Live data from Hacker News

SEC Sues Binance and CEO Zhao for Breaking US Securities Rules

bloomberg.com

111–120 of 489 posts

Re: SEC Sues Binance and CEO Zhao for Breaking US Securities Rules

#111
post #40

> In one instance, the Binance chief compliance officer messaged a colleague that, “[w]e are operating as a fking unlicensed securities exchange in the USA bro.” Source: https://twitter.com/JohnReedStark/status/1665748594421297152 This is a legendary quote from the filing.

is "[w]e ...." literal text from a message? when this kind of wording is used usually in english? For me typing "we" is much easier. reason I am asking is, if text was written "e are operating as fk....." then it's very easy to claim: "oh I wanted to write "they are", when talking about FTX" and blame them for everything (IANAL)

Setting aside whether the original letter was actually capitalized, the rule is common in English writing: https://style.mla.org/capitalizing-start-of-quotation/ ("If the first letter of the first word you quote is capitalized in your source, use a lowercase letter enclosed in square brackets").

More specifically, The Bluebook: A Uniform System of Citation provides one of many sources of angst for first-year law school students in the United States. Its secondary purpose is to prescribe much of the structure and formatting of U.S. legal writing, down to whether there's a space between the period and the capital S in something like "314 F. Supp. 1217 (N.D. Tex. 1970)" (there is), and whether there is one between the period and the 3 in "945 F.3d 265 (5th Cir. 2019)" (there isn't).

The most important Bluebook rule when altering quotations is not to change the meaning of the original text. The second most important rule is to explain the purpose of each alteration through a long set of rules (whether emphasis was in the original, whether a typo existed in the original, etc.). That covers your concern.

Re: SEC Sues Binance and CEO Zhao for Breaking US Securities Rules

#112

Earlier quoted context omitted.

The definition of "security" is pretty objective (Howey test), but the answer it produces tends not to be liked by people in the crypto space, so they argue hard about why it's not a definition of security. What quotes like these do is make it trivial to prove the mens rea (intent) requirements, and put a lie to claims that they didn't know it was a security or that their interpretation as not-a-security was reasonab…

Putting this here in case it's useful. Please correct if it's wrong. What is the Howey test for whether something is a security? """ The Howey Test asks whether a transaction constitutes an "investment contract," which is a type of security. If it is an investment contract, it must satisfy four criteria: It is an investment of money. The investment is in a common enterprise. There is an expectation of profits from th…

If you're really, really motivated, you can make facially-plausible arguments against any of the four factors. (Coinbase does this, for example).

Common enterprise and expectation of profit are the two factors that are the weakest, and for a pure cryptocurrency like Bitcoin or Ethereum, there's probably not enough to meet common enterprise there. Although by the time you get to staking--especially an exchange offering to stake on your behalf--you'd probably pass the threshold of common enterprise, and you should assume your service meets the Howey test.

Re: SEC Sues Binance and CEO Zhao for Breaking US Securities Rules

#113

Earlier quoted context omitted.

> CZ potentially broke the law while running a legitimate service Intentionally broke the law, according to his own statements. Also, co-mingled personal and client assets like Bankman-Fried.

> Intentionally broke the law... It's not like there are much laws regulating cryptocurrency markets in the US to begin with. That's the whole point why most crypto companies avoid the US: random enforcements != clarity But I'm really curious to see whether a large country (e.g. China) or countries union (e.g. EU) is going to provide enough clarity and security as to move the innovation elsewhere from the US.

Bullshit. There are plenty of laws, just none specifically tailored to what the crypto companies would like.

So, no _new_ laws. They still have to follow the old ones.

Not outright breaking them, emailing each other about how much you are breaking them, making memes about how much you are breaking them - yeah, that tends to be pretty well covered.

Re: SEC Sues Binance and CEO Zhao for Breaking US Securities Rules

#114
post #102

Earlier quoted context omitted.

Putting this here in case it's useful. Please correct if it's wrong. What is the Howey test for whether something is a security? """ The Howey Test asks whether a transaction constitutes an "investment contract," which is a type of security. If it is an investment contract, it must satisfy four criteria: It is an investment of money. The investment is in a common enterprise. There is an expectation of profits from th…

who is buying crypto and not expecting to make a profit from it?

You could be buying it to interact with a smart contract.

Re: SEC Sues Binance and CEO Zhao for Breaking US Securities Rules

#115
post #102

Earlier quoted context omitted.

Putting this here in case it's useful. Please correct if it's wrong. What is the Howey test for whether something is a security? """ The Howey Test asks whether a transaction constitutes an "investment contract," which is a type of security. If it is an investment contract, it must satisfy four criteria: It is an investment of money. The investment is in a common enterprise. There is an expectation of profits from th…

who is buying crypto and not expecting to make a profit from it?

People buying narcotics and narcotics accessories.

Re: SEC Sues Binance and CEO Zhao for Breaking US Securities Rules

#116
post #102

Earlier quoted context omitted.

Putting this here in case it's useful. Please correct if it's wrong. What is the Howey test for whether something is a security? """ The Howey Test asks whether a transaction constitutes an "investment contract," which is a type of security. If it is an investment contract, it must satisfy four criteria: It is an investment of money. The investment is in a common enterprise. There is an expectation of profits from th…

who is buying crypto and not expecting to make a profit from it?

> who is buying crypto and not expecting to make a profit from it?

Me. I put my savings in Bitcoin because I dislike the tradfi system.

All I want is to be in control of my savings and to be able to freely transact with anyone anywhere in the world.

I am still affected by the exchange rates to USD and EUR. But the hope is that in the future I will be able to use BTC directly more often and not even have to touch USD or EUR.

Perhaps one day even my country will get with the times and allow me to pay my taxes in BTC directly instead of having to exchange it to government funnymoney first.

Re: SEC Sues Binance and CEO Zhao for Breaking US Securities Rules

#117

Is there any indication that eventually Bitcoin and Ethereum don't eventually get pulled into the "unlicensed security" category?

My understanding may be off, but I believe that Bitcoin will be able to avoid it but Ethereum may have a harder time due to the fact that contracts are pretty much baked into ETH at a basic protocol level. I'm sure if I'm wrong someone will correct me.

Re: SEC Sues Binance and CEO Zhao for Breaking US Securities Rules

#119
post #89

Earlier quoted context omitted.

https://www.sec.gov/corpfin/framework-investment-contract-an...

Coinbase and the Howey test https://www.coinbase.com/blog/coinbases-staking-services-are...

Coinbase's argument hinges upon a blockchain not being a "common enterprise." The rest of their arguments are even weaker.

Re: SEC Sues Binance and CEO Zhao for Breaking US Securities Rules

#120
post #114
post #102

Earlier quoted context omitted.

who is buying crypto and not expecting to make a profit from it?

You could be buying it to interact with a smart contract.

In theory, yes.

In practice, most of the interaction with smart contracts consists of locking up your money in one and expecting yield.

Post reply on HN