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The SEC has told us it wants to sue us over Lend. We don’t know why

blog.coinbase.com

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Re: The SEC has told us it wants to sue us over Lend. We don’t know why

#31

Post by seibelj »

peterbonney wrote: post #25

“We have no idea why the SEC intends to sue us! It is a complete mystery.” (Later in the post…) “All we’ve done is create a thing that people can trade which we are moving towards selling to investors against specific SEC advice to the contrary, but it is definitely not a security and as a result it is completely fine even though we have not complied with SEC regulations in any way with respect to it.” A mystery inde…

Coinbase wants to know the legal rationale as to why it's a security, but SEC is stonewalling them and goading them to get into a legal fight. The opposite of "talk to us, come in" that the SEC claims the crypto industry refuses to do.

Re: The SEC has told us it wants to sue us over Lend. We don’t know why

#32

Post by seehafer »

bpodgursky wrote: post #29
uncomputation wrote: post #23

I actually initially wanted to be on Coinbase’s side here, but after a quick google of “Howey test” and reading even just the introduction on Wikipedia, I cannot imagine how they don’t see the SEC’s reasoning about Lend wrt Howey. If you want to argue that Howey does not apply or fight the decision/lawsuit, then fine. But feigning ignorance of something a (non-legal expert) programmer can connect the dots of instantl…

Brian's concern in the tweet thread is that a lot of other companies are already providing lending services without SEC action, putting Coinbase at a disadvantage. The rule should be applied across the industry in a standard manner, no matter which direction the SEC rules, and it is apparently not being applied consistently currently.

Are the other companies already providing lending services public? Public companies get orders of magnitude more scrutiny from SEC relative to private companies.

Re: The SEC has told us it wants to sue us over Lend. We don’t know why

#33

Post by dataflow »

bpodgursky wrote: post #29
uncomputation wrote: post #23

I actually initially wanted to be on Coinbase’s side here, but after a quick google of “Howey test” and reading even just the introduction on Wikipedia, I cannot imagine how they don’t see the SEC’s reasoning about Lend wrt Howey. If you want to argue that Howey does not apply or fight the decision/lawsuit, then fine. But feigning ignorance of something a (non-legal expert) programmer can connect the dots of instantl…

Brian's concern in the tweet thread is that a lot of other companies are already providing lending services without SEC action, putting Coinbase at a disadvantage. The rule should be applied across the industry in a standard manner, no matter which direction the SEC rules, and it is apparently not being applied consistently currently.

"We think others should be sued too" is quite a different argument from "we don't know why we're being sued". In fact it strongly suggests the opposite.

Re: The SEC has told us it wants to sue us over Lend. We don’t know why

#34

Post by ac29 »

bpodgursky wrote: post #29
uncomputation wrote: post #23

I actually initially wanted to be on Coinbase’s side here, but after a quick google of “Howey test” and reading even just the introduction on Wikipedia, I cannot imagine how they don’t see the SEC’s reasoning about Lend wrt Howey. If you want to argue that Howey does not apply or fight the decision/lawsuit, then fine. But feigning ignorance of something a (non-legal expert) programmer can connect the dots of instantl…

Brian's concern in the tweet thread is that a lot of other companies are already providing lending services without SEC action, putting Coinbase at a disadvantage. The rule should be applied across the industry in a standard manner, no matter which direction the SEC rules, and it is apparently not being applied consistently currently.

Something tells me courts wont be too sympathetic to the "but other people are criming as well" argument.

Re: The SEC has told us it wants to sue us over Lend. We don’t know why

#36

Post by joering2 »

pgrote wrote: post #11
jrochkind1 wrote: post #3

Seems to be gone from the internet. Can't find it in archive.today or archive.org either. reddit comment thread: https://www.reddit.com/r/CryptoCurrency/comments/pk2rjl/coin... Which points to a tweet thread from Brian Armstrong of Coinbase that is still there for now.... https://twitter.com/brian_armstrong/status/14354409980546539... unrolled (and probably will still be there even if tweets deleted?) https://threadr…

Someone snagged an image. https://www.ilbe.com/view/11365594888

Their whole blog is gone

https://blog.coinbase.com

Re: The SEC has told us it wants to sue us over Lend. We don’t know why

#37

Post by ivalm »

bpodgursky wrote: post #30
ivalm wrote: post #28

Earlier quoted context omitted.

They are operating by transparent rules. Howey test has been on the books since 1946: 1. The existence of an investment contract 2. The formation of a common enterprise 3. A promise of profits by the issuer 4. The use of a third party to promote the offering

At minimum, if that was true, Coinbase's competitors would not be freely operating the same service without SEC action.

Coinbase competitors are largely operating in legally gray/black zone. Regulators do try to crack down and will likely to continue these efforts.

Re: The SEC has told us it wants to sue us over Lend. We don’t know why

#39

Post by ac29 »

seehafer wrote: post #32
bpodgursky wrote: post #29

Earlier quoted context omitted.

Brian's concern in the tweet thread is that a lot of other companies are already providing lending services without SEC action, putting Coinbase at a disadvantage. The rule should be applied across the industry in a standard manner, no matter which direction the SEC rules, and it is apparently not being applied consistently currently.

Are the other companies already providing lending services public? Public companies get orders of magnitude more scrutiny from SEC relative to private companies.

Other US companies providing similar products include Gemini, Kraken, and BlockFi. I dont think any of them are public.

BlockFi's lending product has already been banned by several state regulatory agencies, but if they've been sued or warned by the SEC, I dont think thats been made public.

Re: The SEC has told us it wants to sue us over Lend. We don’t know why

#40

Post by bpodgursky »

ac29 wrote: post #34
bpodgursky wrote: post #29

Earlier quoted context omitted.

Brian's concern in the tweet thread is that a lot of other companies are already providing lending services without SEC action, putting Coinbase at a disadvantage. The rule should be applied across the industry in a standard manner, no matter which direction the SEC rules, and it is apparently not being applied consistently currently.

Something tells me courts wont be too sympathetic to the "but other people are criming as well" argument.

That's not true at all? There is a ton of precedent for courts striking down selectively-enforced laws. Equality before the law is extremely important to how courts rule in the US.
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