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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

#101

Post by EA-3167 »

isp wrote: post #44
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.

> Crypto companies think they don't trade securities To quote the Binance Chief "Compliance" Officer: "we are operating as a fking unlicensed securities exchange in the USA bro" Source: Quoted in the filing yesterday where SEC sued Binance > 111. As Binance’s CCO bluntly admitted to another Binance compliance officer in December 2018, “we are operating as a fking unlicensed securities exchange in the USA bro.” https:…

It's almost unbelievable that someone would put something so monumentally incriminating in writing, but there it is.

Those boys are doomed.

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

#102

Post by nancyhn »

menthe wrote: post #23

There is a well-documented public history of Coinbase taunting the SEC - they had it coming. - https://www.coinbase.com/blog/the-sec-has-told-us-it-wants-t... - https://www.coinbase.com/blog/coinbase-does-not-list-securit... - https://www.coinbase.com/blog/coinbases-staking-services-are... - https://www.coinbase.com/blog/we-asked-the-sec-for-reasonabl... - https://www.coinbase.com/blog/coinbase-takes-another-formal-.…

Or that's a well-documented public history of the SEC taunting Coinbase.

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

#103

Post by Retric »

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…

Binance was up for “money laundering and tax offenses” issues because they deal with large sums of fiat money independent from what’s being sold. Replace Bitcoin with physical artwork and you can still run into issues here.

Coinbase similarly ran into issues not because they were selling crypto but from related activities which fall under SEC regulations. It’s one thing to operate an auction selling pigs or crypto, but when you start getting into ‘related activities’ they don’t necessarily fall under the same umbrella. Read up on “Pork Bellies” and you might start to understand the issues.

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

#104

Post by taeric »

vkou wrote: post #91
taeric wrote: post #28

Earlier quoted context omitted.

The fact that they have been asked, point blank, by congress, "is ETH a security?" and the SEC wouldn't answer is pretty fair for claiming "not perfectly clear." Even here, it wasn't all of ETH that is under question. So, if you have bought some ETH from coinbase, it isn't under fire here. If you paid them to stake your ETH, it is. It is unclear, to me, what it would mean for any ETH you staked personally.

I've watched that interview, congress would ask a loaded question, framed in a fallacy[1], the chair would start answering it, and the congresscritter would interrupt him and throw a tantrum. Repeat 5x. It wasn't a good look. For the congresscritter. (I wonder how much money he's gotten from Sam, CZ, and Coinbase...) [1] The fallacy in question is the congresscritter's claim[2] that a security can't also be a commodi…

He wouldn't start answering. He was asked "yes or no, is ..." and would start hemming and hawing with words that were neither "yes" or "no."

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

#105

Post by dcow »

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.

There are two modalities to crypto and the law needs to treat them differently. Running a node on a crypto currency network does not generate securities. It generates commodities. We don't tax people on the FMV of gold when they dig it out of the ground. But, speculating on the price of gold by creating a virtual token/contract/etc. and selling that, well that’s obviously a security. Just because people buy gold speculatively does make it a security. So buying bitcoin or chia (no longer eth) is still buying a commodity. Anything else, yeah, seems like it passes the sniff test for a security.

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

#106

Post by dsg42 »

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 only question here is whether cryptocurrency is a security or a commodity. Securities fall under regulation by the SEC (SECURITIES and Exchange Commission). Commodities are regulated by the CFTC (COMMODITIES Future Trading Commission). SEC Chair Gensler agrees that Bitcoin is a commodity, but thinks everything else is a security.[1] Securities are much more tightly regulated than commodities. The SEC is making it clear with these complaints that they believe certain cryptocurrencies are securities.

A court might disagree. The CFTC could potentially disagree, although yesterday's agreement makes me think they may have given up on that to some extent. But I actually think it's pretty clear that any cryptocurrency project offering a reward for "staking" or similar is a security.

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

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

#107

Post by loeg »

andreygrehov wrote: post #69
dragontamer wrote: post #49

Earlier quoted context omitted.

> 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…

Gains and losses between different investors don't net out. The SEC is interested in protecting the investors who lost (or would lose).

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

#108

Post by jjk166 »

dymk wrote: post #88
chroma wrote: post #82

Earlier quoted context omitted.

If criticizing a regulatory body causes them to go after you, then that regulatory body is corrupt and should be dismantled and replaced with something else.

Taunt and criticize are two different verbs

And criticize is the correct one in this instance.

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

#109

Post by itake »

andreygrehov wrote: post #84
itake wrote: post #47

Earlier quoted context omitted.

> Because, what if there are more Americans who've made money than those who have lost? Why does this matter? Even if Americans are scamming foreigners (0 Americans losing money), that doesn’t make this legal. The difference between aapl and coinbase is there is regulatory audits of the books and required publications about the health of the security. There are rules about insider trading and insurance protections if…

> Why does this matter? Because the parent said "that many Americans lost money over". Plus the SEC is "protecting investors". So I'm asking, what if there are more people who've made money over those who lost? Does that mean life's good? Coinbase has been pretty transparent about their operations. Not only transparent, they've publicly mentioned several times how frustrated they are dealing with SEC, the organizatio…

Would the SEC be protecting investors if they allow 1 investor to get scammed to the benefit of 2+ investors?

We need systems in place where everyone can make trustworthy investments. If people can't feel safe (even if it's one person or many people), then our economy will slow down (see current crypto prices post-terra, ftx, and more).

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

#110

Post by loeg »

throw1234651234 wrote: post #29
taeric wrote: post #28

Earlier quoted context omitted.

The fact that they have been asked, point blank, by congress, "is ETH a security?" and the SEC wouldn't answer is pretty fair for claiming "not perfectly clear." Even here, it wasn't all of ETH that is under question. So, if you have bought some ETH from coinbase, it isn't under fire here. If you paid them to stake your ETH, it is. It is unclear, to me, what it would mean for any ETH you staked personally.

That's the root of the problem - it's absolutely unclear what the global implications are and if this will be used to go after individuals staking on their own, etc.

No agency has the resources or interest to go after individuals that aren't doing anything especially egregious.
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