Amid the fallout of the FTC bankruptcy, a number of Americans who invested in crypto are wondering if they wasted their money. At present, it would seem fair to conclude that they have been dealt with unfairly with major players now facing prison sentences for the role they played in robbing millions of Americans of their investment. This comes after efforts to reimburse creditors in shady Central American banks.
Recently, another major player for crypto investors filed a lawsuit against the SEC to get a crypto-specific rule on the books. At present, it appears that Coinbase is attempting to force the agency to issue crypto-specific rules as a means of adding more stability to a market that thrives on instability. Ultimately, the effort would provide more safety for investors and prevent another FTC from occurring.
Writ of mandamus
Anyone who has never heard of a writ of mandamus can be forgiven. It is only used in exigent and exceptional circumstances to force a government agency to share its ruling. It appears as if Coinbase believes that a ruling has already been determined, but the SEC refuses to share its ruling with Coinbase and the public. It appears more likely that Coinbase knows the petition will be ignored but can at least interpret that as the likely next step. Coinbase probably feels as though its hands are tied by ambiguity and wants to provide crypto enthusiasts with more security.
The writ of mandamus can allow the court to force a government agency to act on a major issue of broad importance. Are crypto investors important enough to force the SEC to act? That remains a serious question.
Are the rules firmly established?
Yes, but there is less oversight for these types of investments than stocks, for example. The SEC steps in to ensure that trading efforts are not harming the economy (like FTC), but it is largely only after a calamity has occurred that the SEC steps in with more regulations.
Government agencies should be transparent when it comes to rules. However, ICOs and digital commodities overlap in such a way that it makes it difficult for individuals to know how to offer and trade coins legally.
Eventually, the SEC will need to come up with rules that everyone can play by, but at this point, it’s killing investor enthusiasm to have the FTC collapse looming over the crypto market.
At this point, some tokens can be treated as securities while others are not. It is the security tokens (or ICOs) that are creating the problem. If they are attached to a company’s investment efforts, they are considered securities which is the purview of the SEC. The rule seems straightforward enough, honestly. Individuals expressing consternation are likely ulteriorly motivated.
Talk to an Indiana Bankruptcy Attorney Today
Did the crypto winter kill put you in the red? Discuss the matter with a bankruptcy attorney today. Call Indiana bankruptcy attorney Chris Arrington for more information.