Courtesy of Pam Martens
If you want to get your hair cut outside of your home in the United States, the job has to be done by a licensed worker at a regulated business. The same thing applies to plumbers, electricians, home inspectors, real estate and insurance agents. They all require a license and are subject to regulatory scrutiny.
Likewise, commodities like corn, sugar, wheat, lumber and oil are all traded on regulated exchanges which are overseen by a federal regulator.
But, for reasons that have yet to be explained to the American people, when it comes to the $1.7 trillion cryptocurrency market – which is effectively a con-game based on the greater fool theory, nothing is regulated. Not the crypto currency; not the promoters; not the crypto exchanges; and not the firms that are providing as much as 100 times leverage to fuel this “rat poison squared,” as the legendary investor Warren Buffett has characterized Bitcoin. (See The Smartest Guys in the Room Call Bitcoin “Rat Poison Squared,” “a Colossal Pump-and-Dump Scheme” and “a Big Criminal Scam” but Federal Regulators Look the Other Way.)
At a May 6 hearing before the House Financial Services Committee, newly-seated Securities and Exchange Commission Chairman Gary Gensler testified as follows: “Right now, the exchanges trading in these crypto assets do not have a regulatory framework, either at the SEC or our sister agency, the Commodity Futures Trading Commission.” Gensler added: “Right now, there’s not a market regulator around these crypto exchanges, and thus there’s really not protection against fraud and manipulation.”
The U.S. now has the dubious distinction of being the capitol of innovation for every conceivable type of fraud surrounding cryptocurrencies – a “currency” backed by nothing and regulated by no one.
Just last Friday, the SEC brought charges against hustlers for the crypto exchange, BitConnect. According to the SEC complaint, “BitConnect, an unincorporated organization, raised approximately $2 billion by conducting an unregistered offering and sale of securities in the form of investments into BitConnect’s ‘lending program.’ Defendants Brown, Grant, Maasen, and Noble, along with BitConnect itself and others, offered and sold the lending program as securities without registering the offering with the SEC as required by the federal securities laws and without a valid exemption from this registration requirement.”
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