The Feds Are Terrified Of Cryptocurrencies... But They're Powerless To Stop Them
Authored by Josie Wales via TheAntiMedia.org,
The federal government is no match for innovation. This is something lawmakers have always known, and it is the reason state and federal regulations exist. But innovation, by its very nature, will always find a way around those regulations, resulting in the implementation of more regulations for creative minds to learn to evade — which they will. This results in the over-regulation we see in America today.
Nothing scares the government more than something it can’t control, and the Securities and Exchange Commission (SEC) revealed this week that it is terrified of cryptocurrencies — as well it should be. See, all those lawmakers and bureaucrats sitting around regulating everything depend on taxpayer money to pay their salaries so they can keep writing regulations. Since cryptocurrencies allow people to keep all of their money, this is a big problem for the lawmakers. Soon, people may even start to realize they can buy, sell, and trade freely without any government intervention. The horror.
So the SEC recently got together to write up even more regulations to try to scare people away from using cryptocurrencies and the blockchain by targeting Initial Coin Offerings, or ICOs. Initial Coin Offerings have become very popular recently as a way for crypto start-ups to raise funds for their ventures using digital tokens (cryptocurrency) like Bitcoin or Ethers. They operate on a blockchain, which is a decentralized digital ledger of publicly and chronologically-recorded cryptocurrency transactions. Investopedia gives a wonderfully detailed breakdown of how ICOs work. You can read it here or watch an explanation by technologist and author of The Internet of Money and Mastering Bitcoin Andreas Antonopoulos here.
Basically, with the birth of the ICO came the emergence of a whole new market — one with a great deal of money floating around that the federal government couldn’t take by force. Naturally, this had to be investigated, and on July 25, the SEC released a Report of Investigation under Section 21(a) of the Securities Exchange Act of 1934. The investigation zeroed in on the DAO, a distributed autonomous organization that set the record for the largest crowdfunding campaign in history, raising over $150 million in ether in 2016. According to the report published by the SEC:
“The Commission applied existing U.S. federal securities laws to this new paradigm, determining that DAO Tokens were securities. The Commission stressed that those who offer and sell securities in the U.S. are required to comply with federal securities laws, regardless of whether those securities are purchased with virtual currencies or distributed with blockchain technology.”
Or, as crowdfunding lawyer Amy Y. Wan explains, the press release amounts to the SEC saying:
“For those of you out there doing ICOs, we’re here to warn you that U.S. securities laws might apply. When we say might, we mean just that — sometimes securities law will apply, sometimes it won’t. It depends on the specific facts of the ICO.”
Okay, so the government wants to regulate virtual tokens, aka cryptocurrency. Good luck. As blockchain engineer Elaine Ou pointed out on Twitter, ICO’s are “Untraceable, international, [have] no central authority, [and] funds can’t be frozen. The SEC ICO warning is the best ad for ICO’s.”
So while the government can — and will — continue to make the lives of innocent people miserable using weapons like civil asset forfeiture, crypto regulations, web-provider takedowns, and the war on drugs, these are all last ditch efforts by a desperate ruling class on its death bed.
The creativity and resilience human beings possess do not exist within the jurisdiction of the government – no matter how hard it tries to convince us otherwise.
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Thank you for the insights!
The more the government get into blockchain technology and thinks about regulation and supervision the better the adoption and outcome for us all i think. We need the party nethertheless if we like it or not. It seems counterintuitive but i think it is necessary to become mainstream and widely adopted by companies and citizens which even haven't heard about it. If you look today into Bitcoin, there is no anonymity, there is pseudonymity because currently you've to deal with an exchange and with your bank to exchange fiat money into cryptocurrency. That's just an example how you're traceable.
video by Phillip Hallam-BakerDon't get me wrong i like anonymity and need no supervision by anyone but that's reality. I'm very optimistic regarding blockchain in contrast to the video above and following technologies
animation from giphy.com
and my hopes going to more decentralization and a whole new era of technology we're are already started here on steemit!
Exciting times ahead no matter what the SEC or government is doing next! Everyone benefits from the current developments!
We should watching what are our incentives are and that we take the right track!
Great article! As Antonopoulos said, we had the separation of church and state, maybe we are ready for the separation of money and state.
When money is centralized and controlled too much, it doesn't usually go well for the people. So we have cryotocurrencies.
When information is centralized and controlled too much, we the people don't get the truth. So we have uncensored platforms like Steemit, onG.Social and Gab.ai.
And both Steemit and onG.Social provide both decentralized money and free speech.
Decentralization seems to be the way od the future...
I like what you say. Definitely we need an urgent decentralization of social media sites to prevent censorship happening on a larger scale.
Steem is good but I ONG better. It will be an upgrate to Steem with the Gravity algoritm.
Once the ICO is finished it will become better than steem with the new improvements planed.
I agree with ur comment. Ong social is a good platform. Soon it will outshine.
Thank you
Disclaimer: I am just a bot trying to be helpful.
Yeeeaaaaah!!!!! What else is there to say eh?
They are blockbuster in a netflix world.
The government has no hold on cryptocurrency either flow with or not
I note your disclaimer @zer0hedge.
Did you get permission from zerohedge.com to post their content?
Do you understand copyright law?
Hi, @zer0hedge, "Nothing scares the government more than something it can’t control", that's absolutely right. So, in future, when crypto currencies dominate the financial world, would these currencies still be decentralized? Thoughts?
To some extent yes, every altcoins has different degree of decentralization.
"Roses are red, violets are blue, taxation is theft, inflation is too" - Jeff Berwick