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posted by janrinok on Sunday December 18 2022, @02:23PM   Printer-friendly
from the regulating-self-regulation dept.

Germany wants countries to regulate the crypto industry after the FTX and Bankman-Fried debacle- Technology News, Firstpost:

Germany's top regulator this week called for global regulation of the cryptocurrency industry to protect consumers, prevent money laundering and preserve financial stability.

Mark Branson, the president of Germany's financial market regulator BaFin, also known as the Federal Financial Supervisory Authority of Germany, said a that hands-off approach that would "just let the industry grow as a playground for grownups" was the wrong tactic.

"We've seen the self-regulated world. It will not work," Branson told journalists in Frankfurt on Tuesday evening.

Branson was speaking hours after U.S. prosecutors accused Sam Bankman-Fried, founder of cryptocurrency exchange FTX, of misappropriating billions of dollars and violating campaign laws in what has been described as potentially one of America's biggest financial frauds.

[...] Regulation of the industry has been loose and patchwork at best. Germany requires licences for banks to deal with cryptocurrency.

[...] The European Union has been working on a new Markets in Crypto Assets Regulation (MiCA) that some, including European Central Bank President Christine Lagarde, say would need to be broadened out in a future iteration and branded "MiCA 2".


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  • (Score: 4, Insightful) by Opportunist on Sunday December 18 2022, @05:04PM (17 children)

    by Opportunist (5545) on Sunday December 18 2022, @05:04PM (#1283015)

    With a hint of luck, the whole "small government! Stay out of my business!" idiots will crash and burn hard and either finally wake up that "da man" is not out to get them or they simply continue the rest of their (hopefully short) existence under some bridge and don't matter anymore.

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  • (Score: 2) by HiThere on Sunday December 18 2022, @05:55PM (5 children)

    by HiThere (866) Subscriber Badge on Sunday December 18 2022, @05:55PM (#1283020) Journal

    The problem is that it's not an either/or, but rather a both/and. Yes, "the man" is out to get you. But it's also true that the system is grossly unstable without regulation and oversight.

    Perhaps modern civilization is inherently unstable, and people are inherently unable to fairly stabilize it. BOTH sides are pointing to valid problems, unfortunately their proposed solutions exacerbate the problems pointed out by the other side.

    --
    Javascript is what you use to allow unknown third parties to run software you have no idea about on your computer.
    • (Score: 0) by Anonymous Coward on Sunday December 18 2022, @07:05PM

      by Anonymous Coward on Sunday December 18 2022, @07:05PM (#1283028)

      > Perhaps modern civilization is inherently unstable

      No shit. You must be a student of history. Civilization is on its way someplace and I don't think humans are in control. Perhaps we are laying down conditions for a billion year rule of the cockroaches.

    • (Score: 2) by JoeMerchant on Sunday December 18 2022, @07:09PM

      by JoeMerchant (3937) on Sunday December 18 2022, @07:09PM (#1283030)

      Transparency, broad overview education, making ALL the information available to potential investors in as unbiased a form as possible - these all seem to me like they would be more effective than attempts at regulation - and probably less expensive to implement, but... major drawback is that they don't benefit the existing (regulation compliant) investment sellers as much as barriers to competition would.

      --
      🌻🌻 [google.com]
    • (Score: 2) by Opportunist on Sunday December 18 2022, @09:47PM (2 children)

      by Opportunist (5545) on Sunday December 18 2022, @09:47PM (#1283046)

      If "da man" is out to get you, kick that asshole to the curb and elect someone better.

      • (Score: 2) by HiThere on Monday December 19 2022, @12:17AM (1 child)

        by HiThere (866) Subscriber Badge on Monday December 19 2022, @12:17AM (#1283064) Journal

        You have a very narrow definition of "da man". It's basically a catch-all term for powerful authoritarian figures. And, from your perspective, they are out to get you. All of them. From their perspective what they're trying to do (generally) is either make their job easier, or, occasionally, to do it at all. Often this can be played for mutual advantage, but this is by no means always true, and even when it is, making it work demands that *you* be the one who is flexible. They're dealing with lots of people at the same time, so usually they either can't be flexible, or don't see that they can.

        --
        Javascript is what you use to allow unknown third parties to run software you have no idea about on your computer.
        • (Score: 2) by Opportunist on Saturday December 24 2022, @10:10AM

          by Opportunist (5545) on Saturday December 24 2022, @10:10AM (#1283835)

          And this is pretty much why we need governments in the first place. Powerful interest stakeholders don't need governments. Actually, they're the first who cheer if they go away. If I have the power myself, anyone who could step up and claim it is my competitor and never my ally. That's what I don't get, when someone who is powerless because he has no money nor power, wants "small government". That's not in your interest, buddy. The government is probably the only power in the country you're in that you actually have any kind of say in. Yes, your say ain't big, but at least you have one. In that industrial juggernaut over there, you have ZERO say. None. And if there isn't anything stopping him, he'll just move over you and sell your carcass.

  • (Score: 1) by khallow on Monday December 19 2022, @03:56AM (10 children)

    by khallow (3766) Subscriber Badge on Monday December 19 2022, @03:56AM (#1283105) Journal

    either finally wake up that "da man" is not out to get them

    Not going to happen, because conflict of interest. Perhaps you've heard of that?

    will crash and burn hard

    I'm fine with that. Stability and instability are poorly understood in this thread. Stability is widely considered good because it reduces uncertainty and risk, and instability bad for the opposite reason. But this ignores opportunity costs and long tail risks. Sure, it'd be bad to have a world so unstable that you don't know where your next meal or place to sleep will come from. But a world with a great deal of economic instability has some powerful advantages. First, it reveals societal and institutional weaknesses. If we're really having trouble with huge amounts of capital flocking to crypto casinos, then that indicates that there's something wrong with the managers of capital and their decision-making - including widespread gullibility.

    Another big problem is that stable societies are only stable in the long run when there are no unexpected changes. When there are unexpected changes (internal unrest or accidents, or external disasters or rival human powers), then they are very fragile, that is, poorly equipped to deal with the change. A classic example is the fall of the USSR. They fell due to growing inability to compete with the western world, internal factors like the economic rot from rigid central planning systems, and the spectacular failure of Chernobyl. The stability of these systems comes from rigid control of societal change. Once, the society has to change in order to survive, then these control mechanisms get in the way.

    The western world has similar examples: most recent recessions have some element of excessive attempts at stability: for example, the Japanese recession of 1990-1991, the dotcom bubble, the real estate crisis of 2008, and the covid response of 2020-2022.

    Consider this hypothetical example. You're running an auto company and you have some business in your supply chain producing a critical part for you. It means lives lost, if this is done wrong. As that elusive breed, the ethical businessperson, do you merely hope that part is made right? Or do you test the hell out of it?

    Here, we have a bunch of regulators wanting to regulate some side market allegedly because it is unstable. But has any part of this story been tested? Do we know the regulators are at all competent at regulating crypto markets? Do we know that their idea of regulation is at all beneficial to us? No. So are we merely going to hope they get it right? Or use crypto and other sources of economic instability as tests that they're getting it right?

    • (Score: 2) by Opportunist on Tuesday December 20 2022, @01:09PM (4 children)

      by Opportunist (5545) on Tuesday December 20 2022, @01:09PM (#1283311)

      Consider this hypothetical example. You're running an auto company and you have some business in your supply chain producing a critical part for you. It means lives lost, if this is done wrong.

      What does it cost if lives are lost? Is there some government agency that crushes my balls if people croak? Do I have to pay compensation if they do? Can I write it into the contract that they only got themselves to blame if they're stupid enough to by my crap and die because of it?

      As that elusive breed, the ethical businessperson

      Ethical businessmen don't exist. Or at least, they don't exist for long. An ethical businessman gets muscled out of the market while pondering whether he should do something that could be morally questionable by someone who doesn't ask that question and doesn't even understand why the fuck anyone would ask that question.

      • (Score: 1) by khallow on Wednesday December 21 2022, @06:38AM (3 children)

        by khallow (3766) Subscriber Badge on Wednesday December 21 2022, @06:38AM (#1283450) Journal

        What does it cost if lives are lost? Is there some government agency that crushes my balls if people croak? Do I have to pay compensation if they do? Can I write it into the contract that they only got themselves to blame if they're stupid enough to by my crap and die because of it?

        Generally in the US, $10 million per for negligent homicide with sky-is-the-limit, if the plaintiff can show defendants knowingly caused death.

        The smart psychopath wouldn't brag as you do above. That'll save them a lot of money in the long run.

        As that elusive breed, the ethical businessperson

        Ethical businessmen don't exist. Or at least, they don't exist for long. An ethical businessman gets muscled out of the market while pondering whether he should do something that could be morally questionable by someone who doesn't ask that question and doesn't even understand why the fuck anyone would ask that question.

        It depends what the business is. A business sector that requires a lot of trust, reputation, or integrity can encourage a great deal of morality, though perhaps of a sort most people wouldn't recognize. We can easily come up with businesses where immoral behavior is routinely rewarded - such as illegal drug sales. But there's also businesses where immoral behavior ended the business. A classic example comes from the accounting world. For example, when Authur Andersen [wikipedia.org] signed off on Enron fraud, overnight (well over the course of nine months) it went from one of the top four accounting/auditing firms of the today to bankruptcy court.

        • (Score: 2) by Opportunist on Thursday December 22 2022, @10:56AM (2 children)

          by Opportunist (5545) on Thursday December 22 2022, @10:56AM (#1283575)

          So I guess what you're saying here is what makes companies give a shit about their customer's safety is governmental regulation of the industry, did I get that right?

          • (Score: 1) by khallow on Friday December 23 2022, @01:18AM (1 child)

            by khallow (3766) Subscriber Badge on Friday December 23 2022, @01:18AM (#1283664) Journal
            Lawsuits are a very different sort of regulation which is very popular with government minimalists.
            • (Score: 2) by Opportunist on Saturday December 24 2022, @10:05AM

              by Opportunist (5545) on Saturday December 24 2022, @10:05AM (#1283834)

              Lawsuits only work if there are laws. Else, well, you can sue, but there ain't anything to base your case on.

              Now guess who makes those laws. And where again do you take those lawsuits?

    • (Score: 2) by quietus on Tuesday December 20 2022, @05:42PM (4 children)

      by quietus (6328) on Tuesday December 20 2022, @05:42PM (#1283369) Journal

      "First, it reveals societal and institutional weaknesses."

      I guess a theorist doesn't appreciate the difference between his ivory tower, and the common ground.

      • (Score: 1) by khallow on Tuesday December 20 2022, @05:54PM (2 children)

        by khallow (3766) Subscriber Badge on Tuesday December 20 2022, @05:54PM (#1283372) Journal
        Show that's a real problem.
        • (Score: 2) by quietus on Thursday December 22 2022, @05:14PM (1 child)

          by quietus (6328) on Thursday December 22 2022, @05:14PM (#1283604) Journal

          The economic shocktherapy applied to Russia after the disintegration of the USSR, by Friedman and the rest of the Chicago Boys.

          • (Score: 1) by khallow on Friday December 23 2022, @01:26AM

            by khallow (3766) Subscriber Badge on Friday December 23 2022, @01:26AM (#1283665) Journal

            The economic shocktherapy applied to Russia after the disintegration of the USSR, by Friedman and the rest of the Chicago Boys.

            Even so, the Chicago Boys didn't create the oligarchs. Or the corruption of present day Russia and Ukraine. I agree that the approach you mentioned failed hard. I don't agree that it is somehow relevant to my observations (which are independent of Chicago Boys). After all, Russia didn't get to that abject state, where Chicago Boys were taken seriously, through deliberately sown instability, but through an authoritarian straitjacket that had bound the society for over 70 years.

      • (Score: 1) by khallow on Wednesday December 28 2022, @06:18PM

        by khallow (3766) Subscriber Badge on Wednesday December 28 2022, @06:18PM (#1284239) Journal
        Another thing "theorists" know about is historical examples of civilization collapses. For example, I have been reading about the Late Bronze Age Collapse. What's interesting about it is that they have no obvious cause. That's a strong candidate for collapse due to fragile societies.

        I think policies that create trillion dollars collapses instead of billion dollar collapses are much more likely to create a fragile society and contribute to some future collapse of civilization.