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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

#371

Post by transducers »

https://en.m.wikipedia.org/wiki/Brian_P._Brooks

He is apparently BAM CEO (B) of the SEC’s Binance lawsuit [0], and also worked at Coinbase (to setup compliance) [1]. I was reading up on his activities on his wiki page and rather impressed. Was a comptroller of the Currency for a while in 2020, too. He’s still sitting on the board of another company that’s in block chains (BitFury [2] does infrastructure) and apparently a lot of “vision” related stuff [3]

[0]: https://news.ycombinator.com/item?id=36202663

[1]: https://en.m.wikipedia.org/wiki/Brian_P._Brooks#Coinbase

“”” After working at Fannie Mae, Brooks was Chief Legal Officer of Coinbase from 2018 to 2020. Coinbase is an $8 billion Silicon Valley startup that is one of the largest digital currency platforms in the world. At Coinbase, he was responsible for the company's legal, compliance, internal audit, government relations, and global intelligence groups. “””

[2]: https://bitfury.com/

[3[]: https://www.axelera.ai/

I got a chuckle from the “democratizing edge AI” since they are selling surveillance AI for the edge. Reminded me of Washington Post’s masthead. Are they being ironic? /g

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

#372

Post by trifurcate »

vkou wrote: post #112
taeric wrote: post #104

Earlier quoted context omitted.

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."

Have you stopped beating your wife? Yes or no. No hemming or hawing. It's a simple question, yes, or no? ---- Is it clear to you now that a simple yes or no question, couched in an incorrect assertion is not actually a simple yes-or-no question?

No, I have not stopped beating my wife.

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

#373

Post by acdha »

whimsicalism wrote: post #162
this_user wrote: post #154

Earlier quoted context omitted.

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 do…

> 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.

HN has many people who understand how technology work and a smaller but still large number of people who understand economics. Cryptocurrency has a few people like that but also a ton of get-rich-quick types who think their best work is making random claims until someone buys whatever they’re selling. We’re a decade and a half into that, with billions of dollars of real money pumped in and almost no benefit outside of some early investors being able to cash out before the inevitable dip.

At this point, the onus is on anyone promoting cryptocurrencies to show up front why they’re different than their waves of predecessors. One big challenge here is the inherent conflict of interest: unlike other things which have come in and out of popularity, someone who tries cryptocurrency but realizes it’s not really useful to them doesn’t have an option for getting out without a financial loss which doesn’t involve finding a buyer for something they know isn’t really worth the price. If you backed MongoDB a decade ago, you can just switch to Postgres without either eating a loss or finding someone to buy your old Mongo server.

This also leads me to your next sentence: for years, the claim was that cryptocurrency was going to transform the financial world and beyond. Sales guys went on at length about how you’d use blockchains to buy coffee and a ride to work, make sure the farmer who grew your coffee beans was organic, store your software licenses, record the deed to your house, etc. They couldn’t explain how any of that would work and dismissed criticism, and were especially upset if people said the only real use cases seemed to be illegal transactions. Now, in 2023 we’re back to the primary use being breaking laws, hoping that the government in question chooses not to monitor cryptocurrencies?

> 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

#374

Post by choppaface »

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’s not a matter of what tokens are “permissible” but rather what protections market participants get against fraud and instability. There was plenty of opportunity for crypto to actually raise the bar in protecting the consumer and it just never happened.

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

#375

Post by lmm »

arcticbull wrote: post #222
whimsicalism wrote: post #211

Earlier quoted context omitted.

Has Gensler never consulted lawyers on the status of ethereum prior to this hearing? It should be easy yes or no from the lawyers, I'm hearing that the law is incredibly clear and not really prone to misinterpretation so it shouldn't be an issue. Or maybe Gensler's lawyers are "extremely inexperienced" if they couldn't figure out such an obvious issue?

You're not answering the question. Why do you think Gensler in official capacity should just dispense one-off soundbite determinations at the request of some clown grilling him? > It should be easy yes or no from the lawyers... When has that ever been the case, and why should it be the case now? [edit] The law is not just what's written but the entirely of case law. The SEC has provided a framework for analysis of se…

> Why do you think Gensler in official capacity should just dispense one-off soundbite determinations at the request of some clown grilling him?

Because the whole point of the rule of law is that the law same law applies to any clown. If the head of securities law in the country can't tell you whether a basic thing is legal or not then why even bother having a congress and elections and any pretense that we live in something other than a corrupt oligarchy?

> [edit] The law is not just what's written but the entirely of case law. The SEC has provided a framework for analysis of securities in the context of crypto. It's here. [1] And it builds on the DAO report, here. [2]

If the SEC themselves is incapable of applying their framework to the second-most-prominent entry in the category of things it's designed to analyse, then what is that framework good for?

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

#376

Post by unyttigfjelltol »

JumpCrisscross wrote: post #278
whimsicalism wrote: post #217

Earlier quoted context omitted.

I don't own any crypto [outside of very small curiosity amounts when I was playing with it to figure out how it works years ago] nor do I consider myself a 'crypto person' (only, perhaps, compared to the backdrop of extreme HN negativity around the topic). I just think that people saying 'regulations are perfectly clear' on this issue have not spent that much time dealing with regulators in emerging technology. > Jus…

> people saying 'regulations are perfectly clear' on this issue have not spent that much time dealing with regulators in emerging technology I work in a regulated industry. I have my criticisms of Gensler. And I’ve (separately) profited off crypto. The regulations for non-Bitcoin exchanges were clear from the start. Nobody liked that clarity. And the regulators spent a few years navel gazing. But the legal advice I g…

One way to look at it is a generation of boiler room operators moved their pump'n-dump schemes from central securities clearinghouse to crypto ledgers, because they realized what a loophole the Bitcoin exception was. And they brought in enough politicians and celebrities to slow walk promises of updated regulations, and regulators cautiously warned and waited, and here we are, with some bowtied man criticizing the SEC for doing its job precisely in the manner politicians demanded.

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

#378

Post by lmm »

reaperman wrote: post #358
majormajor wrote: post #320

Earlier quoted context omitted.

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

They wouldn't. 'yieldcrv is not demonstrating knowledge of the Howey test, and appears to be heavily focused on a narrower reading, "buying something with the expectation of increased future value" -- which they're setting up as a strawman's Howey's test. Sneakers would not meet the Howey Test: An investment contract exists if there is an "investment of money in a common enterprise with a reasonable expectation of pr…

> Buying the latest Yeezy's is not a common enterprise.

And yet buying a token is? What's the distinction here?

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

#379

Post by andreygrehov »

dragontamer wrote: post #369
andreygrehov wrote: post #361

Earlier quoted context omitted.

They filed a petition which SEC failed to address. The result is Coinbase suing SEC. Now, SEC sues Coinbase back. Seriously, wtf? SEC needs a massive slap on their hands. If they lack expertise and don't have enough knowledge (literally), then whoever works there should go "back to school" (figuratively speaking), learn all the ins and outs of crypto, and only after consider joining the SEC as an employee. https://as…

https://www.sec.gov/news/press-release/2023-102 > “We allege that Coinbase, despite being subject to the securities laws, commingled and unlawfully offered exchange, broker-dealer, and clearinghouse functions,” said SEC Chair Gary Gensler. “In other parts of our securities markets, these functions are separate. Coinbase’s alleged failures deprive investors of critical protections, including rulebooks that prevent fra…

This is indeed straightforward, but I'm not complaining about it. If all of these requirements had been outlined by the SEC prior to the release of the products, Coinbase would've followed the rules. Now when all of these products are in production, the SEC woke up and like: "heeey, this is a security, you must follow the rules". But there were no rules before. So, shall Coinbase just sit there and wait while the SEC learns more about blockchains? I don't know if there was any "warning" from the SEC, but if not, they should've published a public one first: "Due to X, Y and Z, the SEC gives Coinbase 6 months to split the broker-dealer and clearinghouse functions off".

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

#380

Post by davorak »

lmm wrote: post #375
arcticbull wrote: post #222

Earlier quoted context omitted.

You're not answering the question. Why do you think Gensler in official capacity should just dispense one-off soundbite determinations at the request of some clown grilling him? > It should be easy yes or no from the lawyers... When has that ever been the case, and why should it be the case now? [edit] The law is not just what's written but the entirely of case law. The SEC has provided a framework for analysis of se…

> Why do you think Gensler in official capacity should just dispense one-off soundbite determinations at the request of some clown grilling him? Because the whole point of the rule of law is that the law same law applies to any clown. If the head of securities law in the country can't tell you whether a basic thing is legal or not then why even bother having a congress and elections and any pretense that we live in s…

> Because the whole point of the rule of law is that the law same law applies to any clown. If the head of securities law in the country can't tell you whether a basic thing is legal or not then why even bother having a congress and elections and any pretense that we live in something other than a corrupt oligarchy?

In the linked video the questioner is asking about about potential future cases/decisions and one reason not to comment on specific cases/decisions, as is what happened in the video[0], is that an agency does not want to telegraph their moves ahead of time, since that would give potential criminals a heads up that they are on a deadline and need to focus on cover up their crimes.

If the questioner needs insight into how policing actions are decided they can ask about pervious cases/decisions and the reasoning that went into those pervious cases/decisions.

[0]: https://youtu.be/VhA1dZXeao0?t=58

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