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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

#311

Post by esotericimpl »

yieldcrv wrote: post #298
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…

The stance isn’t about whether Howey can be applied literally everywhere The stance is that applying it to digital tokens as unregistered securities means applying it to other places, like Nike shoes and baseball cards, just because any random individual expected to profit when they bought one that this framework is not applied everywhere, specifically how congress exempted spot commodities and commodities derivative…

Nike shoes and baseball cards are clearly commodities.

If you were to stake your Air Jordan's with coinbase and Coinbase told you in a years time you'd have 2 pairs, it would become a security.

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

#312

Post by WinstonSmith84 »

mindslight wrote: post #114
WinstonSmith84 wrote: post #21

Earlier quoted context omitted.

[flagged]

I would have written this comment 15 years ago, on the heels of an unnecessarily large military being abused to wage two poorly thought out elective wars. Continued market arbitrage away from wasteful US dominance seemed inevitable, just as the break up of the Soviet Union was. Now, after economic integration with China has run its course and not produced democracy? After Russia's attack on Ukraine demonstrated that…

> There is certainly the open question of whether China will surpass the US military and become a world reserve currency based on the draw of military might alone. But that doesn't have anything to do with decentralization, rather just a different centralizer.

You're right, but it does have something to do. The US dollar is the best weapon the USA have at the moment, far more efficient than all the nukes. When the US dollar will be treated equal to the Euro or the Yuan or the Yen, the USA won't have an edge anymore and... will have nothing to lose anymore.

That's when possibly we will see a mass adoption of cryptocurrencies where powerful countries will search to dominate mining, innovation, etc. As long as we have a single country policing the world, adoption will be incredibly slow and mass adoption will not happen unless we have some visionary politicians ...

> framing it as a political question of whether the Republicans might "embrace change" (ie overtly facilitate the US's decline) seems like a terribly self-destructive paradigm.

US dollar is declining, and that will continue, it's not an "if". Suing every crypto company is not going to help either way on the long term. It's less about "facilitating US decline", than whether politicians can look forward, or will keep looking back. Republicans seem to have a more open minded approach

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

#313

Post by mjburgess »

foodjinn wrote: post #308
mjburgess wrote: post #293

Earlier quoted context omitted.

This is genuinely ridiculous. The "big banks" can buy up and own as much of the crytpo ecosystem as they desire, and all the "whales" are "institutional billionaires". Crypto has, for years, been held by "the elite" -- and Andreessen et al. are exactly using it as a system to commit securities fraud. The direction of wealth flow in crypto is from late retail entrants to billionaire major holders who cash out using la…

I fail to see how that isn't the case when Gensler went to bat for FTX prior to their collapse in similar fashion to the way the SEC behaved in 08, refuses to clarify surrounding the second largest coin in the market, and then comes down on exchanges after years of refusing to clarify what is or is not illegal conduct. They created a situation in which they can choose winners and losers and people are surprised that…

Gensler was taken in by the tech angle -- duped by the (false) claim that this was a world-changing technical innovation. He was, for years, convinced that "revolutionary" blockchain technology was a viable peer-to-peer accounting ledger for a wide variety of assets.

This is the problem with this area: lots of finance guys with no csci experience; lots of csci guys dumb on finance.

Anyone who has enough experience of both worlds runs a mile from all of this, and can see the toxic mixture of IT hype, finance "collectables mania", and grift.

The SEC is just catching up to how much the finance industry has been duped by bros-in-shorts talking about "algorithms"

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

#314

Post by JumpinJack_Cash »

dcow wrote: post #294
JumpinJack_Cash wrote: post #276

Earlier quoted context omitted.

You can consume a Fortnite skin or a Call of Duty weapon. The point is that you cannot consume crypto, it's a problem which is understood inside the community, that's why the push for NFTs which started as legitimate art to enjoy on huge 8K screens or VR headsets but quickly ended up becoming Twitter avatars built for the purpose of trading and offloading to a bigger fool.

You consume it by trading it or, for a direct analog to your example, by showing off your wallet balance. Your Fortnite skin is no more consumable than a BTC. It just has a different value and use.

> > You consume it by trading

Hence the SEC is right to clampdown on crypto for violations of securities law, in order to prevent bubbles that emerge when the only use for something is trading it for something else. We already have that, people who want to participate in that game know where to go, the stock market.

> > for a direct analog to your example, by showing off your wallet balance

That's the most circular thought I've ever heard.

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

#315

Post by foobarbazetc »

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…

It’s kind of interesting that the “commonwealth” countries (AU/NZ/GB/CA) have different classifications of crypto (AU/NZ treat them as property, CA as securities, GB varies depending on the thing).

The SEC filings do give the rationale for why specific coins are securities though.

Hard to summarize each filing though. Worth reading because, unfortunately (?), they make a good case.

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

#316

Post by mulmen »

skinnymuch wrote: post #305
mulmen wrote: post #279

Earlier quoted context omitted.

I was asking an honest question but I don't like being trolled. Have a nice day.

How would you be trolled? You asked and you got answered. What are you disagreeing with?

None of these responses answer the question.

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

#317

Post by foobarbazetc »

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…

Nobody is actually “confused” though.

Crypto proponents (like every other industry that has come before, and will come after) want zero regs.

Everything else is just hand waving.

Regulators clearly know (from these filings) exactly what’s going on.

Congress needs to pass laws to spell out exactly what falls under which new regulations.

It’s clearly possible (see: Australia, NZ, UK, EU, etc, etc)

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

#318

Post by dcow »

llamaimperative wrote: post #306
dcow wrote: post #290

Earlier quoted context omitted.

What about bitcoin makes it any harder to regulate than cash?

First of all, the actual difficulty is not really material since we're debating whether it was a design goal. Bitcoin came out of a long line of libertarian/anarchist projects to circumvent state controls. I don't know why you're pretending like this is some unique interpretation of history. E.g. the problem that the Satoshi whitepaper sets out to solve was ( as cited in the whitepaper , source [1] in the footnotes)…

Bitcoin isn't any different than cash except it’s got a decentralized public immutable ledger and therefore isn't a bearer currency. But like cash its transactions are not governed by an authoritative financial institution that can repudiate and/or reverse them. (It’s proven effectively easier to regulate than cash on the tracking transactions front, though.)

That’s the “anarchy” the paper refers to.

In the paper, the goal was not to topple governments. It was to build a digital cash equivalent where the payment processing happened in a distributed and ultimately trust-less “anarchist” manner. Thus allowing people to transact as they do in cash, but digitally.

All this anti-regulation no laws style of anarchist stuff is downstream. Sure it’s adjacent, but also easily conflated.

Anyway, to be super clear, being resistant to the rule of law is a very different property than being resistant to centralized control.

Cash is decentralized.

Credit, debit, ACH, are centralized.

Crypto is decentralized.

All are subject to the rule of law. But only centralized transactions can be manipulated without coercion or use of force against a one of the parties involved (if they are unwilling to abide).

I don't know any technology that fundamentally cannot have laws created governing its use. It’s just not possible to prevent someone from legally regulating something. But it is possible to design systems that don't require 3rd parties to mediate transactions and do require an actual authoritative monopoly on violence to manipulate, as we’ve seen with cash and as is the case with BTC.

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

#319

Post by foodjinn »

mjburgess wrote: post #313
foodjinn wrote: post #308

Earlier quoted context omitted.

I fail to see how that isn't the case when Gensler went to bat for FTX prior to their collapse in similar fashion to the way the SEC behaved in 08, refuses to clarify surrounding the second largest coin in the market, and then comes down on exchanges after years of refusing to clarify what is or is not illegal conduct. They created a situation in which they can choose winners and losers and people are surprised that…

Gensler was taken in by the tech angle -- duped by the (false) claim that this was a world-changing technical innovation. He was, for years, convinced that "revolutionary" blockchain technology was a viable peer-to-peer accounting ledger for a wide variety of assets. This is the problem with this area: lots of finance guys with no csci experience; lots of csci guys dumb on finance. Anyone who has enough experience of…

The SEC isn't catching up to it when they've explicitly refused to clarify to both the people they are trying to regulate and the lawmakers themselves on what they determine to be a security.

The SEC created a situation by which any action could be deemed criminal and only decided to regulate when it was politically expedient to do so.

There is no reason to believe they are doing this on behalf of protecting investors, because investors have consistently asked for clarity and the SEC refused to do so, and are only now going after the large exchanges after a rash of traditional finance banking failures.

For all of the criticisms against crypto, there is zero reason to believe the SEC is operating in good faith because they have shown time and time again they are not.

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

#320

Post by majormajor »

yieldcrv wrote: post #298
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…

The stance isn’t about whether Howey can be applied literally everywhere The stance is that applying it to digital tokens as unregistered securities means applying it to other places, like Nike shoes and baseball cards, just because any random individual expected to profit when they bought one that this framework is not applied everywhere, specifically how congress exempted spot commodities and commodities derivative…

Why would a sneaker fall under the terms they're using to define a security if not every digital token does?
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