The Consensys case exposes the fundamental mismatch between blockchain tech and securities law.<p>The SEC claims MetaMask Swaps 'effects transactions in securities,' but can a smart contract be a broker?<p>This isn't just about Consensys; it's about whether the '34 Act's definition of a broker can encompass code without breaking the entire DeFi ecosystem.<p>Congress's silence forces courts to decide if 'protecting investors' requires stifling the very innovation that could democratize finance.
It took longer than it should have, but I am extremely glad that the SEC is going after a lot of these crypto companies.<p>I fell for the Gemini Earn scam like a lot of people did because the 7+% interest on GUSD was extremely enticing and Gemini did some kind of weaselly language to loosely imply that the investments were FDIC backed. Obviously it sucks to be a victim of this stuff, but I did eventually get my GUSD back a few weeks ago after a bit more than 1.5 years in limbo (which I very promptly cashed out and converted back into USD), and I think that's in no small part because of the SEC lawsuit against Gemini.<p>I suspect there are many, many more to come. I feel a lot of these crypto companies are playing fast and loose with vague language and have been able to make promises that would be illegal under traditional banking and securities law.
Maybe I am missing something but it feels like massive overreach from SEC. Wouldn't this make basically any software / front-end that performs token swaps via smart contract interactions illegal in the eyes of SEC? Or is the key issue the fact that Consensys has profited from it by having additional fees?
Surprisingly clear and straightforward explanations of staking, liquidity pools, etc. in a legal document.<p>In other news, is it really a surprise that everything is securities fraud?