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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

#161

Post by dcow »

this_user wrote: post #154
dcow wrote: post #116

Earlier quoted context omitted.

I don't think the pure commodity coins (layer 1 networks like btc, xch, etc) are confusing at all. You do work and get rewarded with a digital commodity. It’s exactly like digging up gold, or tapping a tree for maple syrup. Then a bunch of crypto anarchists showed up and started speculating that these coins would be worth a lot in the future because we could topple the financial hegemony by their powers combined. Oka…

I think it's more a case that anyone who was involved in crypto early, and who has actually taken the time to understand the technology, has realised about a decade ago that crypto currencies are mostly useless. But then people had they idea that they could still make money from it by grifting people if they just added layer upon layer of complexity in order to disguise the ultimate uselessness of the underlying tech…

Meh, I'm no bull but I also don't think "cryptos are mostly useless" is accurate. I believe there are solid use cases for distributed global ledger and digital replacement for cash. Is Bitcoin the winning/best manifestation? I doubt it, we likely need something much more energy efficient (like Chia is trying to be). But I don't think the idea is bust. It just isn't as overwhelmingly applicable as people dreamed it might be. We're trying out use cases, vetting the good ones and sometimes painfully learning the which ones were stupid or bad ideas. And once all the speculation settles, I do think true currency is still a viable one. Logistics and markets are another, etc.

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

#162

Post by whimsicalism »

this_user wrote: post #154
dcow wrote: post #116

Earlier quoted context omitted.

I don't think the pure commodity coins (layer 1 networks like btc, xch, etc) are confusing at all. You do work and get rewarded with a digital commodity. It’s exactly like digging up gold, or tapping a tree for maple syrup. Then a bunch of crypto anarchists showed up and started speculating that these coins would be worth a lot in the future because we could topple the financial hegemony by their powers combined. Oka…

I think it's more a case that anyone who was involved in crypto early, and who has actually taken the time to understand the technology, has realised about a decade ago that crypto currencies are mostly useless. But then people had they idea that they could still make money from it by grifting people if they just added layer upon layer of complexity in order to disguise the ultimate uselessness of the underlying tech…

> I think it's more a case that anyone who was involved in crypto early, and who has actually taken the time to understand the technology, has realised about a decade ago that crypto currencies are mostly useless.

I don't know what it is about crypto that makes HN commentators want to make the most ridiculous, put-downy statements without evidence to back it up.

Crypto is not mostly useless, it is just that people don't like the uses. crypto is absolutely massive for avoiding capital controls in countries with inflation, etc.

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

#163

Post by mulmen »

dcow wrote: post #142
lottin wrote: post #129

Earlier quoted context omitted.

But what on earth is a digital commodity? I think the whole concept of digital commodity is nonsensical. A commodity is a product. Products are either consumed or used as raw materials. A digital commodity is not a product. It can't be consumed or used, because it's entirely imaginary. I think a better term is "abstract unit of account".

Respectfully, I think your understanding is behind the curve. Even the SEC says BTC itself is a commodity. You consume a BTC by using/trading it. You consume gold or maple syrup by using/trading it. Just because the uses are a little different doesn't mean it's incompatible with the definition of commodity. If I started using gold in a nonsensical way you wouldn't start saying "oh now it's a security", would you?

I think the hangup with BTC as a commodity is that I can make a loaf of bread with wheat and eat it and the amount of wheat in the world is depleted as a result. Similarly I can use gold to build a cell phone or some jewelry and while it is possible to recover it isn't as simple as trading BTC. How is a BTC consumed?

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

#164

Post by adamsmith143 »

nfRfqX5n wrote: post #76
adamsmith143 wrote: post #10

Always interesting how crypto prices tank after legal action is announced against exchanges. Isn't the whole point to be decentralized in the first place? Hard to believe the whole dip is due to people wanting to get their tokens off the exchanges.

looks like the price barely changed

? Bitcoin is down 5% since Binance was sued...

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

#165

Post by ethanbond »

dcow wrote: post #142
lottin wrote: post #129

Earlier quoted context omitted.

But what on earth is a digital commodity? I think the whole concept of digital commodity is nonsensical. A commodity is a product. Products are either consumed or used as raw materials. A digital commodity is not a product. It can't be consumed or used, because it's entirely imaginary. I think a better term is "abstract unit of account".

Respectfully, I think your understanding is behind the curve. Even the SEC says BTC itself is a commodity. You consume a BTC by using/trading it. You consume gold or maple syrup by using/trading it. Just because the uses are a little different doesn't mean it's incompatible with the definition of commodity. If I started using gold in a nonsensical way you wouldn't start saying "oh now it's a security", would you?

Commodities are usually raw/close-to-raw inputs into some process. Bitcoin doesn’t really meet that, but again the whole point is recent technological innovations haven’t really settled into the language yet.

And again, that is by design of both the instruments themselves and the massive PR campaigns/grifts around them.

The whole trick is attempting to position these things as “the half of the definition of commodity that means this has intrinsic value but not the other half of the definition which says it’s a raw input,” or “the half of the definition of a security that means You Can Make Money, but not the other half that says I can be regulated as someone selling a You Can Make Money instrument.”

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

#166

Post by duxup »

seydor wrote: post #26
duxup wrote: post #22

Earlier quoted context omitted.

> Why people registered their exchanges along with the rest of the banking system ? Access to people and money? Personally I think the initial philosophy behind crypto and how it is actually used has long since disconnected.

i think it's not possible to be disconnected. it's like using laptops to cook pasta

I don’t know what that means.

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

#167

Post by xapata »

ethanbond wrote: post #61
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 r…

Except I'd replace "whims" with "reasoning".

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

#168

Post by ForHackernews »

dsg42 wrote: post #106
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…

It's obviously gambling and should be regulated as such: https://www.theguardian.com/technology/2023/may/17/cryptocur...

Commodities have real-world uses (e.g. gold, oil, frozen orange juice), securities represent a claim on some productive enterprise. Cryptocurrency is neither.

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

#169

Post by ethanbond »

xapata wrote: post #167
ethanbond wrote: post #61

Earlier quoted context omitted.

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 r…

Except I'd replace "whims" with "reasoning".

Yep that’s closer to the reality IMO! Edited :)

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

#170

Post by qeternity »

whimsicalism wrote: post #158
mrcode007 wrote: post #128

Earlier quoted context omitted.

Very good points. People often go a long way to argue against the Howey test. The best example is Howey Co case. If someone is a lawyer dealing in securities and acting as an advisor I would have expected them to be familiar with the law. Coinbase issuing public statements to SEC “tell us what is a security” were basically a ploy or the lawyers involved were extremely inexperienced. https://en.m.wikipedia.org/wiki/SE…

It is not obvious a priori how regulators will treat tokens or which ones will be permissible.

It was obvious to a lot of people who were wondering what was taking regulators so long.
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