CRYPTOCURRENCYDec 6, 2018Rob Loggia
As difficult as it may be for the modern reader to comprehend, there was a time when those in power required at least the pretense of lawful action before plundering the citizenry. When the United States was founded, even the concept of eminent domain, which requires fair market compensation for seized lands, was controversial. The idea that the government may take whatever it wished from individuals was rooted in the divine right of kings, a doctrine thoroughly rejected by the people that undertook a Great Experiment in self rule. From this starting point, we have descended all the way to the present day, where civil asset forfeiture laws allow the government to simply steal from citizens without cause or due process.
In this degenerate atmosphere, entities like the SEC can operate in the background noise with little criticism or even attention. Aided in their camouflage by the relatively gray and often dull subject matter of their jurisdiction, this predatory agency nonetheless commits acts of aggression, extortion and theft against citizens on a regular, recurring basis. It's latest victims, boxing superstar Floyd Mayweather and performer DJ Khaled, have just been ordered to turn over to the government double the amount they earned promoting an ICO while exercising their right to free speech.
The "grounds" cited by the SEC for the action are that neither individual disclosed that they had been compensated for their work. Why this should be an issue is something apparently only financial experts and regulatory agencies understand. Ordinary, rational people have no trouble with the idea that if they see a celebrity talking about a product, brand, or even - gasp - a security in a public forum, it is a pretty good bet they have been paid to do so. So why all the fuss over disclosing something that is patently obvious? One possible justification remaining could be to protect the extraordinarily stupid among us.
Perhaps we should salute the SEC for this commitment. After all, people who are this stupid are the most likely to be taken advantage of. Of course, most of these people are so profoundly dumb that they have guardians to prevent that kind of thing. The population size of the remaining group must be small - so small that one can't help but wonder whether it would be easier to simply assign them guardians. Then we could shut down the SEC.
But of course, all of this is absurd. The SEC is not in place to protect people this stupid. They, like most other modern government agencies, have the primary objective of grifting off the marketplace to help fund the ever-expanding government. A secondary objective for the SEC is to prevent organic wealth redistribution. If you look at the regulations they enforce, how they are crafted and implemented, they clearly achieve this objective. Big money investing is a private club, and you're not in it. Wealth stays and grows with the general group that already has plenty of it, artificially held in place by these regulations.
What makes the SEC's actions even more egregious in this case and the many others like it is that they don't even have jurisdiction in the first place. They claim they do, but if Snoop Dogg claimed to be the Queen of Spain, many of us would have questions. Critics of cryptocurrency enjoy pointing out that blockchain technology is, at the core, little more than a distributed database. And they are correct. Crypto"currencies" are little more than a collection of encrypted statements, composed of human readable words and numbers, that can be printed to paper if necessary. Will they claim jurisdiction over the content of all Oracle databases next? Given their track record for expanding their turf, don't rule it out.
This overreach is not surprising. They recognize the power of distributed blockchains. This power is not the ability to do an end run around securities regulations. Nor is it the power to issue a digital security. The power, so frightening to the SEC, is the power for people to manage their own money, and their own relationships, without needing securities. The trust provided by the blockchain obviates the need for publicly regulated trust. It is a future that has no need of the SEC, and like all government agencies, this existential question rules all. The cart goes before the horse, and we are all asked to simply accept that the SEC, an agency founded in the 1930's, is legally entitled to shake down cryptocurrency users.
But no one could be THAT stupid, right? Certainly not this author. The SEC needs to give Floyd Mayweather, DJ Khaled and every other citizen they've shaken down for using or promoting cryptocurrencies their money back. And an apology would be nice.