[itsoktocry]

>The FCA also issued a consumer warning which, among other other things, reiterated that no entities in Binance Group are registered with the FCA and therefore cannot carry out regulated activity in the UK.

The "impact" of this is that the regulators are beginning to take actions against the wild-west of the crypto world, regardless of how toothless each individual action is.

Put aside your opinions of cryptocurrencies as a technology...there's no way sovereign governments were going to let this fly. There fireworks are just starting.

[rawtxapp]

Are you saying that crypto world wasn't regulated thus far? You realize that's not the case right? SEC and CFTC rules still apply and they have sued companies/people in the crypto space already. These companies and people also have to comply with IRS laws around taxation. Pretty much all of them have stringent KYC/AML verification systems.

[ernopp]

DeFi protocols don't have KYC/AML systems. All they know about is your wallet, and from that wallet you can buy any token, borrow/lend, add liquidity to a market-maker pool, etc.

[rawtxapp]

The goal of regulators should be to stop people from taking advantage/scamming others, not to stop innovative financial products from being built.

Defi protocols (at least on eth) are open source, so I can verify that they are doing what they are supposed to be doing and use those products. It would be far from ideal if some regulator decided that we can't use it because reasons x,y,z.

[jacquesm]

Regulators have far broader scope for regulation than just to ensure that people are not taken advantage of or scammed.

They don't stop innovative financial products from being built, they might stop them from being used for a particular purpose or even at all depending on how a particular development impinges on the list of items for which they regulate.

Amongst others, and depending on where you live your local regulators may add or subtract from this list considerably:

- fairness

- transparency

- stability

- anti money laundering

- anti terrorism financing

- tracking of ultimate beneficiary owners

[RhodoGSA]

That list was developed for traditional finance. After messing around with DxDy protocol, i learned that literally all of those point are impossible. Also, how would you shut them down if they don't comply - It's a smart contract on eth. Even if you arrested everyone involved, it 'lives' outside of the reach of the US gov unless you ban all of eth.

[jabits]

You are wrong to include fairness on your list (and probably stability).

[kcartlidge]

> You are wrong to include fairness on your list

The company I work for is owned by a huge French bank. Even though I am in tech I still need to do some mandatory (legally required) training, and one of the courses is Treating Customers Fairly.

The FCA say "Treating customers fairly is a requirement for all regulated firms, no matter their size or the nature of the activities they undertake".

[jacquesm]

It is right there in the charter of the regulators of the three countries that I'm most familiar with. Spelled out.

[lottin]

> It would be far from ideal if some regulator decided that we can't use it because reasons x,y,z.

Not for you to say. Society as whole decides which regulations are ideal.

[rawtxapp]

Sure, but we also live in a free society, so they can't just ban things because they feel like it without swift opposition. If it's a legitimate thing that people want, it'll still continue to exist, but would only move underground (for example, we know how alcohol ban worked out).

[itsoktocry]

>You realize that's not the case right? SEC and CFTC rules still apply and they have sued companies/people in the crypto space already.

Famous people are literally pumping scams to millions of followers on social media every single day, so I'm not sure a couple people getting sued means anything.

[ernopp]

Indeed. There was a great article in the FT on this looming battle recently:

> Human society, the historian Niall Ferguson says, oscillates between the dynamic of a metaphorical “tower” and the “square”. Sometimes institutions or leaders control social groups in hierarchical ways, just as church towers overshadowed medieval European cities.

> At other times, horizontal networks shape events, operating like crowds in ancient city squares. The “square” used to work best in small, face-to-face groups, but digitisation now enables peer-to-peer systems to operate on a massive scale.

> Now, however, a “tower” dynamic is entering the frame. On Wednesday, the Bank for International Settlements (the central bankers’ bank that, in a delicious irony, occupies an actual black tower in Basel) issued a striking report that lashed out at the “square”.

https://www.ft.com/content/9481d93d-c7ef-4749-9916-bc860d538...

[lbriner]

I'm not sure what they realistically do. They regulate banks but at least banks have deep enough pockets to pay the fines. What do you do when 18 and 21 year old brothers get hacked and lose $100M+?

Well, you say, they wouldn't get registered because they wouldn't have what they would need to provide a fair risk to customers. Then what? People will simply run the exchanges elsewhere and the money will keep getting "lost", "stolen" or seized by the authorities.

[davidebaldini]

Bank deposits of legal tenders are insured by the central bank. In the Eurozone the ECB insures all personal deposits up to 100.000€. When the bank of Nicosia, Cyprus went bankrupt and the account holders could no longer withdraw, their losses were fully subsidized by the ECB, up to the 100.000€ limit.

This undue confidence or trust we bestow in regulated banks comes at the expense of the wider public: when we lose our deposit due to insolvency, everybody is forced to pay for it by the monetary expansion of the ECB, which covers our loss by printing (or by digitally creating) more euro, and distributes this minted money to the affected bank, allowing withdrawals to resume. This intervention of the ECB dilutes the purchasing power of every unrelated person holding euro, regardless of their country of residence, and regardless on how meticulous they are in choosing a reliable bank. Even the CFA franc in West Africa suffers from this enforced depreciation, being pegged against the euro at a fixed ratio.

Thus, the account holders gain an artificially strong confidence in the bank of their choice, regardless of whichever bank that might be, regardless of how much risk exposures the bank takes, regardless of what financial instruments it edges against, and regardless of the size of its fractional reserve compared to its liabilities. It is an insurance whose only purpose is to allow the bank to take undue risk with volatile instruments and to collectivize any resulting losses against the public, while deluding the account holders with the ancillary excuse that their deposits are safe no matter what.

The alternative to having 21 year old Joe running a million-dollar crypto exchange website from a laptop in his basement is to apply fucking due diligence in choosing our counterparty, and prosecute whenever proper fraud and intentional deception take place.

[jimmaswell]

Citizens need to push back more if they want to keep any rights. UK citizens have a poor track record of this, gladly giving up most of their guns and having nothing to say about the absurd anti-knife campaign and fining people for nazi jokes, but they did start having some large-scale protests at the prospect of further lockdowns so maybe they're starting to grow some spine.

[monkeydust]

Most players in crypto space including exchanges want regulation. It wil legitimize the space and that will in turn allow more institutional money to flow in.

[madamelic]

Everyone who would benefit financially from regulation wants regulation.

Regulation is the strongest moat you can have.

[ac29]

If they want regulation, why aren't they registered with the FCA?