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Republican States' Attorneys General Sue SEC, Gensler Over Crypto 'Overreach' (foxbusiness.com) 103

Posted by msmash from the escalating-tension dept.
Eighteen Republican state attorneys general have sued the U.S. Securities and Exchange Commission (SEC) and Chair Gary Gensler on Thursday, challenging the agency's authority to regulate cryptocurrency markets.

The lawsuit, led by Kentucky Attorney General Russell Coleman, alleges the SEC has exceeded its statutory powers by attempting to assume broad regulatory control over digital assets without congressional authorization. The complaint argues the agency's actions infringe on states' rights to develop their own cryptocurrency regulations and harm consumers by imposing ill-fitting federal securities laws on digital assets.

Speaking at a legal conference Thursday, Gensler defended the agency's approach, citing consistent court support for SEC enforcement actions in cryptocurrency cases. The regulatory landscape appears set for change following President-elect Trump's victory. Trump, who previously dismissed cryptocurrency as a "scam," has pledged to make the U.S. the "crypto capital of the planet" and remove Gensler.
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Republican States' Attorneys General Sue SEC, Gensler Over Crypto 'Overreach' More

Republican States' Attorneys General Sue SEC, Gensler Over Crypto 'Overreach'

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  • this != this (Score:5, Funny)

    by Pseudonymous Powers ( 4097097 ) on Friday November 15, 2024 @09:07AM (#64947613)

    CRYPTO D00DS: This is a currency market.

    SEC: Oh? We're charged with regulating currency markets.

    CRYPTO D00DS: Not like that.

    • where I live crypto is not a currency in eyes of the law
      • That's nice. Whatever unspecified country you live in has every right to decide whether or not crypto is a currency in its jurisdiction, but unless you live in the USA, that decision has nothing to do with this discussion.

  • Based on the previous Trump administration, I expect regulatory agencies to be broken and run by Trump loyalists who will do what they're told regardless of rules on the books.

    So .. Trump does occasionally try to suck up to crypto bros. Will he weigh in and force a particular outcome, or will the bureaucracy function because he's moved on and will ignore it?

    • Trump is now effectively a crypto bro himself, although he personally doesn't know anything about it and his kids know barely more.

      • Trump is now effectively a crypto bro himself

        You just made me shudder and throw up a little in my mouth.

        For a moment, I envisioned crypto "Trumpcoin" -- a gold medallion with his self-satisfied smirk on one -- no, both sides. Heads or heads? Sold as a collectible at its current crypto-market value.

        Yeah, I know, they exist already, bigly. [google.com]

        • I apologize. I am usually going for funny, and there is no "+1 squick" so there's no karma in that.

    • Re:I am curious how this will be handled (Score:5, Insightful)

      by nightflameauto ( 6607976 ) on Friday November 15, 2024 @09:45AM (#64947715)

      Based on the previous Trump administration, I expect regulatory agencies to be broken and run by Trump loyalists who will do what they're told regardless of rules on the books.

      So .. Trump does occasionally try to suck up to crypto bros. Will he weigh in and force a particular outcome, or will the bureaucracy function because he's moved on and will ignore it?

      Based on the way he's going about cabinet appointments, I assume he'll appoint Sam Bankman Fried in the newly created position of Government Crypto Oversight Tsar to take care of this whole issue.

      • they're not there to get appointed, they exist to make the insane hardliner extremists he's actually going to appoint seem tame by comparison. It's an old trick.

        One of the most frustrating things about this whole mess is everything about it was just old tricks from 40 years ago. Democrats haven't adjusted any of their tactics since the civil rights movement. For a progressive party they sure are conservative when it comes to running elections.

        • Recess appointments. The plan is for the Senate to avoid going on record as saying yes or no.

          Legally they can serve in the position (with full authority of the office) for up to 2 years without Senate approval if appointed while the Senate is not in session. Trump knows he will shit-can each of them for disappointing him within that timeframe.

  • Is this really good for crypto? (Score:5, Insightful)

    by timeOday ( 582209 ) on Friday November 15, 2024 @09:17AM (#64947639)
    I suppose this will make bitcoin shoot up, but is it really good for crypto? For it to go mainstream, people want protections against being swindled, robbed, and blackmailed. Upfront maybe they don't but letting it run wild is going to result in a steady stream of stories about people who got victimized. You can sneer at them, but doesn't it erode your confidence about putting your own, hard-earned money into crypto?

    • For it to go mainstream

      None of the people using bitcoin are doing so because they want it to go mainstream. That's hasn't been the goal in a long time, literally everything has been about how you can use it for speculative gambling.

    • Pump and dump. All that is important is a good rise for the onsiders

    • That's because Bitcoin is yesterday's news. Nothing of these would be happening with MAGAcoin. Pinky swear.

  • Mark my words (Score:5, Informative)

    by rsilvergun ( 571051 ) on Friday November 15, 2024 @09:19AM (#64947645)
    This is going to get out of hand. It's going to make its way into the broader economy and into your 401k and you're not going to like it when it does.

    The only inherent value in crypto is its utility in money laundering and Ponzi schemes. It is not a good payment facilitator because it requires way way way more computing power and therefore expensive electricity than a simple banking system like we have now.

    Now the risk was always that governments were going to finally crack down on crypto and the crimes there in. Without the election in America when that's basically impossible now.

    But those are crimes for a reason and the probability of a major savings and loan style crash is now the main risk. Imagine for example if the banks did what they did in 2008 with mortgaged back securities but replaced mortgages with pretend money. Unlike 2008 where the bleeding eventually stopped because there were houses you would have pretend money that is completely and genuinely worthless. There is absolutely no bottom to that crash.

    What I'm saying is fasten your seat belts it's going to be a bumpy ride. we have had just enough regulation and oversight to keep the worst from happening and all of that is about to go out the window. It's like how we don't have major problems with our ozone and everyone thinks that means we don't have to worry about it but we did a ton of stuff to fix the ozone layer...

    It's the classic problem that nobody gets a ticker tape parade for stopping a disaster.

    • The grand master plan of crypto (Score:1)

      by Anonymous Coward

      The plan for all cryptocurrencies isn't what they want to make you think it is. It's more sinister than the egalitarian image the crypto boys portray for it.

      After the 2008 financial meltdown, cryptocurrencies were born out of it, declared to be the means by which people could be freed from banks/governments, and promised to avoid any such future meltdowns from happening ever again.

      But the crypto boys watched closely the result of that meltdown, and formulated their plan: create a new form of currency, and

    • Re:Mark my words (Score:5, Interesting)

      by Pseudonymous Powers ( 4097097 ) on Friday November 15, 2024 @09:28AM (#64947677)

      "The only inherent value in crypto is its utility in money laundering and Ponzi schemes."

      That's an unfair characterization. It's also good for illicit trafficking on the dark web and ransomware.

      • Which is even better now that the owner of the Silk Road is going to get a parson from Trump. Yep - nothing shows your commitment to law and order better than to release someone who organised the sale of drugs, weapons and assassins, just because he used bitcoin.

        I think Trump hints that this guy is a crypto martyr somehow. But that wasn't why he was convicted of course.

    • Unlike 2008 where the bleeding eventually stopped because there were houses you would have pretend money that is completely and genuinely worthless

      Even the 2008 crisis could've been avoided, [pbs.org] if it hadn't been for a clash of personalities:

      early warnings of the crash, reveals an intense battle among high-ranking members of the Clinton administration, and uncovers a concerted effort not to regulate the emerging, highly complex, and lucrative derivatives markets, which would become the ticking time-bomb within the American economy.

      • than an individual one. I mean, what you're describing isn't really a clash of personalities so much as "elements in the Clinton administration wanted to do risky deregulation and other, smarter or less corrupt people didn't want to take those risks".

        • what you're describing isn't really a clash of personalities so much as "elements in the Clinton administration wanted to do risky deregulation and other, smarter or less corrupt people didn't want to take those risks".

          The summary doesn't go into details, but essentially someone with knowledge of what was coming (I don't recall her name at the moment) tried to educate the powers that be about the dangers of the derivatives market, but since Clinton didn't get along with her, she never was put in any position of power or influence for her warnings to ever even be considered.

          Note that it's been years since I watched that, so there's a possibility I'm mixing it with another documentary, but I do recall this scenario occurrin

      • A direct cause of the ARM A meltdown was the repeal of the Glass Steagall act by Bill Clinton. This was a gift to the banking industry by Bill and in my opinion was a marker of the shifting of the DNC/democratic party to what they are today. There were protections in place before this happened that would have prevented this from happening.

        • To be fair a Glass Steagall repeal was on the minds of people long before Clinton came along. Besides, the law that repealed it was the Gramm-Leach-Bliley Act, named after the three Republicans that sponsored the legislation. The bill that came out of the joint conference passed the House and Senate with a supermajority that would easily be able to override any veto Clinton would have had if he'd been inclined to issue a veto.

          In short, you can't blame just the Democrats on this one. The repeal of Glass-St

    • What's to worry about my 401k....I can always count on Social Security when I retire in another 25ish years right..............

      (I'm going to have to work until I'm dead aren't I).

      • I've never heard of a 401k offering crypto-currency. In some cases, a person might have indirect exposure due to a stock in an index having exposure. (i.e. you own the SP500 index and one or two companies in the index have meddled in crypto-currency.)

        If you still have 25 working years left, such a crash is a 401k opportunity as you can buy the crash and juice your returns. If you're 10 years from retirement, well, that could bite pretty hard.

    • Crypto really isn't good for the things you mentioned, it's just convenient.

    • Every crash has a bottom. Some bottoms just are deeper. Even cryptocurrency value has a bottom and it is zero, not negative infinity.

      But it will be interesting to behold, indeed.

    • Re:can't they just say Interstate commerce (Score:5, Insightful)

      by smooth wombat ( 796938 ) on Friday November 15, 2024 @09:47AM (#64947721) Journal

      Yes, the administration can. Which is exactly what it is. This is no different than the SEC regulating the financial markets. If people are claiming that crypto can be used as cash, can be traded, and there is an entire industry built around it, the SEC can regulate it.

      If these AGs had a wit of intelligence about them, they would know this is how inflation happened in the early days of our country. Every state had its own currency and the value of the state currency was dependent on a multitude of issues including how far from the state you were when trying to exchange their currency.

      But apparently, due to the lack of basic education in this country, people don't know the history of our country and why things are the way they are. Considering how inept the Supreme Court when it comes to Constitutional issues, this isn't surprising.

  • All laws are "overreach" to criminals. (Score:5, Insightful)

    by Eunomion ( 8640039 ) on Friday November 15, 2024 @09:33AM (#64947683)
    Republicans love every form of fraud they've ever met, but they have a special jones for ones that transfer wealth from average fools to wealthy pigs.

    • Re:All laws are "overreach" to criminals. (Score:5, Interesting)

      by Ol Olsoc ( 1175323 ) on Friday November 15, 2024 @09:41AM (#64947697)

      Republicans love every form of fraud they've ever met, but they have a special jones for ones that transfer wealth from average fools to wealthy pigs.

      The next bubble is now officially started, this one might make the subprime bubble look like a momentary burp when the crypto bubble bursts.

      • Re:All laws are "overreach" to criminals. (Score:4, Insightful)

        by Eunomion ( 8640039 ) on Friday November 15, 2024 @10:06AM (#64947783)
        Then they'll demand bailouts, robbing value from real currencies to feed the crooks who pump-and-dumped the fake ones.

        • The same old playbook. Privatize the profits and socialize the losses.

        • Then they'll demand bailouts, robbing value from real currencies to feed the crooks who pump-and-dumped the fake ones.

          The part I do not get is that anyone with a functioning braincell should be able to see that when the few people who own most of the Crypto make a call, trillions will disappear on an instant.

          It's an exceptionally great way to bankrupt a country overnight. I suspect if it turns out the way I think it will turn out, we won't need to worry about bailouts.

          The thing that amazes me when the one bean counter that predicted the Subprime bubble would blow up years after it was in place was hailed as some s

          • It's casino gambling. The pump and dump cycles of financial frauds are opaque enough to most people that they just treat it like a slot or a lottery ticket. They don't understand that they can't win. Even if they appear to by sheer luck, they've caused a net depletion of the economy they depend on. In the context of climate impact, crypto may become the worst and most destructive fraud in history. It's not just arbitrary, it's also physically depleting and polluting.

    • correction (Score:3, Insightful)

      by tiqui ( 1024021 )

      "POLITICIANS", not "Republicans".

      That whole carbon offsets trading scam is a Democrat thing. It drives-up the costs of energy for lower-income and middle-class people while making guys like Al Gore fabulously rich as they buy and sell imaginary things called "carbon offsets".

      • No. Carbon trading was a system proposed in despair after it became clear that Republicans would simply use all of their ill-gotten power to stop more direct and effective regulating systems like GHG taxes and absolute limits. And in their tyrannical arrogance, Republicans have waged war on even that stopgap. They hate humanity and want it to die. They would consider themselves gods if they ended the world.

  • Scammers gonna scam (Score:5, Insightful)

    by cpurdy ( 4838085 ) on Friday November 15, 2024 @11:21AM (#64947975)
    I love how the entire Republican Party has been turned into an apparatus for supporting cons and scams.

    You just can't make this shit up.

  • ... collecting Beanie Babies. It needs only one regulation: We don't know what it is or how its market works. Therefore, banks' crypto portfolios will be valued at exactly zero for the purpose of capital reserve calculations.

    We should have done this several decades ago with CDOs and other synthetic securities. There would have been no crash in 2008 because it would have been no different than some kid losing his bottle-cap collection.

  • that Republican Attorneys General are laser focused on issues that make a real difference in the lives of the people who elected them.

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