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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

#411

Post by eropple »

TeMPOraL wrote: post #400
jazzyjackson wrote: post #295

Earlier quoted context omitted.

If you can't cash out it's just entertainment. That's why you don't have to be 18 to play pinball. [actually the history of pinball and other arcade games is fraught with legal action, there were a few iterations of payout before we got to the harmless, kid-friendly machines of today, really good podcast about it, interviewing the guy who heads the Pacific Pinball Museum: https://art19.com/shows/the-madecast/episodes…

> harmless, kid-friendly machines of today "Kid-friendly" but really kid-robbing, though - AFAIK most of arcade games that let you win something, e.g. a toy, have subprograms that can override your victory, making it look like you've lost; those are triggered randomly, based on venue-configurable parameters like "max winning rate" and "daily wins threshold". This is designed to ensure the venue always makes a profit,…

> "Kid-friendly" but really kid-robbing, though

I worked in an arcade growing up, and you're not wrong about a lot of them--but pinball doesn't fall into that bucket. Every pinball machine I've ever seen is played pretty straight. Sometimes they have nasty game mechanics, but they don't have the issues you describe here (which is much more in the pseudogambling, Dave and Buster's style of games).

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

#412

Post by Eisenstein »

throwaway6977 wrote: post #402
Eisenstein wrote: post #397

Earlier quoted context omitted.

What is a grey area for 'makes a binding ruling regarding interpretation of law'?

I'm sorry, but I'm not willing to answer that for you in a binding way.

I love it when people refuse to follow the logical conclusion of their own argument and then act like they are being clever when they stonewall with that logical conclusion without realizing what they just did.

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

#413

Post by criddell »

cr__ wrote: post #391
norswap wrote: post #383

Earlier quoted context omitted.

It's important to note that event for the projects creating new tokens, there is NO WAY to register. It exists, in theory. Many people have tried, nothing has progressed even an inch. It's not even a matter of the SEC putting out a list of clear conditions that people deem unacceptable. Instead, the applications just seem to be mired in bureaucracy. As I understand, there is deliberate gaslighting from the SEC and Ga…

If there’s no way to register, why did they proceed?

Maybe they expected to still be profitable after paying the fines?

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

#414

Post by danpalmer »

cr__ wrote: post #391
norswap wrote: post #383

Earlier quoted context omitted.

It's important to note that event for the projects creating new tokens, there is NO WAY to register. It exists, in theory. Many people have tried, nothing has progressed even an inch. It's not even a matter of the SEC putting out a list of clear conditions that people deem unacceptable. Instead, the applications just seem to be mired in bureaucracy. As I understand, there is deliberate gaslighting from the SEC and Ga…

If there’s no way to register, why did they proceed?

Because in the US a lack of explicit laws against something is typically interpreted as legal support. See pretty much any disruptive business mired in legal controversy. It's a cultural difference to many other countries where just because there isn't a law against something doesn't mean people will jump at the chance to exploit it at scale.

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

#415

Post by jongjong »

cr__ wrote: post #391
norswap wrote: post #383

Earlier quoted context omitted.

It's important to note that event for the projects creating new tokens, there is NO WAY to register. It exists, in theory. Many people have tried, nothing has progressed even an inch. It's not even a matter of the SEC putting out a list of clear conditions that people deem unacceptable. Instead, the applications just seem to be mired in bureaucracy. As I understand, there is deliberate gaslighting from the SEC and Ga…

If there’s no way to register, why did they proceed?

Someone once told me it costs like $60K to register a crypto as a security... A chicken and egg problem. How will you get $60K without an ITO? Yet if you have an ITO in order to raise the $60K that you need to register your ITO legally, you're already in breach.

It has similar vibes as the US law which only allows accredited investors to invest in fast growing startups... 'To protect mom and pop investors' yeah right. Is there even a single person in the entire country who actually believes that?

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

#416

Post by ceejayoz »

JumpCrisscross wrote: post #351
ceejayoz wrote: post #342

Earlier quoted context omitted.

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.

The '33 and '34 Acts give the SEC the ability to write the regulations, via wording like "under rules and regulations which the Commission shall prescribe". Congress defines a variety of things, but the SEC makes most of the nitty gritty procedure/rules out of those definitions and directives.

The Howey test exists because the SEC enforced said new-ish regulations against someone, and the court agreed with them, holding Howey liable for violations of the '33 Act as implemented by regulators at the SEC.

All this makes the statement "No, Congress creates the rules" upthread inaccurate.

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

#417

Post by CoastalCoder »

cr__ wrote: post #391
norswap wrote: post #383

Earlier quoted context omitted.

It's important to note that event for the projects creating new tokens, there is NO WAY to register. It exists, in theory. Many people have tried, nothing has progressed even an inch. It's not even a matter of the SEC putting out a list of clear conditions that people deem unacceptable. Instead, the applications just seem to be mired in bureaucracy. As I understand, there is deliberate gaslighting from the SEC and Ga…

If there’s no way to register, why did they proceed?

I'm not sure if this is an appropriate parallel, but it reminds me of Uber.

Uber seems to be successful despite clearly (IIUC) breaking laws that regulate taxi services.

If it worked for Uber, I can see why other businesses might have similar hopes.

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

#418

Post by Eisenstein »

throwaway6977 wrote: post #402
Eisenstein wrote: post #397

Earlier quoted context omitted.

What is a grey area for 'makes a binding ruling regarding interpretation of law'?

I'm sorry, but I'm not willing to answer that for you in a binding way.

You have fallen into the trap of thinking that government bodies tasked with such things should be providing you a customer service -- but they are providing society with a customer service and you are treated as a road would be treated by the government, not as a driver would be treated.

Note: by 'you' I mean if you were in the position of a regulated entity.

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

#419

Post by ceejayoz »

yieldcrv wrote: post #46
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…

> Why didn't Coinbase just register everything non-Bitcoin? The organizations that created the assets have to register them as securities, Coinbase didn't create the assets. A broker-dealer (a securities exchange) can only trade registered securities, broker-dealers have to register to exist. So even if Coinbase went through the process of registering as a broker dealer (to be a securities exchange), they could not t…

> So the SEC changed its strategy recently and started suing exchanges using circular logic, claiming assets that they never said were securities to be securities and saying "these are unregistered securities and you are trading them in violation of Federal Securities laws", having never proved in court that these were securities.

You're describing the procedure of proving in court that they're securities.

The SEC claims they are, sues someone over it, and they fight it out with them in court. The court decides who proved what.

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

#420

Post by lolinder »

norswap wrote: post #383
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…

It's important to note that event for the projects creating new tokens, there is NO WAY to register. It exists, in theory. Many people have tried, nothing has progressed even an inch. It's not even a matter of the SEC putting out a list of clear conditions that people deem unacceptable. Instead, the applications just seem to be mired in bureaucracy. As I understand, there is deliberate gaslighting from the SEC and Ga…

I'd love more details and a source about how all these people have tried and the applications get mired in bureaucracy. Does the process takes too long? Does the SEC demand information they don't have? Bureaucracy takes lots of forms, so something ending up mired in bureaucracy sounds like a bad thing but could also just be the bureaucracy working as designed. A drug manufacturer could describe a drug as "mired in bureaucracy" when what they really mean is "the FDA didn't like the results of our trials".

If it's the speed of it, I can agree that the government is slow, but it's generally accepted as the cost of doing business in a regulated sector that you wait for regulatory approval before proceeding. There's work to be done making things more efficient, but in the meantime everyone still needs to play by the rules.

If it's missing information that the SEC is demanding, that information is required for a reason. If it doesn't apply to your token, maybe your token is broken by design?

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