SBF

Chapter 39About Securities

In Robert Penn Warren's novel All the King's Men (1946), there is a quote by the character Willie Stark,¹ a powerful state politician who tells the book's protagonist that he's no lawyer even though he had practiced some law. Stark says:

The law is like the pants you bought last year for a growing boy, but it is always this year and the seams are popped and the shankbone's to the breeze. The law is always too short and too tight for growing humankind.

I have thought about that line a lot while covering the ongoing collision between crypto and the state. An issue is bubbling under the surface of this whole book, of crypto tokens, coins, and the matter of whether or not they are commodities or securities and what that means about what agencies can tell which people about the kinds of extremely abstract businesses running inside overgrown spreadsheets.

And also what that particular bit of legal minutiae means—and I’m not joking here—for our collective shot at a world that works better.

Once upon a time, too many guileless investors got screwed buying garbage investments, and the states and DC decided that investors needed to be regulated in order to protect regular people trying to bet on a better future. This led to the notion of the state having a duty to provide investor protection.

So I'm going to super‐simplify the question of why this is an issue for crypto entrepreneurs.

There's a lot of talk about how tokens are this and aren't that but not ...