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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

#151

Post by encryptluks2 »

klodolph wrote: post #137
olalonde wrote: post #132

Earlier quoted context omitted.

Correct me if I'm wrong but the bigger problem here seems to be that there is now way to "fight the decision" other than ignoring it, getting sued and maybe winning in court?

Maybe they could sue for a declaratory judgment?

Here is our evidence your honor that we don't respond to support requests when customers have legitimate issues and we ignore them. Can you let us know if that is okay when dealing with people's finances, just to ignore them and keep their staking rewards.

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

#152

Post by andreareina »

dehrmann wrote: post #115
modeless wrote: post #22

Earlier quoted context omitted.

It's there for me. Copied below if people are still having trouble seeing it. The SEC has told us it wants to sue us over Lend. We don’t know why. By Paul Grewal, Chief Legal Officer Last Wednesday, after months of effort by Coinbase to engage productively, the SEC gave us what’s called a Wells notice about our planned Coinbase Lend program. A Wells notice is the official way a regulator tells a company that it inten…

> Chief Legal Officer And Coinbase has a market cap of $70B. I'm scared of investing in a company valued at that much that facilitates trading what are essentially digital trading cards with a chief legal officer with such a poor read on the SEC.

> They have only told us that they are assessing our Lend product through the prism of decades-old Supreme Court cases called Howey and Reves. [...] These two cases are from 1946 and 1990

Nobody seriously makes the argument that Howey is outdated, so why is the year being called out here? It's written to get people up in arms, and as such I wouldn't count on anything written there to represent how Grewal actually feels.

This is pure PR.

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

#153

Post by illgenr »

eru wrote: post #113
JumpCrisscross wrote: post #98

Earlier quoted context omitted.

> lending the bank your money with an 0.04% interest rate. Is that a security? No. Banks are regulated separately and more strenuously than securities firms, much less issuers. If Coinbase wants to offer Lend as an FDIC-insured deposit account, I’m sure the SEC would be fine with it. But Coinbase can’t do that because it doesn’t follow the rules banks must follow.

And FDIC might not want them.

Might is probably an understatement.

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

#155

Post by throwaway2037 »

eru wrote: post #112
adrr wrote: post #97

Earlier quoted context omitted.

Mortgage backed securities are securities even though they are loans under the hood. Bond is also a loan. Same with money market accounts. There are a bunch of debt securities.

You can package almost anything into a security. A bunch of machines and a factory is not a security, but you can package it into a security.

Yes! These are called ABS: Asset-backed Securities. One of the most famous was David Bowie's bonds to securitise the future cashflow of his record sales.

Ref: https://www.investopedia.com/terms/b/bowie-bond.asp

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

#156

Post by justincormack »

dustintrex wrote: post #71
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…

Agreed, and this line pretty much sums it up: > Customers won’t be “investing” in the program, but rather lending the USDC they hold on Coinbase’s platform in connection with their existing relationship. "Give me money for a fixed period of time and I'll pay a guaranteed return on your principal. No, it's not an "investment", you're just lending it in connection with our existing relationship!"

Securities lending, the repo market, is a large well understood and regulated existing market.

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

#157

Post by salawat »

modeless wrote: post #22
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…

It's there for me. Copied below if people are still having trouble seeing it. The SEC has told us it wants to sue us over Lend. We don’t know why. By Paul Grewal, Chief Legal Officer Last Wednesday, after months of effort by Coinbase to engage productively, the SEC gave us what’s called a Wells notice about our planned Coinbase Lend program. A Wells notice is the official way a regulator tells a company that it inten…

Welcome to Administrative Law. Take a number and go sit next to the 2nd Amendment people.

Next.

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

#158

Post by throwaway2037 »

josefx wrote: post #145
OldHand2018 wrote: post #90

Earlier quoted context omitted.

No, that's why I'd like to assume that when he says he doesn't know why the SEC has a problem with their plan, he is telling the truth and this isn't just a PR attempt.

Except he says they got a wells notice, first hit for that on google: > A "Wells Notice" is a letter sent by a securities regulator to a prospective respondent, notifying him of the substance of charges that the regulator intends to bring against the respondent, and affording the respondent with the opportunity to submit a written statement to the ultimate decision maker. So did they receive a notice with the charges…

Good question. I needed to remind myself of the nuance. First sentence from Wiki says: >

To me: "planning" is the key term.

Ref: https://en.wikipedia.org/wiki/Wells_notice

The Wiki article is short and dense. I highly recommend it!

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

#159

Post by throwaway2037 »

klodolph wrote: post #137
olalonde wrote: post #132

Earlier quoted context omitted.

Correct me if I'm wrong but the bigger problem here seems to be that there is now way to "fight the decision" other than ignoring it, getting sued and maybe winning in court?

Maybe they could sue for a declaratory judgment?

Do you have any Real World examples of people using this strategy against a financial regulator? I never heard of such a thing.

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

#160

Post by throwaway2037 »

olalonde wrote: post #132
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…

Correct me if I'm wrong but the bigger problem here seems to be that there is now way to "fight the decision" other than ignoring it, getting sued and maybe winning in court?

I am repeating myself from an earlier post, but read the Wiki page: https://en.wikipedia.org/wiki/Wells_notice

>

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