[roflyear]

back in the day (as in like 30-60 years ago) a popular scam was to create a situation where frontrunning trades was really easy. there are a million examples of similar things.

i don't think regulation is a good thing when a single person is trading with a single person. but, at some point an exchange becomes so big (they deal, seemingly fairly and with honestly, with many people) where people start to trust it. there is an inflection point where people can take advantage of that part of the human condition. then, you need regulation, not because people are stupid, but because we're human and it is easy to fall victim.

in these cases regulation helps to preserve the trust in the systems. otherwise, people just will not use them, or they will use them in ways that are not beneficial to the group.

[imtringued]

There are two problems and they are intertwined.

We need to have regulation that allows startups to open mini exchanges and banks with easy compliance and unconditional licensing but with heavy restrictions on per customer funds and total funds they are allowed to manage.

The problem is that if you want to open an exchange in say Germany that is practically impossible. You can't get equity or loans for a bank if you don't have a bank license. You need a million or more starting capital to start your own bank. It is a chicken and egg problem.

That leaves a huge hole that unregulated exchanges want to fill and they have a massive competitive edge because they aren't held back by these regulations that are meant for megacorporations.

[roflyear]

i do think there is a separate problem entirely that regulations are often really hard to follow, i think limiting the involvement in lobbyists may help there, or at least some lobbyists...

(like, turbotax really should not have a say in how i file my taxes... or how hard it is...)