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New Crypto Law (I鈥檓 terrified) - YouTube
Channel: Max Maher
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the SEC put out a little proposal and if
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enacted it could crush crypto technology
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all without even mentioning the words
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defy or cryptocurrency how is this even
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possible is this some kind of mistake
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intentional ignorance or something else
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altogether this new proposal by the SEC
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plans to expand on the word Securities
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dealer to specifically include
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treasury's dealers making them subject
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to much more regulation a U.S treasury
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is basically a loan that you give to the
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US government in return for a small
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interest rate and it turns out that
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about half of the trades in this
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specific Market are done by brokers who
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may need additional regulation now wait
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you're probably wondering how does this
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relate to crypto whatsoever I mean the
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title of the proposal is literally about
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government securities dealers not crypto
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well in this case it's all about the
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footnotes the fine print you can see on
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footnote 36 it states that this rule
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would apply to any Securities defined by
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the document as well as any digital
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asset that is a security as defined by
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the Securities act meaning if a crypto
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service is to be determined into
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security it would be subject to far more
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regulation this impacts way more than
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just large exchanges if you do anything
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in defy it would impact you but before
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we dig into that we need to determine
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what exactly is a security in this
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context if we look over to the
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Securities Act of 1934 we can see the
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definition of a security and that
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definition includes just about any
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investment that promises a return this
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is thanks to What's called the Howie
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test a four-part test that determines if
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something is a security now there's
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trouble with the Howie test and crypto
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the test is old and it's pretty hard to
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argue that crypto services like lending
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or staking aren't some degree of
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Securities under these old guidelines
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and if this proposal is enacted it would
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give just enough wiggle room to regulate
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crypto without actually passing a bill
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specifically on crypto like some kind of
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D5 sneak attack
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and again before we talk about how this
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impacts you specifically it's important
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to ask why the SEC is acting like
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they're both ready and not ready at the
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same time it's so strange here's
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something that Gary Gensler of the SEC
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recently said on regulating crypto
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platforms those platforms should come in
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they should figure out how to register
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be in an investment protection remit now
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not many have really what about coinbase
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who came to the SEC with their lending
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product last year and you threatened to
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sue them if they launched the product
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without giving any guidance on what they
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should do every time we ask the SEC what
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a Securities dealer is they threaten to
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sue chair genzler you have on multiple
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occasions asks crypto companies to come
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in and speak with you however many of
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these companies that have come to speak
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with you have soon after found
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themselves the targets of enforcement
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actions or even legal threats Kinsler
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even went so far as they have crypto
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Platforms in ultimatum in December come
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to us or we'll come to you
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I don't want to kill you what would I do
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without you on the one hand it's kind of
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hard not to laugh the sec's
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contradictory Behavior here but on the
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other hand it's kind of frightening like
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the SEC is forcing crypto companies to
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come to their office if they have no
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framework to register their offerings as
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Securities nor any official
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determination of what a security in
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crypto even is it's like when you ask
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your mom as a kid if you can go over to
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your friend's house and she says no so
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you're like why can't I go to my
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friend's house and she's like because I
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said so
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the problem is this impacts anyone who
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uses crypto to earn yield whether that
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be through staking mining lending or any
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other creative use of D5 going back to
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the proposal it states treasuries
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dealers would need to officially
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register as Securities dealers meaning
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much more regulations but this also
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includes anyone dealing in digital
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assets whether that be facilitating
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transactions providing liquidity or
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quote buying and selling securities for
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its own account what this translates to
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is anyone who runs a crypto service
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where profits are generated or trades
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are made would be required to file with
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the SEC tens of thousands of stake pools
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dexes and protocols all filing with the
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SEC for the average crypto user this
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would mean yields on your favorite
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services like lending or staking would
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likely go down due to higher expenses
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and a strong likelihood that D5 Services
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would need to require your personal
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information like a social security
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number in order to use the service this
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would then lead to people illegally
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using these services with vpns crypto
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companies moving out of the US and more
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centralization in the space due to the
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fact that it's way harder to get started
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if it's harder to get started you can
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bet fewer and fewer companies will enter
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the space all in all it's not great but
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before I get to a curious exception to
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this rule I need to chat about Larry
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David because Larry David and I have
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something in common besides being known
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for our hair we're both sponsored by FTX
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FDX allows you to buy crypto nfts and
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digital assets for as much as 85 percent
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cheaper than major competitors and if
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you use the link in the description
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you'll not only be supporting this
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channel but you'll also earn free crypto
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on every trade over ten dollars so check
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that out in the description now for all
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two of you who in the audience read this
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200 Page document you might be saying
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hold on it specifically states that
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operators who control less than 50
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million in assets are not subject to
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these rules meaning small operators
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would still have a chance and you'd be
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right except footnote 97 this states
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that even if you have less than 50
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million in assets your assets can be
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combined with someone else's and be
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counted as more than 50 million so
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there's gray area to in include just
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about everything if they want to now
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this proposal is just a proposal for now
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but the problem is the SEC likely
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already has the authority to regulate
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crypto here's what Gensler has to say
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when asked if they have that power I
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think that we have robust authorities
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that the Securities and Exchange
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Commission and we're going to use them
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and continue now this proposal is just
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one of the many questionable ways the
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SEC is approaching crypto like why
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haven't they settled their lawsuit with
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ripple yet how they not approved or even
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denied the mini spot crypto ETFs I mean
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grayscale has been trying to get the SEC
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to approve their Flagship fund gbtc for
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years their CEO said he's considering
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taking the SEC to court over the matter
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and what's strange about this is the SEC
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is concerned about consumer protection I
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mean that's their whole job however more
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than 800 000 Americans already own gbtc
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with low protections approval by the SEC
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would literally give more protection and
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safer access to something that's already
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being used again contradictory now
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listen I'm not totally against
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regulations I think well-educated and
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revised laws specifically for crypto are
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probably a good idea I'm all about
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greater access to the space if more
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safety and regulation means more people
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can safely benefit without sacrificing
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things like solid lending returns I'm
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all for it there's no doubt that we have
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problems in the crypto space I mean take
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what just happened to axi Infinity 625
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million was stolen in a split second due
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to an exploit on Ronin if the wild west
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and endless amounts of Thieves and
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hackers are trying to take advantage of
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weaknesses on blockchains every single
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day it's not perfect but that's when
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people who don't understand the space
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come in and say hey we had this one
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issue over here so we need to completely
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blanket regulate the entire space uh we
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know for example that Iran and North
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Korea uh use
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cryptocurrencies to evade Financial
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sanctions
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um not a lot though it turned out to be
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it is a smaller amount chunk than you
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can make that kind of argument for
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anything let's get rid of cash because
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people buy pot with it let's get rid of
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the internet because I'm sick of all the
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Will Smith memes which I am but you can
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also make the opposite argument ninety
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percent of donations to Ukraine were
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done in crypto so there you go if you
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just look at that it's amazing that's
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just not how things work let's not build
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regulation by cherry picking the good or
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the bad so is this some kind of Shadow
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attack on crypto a conspiracy to control
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and decimate the entire space
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I wish I knew for certain what I can
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tell you is how this Butterfly Effect
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hurts both you and D5 services dexes or
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decentralized exchanges are the backbone
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of D5 this is where you can buy or sell
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just about any kind of digital asset so
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you can then do other interesting things
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unlike centralized exchanges like FDX
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which use order books to match a buy and
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sell decentralized exchanges use an
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automated Market maker or amm you can
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think of it like a little robot sorting
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transactions and matching buyers and
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sellers right now you could copy the
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code of your favorite decks tweak it to
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how you like and launch it and boom now
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you're a D5 operator it doesn't mean
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that you'll have any users but you'll be
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an operator nevertheless this is great
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because you don't need anyone's
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permission not the blockchain not the
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government not even the Decks that you
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literally copy and pasted their code
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from lack of permission has helped this
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space grow extremely quickly that's why
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D5 today is completely different than it
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was just a year ago but this new
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proposal in less altered would mean in
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order to start a DEX you would need to
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file and rest receive a dealer
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application from the SEC on the one hand
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you can see the logic of wanting to know
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these platforms are being run properly
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but on the other hand we've all dealt
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with the government or at the very least
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gone to the DMV if that's any indication
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of how easy getting approved by the SEC
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might be we can see how this could slow
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down innovation in the space and if
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they're too heavy-handed you can bet
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that just about every crypto company
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will quickly move out of the US to
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friendlier countries if you want to help
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the fight for D5 I'll leave a link in
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the description here you can help by
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requesting the SEC revise this proposal
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for greater Clarity on crypto regulation
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in crypto is likely coming whether we
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want it or not but let's just make sure
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that it happens in a well thought out
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manner not in the 96th footnote of an
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unrelated proposal also linked in the
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description is my patreon there you'll
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find access to all of my buy and sell
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alerts my insights on even more news
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events free coaching every single day
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from our top coaches and so much more
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just make sure you grab a spot ASAP
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Linked In the description and I want to
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thank you so much for watching I'm Max
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Maher and I hope you have a profitable
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day
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