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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

#421

Post by cliftonk »

lclc wrote: post #404
georgeecollins wrote: post #52

Earlier quoted context omitted.

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…

For ETH they can sue Vitalik Buterin, the rest of the Ethereum Co-Founders, and the Ethereum foundation. They are the issuers and majority of the ETH supply is there since the beginning.

vitalik and the ethereum foundation hold less than 0.5% of the eth supply.

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

#422

Post by ceejayoz »

everfree wrote: post #24
super256 wrote: post #4

Earlier quoted context omitted.

Ethereum ICO‘d and therefore doesn’t pass the Howey test.

The Howey test is applied to the current status of an asset. It doesn't take an asset's origins into consideration. If you believe that Ethereum currently represents "an investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others", then it is a security. If not, then not.

If it was a security, but no longer is, the sale of an unregistered security back then was still a violation of the law that (barring statutes of limitations) could presumably still be prosecuted. The sale of ETH today would not be if it has transitioned into commodity status.

The Howey test would be applied to the status of the asset at the time of the alleged violation of the law that is being prosecuted.

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

#423

Post by kaycey2022 »

mattdesl wrote: post #374
JumpCrisscross wrote: post #239

Earlier quoted context omitted.

> shitty to want an entire sector of possibilities to just collapse and die just because some people are greedy Crypto could continue as an academic activity and non-commercial hobby.

How? If CEX operations are restricted in the US due to excessive, antiquated, or ambiguous regulations, citizens would be left with fewer ways to acquire these assets including research and hobby usage. To continue with Molly’s drug analogy: look at psilocybin, where academic, hobbyist, and medical research in them has been delayed for many decades due to unreasonable legal restrictions and ideological campaigns agai…

Like it or not, crypto is going to stay. If the US pulls out the vacuum will be filled by those that the Americans consider criminal jurisdictions - Russia, China etc. or hopefully by competing powers - EU, Japan. The opportunities here as an alternate financial system will not be ignored by the rest of the world.

The desire that this should be confined to academic is nothing but a pipe dream at this point.

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

#424

Post by lolinder »

miracle2k wrote: post #378

When approving the S-1, the SEC was asked to review a business, not one selling filtration technology, but one selling illegal securities , well within their area of expertise. I think Americans should fairly expect their regulators to be clear enough about the rules that the very securities regulator, whose job in large part it is to protect retail investors, not allow a company who is in the business of selling ill…

> Any crypto sceptic who does not see a problem with this is tainted by their priors.

I'm not qualified to comment on the legal or financial aspects, but this is a hostile and aggressive statement that detracts from the conversation.

You made a claim and offered reasons why you believe that claim. The correct thing to do from there is to allow other people to defend the other position, not end the discussion by saying "and if you disagree with me you're self-deluded".

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

#425

Post by amalcon »

miracle2k wrote: post #378

When approving the S-1, the SEC was asked to review a business, not one selling filtration technology, but one selling illegal securities , well within their area of expertise. I think Americans should fairly expect their regulators to be clear enough about the rules that the very securities regulator, whose job in large part it is to protect retail investors, not allow a company who is in the business of selling ill…

"Any [person] who [disagrees with me] is [committing an error]" is a thought-terminating statement. Best to avoid using that kind of language -- it doesn't particularly hurt anyone else, but it will hurt the growth of one's own understanding.

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

#426

Post by [deleted] »

rjbwork wrote: post #194
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.

The law is clear. It's not the job of regulatory agencies to advise companies on how to become compliant with the law and their rules. The law and their rules are...the law and their rules! Hire a lawyer for that!

[deleted]

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

#427

Post by [deleted] »

KingOfCoders wrote: post #130
shagie wrote: post #115

Earlier quoted context omitted.

SEC filing by Coinbase as a free writing prospectus related to their S1 - https://d18rn0p25nwr6d.cloudfront.net/CIK-0001679788/334fdd0... QUESTION 17: “Coinbase plays the role of both broker, executing trades on behalf of clients, as well as an exchange, matching buyers and sellers. This is a unique situation. In other markets, i.e. equities, a broker would be required to be legally independent of an exchange. Could…

"What I think is important about the Coinbase business model is that we have set up our business such that there's not a conflict." We have illegal weapons but what is special with us, we won't use them. So it's not illegal.

[deleted]

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

#428

Post by hluska »

miracle2k wrote: post #378

When approving the S-1, the SEC was asked to review a business, not one selling filtration technology, but one selling illegal securities , well within their area of expertise. I think Americans should fairly expect their regulators to be clear enough about the rules that the very securities regulator, whose job in large part it is to protect retail investors, not allow a company who is in the business of selling ill…

You made a good comment and then absolutely ruined it with your last sentence. Blanket statements like that are not only disrespectful but they’re useless. This isn’t Fox News…it is Hacker News.

Second, you’re arguing they were involved in illegal activities since before going public. How do you know that for sure?

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

#429

Post by shkkmo »

khuey wrote: post #150
remarkEon wrote: post #146

Earlier quoted context omitted.

Heroin is illegal, though? Still don't understand how the analogy applies to cryptocurrency. >The company could decide the FDA was wrong... But why would they decide this? Since Heroin is, again, illegal.

Unregistered securities offerings are also illegal.

No, selling unregistered securities to people who aren't accredited investors is illegal.

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

#430

Post by Spivak »

itsoktocry wrote: post #386
miracle2k wrote: post #378

When approving the S-1, the SEC was asked to review a business, not one selling filtration technology, but one selling illegal securities , well within their area of expertise. I think Americans should fairly expect their regulators to be clear enough about the rules that the very securities regulator, whose job in large part it is to protect retail investors, not allow a company who is in the business of selling ill…

> whose job in large part it is to protect retail investors, not allow a company who is in the business of selling illegal securities to go public, and then take multiple years to file suit First, it's not ideal, but an investigation takes time. Second, had the SEC said "we're not allowing you to go public because we think your business might be breaking ambiguous laws" it would have destroyed Coinbase with a combina…

> because we think your business might be breaking ambiguous laws

I think Coinbase and the their investors would have appreciated a real a priori ruling on whether their business is an illegal securities exchange before going public but we can't do that for some reason.

Risks To Our Business: The SEC might shut us down for being an illegal securities exchange but has no way of telling us in advance if we're breaking any laws ¯\_(ツ)_/¯

I think there is very little room for this sequence of events to be considered fine. If there is any sense at all that the SEC's mission to protect retail investors "their whole publicly stated business model might be illegal and we might sue them out of business" is something you might say, "we're not sure if we're comfortable with you going public yet."

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