Nearly every day as of late, scary headlines herald the demise of cryptocurrencies while federal governments and regulators all over the world crackdown on the enigmatic digital assets. ‘SEC Working Overtime to Take Control of Crypto Markets’, ‘People’s Bank of China Rules All Crypto-Related Trading Illegal’, ‘Russia’s Central Bank Wants to Slow Down Cryptocurrency Payments’, ‘Indian Authorities Consider Taxing Cryptocurrency Trades’, to name a few. Indeed, it’s no secret that there is no love lost between the Powers That Be and the crypto world, as decentralized blockchain technology has opened up a realm where the establishment can neither track nor regulate its citizens’ financial activities. It’s precisely this loss of control that drives governments crazy, and also what makes cryptocurrencies so attractive to average people.
Mainstream media outlets aid and abet the authorities’ efforts to discredit digital assets by creating and feeding into negative hype with loud gloom-and-doom headlines that make the crypto world look shady and unreliable. A piece recently appearing in The New Yorker entitled Pumpers, Dumpers, and Shills: The Skycoin Saga does just that. On its surface, the article appears to be a hit piece on a specific crypto project and its founder, but, on reading between the lines, it becomes apparent that it is really an attack on cryptocurrencies in general.
Cryptocurrencies and the SEC
The real intent becomes clear about halfway through the 30-page feature, when its author, Morgen Peck, takes a detour from her assault on Skycoin and its founder, Brandon Smietana, to call into question the very legality of the crypto industry as a whole:
“US law generally requires projects to register with the SEC, forcing them to make financial disclosures that investors could then inspect before buying. Almost none do, giving convoluted rationales that John Reed Stark, the founder of the SEC’s Internet-enforcement office, told me are ‘poppycock,’” she asserts.
Peck goes on to note that: “Not registering can facilitate further rule-breaking, as when, say, influencers promote coins without disclosing their investment, or projects pump coins with fraudulent claims. Stark said, of ICOs, ‘Every single one I ever saw was unlawful on multiple levels.’”
Peck implies that Skycoin was operating illegally because it was not registered with the SEC and, by extension, infers that any cryptocurrency that is not registered with the SEC is a fraud.
The problem is that these suppositions are, at a minimum, highly misleading, and possibly venture