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US SEC sues Coinbase, one day after suing Binance

reuters.com

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Re: US SEC sues Coinbase, one day after suing Binance

#61

Post by ethanbond »

butlerm wrote: post #48

If you look up the definitions of "security", "financial instrument", "commodity", and "currency", it is pretty clear that a plain vanilla crypto-currency like Bitcoin is no ordinary security nor a financial instrument. It is not a claim on something else, even less so than a traditional bank note. It is more like a commodity. Since when is "aluminum" a security? A crypto currency business however may be engaged in t…

I think the real crux of the issue is that these instruments were designed to be confusing to regulate and, alas, they're confusing to regulate. The error was in thinking that a confused regulator says "I don't understand what's going on here, carry on and rest easy" rather than what actually happens: "I don't understand what's going on here, and until I do -- on my schedule, not yours -- your business is always at risk of falling on the wrong side of my reasoning."

Re: US SEC sues Coinbase, one day after suing Binance

#62

Post by strangescript »

dforrestwilson wrote: post #50
butlerm wrote: post #48

If you look up the definitions of "security", "financial instrument", "commodity", and "currency", it is pretty clear that a plain vanilla crypto-currency like Bitcoin is no ordinary security nor a financial instrument. It is not a claim on something else, even less so than a traditional bank note. It is more like a commodity. Since when is "aluminum" a security? A crypto currency business however may be engaged in t…

Getting sued to fall under govt regulation - and therefore gaining imprimatur - seems like exactly what these exchanges should want. We never regulated Beanie Babies.

I mean, that makes some assumptions about the overall outcomes here.

Re: US SEC sues Coinbase, one day after suing Binance

#63

Post by hirako2000 »

wins32767 wrote: post #43
hirako2000 wrote: post #19

Earlier quoted context omitted.

Gemini didn't collapse, and an evidence takes a bit more clarity to be treated as such. Luna is.. a coin Can't you get APY returns as a retail customer with pretty much any high street banks? In what ways is that less dangerous than going through a crypto exchange: by the fact the SEC is actively criminalising the activity rather than issuing licenses so that some customer protection via the justice system remains ou…

>Can't you get APY returns as a retail customer with pretty much any high street banks? In what ways is that less dangerous than going through a crypto exchange: Well, given that there are clear ways of issuing securities that have worked for hundreds of years that aren't being followed and that people generally don't get the rug pulled in normal securities, I'd say that it's less dangerous in many obvious ways.

if coinbase pulls off its earn products you can be well assured that more people will get rug pulled elsewhere.

Would you concede that?

Re: US SEC sues Coinbase, one day after suing Binance

#64

Post by EddieEngineers »

paulpauper wrote: post #46
EddieEngineers wrote: post #42

Earlier quoted context omitted.

This is true when it’s going down and false when it’s going up. Do the same analysis of previous years during bull crypto markets and does this hold up?

bitcoin's performance since late 2017 lags QQQ. the rolling 5-year returns have gotten way worse. Much of the gains were from pre-2018. many people five years ago were predicting six-figures by now, nowhere even close.

Huh? BTC is up 56% YTD, QQQ is up 34.5%. Over five years BTC is up 300%, QQQ is 100%. Over life BTC is 7850% while QQQ is 570%. Today QQQ is up 0.12%, BTC is up 0.95%.

I don’t know which slice you want to compare but general holds of BTC have outperformed QQQ significantly, even today it’s done better while it’s two largest exchanges have been sued by the SEC.

Re: US SEC sues Coinbase, one day after suing Binance

#66

Post by EscapeFromNY »

eli wrote: post #56
butlerm wrote: post #48

If you look up the definitions of "security", "financial instrument", "commodity", and "currency", it is pretty clear that a plain vanilla crypto-currency like Bitcoin is no ordinary security nor a financial instrument. It is not a claim on something else, even less so than a traditional bank note. It is more like a commodity. Since when is "aluminum" a security? A crypto currency business however may be engaged in t…

The SEC didn't sue them over Bitcoin. Seems obvious that Bitcoin shouldn't be unregulated and that there should be no question of which regulator has jurisdiction. Unfortunately that probably needs Congress to act.

I don't think there's any question who has jurisdiction. The SEC and CFTC have both agreed it's the CFTC:

https://www.axios.com/2022/06/28/bitcoin-is-the-only-coin-th...

https://cryptoslate.com/cftc-chair-rostin-behnam-snubs-ether...

Re: US SEC sues Coinbase, one day after suing Binance

#67

Post by strangescript »

pnpnp wrote: post #3
TimPC wrote: post #2

Crypto companies think they don't trade securities which is clearly wrong and contradicted by their own advertising. People buy crypto without a real use for crypto because they think they can sell it for more later. Everyone under the sun knows this. It's obviously a security and failing to register should be met by SEC cases like this one.

Isn’t it true that the SEC wouldn’t let Coinbase register since they said Bitcoin _isn’t_ a security? It’s my understanding that Coinbase tried.

If you opened an exchange and did nothing but trade bitcoin, and only bitcoin, you would be free and clear, but there is no real money in that. Coinbase argued a few years ago they were losing to competition because their competitors could do a lot of gray area stuff they couldn't to do being a US-based traded company. Getting listed on Coinbase used to be the gold standard of a trusted, respectable crypto, but they at some point decided screw it and just embraced the coming legal challenges.

Re: US SEC sues Coinbase, one day after suing Binance

#68

Post by mrkramer »

butlerm wrote: post #48

If you look up the definitions of "security", "financial instrument", "commodity", and "currency", it is pretty clear that a plain vanilla crypto-currency like Bitcoin is no ordinary security nor a financial instrument. It is not a claim on something else, even less so than a traditional bank note. It is more like a commodity. Since when is "aluminum" a security? A crypto currency business however may be engaged in t…

Bitcoin is a commodity [0] under the US Commodity Exchange Act (CEA) and it is regulated by the US Commodity Futures Trading Commission (CFTC).

[0] https://www.cftc.gov/sites/default/files/2019-12/oceo_bitcoi...

Re: US SEC sues Coinbase, one day after suing Binance

#69

Post by andreygrehov »

dragontamer wrote: post #49
andreygrehov wrote: post #40

Earlier quoted context omitted.

> That many Americans lost money over. This requires a citation with data points, eg how many Americans lost money, how much money did they lose, etc. Because, what if there are more Americans who've made money than those who have lost? > SEC said Coinbase has since at least 2019 made billions of dollars by handling cryptocurrency transactions, while evading the disclosure requirements meant to protect investors This…

> This requires a citation with data points, eg how many Americans lost money, how much money did they lose, etc. My coworker lost $X0,000 over Celsius. So yes, maybe this is a personal bias. But its based in reality. His entire account at Celsius is written off. He managed to save his money from Voyager. I got cousins who lost money in FTX. Different people, but same overall problem. If my personal social circle is…

> If my personal social circle is showing huge losses in these companies, I have to imagine that other people out there have similar experiences.

This is a personal bias. I've made $86,000 trading Ethereum. My brother-in-law made $24,000 trading Bitcoin. My reality is different from your reality ¯\_(ツ)_/¯

I can't speak for Celsius, Voyager, and FTX. If there was a scam, it has to be punished. No questions asked. But Coinbase has been closely working with SEC for years.

Re: US SEC sues Coinbase, one day after suing Binance

#70

Post by seydor »

hirako2000 wrote: post #39
jrm4 wrote: post #18

Earlier quoted context omitted.

Not that I agree with the own planet thing; but yes -- it's odd. All of this was 100% predictable and should have been expected by everyone. The stated purpose of crypto was to get around this; its weird to see crypto fans "get mad" at e.g. the SEC. It's like getting mad at a shark for going after bleeding prey; it's just what was always going to happen.

Mad because some entrepreneurs makes the effort to build legitimate business entities, and what certain governments find to do is any scheme to keep them out of legitimity. Not that crypto fans would care all that much about these businesses, but there is a need to onramp and offramp given transactions are made in their vast majority in fiat. An exchange run as a business having at least a lot at stake in ensuring co…

it's not like these onramps served the real purpose of digital currency. People don't buy bitcoin in order to pay for services, they buy it to speculate. Bitcoin could succeed even without onramps; digital workers can easily accept bitcoin if they care, which over time will be traded with goods in the physical world with other people who care. That's grass roots deployment, not VC-backed "legitimate" ponzi exchanges.

I do however understand why people are mad. To me it seems that crypto is to GenZ what Real estate was to boomers. It's about building generational wealth in a time of extreme inequality where most other avenues have been closed. It may come back for that, but it has to be built outside the confines of state-regulated money systems

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