So today news hit the scene - EtherDeltas CEO was charged by SEC for running unlicensed exchange.
Sure this happened as he was from USA but you probably noticed how USA is banned in loads of places already due to possible SEC attacks.
He paid fine right away to avoid more trouble,
Coburn consented to the order and agreed to pay $300,000 in disgorgement plus $13,000 in prejudgment interest and a $75,000 penalty. The Commission's order recognizes Coburn's cooperation, which the Commission considered in determining not to impose a greater penalty.
So at some point if decentralized exchange is not properly hidden SEC may knock to your door when they decide too many USA people are on the exchange.
So what will happen to for example #Bitshares (which fully is a decentralized exchange) or plenty other made on NEO, ETH or even using BTC itself (Bisq) ? Its not looking good to me.
Discuss.
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If a blockchain, an exchange or a social network has a real CEO, it is a point of weakness and evidence for its centralization.
Steem and STINC have it too, and are managed in the same manner that facebook and twitter are, except for the supposed immutability, which in reality exists only for as long as a handpicked "supermajority" allows it to remain immutable.
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SEC wants their cut. Simple solution is for DEX staffers to not live in the USA and even run their projects anonymously.
I guess this news breaking is the reason for the last dip. Pretty mild but understandable.
If the DEX staff are not US citizens then they aren't in theory supposed to be under the jurisdiction of the US government. If they are acting on behalf of the US government even when not citizens of the US government then that is as questionable as if a US citizen would act on behalf of China or Russia to ban or block for that side.
Nope Sec can go after the dex still as long as enough USA people trade on it. Happen to another exchange. And no ip blocking might not be enough...
Hence why Idex is doing KYC.
Now an anonymous team might work..
Can't China or any country use the exact same rationale?
That too lol
The US will be fucked when bitcoin is the largest asset class in the world second to only the global real estate market...unless property ownership can be tied to the bitcoin blockchain lol
VPNs gonna rock ;)
Well, that should definitely be possible from what I understand.
This is terrible news. While it might not be that big deal that a single exchange was brought down, it really gives developers who might be interested in creating something like this fear, driving good US-based developers away from these types of projects.
What about the market on steem?
Steem is run by US citizens so Steem is particularly vulnerable to the US government. Also Steem is famously transparent which makes it easy for witnesses and developers to be threatened by lawyers and various agencies from all countries all around the world. If not the US then Russia or China can also pressure the developers, the known witnesses and the thought leaders.
i was thinking of putting STEEM here but since it exchanges internal tokens i didnt.. but maybe actually i should have. good call!
No one really knows to be honest. Same with Bitshares. It's not known to be quite honest.
I would say that because so many US developers are involved there will likely be immense pressure at some point on the developers. It's something many people saw coming and if these developers are smart they have set some money aside to fight it out in court. If they haven't done that then maybe insurance of some sort would be a good idea for developers.
So who is in this case responsible on Steem? Steemit.inc, Developers, Witnesses or could they shut down the whole Steem Ecosystem. I thought Steem code is open source and belongs to nobody??? How can you make somebody responsible for open source code??? I don't get it, please help!
If Steem is transparent then they can shut down the whole ecosystem. They can trace every transaction to an identity. They can go after the users on any kind of tax charges just due to the confusion around taxes. They can go after developers for writing the code. They can go after witnesses for aiding in some sort of crime or use the RICO measures.
There is no limit to what they could do if they decide to crack down. The lesson that older wiser people will tell you is to always have the law on your side. You can't win by going against the law. If the law is so confusing that you don't know if it's going to be on your side or not (like in the case here) then you've got to pick a side and wait until it reaches the Supreme Court.
Programmers can either shiver in fear or keep writing code. But I would suggest that these programmers who are becoming billionaires consider ways to protect the ecosystem with some of these funds they raised. Use these funds to actually set up SuperPACs, to put in politicians friendly to crypto, to slowly work to get the laws changed, and to put out pro crypto ads on the Superbowl.
Little stuff like that is what will help long term. Going illegal is a losing strategy. Change the laws using the processes available within the system over time. And design the code so that it too can only be changed using processes from within the decentralized system.
You can't fix a broken system by using the means/tools that same system supplies you to do the job. It's a rigged game.
We are in the VERY early days of blockchain and decentralization. There will come a time when people are going to have to make a decision to either support the old dying system or a "new model" that gives them more choice and more freedom.
I don't believe it's entirely rigged. I do think we can elect politicians which are favorable to our interests. I promote using all the available legal and ethical means to get things done.
Very well said, thank you!
I agree with you that the law is ultimatley the goal to go, if we want to enjoy a legal status on Steem.
The part that I don't like at all is the fact, that there is so much legal unclarity, on what Steem actually is, in terms of law. And how are all the different income streams of Steem going to be valued? Nobody knows for certain, and we all face the risk of doing something unwillingly wrong here.
Thats the point, where I get upset about Regulators and the law. They created this black hole of uncertainty, and when you tap in, than they prosecute you. That is just insane!
I hope that Steem will make it thru this regulatory headwinds. Lets cross fingers.
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Which law should define what Steem is? I don't see why US law should be treated as world law. There is a such thing as a UN for example and an international law. Why wouldn't Steem developers appeal to that instead if the goal is an international product and blockchain?
But if the developers are US Citizens it is different. Now they have to be concerned about consequences.
The SEC goes after devs and systems that "do harm" to crypto. Etherdelta traded many "bad ico" tokens, and it's the responsibility of the SEc to protect users from that. Steem does not harm anyone.
You are right. The only way to fix this is to do it from within the system by electing politicians favorable to the interests of Steem, of the global crypto community, etc.
Whether or not there is harm is in my opinion for the community to decide and not for the ivory tower. That being said the SEC legally has the mandate. Simply reprogram the SEC via the law and the SEC will follow a new set of rules.
Im from europe,and im connecting over europe nodes to bitshares dex.how can they shut down bitshares dex if nodes are all around the world?
Isn't this type of thing the reason that DACs and DAOs are being developed? Unlike, centralized operations such as EtherDelta, who exactly are the SEC going to shut down? That's the whole point. They can't shut down a decentralized system.
On a similar note, we've seen a lot of censorship action from the big tech social media companies (Facebook, Twitter, Google). They are acting as an SEC of sorts; attempting to tell people what they can and can't say. So we have a similar situation where decentralized social media is being developed.
If they can ban for the US government then they are functioning like national exchanges run by the United States SEC. After all if the owners obey the US government then they become an extension of the will of the US government rather than of the will of whatever community owns or uses the exchange.
yeah its a complex problem
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of course!
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