> You are leaving out the vacuum created by the regulators.

One phase I’ve heard in other situations is that “bad cases make bad law”[0]. IANAL, but my understanding of this is that because the US is a common law system where precedent influences future outcomes, legal and regulatory bodies are hesitant to take legal action unless the outcome is likely to be in their favor. Loosing cases end up creating legal precedent against the power of the regulatory body.

In a greenfield areas where there there is no precedent to point to regulatory agencies end up being served to wait until there is a clear and obvious case to be made to cement their authority. If the SEC were to have taken aggressive action again kinda scammy ICOs early on, it’s possible they could have lost legal action, and hamper their ability to regulate in the future. Waiting for a scam obvious enough for them to win in court gives them legal precedent to successfully pursue more actions in the future.

[0] This came up a often on the podcast “All the Presidents’ Lawyers” with Ken White, generally when discussing how and why the DOJ does things.

The SEC did just that. The first ICO-related case involved someone issuing a coin supposedly backed by gold and real estate, actually backed by neither. The SEC has been bringing the hammer down on about two crypto-related scams per month.[1] Most of them are out and out frauds. They haven't been aggressively going after every unregistered thing that passes the Howey test.

The SEC is mostly complaint driven. Someone complains they lost money in a scam, and the SEC takes a look. So they get involved in the aftermath, not the runup.

Recently, the SEC just doubled its "cyber" enforcement staff. So enforcement actions should pick up. Just in time for the flakier NFTs that promised something would happen in the future.

[1] https://www.sec.gov/spotlight/cybersecurity-enforcement-acti...

Thanks for your note.

As fellow counsel, I'm sure you get why the post had to be general. I earnestly believe that none of the clients I had did anything I thought illegal when I represented them. But I can't ethically blog details of their compliance postures, or of their private negotiations. I can't name names, of clients or of counterparties.

I did not then and do not now perceive any great regulatory "vacuum" as concerns securities regulation. Having learned the 33 Act from law school and in practice, rather than Coin Center and blogs, I didn't see uncertainty demanding regulator clarification. I saw Coin Center and friends trying to manufacture a perception of such uncertainty. Even so, the SEC Report on Investigation on the DAO came right out and said "security", under both '33 and '34 acts, five years ago. And hammered the point that existing analysis fully applied.

Because bribery has ensured that regulators and regulation got strangled in the US. This has been a multi-decade effort, eg Regan's “Most Terrifying Words – ‘I’m from the government and I’m here to help.’” propaganda meme etc. There is a reason that what is called blatant bribery pretty much anywhere else in the civilized world is called "free speech" and "lobbying" in the US, without any intended or perceived irony or sarcasm.

Absent regulation, rules are defined by those in power for their convenience rather than for the public's benefit.

us citizen not a lawyer -- the problems you state are so obvious, that they ALSO have been a multi-decade effort, to mitigate or control, with real rules, that are enforced. Specifically so that shrill, not-on-your-side people cannot dismiss the Entire System in a few words, as here.

I am not a fan, nor making excuses, but its not constructive to oversimplify important, multi-step mechanisms

> they ALSO have been a multi-decade effort, to mitigate or control, with real rules, that are enforced

Source? In the global north, most regulatory bodies are understaffed and underbudget and cannot possibly even try to protect the public from vicious corporations. With the neoliberal wave of the 80s, there's been a merger of State and Corporations interests (what Mussolini called "corporatism") and millions of people have died as a result: from poverty, from work "accidents", from harmful chemicals advertised as medication, from industry pollution...

The people in the regulatory bodies are friendly with the corporate people. It's not uncommon for these bloodsuckers to jump from one field to the other and back again in about a decade.

To give one small example that's familiar with HN people: all of silicon valley hosts (GAFAM) were illegal by french privacy law (passed in 1978) yet they were all operating luxury offices in Paris and bribing engineers to come deceive/exploit the public.

I'm not a fan of defending defeatist worldview, but to believe that the State is here to protect people from corporations is an oversimplification. The regulation, corporate, and State people all come from the same higher classes, all went to the same schools, and eat in the same fancy restaurants in the same bourgeois districts. We lower people don't have the same interests as them, and they are well aware of that... are we?

yeah exactly this -- the United States specifically rejected the class status system from Royal Europe and Vedic India, and wrote law and legal precedence to defeat "the regulation, corporate, and State people all come from the same higher classes, all went to the same schools, and eat in the same fancy restaurants in the same bourgeois districts"

human nature has developed over thousands of years at least, so is this still true? partly of course. So, make the world you want to live in.. speak in public, write, participate in civil society.. When money is involved of course there is insider dealing.. and there is legal enforcement everyday .. pick an example, the female South Asian lead Attorney for New York somewhere, a Wall Street enforcer.. look for it, easy to find.

I am all for engagement, much less for repeating stories of old problems as if nothing has changed, right?

Lobbyists are overwhelmingly people who make PowerPoint presentations to Hill staffers. What do you think they are?

People who spend a lot of company money to take Hill people on lavish vacations and provide expensive meals and then show a PowerPoint presentation.

It's totally not bribery though, just good business.

Nah, all that stuff is illegal today. The bribery comes later in the form of, “hey, you worked with us on that bill, maybe you’d be a good board member! We pay $xxx,xxx per year to board members and they meet 4 times a year” or, “you know, without this legislation we could totally open a new factory in your state; say, doesn’t your cousin own a supply company there? I wonder what a new factory would do for his business…”

That’s legal in Europe too. Where’s Gerhard Schroeder these days?

Since you brought up Schröder imma make it pretty Germany specific: parties and candidates are much less reliant on fundraising. Coalition building makes bribing/lobbying certain parties way less efficient. Ranked party lists makes singular politicians less targetable for bribing/lobbying. And Schröder has become one of the least popular former chancellors due to his engagements in Russian oil corporations and with the war going on pretty universally a persona non grata

Congressional staffers aren’t allowed to accept meals from lobbyists. The rules are very strict, to the point where government employees will do stuff like kick in for the price of their meal at things like industry conferences.

That's of course what's legal "over the counter". Now look under the table and you find the real bribes. Just from the past decade of french politics i could name at least half a dozen major bribery/collusion scandals that resulted in no punishment for the criminals in power.

And of course, as someone else pointed out, you don't necessarily need to take a bribe right now when you know you can quit your job as a regulator to earn 6 digits working for industry. That's a common bargain with regulators, but it's not even just them. You could say the same about journalists, who at least here in France, often refrain from criticizing private propaganda machines (Lagardère/Bolloré/Bouygues/LVMH empires who control >50% of media) because they don't want to compromise their chances of getting a job with them later.

I remember learning during my ethics briefing (OMB, not congressional) that industry events frequented by feds and congressional staffers will oftentimes say on the invitation how much the catering will cost per person and provide a way for attendees to reimburse the event organizers. Most events will just serve coffee and muffins to avoid this (since it's generally considered kosher to take a small pastry and a beverage w/o needing to file an ethics disclosure or pay back the organizer).

I run into this all the time at industry events. The Congressional ethics rules draw the line at “”reasonable hors d'oeuvres” but not “full meals.”