This week, on Clown World:
Draft legislation to create a U.S. federal framework around stablecoins would temporarily ban the types of payment coins that are not backed by outside assets — similar to TerraUSD, an algorithmic stablecoin that collapsed earlier this year.
Nonbank issuers of stablecoins backed by fiat currency would also be overseen by state banking regulators and the Federal Reserve.
Issuing a stablecoin without approval from those regulators could be punishable by up to five years in prison and a $1 million fine.
wtf does this mean?
Under the bill’s current form, it would prohibit the comingling of customer funds and keys with the stablecoins and other assets of an issuer. In theory, this would allow customers to more easily recoup their money if a stablecoin issuer fails.
Comingling?
Customer funds and stablecoins can't touch?
What does that even mean?
Clown world.
Well that escalated quickly!
@taskmaster just reported on this issue earlier today,
but it's certainly worth a few rehashes.
The language of this bill very specifically bans every algorithmic stable coin in existence no matter what. The only stable coins allowed will be ones pegged to dollars in a bank.
Many on Hive (or on other networks with an algo-stable-coin) would see this as an attack on the network. I see it as a massive opportunity. This is EXACTLY what we signed up for. This law is going to make it extremely difficult (if not impossible) for algorithmic stable coins to pop up. The regulators are standing above crypto with their hammer ready to whack-a-mole any algo-coin that they see. Meanwhile SBD and HBD have been around since 2016.
Think of the kind of press Hive will get if we are just chillin here with our algo coin, the regulators are smashing everything in sight, and then they get to ours and are like... "Uhhhh, what do we do with this one?" The only way to get rid of HBD would be for our core devs to fold and implement a hardfork that buys everyone out of their HBD by printing Hive and eliminating it entirely. If that happens I think I might just dump my entire stack into Bitcoin. That's just too big of a fail for me to personally tolerate.
HBD will be the biggest algo stable coin in the world.
Given enough time and development of course. But think about how badly a law like this would just completely destroy something like DAI and MAKER/MAKERDAO. That project is so intertwined within the corporate world it's enough to make one's head spin. Their majority userbase are a bunch of wealthy private buyers. The project literally can't do what regulations tell them they need to do. I'd be worried if I still held MAKER tokens, but I dumped those years ago when they announced that it was okay to collateralize DAI with USDC. Mmmm hm... sure.
Issuing a stablecoin without approval from those regulators could be punishable by up to five years in prison and a $1 million fine.
We see that once again the regulators can not even begin to wrap their brains around a decentralized ecosystem. In their minds, every stable-coin has a listing on some centralized exchange located in the United States they can legally control and an issuer they can put into jail if they disobey. How else would they take away someone's liberty for five years?
Imagine the possible scenarios:
Extreme pressure is put on Blocktrades to eliminate HBD with a hardfork. He writes the code and then Hive witnesses just... don't allow it. Then the government tries to apply pressure for other nodes to push the code. Imagine those witnesses are viewed as compromised by the network and voted out. Something like this could even create a network split where one side refuses to push code mandated by the government.
This is why people fretting over ETH regulation don't understand what is actually going on here. It doesn't matter what the SEC says. Their words are irrelevant. Ethereum is a security? So what? What are they actually going to do about it? Are they going to try to push code to the network? Who's going to write it? Who's going to allow that code to be pushed? How do you stop the network from splitting because of this attack?
So many people out there just assume that the regulators have all this power that they don't actually have. Oh no the regulators are going to come in and regulate stuff. Then if you ask 'HOW?' everyone just shrugs. No one can come up with an actual scenario where what is being said actually happens in the real world.
Spoiler alert:
The SEC is going to fine some centralized dev teams for issuing unregulated securities. Who cares? That's a completely irrelevant nothing-burger that everyone seems to think is significant. Nothing changes. The world keeps spinning.
The regulators are irrelevant.
In fact, they do exactly what we need them to do: root out the centralized garbage and kick it to the curb. The regulators help by slapping down the bullshit. Goodbye, you won't be missed.
Ripple Lawsuit
How can anyone be afraid of the SEC when they can't even win a lawsuit against the most obviously centralized garbage out there? It's been two goddamn years! LOL! WHAT!? That alone needs to give people pause. Look at how slowly these government organizations operate. Look at all the developments that can happen in crypto within two years. What about five years? It's crazy.
Update on Ripple Lawsuit
So, many people speculated that the SEC was going to bust out a very solid case because a lot of the information of the case was unknown, until now. At this point, it looks like that the SEC has a very weak case against Ripple. It's even weaker when we consider that the XRP community has stepped forward in a big way and helped Ripple during this entire process.
Ripple’s general counsel Stuart Alderoty said,
“My hot take – after two years of litigation, the SEC is unable to identify any contract for investment (that’s what the statute requires); and cannot satisfy a single prong of the Supreme Court’s Howey test. Everything else is just noise.
So not only does XRP fail every single prong of the Howey Test, but also the XRP community themselves comes forward and says there is no agreement with Ripple in terms of an investment contract. Ripple owes XRP nothing. How wild is that? Crypto people are insane.
Say what you want about Ripple and XRP, but it just keeps getting more decentralized. All the tokens that will ever exist were printed all at once. Where there dev funds and founder stake? Yes, of course, but they aren't going to mint more tokens. Compare that to central banking and our debt-based legacy system. It's a completely different brand. Totally non-comparable, but people just assume they are the same thing. It's not.
“I think there’s a reason for Stu to be confident. I have to tell you something, I was proven wrong already by these briefs because if people go back to my tweets a couple of weeks ago, I tweeted out that when we see the summary judgment motions and they’re unredacted, that we’re going to see evidence that we were unaware of. I said I probably predict that there will be some evidence against Ripple that is more damaging than some people think…
[But] it’s missing. I was surprised that the SEC did not have more specific evidence. All the specific evidence that they pointed to was to institutional investors and accredited investors. They made no connection to XRP holders, the retail holders, you or me or people out there.”
lol wut?
If Ripple wins this case it's going to send the entire crypto market into a rampaging bull run. I guarantee it. It doesn't matter how bad the legacy economy is doing. Think about how many investors are worried about regulations. Then Ripple wins the lawsuit and all of them are like "wtf how did that happen?" Huge win for everyone.
Deaton represents 67,000 XRP holders in the lawsuit after U.S. District Judge Analisa Torres granted the crypto investors “Amici Curiae” status last year.
“Amici Curiae” means “friend of the court,” according to Cornell Law School. Amici curiae can submit documents known as amicus briefs on issues relevant to the case as long as the court approves the briefs in advance.
FRIENDS OF THE COURT
So the XRP community is just constantly backing up Ripple and showing over and over again how the SEC is in a constant state of overreach. You have to admit... the SEC's stance of "we're here to protect investors" falls flat on it's damn face when the entire community rises up to protest the SEC's bullshit. It's pretty wild to see, even if I have zero interest in personally holding XRP. I can still root for them. The enemy of my enemy is my friend.
Conclusion
The regulators are doing exactly what we've been expecting this entire time, but somehow people are surprised. This push to reign in stable-coins is potentially the best thing that ever happened to HBD. We are going to get quite a bit of attention when they realize what we have going on here.
And to be fair, a lot of these regulations are going to be reserved solely for centralized exchanges operating within the United States (and perhaps centralized/doxed dev teams and founders). It actually might be quite a while before they try to reach any farther than that.
Hive needs to stand its ground and state the obvious: no one controls HBD. It's just out there and there's nothing any one centralized agent can do about it. Deal with it.
Regulations are an excellent test of decentralization. The best test even; The ultimate test. Can the network stand as a sovereign nation against an empire? Or will it fold like a house of cards? Time will tell, and these are exciting times.
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In Hives case, who would get it? The entire community? :P
Wow! 😲
It never ends!
We all (more than two million people) go to prison. :-D
They don't even know who we are.
What prison? Where? :D
Exactly.
And there's a big world out that wont be affected by US laws.
If anything it is the server that runs the code.
Probably not even that.
Probably the bank that runs the server will get in trouble.
These seem to be more like banking regulations than server regulations.
My impression was and remains the same. Their intention is to scare people into submission. They have no way of controlling crypto if people involved in it refuse to submit.
Exactly! They can't control crypto, and they certainly can't stop it. But they can make examples of a few people (see Ross Ulbricht) which will scare most "respectable" people into refusing to participate in crypto.
good post! Really like how you made it clear how regulators can want a lot of things but don't necessarily hold the power to follow through with it
On another note; I am currently stuck in a country that has restricted access to splinterlands.com and I really want to buy some packs for the SPLTD game from the general sale starting some time this or next week. So here's the deal: would you be willing to buy 150 packs (+ bonus cards) for me? I would send you the vouchers up front so you know I am serious. After the purchase I will then send you $750 worth in Hive/HBD and you transfer the packs to me. What do you think? 🤔
@tipu curate
Wut? Just use a VPN to avoid IP block.
I hear Opera browser gives you access to one for free.
There are also dozens of free trials that would give you more than enough bandwidth.
It's also possible to craft the Custom JSON on Hive without even accessing SL.com
Are you messing with me?
What country blocks splinterlands?
VPNs don't work where I am :D
seems like splinterlands is using amazon cloudfront which is blocking access
How would I craft the JSON?
Upvoted 👌 (Mana: 28/48) Liquid rewards.
I believe you to be correct and this is the path forward to the freedom of man in a society of an alternative economy. People will always find way to convert things of value that can be traded across competing economies/societies....a Black/Bootleg Market always pops up as do money launderers.
Exactly!
I've been talking about parallel systems for a long time!
First we just look like some kinda side hustle, trying to get by in hard times. Then we become a life raft to those who wish to begin leaving the old system, as it slowly starts to crumble.
The collapse is then sped up as people leave the old system behind.
And then we become a rocket, with exit velocity!
Once we get attention (finally), could SEC theoretically ban the trade of Hive? By this they won´t reach HBD itself but still they would obliterate the Hive/HBD ecosystem. They could sanction any DEX who is trading Hive. Just worst case.
The US gov. even managed to shut down a gas pipeline from one country to another (North Stream 2) alltough it was planned years ago, multinational contracts were concluded, it was already built, it would be environment friendly, etc.. All this in Europe where US should have no f...ing right to shut down anything. Just to illustrate their power, if they really want something.
The government banned drugs?
What happened?
The drugs became extremely valuable.
Imagine someone invents a flying car that can go into space or underwater.
And then the government bans it.
Now everyone that didn't ban it has an insane technology that USA doesn't have.
That is crypto.
So unlike drugs, crypto is an actual technology,
and banning the best ones is a very very very bad idea.
It simply won't work.
We can code faster than they can regulate.
Exponentially faster.
They still want everyone using their ever inflating easily trackable CBDC. This isn't over yet.
LOL! NS2 was canceled after Russia commenced its genocidal war on Ukraine and after having announced its aim being the restoration of its sphere of influence in Eastern Europe where it was during the Cold War.
That thing was vatnik friendly and that's the only way it was friendly.
The entirety of Eastern Europe was overjoyed to see that stupid thing gone.
Buying gas from Russia was the greatest fucking policy failure Europe has known since WW II.
Well, you see it from your side. I guess you have no access to other sources than NATO propaganda. Then you would knew that the cheap Russian gas was a source of prosperity for Europe.
You don't know much about the European energy mix, do you.
If you did, you'd know European countries have variety of approaches to energy.
The Nordics rely on nuclear and renewables. Norway exports its gas. France relies on nuclear for electricity generation.
Natural gas is a fossil fuel and a major source of CO2. It's a dead end.
A mix of nuclear and renewables + investments in energy efficiency are the only way.
Giving the Kremlin the power to extort you at will while continuing to burn fossil fuels in the decades to come would've been suicidally stupid.
It maybe a dead end, but the best alternative for the next decades, until nuclear fusion or whatever will take over. I don´t buy this CO2 bullshit, that´s just made up to create scarcity and oppress people.
Very well. Hive is full of people in one fringe or another. That may be one of the reasons more mainstream people stay away apart from the complexity and immaturity of the platform as a product.
Last summer's drought in Europe was the worst in 500 years. The heatwave was extraordinary. Similar anomalous weather conditions were seen also in Asia and North America. 1/3 of all Pakistanis lost their homes in a record flood resulting from melting ice and snow in the mountains. It will soon become apparent to an increasing number of knuckleheads that something's not right.
Not logic. Twitter has many millions of users and the discussions there are even more heated up.
I don´t say that something is changing. It is just way too simple minded to think "If we only decrease CO2 then all will be good.", The biggest contributor to the greenhouse effect is H2O, not CO2 by the way, in the form of water vapor.
Regulation can still make things more difficult even if it can't completely shut us down. Just making HBD illegal would result in many businesses refusing to be involved in anything related to it.
I'm sure any wallet app that supports an "illegal" stablecoin will be removed from the official app stores for Apple, Android, Chrome, etc. Major companies that provide hosting and domain registrar services could stop allowing any of the front-end sites like PeakD, Ecency, LeoFinance, etc.
Going to the gym is more difficult than not excersizing.
It also wastes time.
Therefore everyone should cancel their gym memberships.
Just a waste of money really.
See how easy it is to construct a narrative like this that is obviously false but still follows a logical flow? Does making drugs illegal lower the value? Again, something that makes sense in theory but is completely the opposite in the real world.
"The Moon doesn't care for barking dogs".
Just ignore them. By the time they even realize there is such thing as HBD and assuming they somehow don't fail along the way with getting rid of other stablecoins, we will have more pressing matters to attend to, like the problem of year 2037 (last year that can be expressed with use of classic 32 bit "epoch time").
Lots of people went to prison before weed finally won its space from the war on drugs, let's hope the coders are ready to man up.
In a slave paradigm freedoms aren't given, they are taken by those that want them.
Free people don't need permission.
Code is protected by free speech.
It's the people who run the servers (execute the code) that take the real risks.
But again this can be outsourced to other countries and things like that.
Plenty of anon people running servers that are hard to track down because no paper trail.
Hard to follow the money when people aren't using a credit card for payment.
Freedom isn't free. Code is only protected as free speech from the USG, and as we can see from probative documents that protection is illusory, because the USG was directing the censorship effected by social media companies.
Speech is only free if you protect it from censors, just like any other freedom only exists if you protect it from anyone that would take it.
Payment processors are today censoring people by preventing them from receiving money. Governments are seizing bank accounts without legal process. Banks are just taking the money people deposit without legal consequence.
Is shutting down the electrical grid it? Seizing all our servers? Executing each and every one of us? It seems unlikely that any of these things will happen, until they happen. It's also not necessary that any of these things be done because of HBD at all for them to effectively get rid of HBD. The asteroid that got rid of the dinosaurs didn't set out to make them extinct. It just happened.
I have lost everything I owned more than once. What I learned from that is that I grossly underestimated hazard, and that is why I did not adequately secure my assets.
Learn from my mistakes.
INDEED!
Here's the thing: crypto is all about inefficient redundant solutions that are highly inefficient but extremely robust against systemic failure. I just need to extend that concept into all aspects of live, using crypto to subsidize everything else that can't carry its own weight.
See?
That's exactly what your message is.
Stop rushing forward and secure the borders.
Easier said than done, I suppose.
Sad that we just accept as a matter of course that these people get to control those people through violent means because reasons.
Perhaps that is the button we should push.
Rule by force being a disease.
Bad for children and other peaceful beings.
Blocktrades can't unwrite something that was written by other people a long time ago.
Because he's in the US, the SEC can force him to stop being a witness on any Hive fork that still has HBD. The network will split and the one having HBD will continue to operate outside of US jurisdiction.
Most of us will be airdropped some coins once again.
Regulators are really doing good by forcing garbage out of the space.
Dev teams will have to be anonymous at some point.
Not sure how true that is.
They can stop nodes from running in USA.
Very difficult to stop them from running elsewhere.
Plus people can move and even renounce citizenship in extreme edge cases.
Their idea of what "in USA" is can be flexible. And US persons can still be held liable for what they do outside of the US.
Yes, of course people can move and renounce citizenship if needed.
The SEC seems to have this weird delusion that they are a global regulator, and that they can create US law (something I thought was the job of Congress and the US Senate) and that US laws apply worldwide.
At a time when many countries are scrambling hard to de-dollarise, this is a remarkably arrogant approach. With India, Russia, China and many other SCO countries now transacting in their native currencies, US fiscal dominance is evaporating incredibly fast. It creates a great opportunity for crypto to step into the void left alongside national currencies.
The SEC is just plugging holes with chewing gum as the dam gets closer to breaking.
Everything forbidden is doomed to become popular sooner or later!
You managed to inspire me today.
small miracles
it will be a very difficult test to pass. Hope we survive this as well
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All I want for Christmas is the utter disintegration of the US government.
Let’s let a few cookies crumble before that time. We don’t want a Chinese type government to get established in its place that’s for sure. I don’t think it could with the amount of people we have that are fiercely independent, far more than the cucks in places like Europe but still.
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Apples chasing oranges...it never works well for the apples
For now I have to work with CExes. Forcing delisting of all stablecoins would hurt their value. I sometimes am forced to sell HBD on the DEx in order to go from HBD to some other coin due to low liquidity as it is. Delisting would mean I would have to go through another step of trade to convert to most other currencies. I imagine it would hurt other stablecoins more than that of HBD.
I agree with you, however, what prevents regulators and governments to switch off witness servers installed in the cloud (PRIVEX)?
What prevents witnesses from scrambling to another platform where they won't be censored or directly owning their own server? The financial incentive to keep the boat from sinking is very high.
We can use all these same arguments to say that the government will eventually stop people from pirating music and movies, but they never did. Crypto is 1000x more aggressively decentralized and antifragile compared to 'illegal' torrents.
Hope you are right
bad times create good times, good times create bad times
You're skipping essential steps that are necessary. It's hard men that create good times, because bad times made them hard. Bad times are just bad times without the hard men that come out of them.
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