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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

#321

Post by blq10 »

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).

They are not required to do so, no.

However, abusing retroactive enforcement does create a pretty clear case that the SEC is not interested in forming a regulatory framework for the exchange of digital commodities - instead preferring to import securities frameworks and punishing participants in the nascent industry.

Why should anyone reasonably believe the SEC has intentions to allow crypto to exist, and that coinage just did it wrong?

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

#322

Post by vkou »

Dylan16807 wrote: post #185
xwolfi wrote: post #171

Earlier quoted context omitted.

But they are securities, it's a completely absurd stance to pretend they're not...

The SEC apparently won't decide if Ethereum is a security so it seems pretty complicated to me. I'm not going to insist the answers are obvious in such a legal minefield.

What does that have to do with the price of butter?

Coinbase isn't being sued because it's trading Eth. It's being sued because it's trading a lot of things that aren't BTC or Eth.

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

#324

Post by shapefrog »

scott_w wrote: post #277
hef19898 wrote: post #231

Earlier quoted context omitted.

Heroin, as in heroin derivates, are not illegal. That's what a lot of hard, medical painkillers are. Same goes for weapons in some of the countries with the most restrictions on gun sales and ownership, it is still perfectly legal to sell military grade weapons to the military in those countries. Funny, how HN seems to qctively failing to understand how regulations and compliance works as soon as they themselves, or…

It seems a common "debating" tactic to spend inordinate amounts of effort questioning the analogy and seemingly pretending to not understand what an analogy is.

It depends on what the meaning of the word 'is' is

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

#325

Post by chimeracoder »

growse wrote: post #203
Dylan16807 wrote: post #179

Earlier quoted context omitted.

"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.

> 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!

It's also possible for the Coinbase S1 to contain descriptions of things that are currently not known to be illegal, and which subsequently become illegal, without any changes on Coinbase's part.

They also list this risk in the S1 as well!

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

#326

Post by mort96 »

pylua wrote: post #2

It is scary to me how much legislating is done by these government bodies inside the (executive ?) branch. I do sympathize with anyone trying to get clear requirements in black and white terms of what is and isn’t acceptable . I think this is more of a systemic failure.

I may be confused here. But to my understanding, the role of the executive branch is to enforce laws.

In this situation, there exists a law that was passed by Congress. Coinbase is breaking that law. Is it not the executive branch's role to enforce that law?

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

#327

Post by kaycey2022 »

kredd wrote: post #221
kaycey2022 wrote: post #205

I think its pretty shitty to want an entire sector of possibilities to just collapse and die just because some people are greedy.

Pardon my ignorance, but what possibilities? It’s been more than 10 years since BTC was promoted as “peer-to-peer money transfer with no middle men!”, but in all western countries this idea has been rejected by public due to limitations posed by blockchain itself (e.g. no reversals). The past 6 years, all I’ve seen is either ICO scams, or casino-like trading which impacts the poor mostly (same concept as why lottery…

I can think of many use cases that may be non trivial to get running. For example, if crypto had a privacy layer, which a lot of people are working on right now, it could easily enable a secondary market in digital goods, subscriptions etc. Imagine you bought a 1 year subscription to something which is locked behind some credentials. 2 months down the line you feel you're not using it a lot and would like to get some of your money back by trading those credentials. Crypto networks would enable a secondary market for those. Sure it can be done with web2 but crypto presents another possible solution.

It could also be a way to organise open source software communities around paid work that can incentivise activity around the preferences of the donor, in addition to the current model of free volunteer work. Even NFTs could be used as an abstraction for the access of digital properties. Their popular use for distributing art became a limiting distraction.

10 years since BTC is hardly enough time for anything. As more sophisticated features are developed for the underlying networks, good use cases will come. A lot of oxygen was sucked out by use cases involving speculative investment.

The gambling aspect of crypto is never going away and I don’t think its a problem. Some responsibility has to be taken by the people who chose to trust scammers with their money. In fact at the height of the NFT craze people who are public influencer types were openly scamming and rug pulling marks on fucking youtube. How many of them got arrested? It is right to ask for action against criminals. But instead of that you have US government agencies trying to shut down an entire sector of commerce just because some guy made important people in seats of power look bad. None of this is being done to protect the people who lost money.

I don't think crypto is valuable for things like poverty alleviation etc. That is a challenge which has to be taken up by individual countries. Anyone who says crypto is going to save the world should be looked at with as much scepticism as the tech founders 10 years back who were claiming to do the same thing.

Crypto is super interesting technology that is one of the few tools that can fight the inexorable oligarchization and centralisation of all things in this world. It can make a lot of people very rich by providing them with opportunities that wouldn’t be possible under the current system of monopolies and governments controlling access to everything. For that reason it doesn’t deserve to die.

In any case, SEC can only set back the adoption of crypto networks in the US. But as tech proliferates around the world, cutting crypto off from the home of “tech” will not kill crypto. It just pushes the timetable back a little bit.

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

#328

Post by roenxi »

arcticbull wrote: post #208
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 fr…

I agree that you have an excellent point in relation to the thread ancestor, but to refocus the debate on the actual matter at hand:

A key difference being that opioids have a very real potential to cause massive, undeniable and observable harm to casual users (like all mind altering drugs including alcohol).

Crypto means that people can trade without having the regulators whitelist all the transactions. Historically speaking, that would appear to be an extremely positive thing for the traders. There are worrying signs about that we are about to repeat the 1920s, 1930s then the 1940s - this is a great time to start working with government-independent money. The Canadian trucker incident alone is a nasty foreshadowing of what we are likely to see more of as energy availability tightens. The government is not governed by compromising liberty-minded types.

The illegal uses of crypto aren't going away, so we may as well make it easy for all the honest people to use it.

And there are people who think that consuming energy is in itself a bad thing. I wonder how they feel about people voluntarily taking holidays, which are a much bigger waste of energy. At some point we have to let people make their own choices about what they value without trying to second guess them based on personal opinions.

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

#329

Post by simiones »

friend_and_foe wrote: post #259
growse wrote: post #201

Earlier quoted context omitted.

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?

Yes, but I think first, they ought to tell us what their criteria is in no uncertain terms.

But they have, repeatedly, haven't they? Crypto coins except for Bitcoin are securities, and must be treated as such. Any business allowing for their trade must behave like any other securities trade business.

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

#330

Post by sebzim4500 »

Eisenstein wrote: post #288
friend_and_foe wrote: post #259

Earlier quoted context omitted.

Yes, but I think first, they ought to tell us what their criteria is in no uncertain terms.

Sorry but law enforcement entities do not have a mandate for, nor are they required to, tell you specifically whether an act is expressly legal or illegal if you ask them. Call a police department and ask them if you are allowed to bury your recently deceased relative on your property. They will tell you to get a lawyer. If they feel like arresting you for illegal disposal of human remains you can't use the defense '…

I think there is a very important difference here, specifically that the police department is not going around deciding what is and isn't legal but the SEC is deciding what is and isn't a security.
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