Original post with images here: https://x.com/NuclearHerbs/status/1767623076978856350
This isn’t a #PulseChainLawSchool class, but consider it a bonus seminar.
It’s time to talk about the need to combine forces and fight a common enemy. If you’re a streamer that has members from other crypto communities, I’m talking especially to you, since you have the ability to do things many of us can’t. Use your power wisely.
Since the beginning of civilization, people who were traditionally enemies (or at least not friends) have come together to defeat a common enemy that posed a threat to their survival.
Sparta joined Athens to defeat the Persians, even though those two city states had no love for each other.
Gallic, Germanic, and Brittonic tribes banded together to fight the Romans. (Yes, I know they lost, but they had the right idea at least.)
Britain, the US, and Russia weren’t sending each other Christmas cards every year, but they all recognized the danger posed by the Nazis, so they joined forces until that threat was defeated.
This is where we are in crypto today, a bunch of individual tribes who know there’s an enemy out there, but not realizing the extent of the danger it poses because it might not be at our own doorstep yet.
The SEC’s tactic of regulation by enforcement is BRUTALLY EFFECTIVE because it lasers in on one individual community, coin, or person at a time, while all other crypto communities unaffected by the SEC’s current lawsuit sit back and watch, not realizing that they’re next.
In fact, you’re only reading this post because the SEC filed against Richard Heart and pissed me off enough to start calling out their BS. I didn’t take any real interest in early SEC crypto cases mostly because I wasn’t interested or involved in crypto when those early lawsuits were filed against XRP and others. Like most people outside of crypto, I assumed that there was a legitimate basis for those lawsuits or they wouldn’t have been filed.
But the more I looked into it, the more I learned, and the more I got pissed off. I realized that many of the SEC’s lawsuits weren’t being filed to protect anyone from anything, they were using lawfare as a weapon to achieve political goals. One of those goals is to protect banks and the dollar from the threat of people being able to transact with each other in a currency that the US Government doesn’t control.
Another is to expand their own power. The SEC’s budget for 2022 was $2.02B. The SEC’s budget for 2024 is $2.44B, roughly a 20% increase in two years. And they justify it by filing lawsuits, forcing settlements, and bragging to Congress about how wonderful a job they’re doing. The SEC now boasts about having more than 5,000 employees, an increase of a little over 60% since 2000 when they had just under 3,000. For comparison, the Department of Education – an actual Cabinet-level department – only has 4,400 employees.
The SEC is also boasting about how they filed 700 enforcement actions in 2023 (not just crypto, but all types), and collected $5B in fines and penalties. Of course they can brag about it, their mandatory gag-order they impose on defendants who settle doesn’t apply to them (see the recent #PulseChainLawSchool post about this). Congress sees $2.4B go in and sees $5B come out. As dumb as some members of Congress are, they still understand that lawfare is profitable.
So, it’s just good business for the SEC to label everything a security and make people fight about it, like SOL, ADA, MATIC, FIL, SAND, MANA, and ALGO, which are all among the cryptos the SEC claims are securities in the Coinbase case.
And the chair of the SEC still won’t tell Congress whether he thinks Ethereum is a security or not. In 2023. In a Congressional hearing. This is beyond ridiculous.
What can be done?
It’s easy to ignore one person who calls or writes their representative or senator.
It’s harder to ignore 100,000 people.
It’s much, much harder to ignore 1,000,000.
And it’s impossible to ignore millions of people who have the money to finance that representative’s or senator’s opponent in the next election.
Remember this fact during the upcoming bull run. If we want change, we should all make our collective voices heard by contacting our representatives and voting this fall. If we fail to make the necessary changes this year, we need to maximize the power we can collectively wield with our wallets two years from now.
Side note: If you’re in MA, please learn about @JohnEDeaton1, who is well known for his excellent crypto legal work and is running against Elizabeth Warren for Senate this fall, who we all know would love to kill off our entire industry.
After we get the regulatory clarity we need to make this entire industry thrive, and once the SEC is reined in and focusing on scams and bad actors instead of literally anyone who they believe they can extort money from, we can all go back to our respective corners and make fun of each other’s coins.
So if you have a platform that reaches across communities, consider bringing this up at some point before our own government murders the best asset class in history. Thanks for reading.
