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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

#31

Post by potatototoo99 »

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…

In bitcoin software contributors can propose changes to the protocol and software, but they have no absolute power since they can just be rejected by the miners, who are not paid directly from bitcoin raising in price, but from fees from the operation of the network itself. So there is no organization or entity promising returns for owning bitcoin.

In Ethereum, a centralized group of people put together a public sale of the token, promising great returns in exchange due to their visionary ideas. This is all perfectly fine, except they didn't register their sale as a security and companies touching Ethereum and other tokens continue to not follow security rules; which involve for instance disclosures about ownership and conflicts of interest. Ethereum is an extremelly centralized business with a few key figures with an interest in the appreciation of the asset, advertising it illegally to a US audience without following US laws.

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

#32

Post by nickff »

RestlessMind wrote: post #25

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 de…

I suspect that Gensler was obfuscating intentionally when asked about cryptocurrency. Modern regulators seem to prefer retrospective punishment over prospective advice and regulation.

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

#33

Post by pylua »

GartzenDeHaes wrote: post #27
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.

Vague laws that take years of law to interpret then passed to an agency that does not have the same context of laws passed 100 years ago. If the system worked and the sec felt this way Coinbase should have never existed . This is proof that it is not working.

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

#34

Post by paulpauper »

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?

The stock price would seem to suggest it's a long way from being a company-ending event, otherwise it would be $5 instead of $50. one of the nice things about the EMH is it gives a good heuristic of assessing how important or serious something is, just by looking at how the stock price reacts, without having to understand the actual details. much of the problem has to do with staking.

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

#35

Post by boc »

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…

Yeah agreed; at least heroin sales don’t directly fund nuclear weapons programs in North Korea, enable gigantic ransomware attacks on innocent civilians, or generate massive carbon emissions+e-waste in order to continue existing.

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

#36

Post by pylua »

JohnFen wrote: post #23
pylua wrote: post #10

Earlier quoted context omitted.

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 extraordinari…

That’s why it’s a systemic failure . Years of law study to interpret laws with context long dropped. The fact that the sec let Coinbase last this long is proof the system is over complicated and cannot be maintained efficiently.

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

#37

Post by nickff »

ceejayoz wrote: post #30
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 t…

Well, the SEC told everyone to register, but didn't actually tell them how they could. From what has been made public, it seems like the SEC strung Coinbase along for about two years, then said that their application was inadequate (without stating any criteria).

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

#38

Post by throwaway22032 »

It's not clear to me why almost any of these coins even need to be listed by regulated exchanges.

Couldn't they just stick with BTCUSD and a few others then let decentralized exchanges deal with crypto-crypto trade?

Would they really lose that much business? I always assumed (though I've never actually checked, it doesn't interest me that much) that almost all of the shitcoins were like, the long tail few % of revenue for these businesses, and it feels like that's where all the risk is, since Bitcoin is generally recognised as a commodity.

I mean, if needs must, spin off the shitcoin stuff into its own entity?

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

#39

Post by ZitchDog »

boc wrote: post #35
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…

Yeah agreed; at least heroin sales don’t directly fund nuclear weapons programs in North Korea, enable gigantic ransomware attacks on innocent civilians, or generate massive carbon emissions+e-waste in order to continue existing.

Heroin sales fund all sorts of terrible things.

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

#40

Post by avsteele »

All other arguments aside: the bottom line is that everyone who invested in crypto did it with the knowledge that Coinbase wasn't a securities broker.

The SEC just can't imagine a world where customers are fine without their 'protection'. We don't want your help, we don't need your help. GO away.

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