I literally said the laws should apply to all kinds of property equally - yet you think I "want to get rid of all financial regulation"? I hope you enjoyed building that strawman and then tearing it down

I mean, you did say you wouldn’t want the government regulating jeans manufacturing.

So what did you mean by saying jeans manufacturing should not be regulated, and only (?) jeans (and other goods) ownership should be regulated?

You're putting words in my mouth. I never used the word "regulated" at all. I said "controlled" - meaning the government should not be the sole entity allowed to own and operate a factory that produces jeans. (I hope that's not the contentious point here.) I believe jeans manufacturing should be regulated by the government, but not controlled by the government. And even if the government gives up control, it does not give up its ability to regulate.

Do you agree that, even though the government does not itself manufacture a pair of jeans using taxpayer money, the government can still prosecute theft of those jeans? If so, it should not be a stretch to understand that even though the government does not issue a certain private sector money, it can still prosecute theft of that private sector money.

Ah, I see. That kind of control.

So in this analogy the government should regulate cryptocurrency mining (production), import, export, domestic transfer, exchange, disposal, loans, etc…?

In other words, you're saying that cryptocurrencies should be treated as goods, not monetary instruments?

I'll give you the benefit of the doubt and say that's not quite what you mean. It sounds like you (and I've heard this from other pro-cryptocurrency advocates) want to carve out a new type of asset, basically with the exact purpose to avoid all existing legislation.

This common argument says that it's just like money, but should not be regulated as currency. It's actually much more like a commodity, but should not be regulated like one. It can act as a security, but should definitely not be regulated like one.

Commodities are subject to sales tax/VAT at delivery. Cryptocurrency's delivery is instant, or never. That's not clever avoidance, that's just trying to eat your cake and have it too.

> It sounds like you want to carve out a new type of asset

That's not what I'm saying either. Crypto is just mundane property (like jeans), and property already has plenty of legislation around it. Existing laws work just fine. For example, capital gains applies equally as much to jeans as crypto (if for some reason your jeans appreciated 100x in value and you sold them).

The original comment I replied to claimed crypto should be entirely free of the justice system - THAT would actually be a new legal classification. Afaik the government has never before exempted any kind of property from theft laws. I only posted to point out that inconsistency.

Ok, so sales tax/VAT on cryptocurrencies? You'll be pretty alone advocating for that, I think. At least it's a path I've not heard before.

The word property encompasses more than just what sales tax laws apply to, no? For example, I'd consider an old-school physical stock certificate a kind of property, and subject to theft laws but not sales tax.

As far as classifying it more specifically, I don't have strong opinions. Gensler says BTC is a commodity and ETH is a security--that sounds fine to me, ship it. I'll let the regulators regulate.

I'm just pushing back against this idea that private sector money must exist outside of the law and outside of the justice system—because the anarchy approach is clearly absurd.

> The word property encompasses more than just what sales tax laws apply to, no? For example, I'd consider an old-school physical stock certificate a kind of property, and subject to theft laws but not sales tax.

Sure, but then you're either saying that cryptocurrencies are securities (not commodities), and to be regulated as such, or you want to harmonize laws on commodities and securities.

So your analogy with jeans is not very clear to me. Cryptocurrency (a security?) is just like jeans (a commodity)?

> I'm just pushing back against this idea that private sector money must exist outside of the law and outside of the justice system—because the anarchy approach is clearly absurd.

I entirely agree with this. But like I said cryptocurrencies try to play a language game to avoid being classified as anything that's currently regulated, in order to be as unregulated as possible.

E.g. the reason people use bitcoin instead of western union to send money (to the extent that they do) boils down to the laws that exist to prevent, investigate, and "reverse" crimes. The laws were written such that they can be enforced by the (needed) middleman. Bitcoin doesn't (for this transaction) require a middleman, so the law, the implementation of the intention, doesn't fit well.

But people who call this "savings" are ignoring why the law exists. There was never an intention to punish or burden western union. It was an intention to safeguard (or track, or whatever) the movement of money.

…or commodities, or securities, or whatever a given cryptocurrency should be classified as.

I agree that theft is theft. But movement of financial instruments and commodities is also already covered by the law.

In some countries your primary home is exempt from capital gains (or taxed lower than capital gains). But that doesn't mean that you can take your physical stock certificates, stack them in the form of a shed, sell it, and thus avoid capital gains. Yet this is basically what cryptocurrencies try to do, all while saying that they're "more efficient". It's not, it's just word games.

You're pushing the jeans analogy a little further than I intended. Every analogy has its limits.

Is it a security? A commodity? I don't know! But neither does the US government. The CFTC and SEC are fighting a turf war. The CFTC calls them commodities. The SEC calls (most of) them securities. The IRS has created a brand new category called "digital assets". Who is right? If the government can't tell you, I sure can't.

I can infer there must be some legal justification for the current treatment. Even if you think Coinbase is playing fast and loose with the law, the old school players like Fidelity also don't charge sales tax on bitcoin, and I guarantee you they're not going to risk their core business over crypto. I am curious now how their lawyers would answer some of your questions.

Anyways it's been an interesting conversation, thanks for sticking around after the thread died. You've given me some stuff to think about.