The SEC claims MetaMask Swaps 'effects transactions in securities,' but can a smart contract be a broker?
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.
Congress's silence forces courts to decide if 'protecting investors' requires stifling the very innovation that could democratize finance.
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.
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.
I was also interested in Gemini Earn until I read the terms and decided it was almost a guaranteed way to lose all of my money.
I agree it's not 1 to 1, it's a different thing, I was just saying that it does seem like the SEC is taking these crypto company shenanigans much more seriously now, and I'm really grateful for it. It would have been better five or six years ago, but I'll take the small victories where I can get them. Even if Gemini Earn wasn't quite as bad as Metamask, it was still bad to make misleading promises about safety of your investment.
I accept my share of the responsibility for not reading the terms thoroughly enough, and for not being more skeptical of 7% interest when banks were only offering like 0.5%. It was short sighted of me, I guess I got caught up in the crypto hype like a lot of people did, and I do think Gemini should be held accountable for a bit of the misleading marketing they did.
> I was also interested in Gemini Earn until I read the terms and decided it was almost a guaranteed way to lose all of my money.
As I said, credit to the SEC because I did get all of it back (though I would have much rather gotten it back early because it of course lost value in limbo due to inflation and not being investable in the market).
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I was thinking about how a generally pretty skeptical person like me got caught up in this; I don't gamble and I've never fallen for an MLM and I don't play the lottery, and I think I figured it out.
Whether accidental or not, cryptocurrency was able to launder its reputation through academics. Blockchain is academically interesting and as such a lot of academics got caught into it too, and I guess I put more trust into them than I should. Seeing Philip Wadler working for IOHK made me think that it was a better investment than it should have been.
I forgot that academics are still regular humans and aren't immune to hype trains either.
In other news, is it really a surprise that everything is securities fraud?
