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

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

#151

Post by KingOfCoders » Tue, Jun 13, 2023, 5:16 AM UTC

everfree wrote: post #147

KingOfCoders wrote: post #138

Earlier quoted context omitted.

"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 "t…

"It doesn't mean that companies can't be licensed"

Licensed in this discussion obiviously meant the US.

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

Which is great for them I guess.

"the USA's strong fintech industry"

A tiny, and some might argue irrelevant, part of the US fintech industry is moving offshore.

Crypto to me feels like fusion, it's super relevant, and you just wait some time, you'll see! and then there is another year and another decade and it is still not relevant.

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

#152

Post by everfree » Tue, Jun 13, 2023, 5:17 AM UTC

butitsFake wrote: post #129

everfree wrote: post #88

Earlier quoted context omitted.

I don't really care. I've got a large enough international stock allocation that if the USA loses its status as the financial capital of the world over the next several decades, I'll be just fine in retirement. Companies like Coinbase and a16z have publicly stated their intentions to establish international arms to hedge against the US regulatory environment, and there's no reason my portfolio can't follow their lead…

[flagged]

I've read your comment three times and I've yet to make any sense of it for myself, but good luck to you too. I'm glad you enjoy hunting, growing food, and building things - those are some great hobbies.

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

#153

Post by bb88 » Tue, Jun 13, 2023, 5:17 AM UTC

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.

Would it have helped if she prefaced it with, "Here's a hypothetical about a company wanting to do illegal things..."?

The style of argument is akin to Reductio ad Absurdum, taking an absurd position to it's logical conclusion. The "absurd position" here is a company wanting to sell heroin on the open market, and she takes that to the logical conclusion.

She could have said "meth", "nuclear weapons", or "dead infants", or whatever instead of heroin to make her point. If you read that as a comparison to Coinbase being a heroin dealer than you're the one editorializing her effort.

Here's another reductio ad absurdum argument:

Let's assume the earth is flat. Either the surface of the earth must go to infinity or people must be walking off the edge of it somewhere.

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

#154

Post by seanhunter » Tue, Jun 13, 2023, 5:18 AM UTC

everfree wrote: post #78

ceejayoz wrote: post #67

Earlier quoted context omitted.

The process is the same; securities are securities, crypto or otherwise. They don’t like that process, so they’re asking for a special one just for them. The SEC just said no.

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…

Say your understanding is true.

The whole point of regulations is to make various business models impossible.

The job of the SEC is to enforce the existing regulations and the job of lawmakers to (maybe) change the regulations if they think it's important to make this type of business possible in the US. In doing so they have to weigh potential benefits and harms caused by doing so.

The guiding priciples behind the SEC's current mandate and the current regulatory enforcement framework in the US Securities Laws are 1)investor protection, 2)fair, efficient and orderly markets and 3)capital formation[1]. In making changes to the securities laws, lawmakers would have to decide whether these changes would compromise these principles and whether the benefit of doing so might outweigh the downsides.

An impartial observer might look at the crypto markets thus far and decide that they are not (in the main) fair, orderly and efficient and that investors have suffered significant losses due to fraud and other malpractise and decide that it wasn't worth the risk to make changes to facilitate these businesses. That said, the crypto industry has spent a very significant amount lobbying lawmakers so they may decide otherwise.

Either way, it's not the job of the SEC (Securities regulator) to decide coinbase gets a free pass to ignore securities regulation in this case because the existing regulations make their business model impossible.

[1] https://www.sec.gov/about

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

#155

Post by everfree » Tue, Jun 13, 2023, 5:18 AM UTC

KingOfCoders wrote: post #148

everfree wrote: post #81

Earlier quoted context omitted.

> 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.

The US dollar is not a security. They could have a BTC/USD trading pair.

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

#156

Post by KingOfCoders » Tue, Jun 13, 2023, 5:23 AM UTC

The reason why many like crypto is that it's the purest form of speculation. Stocks, pork halves, the $, all are more or less tied to reality and influenced by reality - even gold. Crypto isn't which makes it so beautiful in the eyes of some.

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

#157

Post by loveparade » Tue, Jun 13, 2023, 5:23 AM UTC

_fizz_buzz_ wrote: post #145

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?

It's not about what's wrong, it's about the selection bias of what's included in such an article. You can write a technically "factually correct" article by only including statements that heavily favor one side of the argument, which is what's done here.

Also, "facts" in topics that touch politics and law are complicated. This is not like science where measurement can be unambiguous. Most facts in topics such as these like these are not scientific facts, but highly politicized opinions that are ambiguous and open to interpretation. Much of the legal code is (on purpose) open to interpretation, including what's a security and what's not.

When trying to understand a topic like this the IMO best thing you can do is seek our content from people who have a somewhat neutral stance. Don't listen to a16z who want to pump all their crypto tokens. Don't listen to Molly White whose whole career depends on bashing anything crypto-related.

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

#158

Post by stickfigure » Tue, Jun 13, 2023, 5:24 AM UTC

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…

She's comparing cryptocurrency to heroin. The parent's point stands.

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

#159

Post by mthoms » Tue, Jun 13, 2023, 5:25 AM UTC

KingOfCoders wrote: post #144

mthoms wrote: post #119

Earlier quoted context omitted.

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]

Please don't post comments that don't contribute anything to the discussion.

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

#160

Post by scott_w » Tue, Jun 13, 2023, 5:25 AM UTC

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.

Then replace “heroin” with “mouldy, maggot-ridden meat” and you get the point.