Why are stable coins free from SEC ? - page 3.

The Sceptical Chymist

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Quote from: Zlantann on August 14, 2023, 07:11:08 PM

The SEC Chairman Gensler once said that stablecoins are risky and can harm the US economy, he even referred to them as poker chips at the casino.

He's right about them being risky IMO, just based on some of the crypto disasters we've seen in the past year or so, but stablecoins harming the US economy? Please, the US government is doing a damn good job doing that all by itself with its reckless monetary policies, heavy taxation, and the aftereffects we're now starting to see, e.g., inflation. Compared to the carnage the government has left in its wake, stablecoins are nothing.

I snipped out the part where you said those coins are under scrutiny, but you're on the money about that. My guess is that the banking lobbyists' power far outweighs the power of people fighting for crypto. Banks have got to be the ones influencing politicians to go after stablecoins, requiring exchanges to implement KYC measures, and probably a bunch of other things we've not seen yet. As an aside, the whole money laundering excuse they use is laughable on its face. Compared to fiat, crypto is a tiny portion of the problem and doesn't deserve the heavy scrutiny IMO.

el kaka22

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I would guess that it's obviously a situation where SEC is not doing a big thing about it, because most of them are not established in the USA. Which would be like saying "oh that French company can't sell here", and they can't just do that. This means that they can only stop them from doing any criminal thing inside the USA lands, and that's exactly what they have done already as well.

They investigated USDT before, and even punished them with an 18 million dollar fine if I am not wrong, and they have asked Binance to stop with binance.us if they keep BUSD going and there are talks about binance closing down BUSD completely. That two alone should show you that they are not just sitting and letting the stablecoins be.

Darker45

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I don't think stablecoins are being exempted from the suspecting eyes of the SEC. I don't know why you have this impression, but we have already heard of a number of statements coming from the SEC regarding stablecoins. And while I highly doubt that stablecoins are securities, the SEC is even interested to take a look at the assets which back them up. Furthermore, stablecoins are also perceived as a direct threat to the banks. They're not off the hook.

Pejoh Asu

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In my opinion, the thing that makes stable coins not too problematic so that they are free from the SEC is because coins are stable, the value does not change so there is no speculation, the developer states that every transaction that uses stable coins will immediately save real money, for example USD, so it doesn't make the SEC worry about being used for speculation as in other types of crypto.

naira

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Quote from: KiaKia on August 14, 2023, 01:44:59 PM

Because if stable coins was target it will be a enormous hit to the whole crypto market, why haven't such thing happened yet? I also read where the former Binance.US said that the White House is trying to keep stable coins "out of discussions" like they know something.

Is this all about saving their USD? Or they are waiting to create CBDC successfully first before they go after stable coins?

Different types of stablecoins with different names and who launched them. An example of BUSD from Binance because the exchange that issues it, the SEC has more freedom to play. But what if the government issued its own Stablecoin in crypto form? looks safe or is always not taken seriously. That's why this distinction is quite clear. As long as it is centralized and the SEC itself is controlled under the auspices of certain institutions, it does not rule out the possibility that everything will go well. This is all still under the same title, which is only about profit control.

kryptqnick

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It's great that others have mentioned a lot of cases where the SEC expressed their negative attitude toward various stable coins. I want to focus on another matter. The SEC is pretty consistent on what fall under their regulations: securities or something very similar to securities. But here we hit a weird spot because the SEC seems to believe that stablecoins are close enough to securities that they should be registered as such. On the other hand, some argue that since there's no expectation of profiting when it comes to stablecoins, they aren't securities and thus shouldn't be under the SEC.
In any case, it seems that the op is wrong in assuming that stable coins are free from the SEC, at least if the SEC's position on the matter counts.

Peanutswar

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Most of the stable coins are bound into a local currency, for example, the BUSD, USDT and another stable coin which is bound with the USD price. They keep stable but not as always, remember the issue regarding the Luna with the pair of stable coins even though they called stable coins, unexpectedly people keep selling their assets and use the stable coins to prevent their losses, as long as the project of those coins does disobey the rule of the SEC there's nothing the issue with it. Like the recently added feature of the Paypal they release their coins too.

Joshapat

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Stable coins are indeed things that make us curious because there are no problems like with other projects or coins, and in my opinion the factor that makes stable coins safe is that they use USD to support stable coins even though this fact is still difficult to prove. we'll see if later it's still safe and there's no problem or the problem will explode causing shocks in the market.

yhiaali3

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Not all stablecoins are safe but of course stablecoins that are accepted by the US government and the SEC will remain safe as they promote centralization and government control.

Recently PayPal launched its own stablecoin and it has a lot of support from the US government because PayPal is fully subject to US regulatory laws regarding KYC, AML is fully dollar backed of course this will enhance the dominance of the dollar around the world thanks to the widespread services of PayPal around the world.

Control is what the United States seeks, and it does not matter if this happens through the paper dollar or the digital dollar.

DrBeer

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Quote from: KiaKia on August 14, 2023, 01:44:59 PM

Have anyone wonder why stable coins are safe all this while from Gensler and SEC, even the government? Why hasn't there any hunt on those centralized stablecoins? Is there something we don't know? Are stable coins somehow settled with the government and SEC behind the curtain?

Because if stable coins was target it will be a enormous hit to the whole crypto market, why haven't such thing happened yet? I also read where the former Binance.US said that the White House is trying to keep stable coins "out of discussions" like they know something.

Is this all about saving their USD? Or they are waiting to create CBDC successfully first before they go after stable coins?

There are tons of answer options.
- behind these tokens is the dollar, which means stability and lack of volatility. Yes, I agree - there are risks that the owner can manipulate the stock (collateral), but there are many articles of the criminal code on this

.
- there is nothing behind a common cryptocurrency. The collateral of any other cryptocurrency is nothing, but they attract money for their projects. And such actions (working with securities or equivalent to them) are the responsibility of the SEC
- Many stablecoins have mechanisms of centralized monetary systems, such as freezing your account (read - your wallet), cryptocurrencies do not. Therefore, stablecoins are "closer" to the legislation

o48o

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Quote from: KiaKia on August 14, 2023, 01:44:59 PM

Have anyone wonder why stable coins are safe all this while from Gensler and SEC, even the government? Why hasn't there any hunt on those centralized stablecoins? Is there something we don't know? Are stable coins somehow settled with the government and SEC behind the curtain?

Because if stable coins was target it will be a enormous hit to the whole crypto market, why haven't such thing happened yet? I also read where the former Binance.US said that the White House is trying to keep stable coins "out of discussions" like they know something.

Is this all about saving their USD? Or they are waiting to create CBDC successfully first before they go after stable coins?

Well this has nothing to do with cbdc's, as that's only new platform for digitalized usd (which people have been using since bank transactions), but one huge difference to altcoins, that comes in mind, is that you can't argue that usdt exists for making profit, which you can argue about altcoins and their marketing related to icos/idos/ieos or whatever. Obviously there are services that pay profit for holding usdt, but that's has nothing to do with Tether the company.

And one of the reasons SEC attacks to altcoins you can find from the Howey test, and that is under "3. With the expectation of profit"

gunhell16

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Quote from: KiaKia on August 14, 2023, 01:44:59 PM

Have anyone wonder why stable coins are safe all this while from Gensler and SEC, even the government? Why hasn't there any hunt on those centralized stablecoins? Is there something we don't know? Are stable coins somehow settled with the government and SEC behind the curtain?

Because if stable coins was target it will be a enormous hit to the whole crypto market, why haven't such thing happened yet? I also read where the former Binance.US said that the White House is trying to keep stable coins "out of discussions" like they know something.

Is this all about saving their USD? Or they are waiting to create CBDC successfully first before they go after stable coins?

What stablecoins you are referring with dude to do this topic anyway? As far as I know, I'm not just sure if the SEC really is after Stablecoins, or because they are planing something we don't know to enter that they want to benefit more or their government.

Because we know that the SEC has recently been hurting cryptocurrencies and others have even closed it as harassment and abuse of their power. So I don't think it's as good as you think dude. It is in my opinion that there is nothing else.

Minor Miner

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Quote from: icalical on August 16, 2023, 03:29:43 AM

If what you mean by 'free from SEC' was that stable coin is never considered as a security then it is because stable coin is backed by USD it can't be considered as a security because the price is always 1:1 to USD. Therefore it can't be used as an investment by US citizen and can't give them any profit. Security is something that you can speculate and look for profit.

Not true, even though we often think of stable coins as always 1:1 to USD, there have been many cases where USDT or BUSD also fell or rose creating a disparity with USD. It's just that their volatility is so small and we don't care about them, but they obviously also have volatility risks.

I think the SEC has their plan and will attack the market step by step, most likely exchanges and altcoins being their first target. If they succeed, the rest of the market will be their next target. And I believe even bitcoin will be their goal and their ultimate goal is to regulate and control the whole market.

Despairo

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Actually SEC have sued many stablecoins, you need to be more active reading in Altcoins discussion and Legal sections where it were this topic discussed before.

But even though they got sued, they're centralized, no privacy, and stable price, this make them easier to convince SEC. It's different if we talk about privacy coins where SEC and centralized exchanges are working together to fight and delist them from the market.

icalical

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If what you mean by 'free from SEC' was that stable coin is never considered as a security then it is because stable coin is backed by USD it can't be considered as a security because the price is always 1:1 to USD. Therefore it can't be used as an investment by US citizen and can't give them any profit. Security is something that you can speculate and look for profit.

Husires

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Quote from: KiaKia on August 14, 2023, 01:44:59 PM

Have anyone wonder why stable coins are safe all this while from Gensler and SEC, even the government? Why hasn't there any hunt on those centralized stablecoins? Is there something we don't know? Are stable coins somehow settled with the government and SEC behind the curtain?

Because if stable coins was target it will be a enormous hit to the whole crypto market, why haven't such thing happened yet? I also read where the former Binance.US said that the White House is trying to keep stable coins "out of discussions" like they know something.

Is this all about saving their USD? Or they are waiting to create CBDC successfully first before they go after stable coins?

which stable coins you mean? If you didn't know, all the regulatory tightening from the SEC was caused by FTX platform and the loss of thousands of investors in the stablecoin LUNA, which prompted many citizens in the United States to put pressure on lawmakers to regulate cryptocurrency exchnages, and therefore you find all these investigations into the platforms and force them to leave or pay penalties Financial and commitment to guarantee the funds of depositors.

Look at the headlines of the articles that forced the SEC to act

THE SUN TERRA ATTACK I’m a Terra Luna investor – I’ve lost my entire £400,000 life savings after cryptocurrency crashed 98% overnight
independent I lost my life savings’: Terra Luna cryptocurrency collapses 98% overnight
Euronews Terra Luna crash: 'I alone am responsible,' says CEO Do Kwon in first interview since collapse

Sayeds56

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Quote from: KiaKia on August 14, 2023, 01:44:59 PM

Have anyone wonder why stable coins are safe all this while from Gensler and SEC, even the government? Why hasn't there any hunt on those centralized stablecoins? Is there something we don't know? Are stable coins somehow settled with the government and SEC behind the curtain?

Because if stable coins was target it will be a enormous hit to the whole crypto market, why haven't such thing happened yet? I also read where the former Binance.US said that the White House is trying to keep stable coins "out of discussions" like they know something.

Is this all about saving their USD? Or they are waiting to create CBDC successfully first before they go after stable coins?

To the best of my knowledge, stable coins are not exempt from oversight of Security and Exchange Commission(SEC) of USA. However, due to their direct pegging to fiat currencies like US dollar or Euro, they are less likely to be categorized as securities. It is important to highlight that regulatory approaches can indeed differ between jurisdictions.

avikz

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Quote from: KiaKia on August 14, 2023, 01:44:59 PM

Have anyone wonder why stable coins are safe all this while from Gensler and SEC, even the government? Why hasn't there any hunt on those centralized stablecoins? Is there something we don't know? Are stable coins somehow settled with the government and SEC behind the curtain?

Because if stable coins was target it will be a enormous hit to the whole crypto market, why haven't such thing happened yet? I also read where the former Binance.US said that the White House is trying to keep stable coins "out of discussions" like they know something.

Is this all about saving their USD? Or they are waiting to create CBDC successfully first before they go after stable coins?

SEC might not be going after the stablecoins now, but that doesn't mean they won't ever. I am sure SEC will go after the stablecoins when they are done with decentralised coins. The current ignorance of SEC should not be considered for future planning.

Also stablecoins are usually launched by a centralized business. So it is always easier to catch and control them. The real challenge for SEC is to get hold of decentralised coins. Once they will get fed up, they will run after easy catches.

Yamane_Keto

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SEC is an acronym for the U.S. Securities and Exchange Commission It is an independent federal agency and from its name we will find that its focus is on Securities and Exchange. Stablecoins are usually seen as gateways that provide crypto exchanges with services that are no different from those provided by financial institutions in traditional markets in terms of liquidity and the ability to fix prices, but they need to open bank accounts or invest in the proceeds of US Treasury bonds to provide this liquidity and therefore these stable currencies need entities Provides financial services subject to regulation in one of the US states.

BUSD coin was operating under the entity Paxos private regulation in the New York Department of Financial Services (NYDFS) so the cooperation between the SEC and NYDFS leads to regulatory restrictions on the BUSD stablecoin.

Quote

Paxos customers holding BUSD stablecoins will be able to redeem them through at least February 2024, per the press release announcing the company's response to the regulatory probe.

Binance and Paxos partnered to launch the BUSD stablecoin product in 2019, and the stablecoin was approved then by the NYDFS.

"All BUSD tokens issued by Paxos Trust have and always will be backed 1:1 with U.S. dollar-denominated reserves, fully segregated and held in bankruptcy remote accounts," the company said

https://www.pymnts.com/cryptocurrency/2023/sec-and-nydfs-heat-puts-binance-branded-paxos-stablecoin-on-ice/

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Quote from: adaseb on August 15, 2023, 12:42:08 AM

They might be free and clear under SEC but other governments are cracking down. Here in Canada there is word that USDC might be the only approved stablecoin you can hold after that Luna stablecoin caused people to lose their entire balance pretty much.

Tether is also under their radar because of the lack of audits and all the shady stuff that they did in the past. So they might be safe from SEC but eventually they will be required to be regulated.

Stable coins should be regulated because there should be a guarantee that what happens in Luna will not happen in another coin. I don't think there is any institution trying to end crypto. If there was such an institution, they would attack stable coins at first. Stable coins should be an element of trust in the crypto market. When people wake up one day, they should not see their stablecoins, which are equal to 1 dollar, at a lower value. Therefore, the regulation of stable coins and the elimination of risks are of great importance for the crypto market.

Topic: Why are stable coins free from SEC ? - page 3. (Read 551 times)