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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

#511

Post by paulddraper »

JohnFen wrote: post #23
pylua wrote: post #10

Earlier quoted context omitted.

Thanks for the insight. It does feel like the organizations ability to interpret the laws is more related to a political agency than the letter of the law. There should just be a letter of the law , analytical meaning branch of government.

It's also useful to know that Congress created the SEC in response to the 1929 stock market crash. Their primary purpose is to prevent the conditions that caused that. > There should just be a letter of the law , analytical meaning branch of government. I don't think that's a thing that is possible. You can't write laws to cover every possible case, and writing them to be "self-interpreting" would be an extraordinari…

There's a spectrum.

Is it reasonable to have them be completely unambiguous in every circumstances? No.

Is it reasonable to have them be unambiguous in the vast majority of circumstances? Yes.

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

#512

Post by rtkwe »

anonymouskimmer wrote: post #99
pylua wrote: post #36

Earlier quoted context omitted.

That’s why it’s a systemic failure . Years of law study to interpret laws with context long dropped. The fact that the sec let Coinbase last this long is proof the system is over complicated and cannot be maintained efficiently.

It's a systemic failure of analytics, not a systemic failure of the law. > The fact that the sec let Coinbase last this long is proof the system is over complicated and cannot be maintained efficiently. There are numerous other possible reasons it took this long for the SEC to take action, other than the system being overly complicated or inefficient (lack of workers, bigger fish to fry [prioritization], the evolutio…

Yeah for the longest time Coinbase was mainly hosting the relatively old coins that tended to be closer to commodities than securities. While they were doing that it's a very different regulatory environment.

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

#513

Post by paulddraper »

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…

> How is this different from, say, Ethereum?

The House Financial Services Chairman asked Gensler (Head of SEC) point blank half a dozen times whether Ethereum was a security.

Half a dozen times, Gensler refused to answer. :/

https://youtu.be/VhA1dZXeao0

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

#514

Post by miracle2k »

hluska wrote: post #488
miracle2k wrote: post #448

Earlier quoted context omitted.

> 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. I appreciate this feedback. I like how another commenter put it: "I think there is very little room for this sequence of events to be considered fine" - from a non-crypto-partisan, rule-of-law perspective. > Second, you’re…

> Because that is what the SEC is alleging in their lawsuit. And investigations obviously take time. We don’t want a securities regulator who blindly files lawsuits against public companies. Sorry but your arguments aren’t very convincing and I really dislike crypto.

> And investigations obviously take time.

Maybe the SEC will be able to lay out in court that they have been very busy with their investigation since 2019 (the date they are alleging is the latest Coinbase started trading securities).

I doubt it - but even if so, that's just not good enough.

Crypto sceptics generally agree that the SEC has been asleep at the wheel. What they aren't willing to acknowledge is that there are basic, non-crypto-related due process concerns with a regulator who lets a company operate, very publically and thus with its tacit approval, for basically a decade (that is how hold this debate around securities law is) - before then deciding they don't like it after all.

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

#515

Post by LawTalkingGuy »

JumpCrisscross wrote: post #237
Dylan16807 wrote: post #232

Earlier quoted context omitted.

> Would you really want a big government agency to decide on the merit of your business ehen you IPO? I said the exact opposite of that. Please look at the second sentence again. I want them to decide if I'm trading securities, especially when "this might be considered a security" is in my S1. Nothing more.

> want them to decide if I'm trading securities, especially when "this might be considered a security" is in my S1. Nothing more Investment banks would love this. It’s pro bono legal advice. If this is important, require a legal opinion or no-action letter prior to investing in the IPO. Coinbase didn’t secure those and investors didn’t demand it. Here we are.

> It’s pro bono legal advice.

No, it's asking an agency to clarify its own rules.

If I, as a ham radio enthusiast, find an unclear section of the FCC rules I expect to be able to contact someone and ask what the agency's understanding of it is. They wrote it after all.

For example, if they wrote 5-15Mhz, I might wonder if they mean inclusively. Does that cover 15Mhz, or just 14.9999?

I'm not expecting them to preemptively rule on all legal cases which depend on this, just on their interpretation of their own words.

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

#516

Post by mrguyorama »

jongjong wrote: post #409
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…

The veneer of a working system really started coming off over the past few years. Everything feels like a massive psyop. At times it even feels like a significant portion of the population is in on it... I mean, most people are probably just brainwashed into compliance but their level of commitment to the whole charade makes it seem like they're actually in on it.

Ah yes, avoiding a digital version of the great depression is a "psyop" that most people are "in on".

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

#517

Post by Bohica »

adsfgiodsnrio wrote: post #439
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…

There is nothing in the law that explicitly prevents the registration of a cryptocurrency. The problem is that the people making them are not able to answer the kinds of questions the SEC asks. How many cryptocurrency companies do you know of that could pass an audit? Even when ICOs aren't out-and-out scams I have never encountered one transparent enough for me to want to touch it with a ten foot pole. Why should the…

Sure - Greyscale is a Cryptocurrency holdings company. They have tried several times to make a Bitcoin ETF, but keep getting strong armed by the SEC to the point that Greyscale had to sue them for reasons why they were not allowed to register the bitcoin ETF. The SEC isn't even letting crypto companies register their crypto ETF's.

There is mountains upon mountains of evidence that show that the SEC is biased towards crypto and that killing it will be done by way of confusion and corruption through dumb lawsuits.

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

#518

Post by mrguyorama »

paulddraper wrote: post #508
semiquaver wrote: post #438

Earlier quoted context omitted.

> clear requirements in black and white terms of what is and isn’t acceptable. I’ll give you the benefit of the doubt and assume you have been misled by this frequently made claim. It’s just not true. The requirements have been clearly stated for a long time, they’re just not what people in the crypto space want to hear, so they pretend the guidance and law doesn’t exist. This document dates from 2019 and lays out in…

> The SEC has repeatedly and publicly stated in no uncertain terms, what the definition of a security is and also identified specific coins The head of the SEC was asked point blank multiple times if a little thing called "Etherium" was a security. He refused over and over the opportunity to be clear and certain. https://www.youtube.com/watch?v=VhA1dZXeao0

Fun story, it literally doesn't matter what Mr Gensler says or doesn't say, the related law exists on paper. Gensler doesn't make the rules. The SEC is tasked with enforcing the rules.

If your company wants to know what is and isn't a security, that's up to your legal department to put together a working theory, one you think could win in court if the SEC sues you. Judges are the only people who get to clarify law without writing new law.

Gensler could be fired tomorrow and the only change would be the case getting dropped, but that wouldn't make Coinbase and others compliant, any different than states with legal marijuana are compliant with the law.

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

#519

Post by mrguyorama »

cududa wrote: post #493
kjs3 wrote: post #476

Earlier quoted context omitted.

I wish I could upvote this a couple of dozen times, because it's really the core of the issue. All this "the SEC won't give us guidance" is theater.

And the fact that it's stuck so well is what troubles me so much. The Securities Exchange Act is about a hundred years old and written in a way a laymen can understand the gist of it. It's a security. Just because you called it something else doesn't mean there aren't laws or guidance on how to register it. They just don't want to. Everyone into crypto parrots the "they won't give us guidance" line without even doing…

Because they don't care what the truth is, they are HEAVILY invested in crypto going up so they can cash out, and this whole "being explicitly illegal" thing is a threat to that.

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

#520

Post by mrguyorama »

pylua wrote: post #33
GartzenDeHaes wrote: post #27

Earlier quoted context omitted.

It's called regulating. For areas that require complex administration, Congress passes laws that express its intent and directs the administrating agency to make rules that implement their intent. Congress can amend these laws to expand, contract, or direct the regulations made by these agencies.

Vague laws that take years of law to interpret then passed to an agency that does not have the same context of laws passed 100 years ago. If the system worked and the sec felt this way Coinbase should have never existed . This is proof that it is not working.

There's nothing about a crypto token that make the economics different though. That's the whole point. That's why law from 1930 is relevant. Crypto isn't economic innovation.
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