So at this point, I am probably very late to the party but somewhere around the beginning of last week, there was a story that generated a lot of news articles, it was, of course, a story that in my view just shows how practically in crypto space nothing is certain from a legal standpoint.
I am talking about the story that a previous OpenSea employee was criminally charged with insider trading and another host of financial crimes.
So the whole scandal revolves around the fact that this guy, using his insider knowledge of knowing which NFTs will be featured on the home page, bought and sold NTFs to make some profit.
What I am guessing is that this guy didn’t even think he is doing something illegal, he was found out probably by the community which for whatever reason(probably hunting for profit) looked more closely at some blockchain transactions.
I am assuming that if the guy thought he was doing something illegal he would have put some effort into anonymizing his wallet transactions.
Anyway, after the news broke out OpenSea fired the guy, which seems reasonable after all even the OpenSea publicly remarked that in their view he was doing something unethical but they didn’t think it was illegal.
So a couple of months after he was fired the FBI charged him.
They touted this as a huge victory and said that: “even if the technology is new the schemes are old”.
The problem with this view is there’s not a definite answer to what tokens on a blockchain really are. They are money? They are stocks? They are digital assets? They are securities? Who the fuck really knows…
From my perspective I would like tokens, in general, to have no classification after all they are just some information stored on the blockchain.
A blockchain could be created by anyone, and that’s true for the tokens as well, there should be no legal status, and people should be able to do whatever they want with tokens.
Imagine this example you have a video blog, and every video is an NFT, and you will have an algorithm that can be manually influenced that showcase your videos, one day you decide to showcase 3 of your old videos then somehow ppl want to buy the NFT linked to any of that video at a higher price than normal, then you decide to sell, and then by the logic in the story you’re chargeable… Think about it is completely ridiculous, the only thing that changed from my analogy is just the perceived sum of money would be able to get.
Tokens should only have legal if they are issued by a government and I say that because I see tokens as a form of private money.
Private money in general is pretty much outlawed everywhere so I don’t really know why there’s an exception for crypto.
I am not saying to outlaw crypto tokens or anything but I think the lack of regulation creates a lot of abuse, it seems that law enforcement is eager to create precedents all the time and in general the only factor is how much those crypto tokens are worth on the market.
But the problem here is that not the market is supposed to be regulating the government is the other way around.
These crypto law enforcement divisions that are made overnight seem to me as an indication that we abandoned the idea of democracy, it all seems that regular people have a smaller say in everything and that capital similar to a plague increases its definitive power over much of the world.
There are countless cases that reak of abuse in my book, one that I notoriously remember is the case where a US citizen Ethereum dev, was charged because he went to North Korea and gave a talk about how to use crypto.
So what I hope will happen in the future is clarity, either tokens will not have any legal status and won’t have anything to do with laws or they are rigidly classified, otherwise, this gray space will continue to create scenarios that are hard to not be seen as pure institutional abuse.