Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

newsletter.mollywhite.net

Post reply on HN
Print view View original

201–210 of 557 posts

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

#201

Post by growse »

friend_and_foe wrote: post #177
rodgerd wrote: post #111

Earlier quoted context omitted.

> It seems like a massive regulatory failure to let Coinbase IPO if there are the sort of glaring issues they claim Did you read the article? Specifically the part where it explains why the SEC does not evaluate the business models of companies?

I did... the article lists several examples with the claim that the SEC cannot be expected to understand every business under the sun before approving a public sale, completely ignoring the fact that in this case, knowing if a company is operating as an unregistered securities exchange is their supposed expertise and reason to exist. Did you read it?

Do you think that if the SEC thinks that Coinbase is operating some sort of unregulated securities exchange, that they should bring some sort of enforcement action?

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

#202

Post by everfree »

Animats wrote: post #182
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…

If you actually read the UK crypto bill[1] rather than what Coinbase says about it, you find that it's quite restrictive. "The government’s view is that cryptoassets and the activities underpinning their use should follow the standards expected of other similar financial services activities, commensurate to the risks they pose, while harnessing potential benefits of the technology behind them." ... "HM Treasury propo…

I know what the crypto bill says, thanks.

> All this is close to what the SEC requires.

No, the SEC requires cryptoassets to slot perfectly into existing regulation, making it de-facto impossible for any public-ledger-based-securities exchange to operate. I cover that in my comment here:

https://news.ycombinator.com/item?id=36303345

Contrast that with the proposed UK law, which applies existing regulations in a commonsense way while realizing ones and zeroes in a public ledger behave fundamentally differently than the legal contracts they're used to regulating, and that those ones and zeroes absolutely, categorically cannot do certain things that 1930s laws might ask of them.

> This is probably more "clarity" than Coinbase wants.

Two months after the crypto bill was proposed, Brian Armstrong publicly stated (at a conference in London) that the UK's system is better for Coinbase than the US's system in the sense that there is one regulator providing clear guidelines (FCA) rather than two regulators squabbling over jurisdiction (SEC and CFTC).

He said: "You don't have this unfortunate thing happening where the CFTC and the SEC are having a turf battle. We actually have contradictory statements from the heads of the CFTC and the SEC coming out almost every few weeks. How's a business going to operate in that environment? We just want a clear rulebook."

So Coinbase has come out explicitly, emphatically, saying that the UK's crypto bill is exactly the level of clarity that they want.

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

#203

Post by growse »

Dylan16807 wrote: post #179
rodgerd wrote: post #111

Earlier quoted context omitted.

> It seems like a massive regulatory failure to let Coinbase IPO if there are the sort of glaring issues they claim Did you read the article? Specifically the part where it explains why the SEC does not evaluate the business models of companies?

"If the SEC was in the business of making merit-based judgments on companies before they IPOed, they would need to somehow have expertise in everything from industrial filtration to financial management to projection technology to biotech to the manufacture of skincare products, bandages, and mouthwash. It’s simply not feasible, much less desirable." Yeah that part doesn't make sense. A "merit-based judgement" that r…

It's perfectly reasonable that the Coinbase S1 doesn't include any descriptions of activities that are illegal, and for Coinbase to subsequently start doing illegal things. They even list this risk in the S1!

The SEC saying your S1 and IPO offering is probably kosher isn't a carte blanche to then do whatever you want without continued regulatory oversight.

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

#204

Post by [deleted] »

loveparade wrote: post #174
refulgentis wrote: post #167

Earlier quoted context omitted.

That's called "expressing an opinion." What world would we live in if the very fact we wanted to talk about something meant we couldn't? You're welcome to write a rebuttal but you're attacking the messenger repeatedly instead. She wrote a cogent concise article that describes what's going on in the real world. Now, we await your brilliance, as soon as you're done repeatedly telling us it's "her career."

Nothing wrong with expressing an opinion, it's just sad to consistently see these highly biased and political opinions being upvoted on a website that's supposedly about rational thinking, not political incentives. I would expect upvoted articles here to strike a fair balance in presenting both sides of the argument, not just one.

[deleted]

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

#206

Post by rockemsockem »

bb88 wrote: post #196
friend_and_foe wrote: post #181

Earlier quoted context omitted.

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 b…

Sounds like they expected in advance for the SEC to do something stupid and were very upfront about that fact. Now that the SEC has done a stupid thing they are complaining that the SEC in fact did the stupid thing. Sounds perfectly reasonable to me.

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

#207

Post by lancewiggs »

Dylan16807 wrote: post #179
rodgerd wrote: post #111

Earlier quoted context omitted.

> It seems like a massive regulatory failure to let Coinbase IPO if there are the sort of glaring issues they claim Did you read the article? Specifically the part where it explains why the SEC does not evaluate the business models of companies?

"If the SEC was in the business of making merit-based judgments on companies before they IPOed, they would need to somehow have expertise in everything from industrial filtration to financial management to projection technology to biotech to the manufacture of skincare products, bandages, and mouthwash. It’s simply not feasible, much less desirable." Yeah that part doesn't make sense. A "merit-based judgement" that r…

Their job is to make sure that the IPO document discloses everything material so that investors can make an informed decision. That’s it.

In this case they would’ve been content with the disclosure that the entire business was at risk of being regulated, which is what’s happening here.

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

#208

Post by arcticbull »

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…

> 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.

So uh, you know you just described the opioid crisis in a nutshell right?

Modern opioid painkillers are in fact generally if not entirely accurately, 'heroin based products.' Not just that, prior to the Narcotics Tax Act of 1914 it was kind of a free-for-all, Bayer was selling heroin too! Opium was used to settle fussy babies (note, I'm sure it was very effective). [1] They were approved by the FDA. Then, of course, the FDA went after the makers of these drugs and tightened access to the drugs themselves.

[edit] If I were to offer a generous interpretation of the actions of the SEC, it would be that they didn't want to be seen as killing innovation in the crib. They gave crypto latitude, and then they decided they really didn't like what they saw. It's kind of a 'damned if you do, damned if you don't' thing - you either kill it early and get reamed for that, or you let it fester and get blamed for ever having allowed it at all.

[1] https://gizmodo.com/when-opium-was-for-newborns-and-bayer-so...

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

#209

Post by JumpCrisscross »

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…

> 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

You’re describing regulated opiates versus street heroin. That is the point. Nobody thinks street heroin distributors can reasonably be shocked they’re breaking the law just because pharmacists distribute similar products.

Expressing good arguments forcefully isn’t irrational. The comparison to heroin distribution is an argument ad absurdum showing why Coinbase’s arguments aren’t novel. The rhetoric would not be a structurally different argument if it were instead about jumbo jets or vodka.

> the dude didn't even have a clear answer about the status of Ethereum

Is he required to? The SEC isn’t doing anything to suggest it claims jurisdiction over Ethereum. (It’s also not at his discretion.)

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

#210

Post by jacquesm »

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?

Yesterday would be fine too. In general you should not hold a balance anywhere but in a bank that is backed by the Federal Deposit Insurance Corporation (FDIC) or your local equivalent. If it's pocket change then it doesn't really matter.
Post reply on HN