Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

blog.coinbase.com

Post reply on HN
Print view View original

171–180 of 454 posts

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

#171

Post by throwaway2037 »

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…

Thank you to post.

Real question (zero trolling): What are the rules around here (implicit or explicit) about reposting / quoting? Sometimes, I am bit nervous to repost the whole thing. I don't see it often on HN. Maybe @dang can provide some insight.

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

#172

Post by throwaway224466 »

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…

At the end of the day, the SEC is bought and paid for by the banks. They are essentially an HR department for banking execs. E.g. How many bank execs went to prison after the great recession? And where were the "Howey test" type threats from the SEC when it was actually needed?

Coinbase offering interest bearing assets is taking business away from the banks. Hence, the SEC will be used as guard dogs by the banks to at the very least slow them down.

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

#173

Post by Gibbon1 »

ternaryoperator wrote: post #124
dehrmann wrote: post #122

Earlier quoted context omitted.

Nit: the Emancipation Proclamation only freed slaves in states rebelling against the union. Slavery was perfectly legal in Kentucky until December 18, 1865.

That is just a nit, as you say. The point is that the Supreme Court had nothing to do with ending the slave trade.

During and after civil war the Supreme Court was problematic and the Republicans solved the problem in part by packing it.

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

#174

Post by kybernetikos »

NicoJuicy wrote: post #168
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).

> Lots of defi has no counterparty risk Euh... https://rekt.news/

Those stories look like they're mainly the software risk I was referring to in my comment.

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

#175

Post by mthoms »

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!"

Excuse my ignorance but how is that any different from "interest"?

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

#176

Post by qeternity »

Why do some in the crypto community think that technology magically changes the fundamental tenets of a given activity?

Nobody would argue that it's impossible to commit wire fraud with a cellphone because it's wireless. And it's similarly disingenuous to argue the Howey test is irrelevant because it's decades old.

Is the First Amendment just some dusty old law that doesn't apply anymore because the Founding Fathers didn't have TikTok?

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

#177

Post by chitowneats »

yunohn wrote: post #139
seibelj wrote: post #119

Earlier quoted context omitted.

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 laugh all the way to the bank… You ran an ICO that settled with the SEC. I’m not clear on what value you offered to the public, or how you justify “making bank”?

Presumably he's referring to the bitcoin price.

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

#178

Post by jmchuster »

fogof wrote: post #42

> 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. Trying to make out like Howey is some obscure precedent from decades ago which the SEC is nitpicking over. The Howey test is the test applied to determine if something is an investment contract.

And Reves is the Court doubling down on Howey and saying, yes, our decision from 1946 totally still works 50 years later, here's us restating it for you if you're still confused.

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

#179

Post by Glyptodon »

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…

The Howey test generally hasn't applied to loans I don't think. What makes this different than other loans?

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

#180

Post by davedx »

JumpCrisscross wrote: post #98
gnee wrote: post #89

Earlier quoted context omitted.

When you put your money into a saving account, you're lending the bank your money with an 0.04% interest rate. Is that a security?

> 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.

But is Lend a security? As far as I can tell, there's no contract for capital flows that you can trade with others. Lend isn't fungible, the USDC is.
Post reply on HN