[paulgb]

I’m not a fan of Trump but my steelman argument for this is: policing public markets is a public good because efficient capital markets are the bedrock of a capitalist society.

It’s hard to make the same case for crypto, which (despite the insistences of its participants) more or less exists in isolation from the rest of the market. The industry feels it is over-regulated. Makes sense that a more lassiez-faire leader would take a more hands-off approach to it.

[nativeit]

If nothing else, I feel like this view is myopic. Capital markets are people and jobs. When crypto projects collapse, or rampant fraud, abuse, manipulation, and outright theft are allowed, that money is coming out of real peoples pockets, and that has real rippling effects that are not only objectively disruptive to the economy, but are also much more difficult to then predict, measure, and respond to which further amplifies their detrimental impacts.

[paulgb]

This isn’t really “allowing” fraud though. From the memo:

> Prosecutors shall prioritize cases that hold accountable individuals who (a) cause financial harm to digital asset investors and consumers; and/or (b) use digital assets in furtherance of other criminal conduct, such as fentanyl trafficking, terrorism, cartels, organized crime, and human trafficking and smuggling. Seeking accountability from individuals who perpetrate these types of wrongdoing deters future illegal activity, compensates victims, and promotes the public’s confidence in the digital asset markets and broader industry. On the other hand, criminal matters premised on regulatory violations resulting from diffuse decisions made at lower levels of digital asset companies often fail to advance the priorities of the Department.

I read this as switching from proactive enforcement (stop the act before it causes damage) to reactive regulation (punish the guilty after the act happens). Proactive regulation of public markets makes sense because the general public has an interest in well-functioning capital markets even if they are not direct participants (markets are essentially the capitalist replacement for central planning).

[bamboozled]

Why police any gambling where people can get addicted and lose their home and worse m? There’s a lot of reasons.

[paulgb]

I worry that having the SEC regulate crypto can actually be worse for those people, because it sends the message that it’s a legit government-approved investment instead of a wild west zero-sum craps table.

[bamboozled]

The reality is that it exists and that people take crypto risks. Just like illegal gambling.

There is a reason exchanges were investigated in the first place and it wasn’t for fun.

[nielsbot]

But what’s to reason to not prosecute lawbreakers/fraud?

[paulgb]

My read is that they will still prosecute fraud once it happens, they just won’t proactively regulate the industry.

[stevenwoo]

I’m thinking there will be prosecution but there will be quid pro quo’s like the guy Trump just pardoned after the felon donated 2 million to GOP. https://news.bloomberglaw.com/us-law-week/nikola-founder-mil... Wipe the slate so the felon no longer owes money for fraud.