Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

SEC charges Kraken for operating as an unregistered securities exchange

sec.gov

Post reply on HN
Print view View original

51–60 of 308 posts

Re: SEC charges Kraken for operating as an unregistered securities exchange

#51

Post by SeanAnderson »

kylebenzle wrote: post #46
SeanAnderson wrote: post #42

Earlier quoted context omitted.

Well, Gary Gensler is on record in 2023 saying Bitcoin is not a security. So, I don't think it's accurate to say "probably all." In previous years Ethereum had also been described as not a security, but that opinion seems to have shifted with time. It's still not super clear to me why he says Bitcoin is not a security, but that Ethereum would be a security. I'm fine with whatever ruling as long as I can understand ho…

Bottom line is that the founder/owner of Ethereum has said very clearly that investing in ETH is investing in the Ethereum team. Bitcoin Cash has no such "team" you invest in when buying BCH. I think thats the difference.

Well, I had started the conversation about BTC not BCH. Personally, I feel that BCH has more of a team associated with it than BTC.

That said, none of what we're talking about addresses the fact that, in 2018, Gensler said, quote, "Bitcoin. Ether. Litecoin. Bitcoin Cash. Why did I name those four? They’re not securities."

Since then, things have changed, and now Gensler only highlights BTC as not a security.

If the inflection point was various teams speaking publicly about their usage of funds, and those talking points shifted Gensler's opinion, then OK, but I am not aware of an official moment when his sentiment shifted. As another commenter highlights, it could also be the transition to POS for Ethereum, but, again, I am not aware of Gensler highlighting the transition as the inflection point and this rationale fails to explain LTC and BCH.

To me, it feels like chasing opinion and public sentiment - not following rigid, established legal patterns.

Re: SEC charges Kraken for operating as an unregistered securities exchange

#52

Post by Danjoe4 »

yieldcrv wrote: post #44
ketzo wrote: post #37

Earlier quoted context omitted.

I mean, Kraken is not a registered securities exchange. They offer many cryptocurrencies. The SEC has indicated that it considers most, probably all, cryptocurrencies to a be securities. The writing has been on the wall for a while -- Coinbase got a Wells letter, basically a "lawsuit is coming" warning, months ago.

This logic is why the SEC is losing in court The SEC’s first strategy was to go after the companies creating the crypto. Most that are targeted settled and exchanges delisted those crypto assets that were ruled to be securities - registered or not - then the SEC went after well funded, more professional and less risk averse ones and have been losing in court. So this is a war of attrition so the SEC then just went wi…

You hit the nail on the head here. A judge or jury is unlikely to side with the SEC because the kraken will undoubtedly mention the dozens of letters they sent to the SEC basically saying they want to be in full legal compliance and will remove any securities from their exchange.

The SEC will argue they just enforce the law and aren't required to tell them how to comply. Buuut they are professionally obligated to tell them, especially when the law is so ambiguous. It's obvious the SEC is being a bully, so the judiciary and public will hopefully side with Kraken.

Re: SEC charges Kraken for operating as an unregistered securities exchange

#53

Post by kylebenzle »

SeanAnderson wrote: post #51
kylebenzle wrote: post #46

Earlier quoted context omitted.

Bottom line is that the founder/owner of Ethereum has said very clearly that investing in ETH is investing in the Ethereum team. Bitcoin Cash has no such "team" you invest in when buying BCH. I think thats the difference.

Well, I had started the conversation about BTC not BCH. Personally, I feel that BCH has more of a team associated with it than BTC. That said, none of what we're talking about addresses the fact that, in 2018, Gensler said, quote, "Bitcoin. Ether. Litecoin. Bitcoin Cash. Why did I name those four? They’re not securities." Since then, things have changed, and now Gensler only highlights BTC as not a security. If the i…

Isn't BTC controlled by one single very centralized group, Blockstream? I could be wrong but I thought Adam Back's Blockstream long ago hijacked the GitHub repo and took full control of that project.

Re: SEC charges Kraken for operating as an unregistered securities exchange

#54

Post by hanniabu »

ketzo wrote: post #37
SeanAnderson wrote: post #6

Uhh, what? I've always considered Kraken to be the most rules-abiding exchange - more so than Coinbase. They're quite shrewd in what they're willing to list. I wonder if SEC is charging Coinbase soon, too?

I mean, Kraken is not a registered securities exchange. They offer many cryptocurrencies. The SEC has indicated that it considers most, probably all, cryptocurrencies to a be securities. The writing has been on the wall for a while -- Coinbase got a Wells letter, basically a "lawsuit is coming" warning, months ago.

The Coinbase Wells letter was in reference to their interest bearing offerings

Re: SEC charges Kraken for operating as an unregistered securities exchange

#55

Post by hanniabu »

kylebenzle wrote: post #53
SeanAnderson wrote: post #51

Earlier quoted context omitted.

Well, I had started the conversation about BTC not BCH. Personally, I feel that BCH has more of a team associated with it than BTC. That said, none of what we're talking about addresses the fact that, in 2018, Gensler said, quote, "Bitcoin. Ether. Litecoin. Bitcoin Cash. Why did I name those four? They’re not securities." Since then, things have changed, and now Gensler only highlights BTC as not a security. If the i…

Isn't BTC controlled by one single very centralized group, Blockstream? I could be wrong but I thought Adam Back's Blockstream long ago hijacked the GitHub repo and took full control of that project.

That's correct, there's effectively no difference

Re: SEC charges Kraken for operating as an unregistered securities exchange

#56

Post by Auracle »

sillysaurusx wrote: post #7

Oh, great. Right when we’re on the verge of receiving our Mt Gox payouts. Ah well, I knew it was too good to be true. The way not to be disappointed is to not get your hopes up involving money.

At least you’ll probably get some. I had a fair amount on btc-e which the government happily took.

Re: SEC charges Kraken for operating as an unregistered securities exchange

#57

Post by guessmyname »

glerk wrote: post #40
guessmyname wrote: post #34

Earlier quoted context omitted.

> This sentence is so weird for me. Why would you want to work for a company if you seemingly don’t care about their product. For money, of course. A company’s mission doesn’t pay for my groceries or rent. A substantial compensation package serves as a strong incentive to perform well. > And conversely, why would anyone ever hire someone for a role if the person looking to get hired doesn’t care about the product? Th…

Please take this as constructive criticism: telling an interviewer you’re not interested in the product and you only care about collecting a paycheck comes across as arrogant and is a huge red flag. Ultimately, people hire people they want to work with. You might be in the top 0.1% rust programmers, and I would still not hire you because of that attitude.

Thank you for your feedback; I value constructive criticism.

I understand the importance of aligning with the vision of a product, service, or company when working with a team.

I genuinely try to do the best job I can with my skills despite lacking genuine interest in the products I have touched. I acknowledge the significance of shared enthusiasm for a product, but I wonder if there could be merit in having individuals with differing perspectives, even if they don’t personally resonate with the product. It could provide valuable contrast and potentially lead to innovative solutions.

Perhaps I might be an outlier in this regard.

Re: SEC charges Kraken for operating as an unregistered securities exchange

#58

Post by dragonwriter »

Danjoe4 wrote: post #52
yieldcrv wrote: post #44

Earlier quoted context omitted.

This logic is why the SEC is losing in court The SEC’s first strategy was to go after the companies creating the crypto. Most that are targeted settled and exchanges delisted those crypto assets that were ruled to be securities - registered or not - then the SEC went after well funded, more professional and less risk averse ones and have been losing in court. So this is a war of attrition so the SEC then just went wi…

You hit the nail on the head here. A judge or jury is unlikely to side with the SEC because the kraken will undoubtedly mention the dozens of letters they sent to the SEC basically saying they want to be in full legal compliance and will remove any securities from their exchange. The SEC will argue they just enforce the law and aren't required to tell them how to comply. Buuut they are professionally obligated to tel…

> The SEC will argue they just enforce the law and aren't required to tell them how to comply.

This is correct.

> Buuut they are professionally obligated to tell them,

No, they aren't.

> especially when the law is so ambiguous.

If the law is actually vague that's not an argument SEC has to tell them how to comply, its an argument that the law is unenforceable.

If its not actually vague, then the government isn't obligated to tell them how to comply other than with the law (including statute and regulation.)

Re: SEC charges Kraken for operating as an unregistered securities exchange

#59

Post by yieldcrv »

ForkMeOnTinder wrote: post #36
Animats wrote: post #32

Earlier quoted context omitted.

Yes. Because they're gambling with the customers' money. That seldom ends well.

Commingling doesn't imply gambling. I could borrow $10 from Jim, and $20 from Sue, and deposit them both into the same Chase account which now has $30. As long as the balance stays above $30, everything is fine.

Right, the problem is when leverage and borrowing comes in

Re: SEC charges Kraken for operating as an unregistered securities exchange

#60

Post by wslh »

The main issue I see now is that the SEC should charge himself for not bringing clarity in the space beyond all the scams and frauds.

It is ironic that now when you try to use some of the crypto services it asks you if you are in Iran, North Korea, US, etc... I don't think all they were in the same list before.

Post reply on HN