Re:SEC brought its first non-fungible token enforcement action
by lukev on Monday August 28, 2023 @01:59PM
(#37298015)
The only way to be discerning with respect to most* crypto is not to participate.
Even "succeeding" at crypto just means you sold early enough to a greater fool.
* jury still out on the couple major cryptocurrencies, though I hope they follow the same path.
even the term “rug-pull” is not discerning enough, it refers to a dozen distinct behaviors, of which a few would still be illegal while the other many behaviors are just a misalignment of expectations
removing liquidity? thats not illegal under either consumer or securities framework and most commonly called a “rug pull”. communities can provide their own liquidity as a feature of the crypto space, and in no space do purchasers have an expectation for liquidity
ceasing to continue making press releases or taking down a website and community channels? also not illegal under the consumer or securities framework.
taking other people’s provided liquidity out of a staking contract without saying thats whats going to happen would be illegal under both frameworks. that kind of rug pull is theft.
collecting funds and promising to do X and then not even attempting it, thats prosecutable under both the consumer and securities frameworks, in more ways under a securities framework