is considered regulation but it really doesn't prevent or control activity just makes them report holdings.

The other regulation might be proof of origin of funds - like if you get a gift from a relative that you use to purchase a home and a mortgage for the balance. The bank issuing the mortgage has to ensure that you aren't bringing illicit funds into the transaction and laundering it via their mortgage service. Whatever that regulation is called could apply where they have to prove US firms aren't moving illicit funds around, etc.

I use a different frame of reference. The US Government cannot change a decentralized system. But it can regulate you and the companies you use to interact with Crypto.

Regulation makes sense, as it will allow it to become mainstream. Also a lot more clarification and guidelines needed around taxation with DeFi and related products - government really has to do tremendous catch up.

I balk whenever someone calls DeFi 'a product'. You can't actually do anything with it. It's just a bunch of hand waving and shuffling more crypto around. The emperor has no clothes.

Comments like this make me wonder how misunderstood a lot of the crypto space is and how little many know about it.

It's very normal in finance to call financial offerings, lending, loans, etc. products.

Some DeFi products offer nice rewards even - like somewhere around 12% pa for more risky, but about 6% pa for low risk products.

We are far from close to mainstream usage and early adopters probably will benefit the most.

What's to understand? I can get a loan on crypto but I have to put the same amount of crypto as collateral. What is the point of this?

If I go to a bank I can get a loan for a car and use the car I'm purchasing itself as collateral.

That is one product. The benefit is related to growth and related taxation (but might depend on the country you are in).

> The benefit is related to growth

Right... so pure speculation then with no underlying utility.

Bitcoin is already regulated, with the algorithm that determines the difficulty of successfully calculating a transaction block, and the max number of Bitcoins.

The USD, on the other hand, has no such algorithms, and so in the last year alone the USD was weakened with three trillion new dollars without any backing.

Regulating the USD would be a high priority, but realistically you shouldn't expect that to happen. There's more value, from the perspective of owners of real estate and other assets in letting the USD melt down, create a crash on a scale that has never been seen before and just take whatever you may still own in exchange for some food and water.

The slightly less serious analysis from a couple of years ago: https://m.youtube.com/watch?v=-j_CxQFziFU

What does it mean for a senator to say “this is a deadline”? It doesn’t seem like it should matter?

> The senator, who chairs the Senate Banking Committee’s Subcommittee on Economic Policy

Which has jurisdiction that includes

> Monetary policy

> Financial Stability Oversight

> Money and credit, including currency, coinage and notes

Wants information in order

> to determine if Congress needs to act to ensure that the SEC has the proper authority

to regulate

> Cryptocurrency exchanges

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