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

351–360 of 557 posts

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

#351

Post by JumpCrisscross »

ceejayoz wrote: post #342
growse wrote: post #303

Earlier quoted context omitted.

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

No, in most cases, Congress makes laws that say things like “we delegate our rule making authority to the EPA with regards to air pollution” (Clean Air Act). The agencies then create the rules; https://en.wikipedia.org/wiki/Code_of_Federal_Regulations Sometimes the court system decides the agency’s rules exceed the authority granted to them by Congress. Other times Congress uses the Congressional Review Act or new le…

The laws pertinent to the SEC's complaint are the '33 Act, '34 Act and court cases which constructed the Howey Test. None of them were created by the SEC.

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

#352

Post by ceejayoz »

KptMarchewa wrote: post #336
Eisenstein wrote: post #288

Earlier quoted context omitted.

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 '…

IDK, you can ask polish tax authority for a individual interpretation of law and it's binding in court.

The US IRS also has this; a “Private Letter Ruling”. https://www.irs.gov/newsroom/understanding-irs-guidance-a-br...

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

#353

Post by [deleted] »

cmcaleer wrote: post #72
triceratops wrote: post #19

Earlier quoted context omitted.

> aren't possible to comply with for crypto because of how it works Why is this? Thanks for the other detail you provided.

Here is only one such brutal squeeze: registered security brokers must maintain control of all securities [0]. In practice, this means brokers use custodians[1]. Regulators have been working on making holding crypto harder for custodians [2]. [0]: Securities Exchange Act of 1934, Rule 15c3-3 [1]: https://www.sec.gov/news/public-statement/joint-staff-statem... [2]: https://www.risk.net/investing/7956492/crypto-custody…

[deleted]

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

#354

Post by JumpCrisscross »

H8crilA wrote: post #309
Nursie wrote: post #169

Earlier quoted context omitted.

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

No one is allowed to deal in unregistered securities.

> No one is allowed to deal in unregistered securities

All of VC happens with unregistered securities.

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

#355

Post by [deleted] »

triceratops wrote: post #19
habitue wrote: post #17

Earlier quoted context omitted.

The issue is that if most coins are securities, then that means in order to operate, Coinbase has to become a registered securities exchange in order for it to do what it does. The regulations for securities exchanges are onerous, but also many of them aren't possible to comply with for crypto because of how it works. So the SEC is saying "You are an unregistered securities exchange" And coinbase is saying "Please gi…

> aren't possible to comply with for crypto because of how it works Why is this? Thanks for the other detail you provided.

[deleted]

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

#356

Post by gumby »

nickff wrote: post #32
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…

I suspect that Gensler was obfuscating intentionally when asked about cryptocurrency. Modern regulators seem to prefer retrospective punishment over prospective advice and regulation.

> Modern regulators seem to prefer retrospective punishment over prospective advice and regulation.

In most cases that’s what you want. The Communications Decency Act was written way too early and most of it was struck down, except the important section 230. When the Food, Drug and Cosmetic Act was revised in 1962 a huge swath of previously approved drugs of longstanding experience (e.g. aspirin) were grandparented.

Most cases. Nuclear reactors are a good counter example.

I consider cryptocurrency mathematically interesting but otherwise arrant nonsense. Nevertheless I think the “wait and see” regulatory approach, while frustrating, was the right one: don’t stop it (so people can innovate) but don’t provide the protection of widow-and-orphan rules until it has had time to develop. After all, perhaps there is a pony in there, and early regulation could have strangled it.

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

#357

Post by roenxi »

infinite8s wrote: post #343
roenxi wrote: post #328

Earlier quoted context omitted.

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…

> There are worrying signs about that we are about to repeat the 1920s, 1930s then the 1940s The rest of this comment was not where I thought you'd go with this. You realize the creation of the SEC was a direct result of the stock market crash in 1929 ,due mainly to people's life savings being invested by commercial banks without regards for the underlying economics of the investments, exactly what the SEC is trying…

I mean, so? Crypto isn't an investment. I haven't heard a plausible theory why its value would increase over time. It'll be lucky if the equilibrium position is value holding steady.

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

#358

Post by ethanbond »

JumpCrisscross wrote: post #346
iterativ wrote: post #279

Earlier quoted context omitted.

Yes well, some claim it's "securities", there is no clear law for that. Can I give you, for example, Amazon shared and get a coffee or a pizza ? Directly, not liquidate it first. Let's find out how the Ripple lawsuit is going to end, there is good chance to win it. The woke up one day and they "hey this crypto is a threat to our dollar'. Gensler said "we don't need any more digital currencies, we have USD, EUR, YEN".…

> Can I give you, for example, Amazon shared and get a coffee or a pizza ? Directly, not liquidate it first. No, this is specifically addressed by securities law. It's not impossible, but you have to do it properly.

what’s next, are you going to tell me that I can’t realize millions of dollars in crypto gains without paying income tax?

Inconceivable!

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

#359

Post by ceejayoz »

lmm wrote: post #134
ceejayoz wrote: post #98

Earlier quoted context omitted.

They've explained their reasoning in various spots. For example: https://www.axios.com/2022/06/28/bitcoin-is-the-only-coin-th... > Elsewhere in the speech, Hinman explained: "If the network on which [a] token or coin is to function is sufficiently decentralized — where purchasers would no longer reasonably expect a person or group to carry out essential managerial or entrepreneurial efforts — the assets may not repre…

"Sufficiently...may..." but even the SEC themselves will not tell you whether Ethereum qualifies or not. That is not rule of law.

Sure it is. The SEC alleges a violation of the law. The courts decide if they are right at trial.

Eth is fairly uniquely complicated by the fact that it probably went from security to commodity before they could get smacked for the security period.

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

#360

Post by mentalpiracy »

roenxi wrote: post #357
infinite8s wrote: post #343

Earlier quoted context omitted.

> There are worrying signs about that we are about to repeat the 1920s, 1930s then the 1940s The rest of this comment was not where I thought you'd go with this. You realize the creation of the SEC was a direct result of the stock market crash in 1929 ,due mainly to people's life savings being invested by commercial banks without regards for the underlying economics of the investments, exactly what the SEC is trying…

I mean, so? Crypto isn't an investment. I haven't heard a plausible theory why its value would increase over time. It'll be lucky if the equilibrium position is value holding steady.

“not an investment” is an interesting way to describe financial instruments that are being marketed as investment vehicles.

These are not magic words; repeating them does not make one immune from regulation/prosecution.

Post reply on HN