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

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

#161

Post by encryptluks2 »

seibelj wrote: post #119
peterbonney wrote: post #111

Earlier quoted context omitted.

> …all of the SEC’s questions in writing and then again in person… They asked for documents and written responses… Plain as day! And since you have so much experience dealing with the SEC, you surely understand that the specific questions they ask will typically reveal precisely their rationale for taking the (extraordinary) step of an enforcement action, just as a prosecutor’s investigatory questions reveals their l…

The SEC can and does provide candid advice. I know entrepreneurs who have had lengthy calls with both state and federal SEC reps who will give straight talk. This is not that. This is preparation to make a court case to use as precedent to attack the industry. I feel the SEC is being a bad actor - stifling innovation rather than encouraging it. Over the last 10 years the HN chattering class has dismissed crypto endle…

I personally look forward to the SEC handing it to Coinbase hard. After having Coinbase ignore multiple support requests for over 3 months where they weren't giving me my staking rewards, I can only assume they decided to just up and keep them for themselves. Coinbase will always be considered a joke to me when they can't even respond to their customers.

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

#162

Post by throwaway2037 »

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.

I agree. It is very unlikely that FDIC would allow it. As I understand, all deposit products, including certificates of deposit, are guaranteed up to a certain amount with FDIC regulated banking institutions. The same is also true of securities brokers, but under a different regulator (SEC?) and different programme.

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

#163

Post by Dylan16807 »

quickthrower2 wrote: post #120
kybernetikos wrote: post #117

Earlier quoted context omitted.

Lots of defi has no counterparty risk. Much of it is over collateralised and managed by smart contacts. There is of course software risk in the smart contract (although I think people underestimate that in conventional finance too).

The security of the Ethereum network is the counterparty

The network itself? That seems pretty safe to me. Even if other nodes get hacked, you can run your own.

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

#166

Post by kybernetikos »

arisAlexis wrote: post #140
kybernetikos wrote: post #117

Earlier quoted context omitted.

Lots of defi has no counterparty risk. Much of it is over collateralised and managed by smart contacts. There is of course software risk in the smart contract (although I think people underestimate that in conventional finance too).

What you are saying is totally debunked by the sheer number of Defi hacks,rug pulls and exoloits the previous year resulting in billions of lost money. That defi has no counterparty risk is probably one of thr all time wrong sentences on HN.

> That defi has no counterparty risk is probably one of thr all time wrong sentences on HN

Which is why I didn't say it. One of the nice features of smart contract platforms is that any two people can quickly set up a transaction where they swap a basket of assets for another basket of assets atomically and without counterparty risk. To get similar guarantees in tradfi requires either an underwriter (that we assume can't go bust) or escrow (with a party we both completely trust).

Smart contract systems are of course infinitely flexible, and some of the most useful kinds of systems you might want to build are not overcollateralized, but those that are can liquidate automatically with no counterparty risk.

Your comment seems to treat 'defi' as just one thing. It's not. There're a huge range of products offered, with risk ranging from lower than lots of traditional products to crazy high.

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

#167

Post by throwaway2037 »

arcticbull wrote: post #125
harry8 wrote: post #121

Earlier quoted context omitted.

yeah sure. Or you know the SEC is allowed to announce /why/ they are prosecuting. And why they are prosecuting a particular alleged transgressor first as opposed to some other having not done so until now. Seems like a reasonable thing to do to me? Generally ".. a written determination you're in the clear" is the opposite to how law is kind of meant to work. I haven't got a written determination that I'm not infringi…

> Or you know the SEC is allowed to announce /why/ they are prosecuting. They are, but they don't have to since the law is spelled out. > And why they are prosecuting a particular alleged transgressor first as opposed to some other having not done so until now. Gotta start somewhere, and the fact someone else is breaking the law isn't a defense. If it was any two people doing the same crime couldn't ever be charged r…

I agree 100% with your last paragraph. And, I was surprised by the age of this judgement! Wiki says: Decided May 27, 1946

Ref: https://en.wikipedia.org/wiki/SEC_v._W._J._Howey_Co.

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

#168

Post by NicoJuicy »

kybernetikos wrote: post #117
rjknight wrote: post #102

Earlier quoted context omitted.

But all contracts have some element of counterparty risk. Contractual guarantees are just contractual, nobody can give absolute guarantees of anything.

Lots of defi has no counterparty risk. Much of it is over collateralised and managed by smart contacts. There is of course software risk in the smart contract (although I think people underestimate that in conventional finance too).

> Lots of defi has no counterparty risk

Euh... https://rekt.news/

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

#169

Post by encryptluks2 »

hackingforfun wrote: post #77
zxcvbn4038 wrote: post #63

Coinbase is even shifter then PayPal. It took several months and numerous support tickets before they clarified that they take a percentage of all ACH withdrawals regardless if it is cash you deposited or proceeds of a crypto sale. If you take money out you pay them a percentage. They try really to hide that in their pricing matrix. Every time I asked about it I would either get a form letter pointing me to the prici…

Coinbase Pro [1] definitely has free ACH deposits and withdrawals, i.e. see the Fiat Deposit (Add Cash) and Withdrawal Fees table here [2]. That said I have heard that Coinbase does need to get their support in order, although that is surprising that with Coinbase.com (I'm guessing that's what you used) they would charge you to withdrawal cash. When buying or selling crypto on Coinbase.com vs Coinbase Pro, the tradin…

Support in order = they ignore support tickets for months or just delete them. They are acting like a bank essentially. Imagine going to or calling your bank and no one being home for months.

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

#170

Post by qeternity »

kybernetikos wrote: post #117
rjknight wrote: post #102

Earlier quoted context omitted.

But all contracts have some element of counterparty risk. Contractual guarantees are just contractual, nobody can give absolute guarantees of anything.

Lots of defi has no counterparty risk. Much of it is over collateralised and managed by smart contacts. There is of course software risk in the smart contract (although I think people underestimate that in conventional finance too).

> Lots of defi has no counterparty risk. Much of it is over collateralised and managed by smart contacts.

There is no such thing as overcollateralization. Higher levels of collateral are required against higher levels of risk. If one party is required to post "excess" collateral, that's because the risk is greater than whatever you think it is.

The very fact that certain DeFi projects dealing in things like stablecoins require obscene collateral is proof that there is tremendous risk...and the high levels of collateral are an attempt to mitigate some of that.

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