Stop Pretending Crypto Regulation is Hard

Protect us from the next FTX, not the next airdrop.
Feb 8, 20241 min read

Regulating crypto is easy. A lot of regulators and lawmakers are being intentionally obtuse.

Protect us from the next FTX, not the next airdrop.

Of course, tokens can be securities. That doesn't mean all tokens are securities; some can be collectibles, some can be currencies, and some can be commodities.

Tokens can be anything you can program.

This is self-evident and has been for over a decade.

Yes, tokens can be like equities if they govern onchain cash flow generated by onchain code.

No, this does not make them securities.

Network equities don't require the settlement of legal meatspace or the transparency of 10k filings. With network equities – the code is the regulator - anyone can be the auditor – the assets are "view source."

It would be dumb to treat network equities exactly as securities. It's a great way to nerf your economy, control capital, and consolidate your shrinking power...but also dumb dumb dumb.

No, this doesn't make crypto people criminals that "DoN't wANt tO bE rEGuLaTeD". We just don't want to force rules from 1933 on these new internet assets... because that would be dumb.

When assets are offchain, held by intermediaries, or require the trust of a third-party custodian – the existing regulations hold up well. Not much to update.

Go take down the scammers. Thank you and Godspeed! We want you to protect us from the next FTX not the next airdrop.

A set of reasonable regulators and lawmakers could put the U.S. on a sensible path to maximize the crypto opportunity in like a week.

They're pretending it's hard, but it's not.

Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This newsletter is not tax advice. Talk to your accountant. Do your own research.

Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here.

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