Congressmembers Tried to Stop the SEC’s Inquiry into FTX(prospect.org)
prospect.org
Congressmembers Tried to Stop the SEC’s Inquiry into FTX
https://prospect.org/power/congressmembers-tried-to-stop-secs-inquiry-into-ftx/
114 comments
Why do they keep telling us bipartisanship is dead?
80% is still agreed upon by the uniparty. It’s the fringes on either side that make it so the government can’t agree on the other 20%.
That's how they market it anyway
because both parties can agree that the B in BIPOC stands for billionaires.
I think you'll find a lot of the things they tell us are wrong
Because once Cthulhu devoured the Ds and Rs there was no "bi", only bones.
If one of the Ds or Rs was flipped, we could all condemn the most-guilty party with great conviction.
I don't know anyone with basic knowledge of Congress who doesn't understand that lobbying heavily influences both parties, although not at all equally.
Possibly, but what percentage of the population actually has the basic knowledge you presume?
A large percentage. There's a reason Trump's “drain the swamp” slogan resonated with so many people.
[deleted]
Very glad to see that in the US political divisions can still be overcome and there can be a bipartisan effort to allow criminals to hide from the scrutiny of the SEC.
Their parties should kick them out and replace them with more principled people.
That would be ideal but in reality these party members raised money for the party so.. they’re in 0 trouble as far as their party is concerned. The system is a farting contest that enables this behavior. Solution would be to do away with the 2 party system and make parties more responsible with consequences as being completely voted out if corruption isn’t handled. Now both Reps and Dems are corrupted and they known we have no other choice
Countries like India have multi party system. That doesn’t seem to have slowed corruption/bribery at all. How would it help in the U.S?
In a way, corruption is the U.S is worse because it is legalized (campaign contributions). If there were 25 parties instead of 2, it would be a bit more work to find out who to bribe, but I guess it is still doable
In a way, corruption is the U.S is worse because it is legalized (campaign contributions). If there were 25 parties instead of 2, it would be a bit more work to find out who to bribe, but I guess it is still doable
s3r3nity(7)
Political parties have no legal authority to expel a member from Congress. Parties are voluntary private organizations with no formal role in any branch of government. The most the parties can really do to punish a politician is to withdraw financial and organizational support, which might make reelection difficult.
Both the House and the Senate make their own rules, and that includes the ability to unseat a member. If they really wanted to, they could (but they won’t).
Huh, I’m surprised one party who controlled the House or Senate never decided to just kick out all their opponents, if they are legally allowed to.
It’s an escalating game of chicken. You can see it happening in the new Congress with public statements from the Republican incoming majority leader to remove certain Democrats from committee assignments (e.g. removing Schiff from the intelligence committee).
Not that long ago that was unheard of and either party could seat whoever they’d like in a committee. But similar to how the Democrats killed the executive appointment filibuster, they killed that as well by refusing to seat Republicans on the Jan 6th and removing some from other committees .
Now it’s going to come full circle. I wouldn’t be surprised if it eventually gets to unseating or refusing to seat a controversial figure.
Not that long ago that was unheard of and either party could seat whoever they’d like in a committee. But similar to how the Democrats killed the executive appointment filibuster, they killed that as well by refusing to seat Republicans on the Jan 6th and removing some from other committees .
Now it’s going to come full circle. I wouldn’t be surprised if it eventually gets to unseating or refusing to seat a controversial figure.
Congress can't refuse to seat a controversial figure. They can only unseat after the fact, and that requires a 2/3 vote.
https://supreme.justia.com/cases/federal/us/395/486/
https://supreme.justia.com/cases/federal/us/395/486/
Removing each other from committees is a far cry from kicking each other out of Congress. That has only happened twice since the 19th century, and both times it came after a criminal conviction. Merely being an absolute idiot isn't enough to get a 2/3rds vote to kick out a congressmen because that would be mutually assured destruction; they all know they're all absolute idiots so they don't expel each other out for that.
Also,
> Both the House and the Senate make their own rules,
The rules for expelling congressmen are set in the US Constitution, they don't just make it up as they go. Unless you're talking about their ability to amend the US Constitution, but that's even less likely than kicking these guys out the normal way.
The best way to get them kicked out would be to have them convicted for bribery/corruption, then you might get a 2/3rds vote to expel them.
Also,
> Both the House and the Senate make their own rules,
The rules for expelling congressmen are set in the US Constitution, they don't just make it up as they go. Unless you're talking about their ability to amend the US Constitution, but that's even less likely than kicking these guys out the normal way.
The best way to get them kicked out would be to have them convicted for bribery/corruption, then you might get a 2/3rds vote to expel them.
What would be the upside? They are already fairly powerless in the opposition and this would be a huge scandal
The thing about democracy is, even if the people make a bad choice it's still democracy
From "Teller Reveals His Secrets" (https://www.smithsonianmag.com/arts-culture/teller-reveals-h...)...
"7. If you are given a choice, you believe you have acted freely.
[...]
When I cut the cards, I let you glimpse a few different faces. You conclude the deck contains 52 different cards (No. 1—Pattern recognition). You think you’ve made a choice, just as when you choose between two candidates preselected by entrenched political parties (No. 7—Choice is not freedom)."
It may still be democracy, but the task of the people isn't to pick the best or most desirable policy/candidate/etc. It's to pick from the presented selections. If all choices are bad, nothing good will come of it no matter what you call it. Add an option for "None of the above/Do-over" and I'll have more faith in democracy.
"7. If you are given a choice, you believe you have acted freely.
[...]
When I cut the cards, I let you glimpse a few different faces. You conclude the deck contains 52 different cards (No. 1—Pattern recognition). You think you’ve made a choice, just as when you choose between two candidates preselected by entrenched political parties (No. 7—Choice is not freedom)."
It may still be democracy, but the task of the people isn't to pick the best or most desirable policy/candidate/etc. It's to pick from the presented selections. If all choices are bad, nothing good will come of it no matter what you call it. Add an option for "None of the above/Do-over" and I'll have more faith in democracy.
> Add an option for "None of the above/Do-over" and I'll have more faith in democracy.
I would really love this and to end PACs.
I would really love this and to end PACs.
Wouldn't misinformation also be a similar situation. If you make a choice based on misinformation or incomplete information, is that democracy.
"The thing about democracy is, even if the people abuse their power it's still okay" - well, not much different from a non-violent dictatorship then.
No, it’s exactly the opposite. A system that puts unelected prosecutors of “abuse of power” above elected officials would be a non-violent dictatorship.
> parties should kick them out and replace them with more principled people
Their parties could evict them. But they’d retain their seats. Their voters gave those to them.
Their parties could evict them. But they’d retain their seats. Their voters gave those to them.
If their parties had something like a consensus, under the constitution congress could vote to expel them for ethics violations. Of course, congresspeople don't like to punish congresspeople for ethical lapses too vociferously or too frequently, for some obvious reasons...
If they punished them, especially in a way that would cause then not be funded in their next election, they could just switch parties.
Which would make the party that expels them look good, and the party that takes them and their funding on board look bad.
No matter who you vote for, the government wins every election.
What does this even mean? The government (the elected portion) isn't an entity outside of the people that are elected.
Like... they guy running on whether he wants to be a warewolf or vampire? The lady worried about Jewish space lasers?
Just getting people who are sufficiently in touch with reality that they're merely corrupt seems like a win at this point.
Just getting people who are sufficiently in touch with reality that they're merely corrupt seems like a win at this point.
Au contrare, Ted budd just got promoted to senator.
This comment makes no sense in the context of America. I guess you're from a country with some sort of Parliamentary system where governments are formed when a party is elected?
In America, parties aren't elected and don't form governments. Accordingly, an American political party cannot kick out a congressman, much less replace one. To remove a congressman requires a two third vote (from congress, not from a political party); this never happens in the modern era without a criminal conviction as the impetus. And nether congress or a political party can simply bring in a new congressman; you'd need another election for that.
In America, parties aren't elected and don't form governments. Accordingly, an American political party cannot kick out a congressman, much less replace one. To remove a congressman requires a two third vote (from congress, not from a political party); this never happens in the modern era without a criminal conviction as the impetus. And nether congress or a political party can simply bring in a new congressman; you'd need another election for that.
It still can be done for the next term. AFAIK there is no limit on terms and people stay in congress far too long for my taste.
Politicians right and left have no problem with taking a big check to further their own interests.
How much was donated to them versus other senators?
[deleted]
A sufficient amount of money, clearly.
"The March letter from eight House members—four Democrats and four Republicans—questioned the SEC’s authority to make informal inquiries to crypto and blockchain companies, and intimated that the requests violated federal law."
This wasn't an investigation into just FTX. This was a broader investigation into crypto companies, plural. The current post title of "Inquiry into FTX" seems to be editorializing. Dang must be slow on the tryptophan to not post the usual HN guidelines reprimand
This wasn't an investigation into just FTX. This was a broader investigation into crypto companies, plural. The current post title of "Inquiry into FTX" seems to be editorializing. Dang must be slow on the tryptophan to not post the usual HN guidelines reprimand
It’s the title of the article which makes it appropriate here. That it’s a bad title, however, is not in dispute.
I mean there’s zero mention of FTX in the letter. Perhaps a question mark is in order.
I wouldn't blame the poster but the source which is using an extremely manipulative headline.
There are politicians and media publications protecting Sam Bankman-Fried's criminality, but these congressmen aren't among them.
The letter in this article was written in March. FTX's long-term fraud has only been known since early November.
The letter in this article was written in March. FTX's long-term fraud has only been known since early November.
You don't have to know about specific bad actions to shield the entity that is doing them.
But if you fight against overzealous enforcement you will necessarily be shielding some bad actors along with the good.
Not that I'm personally against the SEC (and other agencies) crossing into crypto and interpreting their mandate broadly, rather than being overly conservative and waiting for new laws while the scammers run wild. But in other areas these paperwork demands could be a huge burden...
Not that I'm personally against the SEC (and other agencies) crossing into crypto and interpreting their mandate broadly, rather than being overly conservative and waiting for new laws while the scammers run wild. But in other areas these paperwork demands could be a huge burden...
True but it changes the amount of guilt right?
Maybe they were just helping companies donating to then, the letter is about cryptocurrenty in general.
Maybe they were just helping companies donating to then, the letter is about cryptocurrenty in general.
Yes, the crypto world is a hornet's nest, but the non-crypto world is ruled by bankers with an ever-increasing thirst for control over our lives. (Read up about the Fed's new CBDC plans)
As far as I'm aware, Monero and cash are the only practical ways to pay anonymously.
So, who are worse? The congressmen who (perhaps in this case naively) tried to avoid overregulating crypto, or the remaining congressmen who continue to condone an economy completely manipulable by private bankers by way of the Federal Reserve?
As far as I'm aware, Monero and cash are the only practical ways to pay anonymously.
So, who are worse? The congressmen who (perhaps in this case naively) tried to avoid overregulating crypto, or the remaining congressmen who continue to condone an economy completely manipulable by private bankers by way of the Federal Reserve?
Intent matters. Even if these congresspeople are correct that the SEC shouldn't be doing what they're doing, if the reason the congresspeople wrote that letter is because they received "donations" from cryptocurrency companies or PACs, then I think we should still give it some scrutiny.
Regulating a sketchy Ponzi scheme with vaguely crypto trappings != regulating crypto
They both suck and both should be criticized. But also both crypto and banks are diverse and not all bad.
"Enforcement powers, while conceptually broader with respect to non-SEC
regulated entities, are still circumscribed by statute, federal judicial review, congressional
oversight and the Commission’s own policies and procedures for initiating and conducting
inquiries and investigations."
Now that's being squishy-soft on crime. That's the point to make when those members of Congress come up for re-election. They're soft on crime.
The basic law the SEC enforces, the Securities Exchange Act of 1934, is pretty clear on what's a security. The Supreme Court has clarified that. Investment of money, expectation of profit, common enterprise - it's a security. That's called the Howey Test. It's also been established that what you call it or how it works doesn't matter. There have been, over the years, many imaginative schemes cooked up to get around this. The Howey case involved tradeable orange grove harvesting rights in Florida. That was held to be a security.
The crypto crowd has been yammering for years "but this is different". Well, it's not.
The scams around crypto are classic. It's usually insiders stealing the money. The crashes are also classic. It's someone being over-leveraged when something goes down. This is not financial innovation.
Now that's being squishy-soft on crime. That's the point to make when those members of Congress come up for re-election. They're soft on crime.
The basic law the SEC enforces, the Securities Exchange Act of 1934, is pretty clear on what's a security. The Supreme Court has clarified that. Investment of money, expectation of profit, common enterprise - it's a security. That's called the Howey Test. It's also been established that what you call it or how it works doesn't matter. There have been, over the years, many imaginative schemes cooked up to get around this. The Howey case involved tradeable orange grove harvesting rights in Florida. That was held to be a security.
The crypto crowd has been yammering for years "but this is different". Well, it's not.
The scams around crypto are classic. It's usually insiders stealing the money. The crashes are also classic. It's someone being over-leveraged when something goes down. This is not financial innovation.
>”The crypto crowd has been yammering for years "but this is different". Well, it's not.”
In what way? Some cryptocurrencies have been declared securities, while many have not. Those such as Bitcoin and Ethereum have been around for long enough that if they were going to be ruled as securities via Howey, that would have surely been done by now.
In what way? Some cryptocurrencies have been declared securities, while many have not. Those such as Bitcoin and Ethereum have been around for long enough that if they were going to be ruled as securities via Howey, that would have surely been done by now.
That was done years ago. The SEC cracked down on initial coin offerings back in 2018. They're still working down the backlog.[1] The "cyber" enforcement staff was doubled a few months back to catch up.
The SEC does not consider Bitcoin to be a security because there's no "common enterprise". It's distributed more like a mined commodity. Miners are competitors. But where there's an issuer, or "minting", or "pre-mining", or anything like that, you can buy it, and it's expected to go up, it's clearly a security.
Etherium is in an interesting position with the shift to proof of stake. That may have made it a security, because it's now controlled by voting owners, just like a stock. So now there's a "common enterprise", unlike in the "mining" phase.
The big question now is exchange regulation. Are Bitcoin exchanges and brokers going to have to register with the SEC, pay for and be covered by SIPC insurance, and be regulated by FINRA? After FTX, that's probably coming. FTX acted like a retail broker, after all. Nobody runs Super Bowl ads or buys stadium naming rights for something sold only to institutional clients.
The law in this area looks at the economic realities, not the form. If it looks like a security, is marketed like a security, and is bought and sold for the same reasons as securities, it's a security. Doesn't matter what you call it.
[1] https://www.sec.gov/spotlight/cybersecurity-enforcement-acti...
The SEC does not consider Bitcoin to be a security because there's no "common enterprise". It's distributed more like a mined commodity. Miners are competitors. But where there's an issuer, or "minting", or "pre-mining", or anything like that, you can buy it, and it's expected to go up, it's clearly a security.
Etherium is in an interesting position with the shift to proof of stake. That may have made it a security, because it's now controlled by voting owners, just like a stock. So now there's a "common enterprise", unlike in the "mining" phase.
The big question now is exchange regulation. Are Bitcoin exchanges and brokers going to have to register with the SEC, pay for and be covered by SIPC insurance, and be regulated by FINRA? After FTX, that's probably coming. FTX acted like a retail broker, after all. Nobody runs Super Bowl ads or buys stadium naming rights for something sold only to institutional clients.
The law in this area looks at the economic realities, not the form. If it looks like a security, is marketed like a security, and is bought and sold for the same reasons as securities, it's a security. Doesn't matter what you call it.
[1] https://www.sec.gov/spotlight/cybersecurity-enforcement-acti...
> that would have surely been done by now
We are getting damn close to that being done through statute in the U.S.
We are getting damn close to that being done through statute in the U.S.
"Blockchain Eight" when you coulda had "Chain Gang"? Cmon.
It's a reference to the "Keating Five".
Didn't know about that scandal, but it's also just standard to uncreatively (but tersely) name important events etc. with a structure of <noun/adjective> <number> (Boston Six, Gang of Four).
The SEC tried to stop the SEC's inquiry into FTX.
Gensler said earlier this year that the SEC should be regulating FTX. SBF unleashes his torrent of mid-term money and then Gensler was saying up until FTX went bust (he was reportedly lobbying for them a few weeks before) that it should be the CTFC's job (which was the position that FTX were lobbying for as they had also bought a few people at the CTFC).
Gensler said earlier this year that the SEC should be regulating FTX. SBF unleashes his torrent of mid-term money and then Gensler was saying up until FTX went bust (he was reportedly lobbying for them a few weeks before) that it should be the CTFC's job (which was the position that FTX were lobbying for as they had also bought a few people at the CTFC).
In March. And not FTX specifically, but crypto in general.
So, as d1str0 said, yes, very inflamatory (and misleading) headline.
So, as d1str0 said, yes, very inflamatory (and misleading) headline.
The headline is still accurate, as stopping SEC inquiry in crypto would have the same effect.
Would an inquiry in March have prevented the FTX mess? Maybe. It would have been good to at least give it the chance.
But in the current situation, the headline reads like these 8 tried to stop an inquiry specifically into FTX after the collapse, which is totally not what happened.
But in the current situation, the headline reads like these 8 tried to stop an inquiry specifically into FTX after the collapse, which is totally not what happened.
It's accurate but extremely manipulative because it implies this the congressman were directly helping FTX.
Accurate maybe, but very imprecise.
Let's not Friday (Holiday) News Dump this possible story.
If there's something to it, next week people will have more time to look into it, without it spoiling their turkey appetite.
If there's something to it, next week people will have more time to look into it, without it spoiling their turkey appetite.
Not everyone celebrates Thanksgiving
If the topic is a US domestic matter, most of the people who need to pay attention do.
This idea that having accurate information about things happening on the opposite side of the world is going to change anything? You don't have to think about it for more than two seconds to see that's not true. It's an Illusion of Control.
Exposing something is only the first step do changing it. But you can expose things and not change a damn thing.
This idea that having accurate information about things happening on the opposite side of the world is going to change anything? You don't have to think about it for more than two seconds to see that's not true. It's an Illusion of Control.
Exposing something is only the first step do changing it. But you can expose things and not change a damn thing.
Just like the Keating Five. These politicians should be vilified.
FYI this site isn't paywalled, it just has an obnoxious popup.
[deleted]
When it comes to doing shady things and not having the backs of regular people there is a lot of unity and bipartisanship in congress.
Tell me it's not a corruption.
I can tell you the headline is manipulative BS because they were questioning the ability of the SEC to investigate these types of companies in general and they didn't specifically mention FTX
Paywall
You know things are looking bad if out of the gazillions of $ FTX laundered into the DNC they front-run their "reports" with the handful Republicans which were allowed to nibble at the trough.
Meanwhile, SBF is still not in jail and on the contrary even invited to speak: https://twitter.com/andrewrsorkin/status/1595517635441090565
Meanwhile, SBF is still not in jail and on the contrary even invited to speak: https://twitter.com/andrewrsorkin/status/1595517635441090565
Tom Emmer (R-MN)
Warren Davidson (R-OH)
Byron Donalds (R-FL)
Ted Budd (R-NC)
Josh Gottheimer (D-NJ)
Jake Auchincloss (D-MA)
Ritchie Torres (D-NY)
Darren Soto (D-FL)
The signed letter: https://emmer.house.gov/_cache/files/0/c/0c7fc863-7916-4b19-...