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“But the SEC let us go public” and other flawed arguments in Coinbase's defense

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Re: “But the SEC let us go public” and other flawed arguments in Coinbase's defense

#21

Post by [deleted] »

pylua wrote: post #15
burnte wrote: post #11

Earlier quoted context omitted.

> It is scary to me how much legislating is done by these government bodies inside the (executive ?) branch. Congress explicitly delegated these authorities to these agencies as part of the administrative state overhaul in the beginning of the 20th century. The reason was to help become more responsive, and less beholden to daily politics by putting neutral experts in charge, and by and large it works. Safety and sec…

That is good history to know , thank you. It does feel like to me in this case, this is a failure due the government being slow to respond and unable to produce an interpretation of the law consistent with a completely analytical meaning letter of the law, in my opinion.

[deleted]

Re: “But the SEC let us go public” and other flawed arguments in Coinbase's defense

#22

Post by [deleted] »

everfree wrote: post #13

I stopped reading the article when it started comparing cryptocurrency exchanges to the business of selling heroin. No matter your opinion on the issue, that's just alarmist nonsense. I agree that it's reasonable to apply existing securities laws to cryptocurrency, and I agree that "but they let us go public" is a bad argument, but Gensler's SEC has also been intentionally obtuse about how those securities laws shoul…

[deleted]

Re: “But the SEC let us go public” and other flawed arguments in Coinbase's defense

#23

Post by JohnFen »

pylua wrote: post #10
JohnFen wrote: post #7

Earlier quoted context omitted.

The SEC is not part of the executive branch. It is an independent agency. While it is also not part of the legislative branch, the legislative branch is the one that effectively controls it.

Thanks for the insight. It does feel like the organizations ability to interpret the laws is more related to a political agency than the letter of the law. There should just be a letter of the law , analytical meaning branch of government.

It's also useful to know that Congress created the SEC in response to the 1929 stock market crash. Their primary purpose is to prevent the conditions that caused that.

> There should just be a letter of the law , analytical meaning branch of government.

I don't think that's a thing that is possible. You can't write laws to cover every possible case, and writing them to be "self-interpreting" would be an extraordinarily difficult thing. Interpretation will always be required.

Re: “But the SEC let us go public” and other flawed arguments in Coinbase's defense

#24

Post by everfree »

super256 wrote: post #4
gurchik wrote: post #3

Sorry for the stupid questions, I really know very little about crypto. With that said, > Gensler firmly maintains that the vast majority of crypto assets are securities, with the exception of Bitcoin Why? From an article on Reuters[1], > Bitcoin is not considered a security because its anonymous and open-source origins mean investor profits are not dependent on the efforts of developers or managers, said Carol Gofor…

Ethereum ICO‘d and therefore doesn’t pass the Howey test.

The Howey test is applied to the current status of an asset. It doesn't take an asset's origins into consideration.

If you believe that Ethereum currently represents "an investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others", then it is a security. If not, then not.

Re: “But the SEC let us go public” and other flawed arguments in Coinbase's defense

#25

Post by RestlessMind »

I like reasoned critiques of crypto. Heck, I think many crypto actors are scammers and should be punished. However, a lot of crypto is legit and this piece reeks of bias. Some examples:

- comparison with heroin - wtf? To extend that ridiculous analogy, it would be akin to FDA approving heroin based products (similar to how SEC approved Bitcoin ETF in 2021) and then going after heroin. What message is SEC trying to deliver? That holding Bitcoin via futures-based ETF is okay but crypto itself is scam? Kafka couldn't have invented a better plot

- scare quotes when saying “tyrannical” Gary Gensler - tyrannical is an apt description of Gary. See the previous point about kafkaesque treatment. Also see the congressional testimony where the dude didn't even have a clear answer about the status of Ethereum, which is bigger in market cap than 90% of S&P500. Talk about protecting American consumers!

Re: “But the SEC let us go public” and other flawed arguments in Coinbase's defense

#26

Post by everfree »

gurchik wrote: post #3

Sorry for the stupid questions, I really know very little about crypto. With that said, > Gensler firmly maintains that the vast majority of crypto assets are securities, with the exception of Bitcoin Why? From an article on Reuters[1], > Bitcoin is not considered a security because its anonymous and open-source origins mean investor profits are not dependent on the efforts of developers or managers, said Carol Gofor…

That's a good point. It sure would be helpful if Gary Gensler elaborated on his reasoning, rather than handing down his opinions with no explanation.

Re: “But the SEC let us go public” and other flawed arguments in Coinbase's defense

#27

Post by GartzenDeHaes »

pylua wrote: post #2

It is scary to me how much legislating is done by these government bodies inside the (executive ?) branch. I do sympathize with anyone trying to get clear requirements in black and white terms of what is and isn’t acceptable . I think this is more of a systemic failure.

It's called regulating. For areas that require complex administration, Congress passes laws that express its intent and directs the administrating agency to make rules that implement their intent. Congress can amend these laws to expand, contract, or direct the regulations made by these agencies.

Re: “But the SEC let us go public” and other flawed arguments in Coinbase's defense

#28

Post by paulpauper »

civilitty wrote: post #9
triceratops wrote: post #5

Can anyone summarize what the stakes are here? Is a loss for Coinbase a company-ending event? Or is being forced to register all the coins that aren't BTC or ETH a costly regulatory burden? What are the implications of registering all these coins as securities? Does it affect whether they can be offered to non-accredited investors? How expensive is it? Who bears the costs?

> Is a loss for Coinbase a company-ending event? We don’t do that kind of thing in America except for the occasional Enron when extreme levels of fraud are involved and someone takes out California’s electrical grid to boost profits. IANAL but these SEC violations don’t seem to fit the bill.

how about for-profit colleges . many were forced to shutdown due to lawsuits and major regulation under Obama

Re: “But the SEC let us go public” and other flawed arguments in Coinbase's defense

#29

Post by pylua »

meepmorp wrote: post #18
pylua wrote: post #2

It is scary to me how much legislating is done by these government bodies inside the (executive ?) branch. I do sympathize with anyone trying to get clear requirements in black and white terms of what is and isn’t acceptable . I think this is more of a systemic failure.

Why? I think it makes sense to delegate rule making to specialized agencies that are specifically staffed for handling the kind of regulation they're meant to apply. I don't doubt that the process could be improved, but insulating decisions about how to protect investors from political interference sounds like a fine idea.

Originally well intentioned , I think we are seeing it break down here. I am not a lawyer, but as a layman I am not convinced by the sec and their interpretation of things. I am inclined to think that they will bow to political pressure and what is expedient for the current legislature instead of looking at things in a completely objective analytical manner.

Re: “But the SEC let us go public” and other flawed arguments in Coinbase's defense

#30

Post by ceejayoz »

everfree wrote: post #13

I stopped reading the article when it started comparing cryptocurrency exchanges to the business of selling heroin. No matter your opinion on the issue, that's just alarmist nonsense. I agree that it's reasonable to apply existing securities laws to cryptocurrency, and I agree that "but they let us go public" is a bad argument, but Gensler's SEC has also been intentionally obtuse about how those securities laws shoul…

> Gensler's SEC has also been intentionally obtuse about how those securities laws should apply to cryptocurrency.

No. Coinbase’s complaint is that the SEC has been clear, but that they don’t like the clear answer.

https://assets.ctfassets.net/c5bd0wqjc7v0/5NRidtW8lvwVEfSHpn...

> Rather than initiate new rulemaking, Chair Gensler has repeatedly stated through speeches and testimony that the vast majority of digital tokens are securities, and has asked issuers and exchanges that offer, sell, and trade them to come in and register. We disagree that the majority of digital assets are securities. For those digital assets that are securities, registration under the current rules is, for many market participants, either not possible or not economically viable given the associated and unnecessary compliance burdens.

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