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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

#301

Post by [deleted] »

handsclean wrote: post #272
stickfigure wrote: post #158

Earlier quoted context omitted.

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

I think I’ve run into this misunderstanding in my own conversations. The problem is that there are two different lines of reasoning that can look very similar: A: You say “Z is true of X”, and I respond “Z is false for thing-like-X”, implying “Z is likely false for X”. B: You say “Z is true”, and I respond “Z is false for Y”, implying not “Y is like X therefore Z is likely false”, but “Z is sometimes false, so we nee…

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

#302

Post by [deleted] »

vba616 wrote: post #122
cypress66 wrote: post #103

Earlier quoted context omitted.

A congressman asked gensler face to face if ethereum is a security and gensler declined to answer. So no, the SEC has not been clear.

It suggests bad faith to ask why the SEC didn't crack down earlier. Sure, it was politics, but it seems entirely understandable. We all know that before the crypto bust, a lot of people would've been starting a witch hunt if the SEC had tried to enforce the law. Congress, for starters. Gensler is being opportunistic now because that's the reality they have to work with. The wealthy and powerful in this country take i…

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

#303

Post by growse »

ETH_start wrote: post #298
growse wrote: post #240

Earlier quoted context omitted.

Why are people so desperate to seek legal advice from law enforcement?

Because in this case the agency that enforces the rules is also charged with creating them, and how the rules this agency creates apply to novel instruments with no centralized issuer, centralized operator or investment contract, is not at all clear.

No, Congress creates the rules. The SEC decides how to enforce them. A court then decides who's right in any given action.

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

#304

Post by pylua »

Hermitian909 wrote: post #95
pylua wrote: post #70

Earlier quoted context omitted.

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.

> 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…

If this indeed the case it explains the true power these organizations and current legislature have, which I do find worrisome.

I believe that this situation may be a failure of that way of working.

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

#305

Post by ETH_start »

throwaway22032 wrote: post #56
gurchik wrote: post #3

Sorry for the stupid questions, I really know very little about crypto. With that said, > Gensler firmly maintains that the vast majority of crypto assets are securities, with the exception of Bitcoin Why? From an article on Reuters[1], > Bitcoin is not considered a security because its anonymous and open-source origins mean investor profits are not dependent on the efforts of developers or managers, said Carol Gofor…

For those who saw Bitcoin and Ethereum from day 1 or close to it it makes more sense. Bitcoin started out as a toy with no value, even perhaps a proof of concept, which eventually gained value and began to be traded. Even years after its' creation people gave it away for free, there were faucets. The creator disappeared and the protocol intentionally has been designed in such a way that making changes is difficult an…

>Ethereum has nothing like the same origin story.

Ethereum was the first token sale. There was no precedent established at the time of people profiting off of token sales. The token sale agreement explicitly said not to expect a profit. It was treated by participants as more of a kickstarter to crowdfund the launch of a new kind of decentralized computing platform.

Going off tangent: if a token sale explicitly states that participants should not expect to profit, then the SEC should have no jurisdiction over it. Securities laws, as is, are already severe limitations on the right of adults to freely contract. To then shoehorn tokens - that represent no equity and make no representation of giving a claim to assets - into being subject to securities laws, is just egregious suppression of basic rights.

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

#306

Post by [deleted] »

AnthonyMouse wrote: post #255
hef19898 wrote: post #253

Earlier quoted context omitted.

Without case law, authorities don't know neither. With the two law suites, Coinbase and Binance, we are goong to find out. Generally so, if a company works in, or close, to a highly regulated industry it is up to that company to do so in a compliant way. Or generally compliant, there isba tendency of start-ups in Germany complaining about how taxes apply to them as well. If said company is not comoliant, it is on the…

> Without case law, authorities don't know neither. Authorities are the ones who create the rules. If they tell you what the rule means, that's what the rule means, because it's their rule. That's the point of having them be the one to tell you.

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

#307

Post by H8crilA »

georgeecollins wrote: post #52
crazygringo wrote: post #12

> Coinbase, as with most crypto platforms, has decided it wants to simultaneously operate as an exchange, broker-dealer, and clearing agency. These three functions — bringing together securities orders for buyers and sellers, trading securities on behalf of others, and intermediating trades — are typically required to be separate due to conflicts of interest that emerge when one entity controls all of them. Coinbase…

Rather that claim knowledge, I would suggest you read Matt Levine's newsletter on this. He is a former securities lawyer who is extremely knowledgeable. -- I mean very extremely, he wrote an entire Business Week magazine about it. Some key takeaways: For historical reasons as well as practical ones (who would you sue) BTC and ETH are probably considered commodities. Most of the rest are very similar to ICOs which wer…

On top of that it is very, very hard to not see staking as unregistered securities offering. It is so bad that many states issued an immediate cease and desist letters, as well as awarded fines per violation, that is per investor.

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

#308

Post by H8crilA »

refulgentis wrote: post #172
nnx wrote: post #121

Earlier quoted context omitted.

"In Ethereum, a centralized group of people put together a public sale of the token, promising great returns in exchange due to their visionary ideas. This is all perfectly fine, except they didn't register their sale as a security" If I write a book with visionary ideas that promises to change your life (great returns) and continue to work on revisions as I come up with new ideas - should I register it as a security…

You nailed it, securities law doesn't make sense if you don't apply it to finance. Not sure that really advances the rest of the claims.

Owning the book does not promise returns.

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

#309

Post by H8crilA »

Nursie wrote: post #169
lokar wrote: post #131

Earlier quoted context omitted.

I think that is mostly about offering a new security, not acting as a broker.

Sure, but presumably registered brokers can only deal in registered securities?

No one is allowed to deal in unregistered securities.

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

#310

Post by [deleted] »

scott_w wrote: post #274
rockemsockem wrote: post #206

Earlier quoted context omitted.

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.

Enforcement agencies don't have to stop you ahead of time, even if that action is disallowed or even illegal. For example, police officers will regularly sit by the side of the road with a speed gun. They'll make no attempt to stop you driving at 150mph on the motorway but, in the UK, you'll receive a court summons through your door after the fact (and probably lose your license).

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