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

201–210 of 454 posts

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

#201

Post by kybernetikos »

ac29 wrote: post #181
kybernetikos wrote: post #166

Earlier quoted context omitted.

> 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 c…

> they swap a basket of assets for another basket of assets atomically and without counterparty risk. Of course there is counterparty risk - the contract writer could be adversarial. People dont always audit smart contracts (or may not realistically be able to, especially if the contract writer is attempting to obfuscate a subtle bug they can use for their own advantage). Thats the point of the above comment. If the…

> the contract writer could be adversarial

Fair enough, if you consider that to be counterparty risk. I prefer to think of that as an entirely separate kind of risk ('software risk'). This is partly because these contracts can be written by entirely separate parties having nothing to do with the counterparty (and sometimes provided as public infrastructure, since they don't cost the writer anything beyond the initial deployment cost).

I suppose to some extent it depends whether you consider the smart contract itself as a virtual counterparty that could default either through malicious coding or through bugs that allow hackers to steal assets.

I also don't see any problem with combining smart contracts and real legal contracts. If someone scams you in the DeFi world, they're scamming you in the real world too. I know that at least the UK Supreme Court has ruled that digital assets are property at common law.

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

#203

Post by ivalm »

McAtNite wrote: post #53
ivalm wrote: post #51

Earlier quoted context omitted.

Existence of prior rule breakers doesn't mean that it is not forbidden. In reality SEC does try to pursue lots of crypto businesses and in general goes in the order of size rather than chronology.

That’s a possibility as well, and at the end of the day we only have Coinbase’s perspective on the interactions. To be honest, as someone who follows crypto, I get the impression that the SEC simply doesn’t know what they want to do with crypto yet.

I actually agree with you. I think it is fair to say crypto is hard to get right — on the one hand there are lots of scams, on the other hand there is a large amount of investment in non-scams.

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

#204

Post by oefrha »

throwaway2037 wrote: post #171
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…

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.

You shouldn’t paste large blobs of an article here in general. https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que... (There are more recent instances of dang repeating the rule; can’t find them at the moment.) Also, @dang doesn’t do anything; if you have a question, send an email.

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

#205

Post by NicoJuicy »

kybernetikos wrote: post #174
NicoJuicy wrote: post #168

Earlier quoted context omitted.

> 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.

What's defi without the software?

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

#206

Post by sneak »

qeternity wrote: post #176

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…

Well, the NFA wasn't deemed unconstitutional so it's clear that not all technological advances are considered equal in the eyes of the law.

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

#207

Post by capableweb »

chinathrow wrote: post #193
gnee wrote: post #148

Earlier quoted context omitted.

Interesting how the folks so passionate about open-source are the most hostile to open finance

That's because the two things are not related or even comparable. I do use OSS and I want open banking. What I do not want is that lots of people lose money due to fraud or high volatility.

> I want open banking ... What I do not want is that lots of people lose money due to fraud or high volatility

That's a bit like saying you want open source without the bugs, drama, forks or the ability for people to see the code you're publishing.

Things come with tradeoffs. Open banking comes with the tradeoff that fraud and loosing your funds become easier, but it also means that it's easier for people without access to banks to have something to store value in.

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

#209

Post by capableweb »

rockbruno wrote: post #165

...How childish is for someone in an executive position to start whining on Medium in the name of the company about something as serious as legal issues? Did they start hiring 12 year olds after the recent mass exodus?

As a customer of Coinbase for a long time (since 2013), I'm happy they tell the public what's going on, even if it's bad or good. Their customer support is abysmal, so any updates from their own back office is good to me.

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

#210

Post by mthoms »

Lazare wrote: post #191
mthoms wrote: post #175

Earlier quoted context omitted.

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

As in, the interest you might earn on a savings account? The rule is basically: "If you're giving someone else money in the hope of getting more money back later, it's a security UNLESS it fits into a list of exceptions, or if it meets the criteria to be added as a new exception." So a savings account would absolutely be a security, unless it fits into one of the recognised exceptions. One of those exceptions is the…

Very helpful, thanks.

It sounds like you're saying the banks get a special carve-out to provide this service simply because the regulator is different.

On a fundamental level though, I still don't see the difference.

I do have to disagree with the last paragraph though. Consulting with relevant regulators when the legislation is unclear (or non-existent) seems like the opposite of a red flag.

Post reply on HN