“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

#191

Post by dotnet00 » Tue, Jun 13, 2023, 6:06 AM UTC

avsteele wrote: post #40

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.

You might be sufficiently informed on the topic and sufficiently good at managing your crypto, but if you've seen the whining after any crypto company has turned out to be a scam or has otherwise failed, it's pretty obvious that most people cannot be trusted with the ability to participate in an unregulated crypto market.

In a way, the mere existence of these big centralized exchanges is indication enough of the fact that the average person cannot be trusted to handle crypto without government backing them.

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

#192

Post by KingOfCoders » Tue, Jun 13, 2023, 6:06 AM UTC

mthoms wrote: post #184

KingOfCoders wrote: post #170

Earlier quoted context omitted.

[flagged]

My comment pointed out that they outright refuse to state which ones fall into which category. That is a 100% factual statement and highly relevant to the discussion. If you'd like to provide a rebuttal to that, be my guest. But childish swipes that don't address the point being made are just that... childish.

I can't see

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

as highly relevant to the discussion.

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

#193

Post by Dylan16807 » Tue, Jun 13, 2023, 6:06 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]

Commenting on a news article doesn't mean you care what happens to the subject of the article.

Your comment is not only pointless and petty, it's wrong.

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

#194

Post by rjbwork » Tue, Jun 13, 2023, 6:07 AM UTC

friend_and_foe wrote: post #181

bb88 wrote: post #153

Earlier quoted context omitted.

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…

Youre completely.ignoring the fact that "heroin is illegal" is cut and dry. Securities are not illegal. Selling them without a license is. Asking them to clarify the law and getting told "the law is clear" is not in any way the same as selling heroin knowing it is illegal.

The law is clear. It's not the job of regulatory agencies to advise companies on how to become compliant with the law and their rules. The law and their rules are...the law and their rules! Hire a lawyer for that!

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

#195

Post by JumpCrisscross » Tue, Jun 13, 2023, 6:07 AM UTC

mthoms wrote: post #162

JumpCrisscross wrote: post #137

Earlier quoted context omitted.

> Anyone: "Okay then, is [insert ANY crypto here other than BTC] a security?" The SEC has been super clear for most crypto except Bitcoin and Ether.

Really? Where can I learn about which cryptocurrencies constitute securities and which don't? Is there a list?

> Where can I learn about which cryptocurrencies constitute securities and which don't? Is there a list?

Yes. Start with the SEC’s complaint against Coinbase: SOL, ADA, MATIC and ten others [1].

Beyond that, ask a securities lawyer or ask the SEC. Coinbase did. The SEC answered. Coinbase didn’t like the answer, and focussed its messaging on irrelevant statements (or a lack thereof) by Gensler about Bitcoin and Ether. If someone only cash traded those two, they would have a legitimate argument against the SEC’s ambiguity. But practically nobody does: instead they operate unlicensed and illegally-configured securities outfits.

[1] https://www.sec.gov/litigation/complaints/2023/comp-pr2023-1... 114

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

#196

Post by bb88 » Tue, Jun 13, 2023, 6:08 AM UTC

friend_and_foe wrote: post #181

bb88 wrote: post #153

Earlier quoted context omitted.

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…

Youre completely.ignoring the fact that "heroin is illegal" is cut and dry. Securities are not illegal. Selling them without a license is. Asking them to clarify the law and getting told "the law is clear" is not in any way the same as selling heroin knowing it is illegal.

I quote from TFA:

    Coinbase also writes in great detail in the S-1 about 
    the risk that the SEC might bring a lawsuit exactly like 
    the one they just have:

        [W]e could be subject to legal or regulatory action in the event the 
        SEC, a foreign regulatory authority, or a court were to determine that a supported crypto asset 
        currently offered, sold, or traded on our platform is a “security” under applicable laws… [W]e could 
        be subject to judicial or administrative sanctions for failing to offer or sell the crypto asset in 
        compliance with the registration requirements, or for acting as a broker, dealer, or national 
        securities exchange without appropriate registration.

        [T]here is regulatory uncertainty regarding the status of our staking activities under the U.S. 
        federal securities laws.

It's pretty clear they knew they were operating in a shady area from their S1 filing -- and so now you're surprised the regulatory hammer fell on them?

Imagine if a company was selling "ground human meat" (see the movie "Soylent Green"). And they did it, well, because the market for ground human meat was suddenly exploding! I mean, in their S1 they might say "Sure this might be illegal, the FDA might take regulatory action against us." But also "Ground human meat is one hot market right now, you don't want to be left out on this rocket that's going straight to the moon!"

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

#197

Post by Dylan16807 » Tue, Jun 13, 2023, 6:08 AM UTC

KingOfCoders wrote: post #192

mthoms wrote: post #184

Earlier quoted context omitted.

My comment pointed out that they outright refuse to state which ones fall into which category. That is a 100% factual statement and highly relevant to the discussion. If you'd like to provide a rebuttal to that, be my guest. But childish swipes that don't address the point being made are just that... childish.

I can't see "Please don't post comments that don't contribute anything to the discussion." as highly relevant to the discussion.

Defending a bad meta comment is the worst option of all.

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

#198

Post by Animats » Tue, Jun 13, 2023, 6:08 AM UTC

friend_and_foe wrote: post #183

Animats wrote: post #163

Earlier quoted context omitted.

Coinbase has clarity. The SEC is saying "What part of 'no" did you not understand?"

But the SEC has never told them no. They've said "we don't know, you'll find out if we ever sue you."

Did they ever ask? You can ask the SEC for a "no-action letter", where they will officially tell you if what you want to do is OK. Here are all no-action letters.[1]

Here's one for Paxos.[2] They asked for permission to run a small-scale blockchain-based clearing operation without being registered as a clearing house. No more than 7 institutional customers, a limited list of stocks, and a time limit. They got it.

Somehow, Coinbase doesn't seem to be on the list there. It's a public record.

[1] https://www.sec.gov/divisions/marketreg/mr-noaction

[2] https://www.sec.gov/divisions/marketreg/mr-noaction/2020/fin...

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

#199

Post by KingOfCoders » Tue, Jun 13, 2023, 6:09 AM UTC

everfree wrote: post #176

KingOfCoders wrote: post #151

Earlier quoted context omitted.

"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…

> A tiny, and some might argue irrelevant, part of the US fintech industry is moving offshore. You'd better be very sure of its irrelevancy before sending it all to the UK, where they're embracing it with a clear regulatory framework. If you are right, the US pushes a small ("irrelevant") amount of crime offshore. But in the off chance you are wrong, the USA risks losing their position as the world's financial superp…

The "1 in 5" comes from that Coinbase survey or is there any other source?

I also own crypto somewhere. I don't use it, I don't sell it, I don't care.

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

#200

Post by [deleted] » Tue, Jun 13, 2023, 6:11 AM UTC

stickfigure wrote: post #158

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…

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

[deleted]