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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

#141

Post by JumpCrisscross »

jbverschoor wrote: post #139
JumpCrisscross wrote: post #128

Earlier quoted context omitted.

> Gensler declined to say whether or not Ether is a security in front of congress Whether Ether is a security is irrelevant to this case, based on an investigation which pre-dates Gensler’s term at the SEC, which is about whether Coinbase is required to register and operate as a securities exchange on account of having traded e.g. Solana. The entire argument obsessing over his refusing to come to conclusions until fa…

Coinbase already has a license, but they're not using it. If it's not even clear what a security is, why would you register as a securities broker/exchange?

> If it's not even clear what a security is, why would you register as a securities broker/exchange

False condition. The SEC has made it clear that various crypto, e.g. Solana, are securities. If you want to trade those, you must register. Again, if you just want to cash trade Bitcoin and Ether, the SEC has shown zero inclination of messing with you.

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

#142

Post by latchkey »

personjerry wrote: post #112

If I used Coinbase to purchase ETH (and it's still held there) should I be moving those assets right about now?

Self custody is always the best route, if you know what you're doing. If you have zero clue on how to set up and secure a wallet and don't care to do it, Coinbase is probably an ok option, for now.

Not financial advice, but smart move to be buying ETH.

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

#143

Post by noitpmeder »

personjerry wrote: post #112

If I used Coinbase to purchase ETH (and it's still held there) should I be moving those assets right about now?

Yes -- if you are concerned about coinbase losing this deal you should be moving all assets (coins, dollars, ...) out.

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

#144

Post by KingOfCoders »

mthoms wrote: post #119
ceejayoz wrote: post #73

Earlier quoted context omitted.

Coinbase: “We list dozens of coins, including all the big ones. Maybe they’re all in the tiny minority?” SEC: “No. Stop playing games. You have to register.”

That may be the case, but refusing to state which ones and why is not "clarity". Plain and simple. Like I said, I don't care what happens - but as an outside observer - it's ridiculous.

[flagged]

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

#145

Post by _fizz_buzz_ »

loveparade wrote: post #75

I don't understand how anyone can take this obviously super-biased articles from someone who has made it their career to hate anything crypto-related seriously. It's full of personal jabs and bias like "my guess is that it’s going to involve a lot of PR stunts and headline-grabbing" It's obvious that there is zero incentive here to do any real reporting or research. It's just clickbaity headlines and statements appea…

The bias is obvious, but is there anything factually wrong in the article?

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

#146

Post by remarkEon »

bb88 wrote: post #127
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…

TIL to stop reading the top voted comment if it appears to be outrage and just read the article for myself instead. Just FYI here's the quote in context. She's posing a hypothetical here and not actually comparing Coinbase to a heroin dealer. This is very much in the style of Matt Levine at Bloomberg, btw. If a company went to the FDA and said “hello, we’d like to start selling heroin to the public for recreational u…

Heroin is illegal, though?

Still don't understand how the analogy applies to cryptocurrency.

>The company could decide the FDA was wrong...

But why would they decide this? Since Heroin is, again, illegal.

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

#147

Post by everfree »

KingOfCoders wrote: post #138
everfree wrote: post #78

Earlier quoted context omitted.

My understanding is that the corporate framework that securities licenses require is literally impossible to satisfy when trading current public blockchain assets. As in, to trade crypto as a security on your exchange, you would need to walk up to every dev team of every crypto you wanted to trade and kindly ask them to KYC/AML every single user of the blockchain so that you could be in compliance. In practice this j…

"is literally impossible to satisfy" Then you can't be licensed. Simple. "But I really really really want to be licensed" "..."

It doesn't mean that companies can't be licensed. It just means that they will move out of the USA (to another country that has strong financial infrastructure but sane securities laws like the UK), get licensed there, and exclude US customers from their platforms.

Coinbase and a16z have already publicly stated that they have plans to set up international arms to hedge against US regulatory risk.

So your statement "then you can't be licensed, simple", comes with the corollary of "the USA's strong fintech industry may move entirely offshore within the next decade." If everyone is cool with that, then yeah, go ahead and blanket ban all US residents from trading any financial instrument that's recorded on a public digital ledger.

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

#148

Post by KingOfCoders »

everfree wrote: post #81
ceejayoz wrote: post #73

Earlier quoted context omitted.

Coinbase: “We list dozens of coins, including all the big ones. Maybe they’re all in the tiny minority?” SEC: “No. Stop playing games. You have to register.”

> Maybe they’re all in the tiny minority? Coinbase lists less than 300 of the tens of thousands of cryptocurrencies out there - indeed a tiny minority of them, and they do have some kind of legal review process, so while that claim may well be untrue, it's not absurd on its face.

"Coinbase lists less than 300"

With only BTC Coinbase would not be an exchange but a wallet.

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

#149

Post by Dylan16807 »

JumpCrisscross wrote: post #125
BLKNSLVR wrote: post #106

Earlier quoted context omitted.

> are typically required to be separate due to conflicts of interest that emerge when one entity controls all of them. This doesn't appear to be what the SEC is suing Coinbase for though, and is actually far more applicable to the question "then why were they allowed to go public?" It's possible (likely even) there are nuances I don't grok, but sued for selling unregistred securities is not the same as requiring stru…

> far more applicable to the question "then why were they allowed to go public?" The SEC does not approve IPOs. This is made abundantly clear in the law and rules, it is hammered into every first-year securities candidate as part of their licensing and it is front and centre on every S-1.

Well maybe they should? At least big ones.

They don't need to make "merit-based judgements" to do the same security analysis they'd do after the IPO.

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

#150

Post by khuey »

remarkEon wrote: post #146
bb88 wrote: post #127

Earlier quoted context omitted.

TIL to stop reading the top voted comment if it appears to be outrage and just read the article for myself instead. Just FYI here's the quote in context. She's posing a hypothetical here and not actually comparing Coinbase to a heroin dealer. This is very much in the style of Matt Levine at Bloomberg, btw. If a company went to the FDA and said “hello, we’d like to start selling heroin to the public for recreational u…

Heroin is illegal, though? Still don't understand how the analogy applies to cryptocurrency. >The company could decide the FDA was wrong... But why would they decide this? Since Heroin is, again, illegal.

Unregistered securities offerings are also illegal.
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