91–100 of 557 posts
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…
Earlier quoted context omitted.
I don't agree that a regulatory agency saying "hint hint time to register" for years on end is an effective way to regulate. The first step of effective regulation is to state exactly what is out of compliance, which they finally did only a few days ago by listing which particular coins are the ones that put Coinbase out of compliance. The second step is to explain why those particular coins cause them to be non-comp…
> I don't agree that a regulatory agency saying "hint hint time to register" for years on end is an effective way to regulate. Nah, the alternative is why cops get away with everything via qualified immunity. Conmen don’t get given a pat list of what is and isn’t allowed; no one wants to play the “but you saaaaaaid!” game that results.
Yes, they do. Civil courts are full of almost nothing besides "but you said" games. You're just describing the status quo of how law works.
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> I don't agree that a regulatory agency saying "hint hint time to register" for years on end is an effective way to regulate. Nah, the alternative is why cops get away with everything via qualified immunity. Conmen don’t get given a pat list of what is and isn’t allowed; no one wants to play the “but you saaaaaaid!” game that results.
> Conmen don’t get given a pat list of what is and isn’t allowed; no one wants to play the “but you saaaaaaid!” game that results. Yes, they do. Civil courts are full of almost nothing besides "but you said" games. You're just describing the status quo of how law works.
Same with securities. The Howey test exists. The courts and Congress occasionally find a tweak that needs making, but they aren’t likely to be impressed by shenanigans like “oh it isn’t a shared enterprise because of this cute quirky thing”.
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If a company can't use a piece of accounting software that's gaining worldwide relevance, that's the company's problem. If an entire country can't use a piece of accounting software that's gaining worldwide relevance, that's the country's problem.
And the owners of that accounting software can make the case that they should be allowed to be used in the country. Lots of companies do that, and some are even successful! So you have to ask yourself... why isn't Coinbase making that argument?
Coinbase has (obviously) always been a strong advocate of distributed ledger technology, is constantly warning of the ramifications of this software being de-facto banned in the US, and has publicly stated that they have contingencies in place for moving offshore if it's economically unviable to be headquartered in and/or serve the US market.
They've been making that argument since 2012.
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> unable to produce an interpretation of the law consistent with a completely analytical meaning letter of the law The legal profession writ large (including legislators) consider this a feature, not a bug. The reason this is the legal profession's opinion essentially three points: 1. You can't write "bug free" laws and regulations 2. Fixing mistakes in laws and regulations is slow 3. The amount of damage someone can…
Is the spirit of the law always aligned with the analytical meaning ? Do you think it is here ? I understand the spirit of the law, but I do not feel like that can override an analytical interpretation.
You may feel so, but our entire legal tradition is based on the idea that this is not the case. In fact, no active legal tradition I'm aware of nation holds strictly to analytical interpretations of its laws. This is one aspect of the world it's better to accept as a fact of life, I believe there's good reason it's what everyone has settled on.
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> Conmen don’t get given a pat list of what is and isn’t allowed; no one wants to play the “but you saaaaaaid!” game that results. Yes, they do. Civil courts are full of almost nothing besides "but you said" games. You're just describing the status quo of how law works.
No; “fraud” is illegal. They don’t have to specifically list each of the different possible techniques somewhere. Same with securities. The Howey test exists. The courts and Congress occasionally find a tweak that needs making, but they aren’t likely to be impressed by shenanigans like “oh it isn’t a shared enterprise because of this cute quirky thing”.
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…
Earlier quoted context omitted.
No; “fraud” is illegal. They don’t have to specifically list each of the different possible techniques somewhere. Same with securities. The Howey test exists. The courts and Congress occasionally find a tweak that needs making, but they aren’t likely to be impressed by shenanigans like “oh it isn’t a shared enterprise because of this cute quirky thing”.
So according to you, following the SEC's lead: Selling Bitcoin is legal, selling Solana is illegal, and selling ETH (Ethereum) is in a quasi-state of legal and illegal. Nobody knows exactly why any of this is the case, and that's totally fine with you because you don't want to dive into any of these "cute quirky things".
https://www.axios.com/2022/06/28/bitcoin-is-the-only-coin-th...
> Elsewhere in the speech, Hinman explained: "If the network on which [a] token or coin is to function is sufficiently decentralized — where purchasers would no longer reasonably expect a person or group to carry out essential managerial or entrepreneurial efforts — the assets may not represent an investment contract."
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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.
> The fact that the sec let Coinbase last this long is proof the system is over complicated and cannot be maintained efficiently.
There are numerous other possible reasons it took this long for the SEC to take action, other than the system being overly complicated or inefficient (lack of workers, bigger fish to fry [prioritization], the evolution of Coinbase into less of a commodities trader and more of a securities trader). Complications and inefficiencies usually require additional time and effort, but additional time and effort is not an absolute indication that something is complicated or inefficient.
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I suspect that Gensler was obfuscating intentionally when asked about cryptocurrency. Modern regulators seem to prefer retrospective punishment over prospective advice and regulation.
It seems like a massive regulatory failure to let Coinbase IPO if there are the sort of glaring issues they claim. Coinbase has a market cap of around $10 billion, and is owned by retail investors as part of standard index funds. If it goes to zero tomorrow because of the SEC, that is billions of dollars in losses that could have been avoided by more responsible regulatory behavior. Meanwhile insiders will have cashe…
And the S1A https://d18rn0p25nwr6d.cloudfront.net/CIK-0001679788/c947576...
In particular:
> Bitcoin sparked a revolution by proving the ability to create digital scarcity: a unique and finite digital asset whose ownership could be proven with certainty. This innovation laid the foundation for an open financial system. Today, all forms of value – from those natively created online such as in-game digital goods to traditional securities like equities and bonds – can be represented digitally, as crypto assets. Like the bits of data that power the internet, these crypto assets can be dynamically transmitted, stored, and programmed to serve the needs of an increasingly digital and globally interconnected economy.
> Today, we enable customers around the world to store their savings in a wide range of crypto assets, including Bitcoin and USD Coin, and to instantly transfer value globally with the tap of a finger on a smartphone. We provide companies with new ways to transact, incentivize, and reward their users, from offering compounding rewards on savings that pay out by the second to compensating users for virtually completing tasks through global micropayments.
The claim is that they're selling assets and traditional securities that are represented digitally.
And they acknowledge the risks of future regulation:
> • We are subject to an extensive and highly-evolving regulatory landscape and any adverse changes to, or our failure to comply with, any laws and regulations could adversely affect our brand, reputation, business, operating results, and financial condition.
> ...
> • A particular crypto asset’s status as a “security” in any relevant jurisdiction is subject to a high degree of uncertainty and if we are unable to properly characterize a crypto asset, we may be subject to regulatory scrutiny, investigations, fines, and other penalties, and our business, operating results, and financial condition may be adversely affected.
The 'i's are dotted and the 't's are crossed. Is the SEC to evaluate those future possibilities that the assets they claim (in addition to Bitcoin) may be considered securities? Coinbase said its a risk and, well, yep - it is.