Sounds like they expected in advance for the SEC to do something stupid and were very upfront about that fact. Now that the SEC has done a stupid thing they are complaining that the SEC in fact did the stupid thing. Sounds perfectly reasonable to me.
Enforcement agencies don't have to stop you ahead of time, even if that action is disallowed or even illegal.
For example, police officers will regularly sit by the side of the road with a speed gun. They'll make no attempt to stop you driving at 150mph on the motorway but, in the UK, you'll receive a court summons through your door after the fact (and probably lose your license).
However, abusing retroactive enforcement does create a pretty clear case that the SEC is not interested in forming a regulatory framework for the exchange of digital commodities - instead preferring to import securities frameworks and punishing participants in the nascent industry.
Why should anyone reasonably believe the SEC has intentions to allow crypto to exist, and that coinage just did it wrong?
Statements like this create a pretty clear case that you haven’t read or shown any real interest in the SEC investigation and litigation related to crypto.
The particular product under investigation and or litigation was around for 3 or 4 years, and while the SEC is free to reclassify financial products at will - the fact that they did so and are now attempting to extract company-destroying damages indicates that they did not particularly care.
And if that same policeman happened to be speaking to parliament and was asked whether going 150 mph was legal he would be able to give a clear answer.
A better example is HMRC, the tax authority, in the UK. They won't tell you if your tax avoidance scheme is legal or not, but they will fine you or take you to court if they later decide it is not.
Just reading that, it looks like this isn't free. Essentially, what you're paying the IRS for here is for them to procure legal advice for you (with the added benefit that they'll bind themselves to that for a while?)
However:
> Even with a favorable ruling, a taxpayer has no absolute guarantee of the tax consequences, since the IRS can modify or revoke a previously issued private letter ruling if it is later determined that the ruling was incorrect or inconsistent with the current position of the IRS.
> 1. Firstly, if the law isn't settled, then no they wouldn't.
> The head of the SEC was asked by congress if Eth was a security, and true to form he refused to answer.
So what you're saying is that the Head of the SEC refused to answer a question they're not qualified to. Because it's an unsettled area of law that they're now challenging through enforcement action.
> I don't understand how anyone can believe these people act in good faith.
One way to look at it: the SEC doesn’t decide what is legal. They have an opinion, but it is the courts that decide. This is the process working as designed.
