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SEC charges Kraken for operating as an unregistered securities exchange

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

#131

Post by fallingknife »

pseg134 wrote: post #118
knlam wrote: post #106

Earlier quoted context omitted.

At least in the case of Bernie Madoff, the SEC can say "no, it is illegal to run a ponzi scheme and in this case it should say what law the exchange broke to make it valid

They offered an unregistered security for sale. That is against the law.

But the only time that a judge has ruled on whether or not a crypto token is a security is in the XRP case, and it ruled that it was not (at least when it was sold on exchanges). This is not comparable to a ponzi scheme where the legality is not in question at all.

And let's not ignore the fact that these exchanges have done this right out in the open for around 10 years now. Coinbase even had their IPO approved by the SEC. So it's very clear that the SEC treated this as legal for a decade before suddenly changing their position. This seems incredibly dishonest to me.

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

#132

Post by lmm »

landemva wrote: post #126
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…

> I feel pretty good about considering stable coins securities. Take that further to airline points and Chipotle points. If the stablecoin does not provide returns to the holder, how is it an investment contract?

> Take that further to airline points and Chipotle points.

No-one is holding those with an "expectation of profit". Whereas essentially the only use of "stablecoins" is as investment schemes; even if someone isn't expecting the value of their stablecoin to rise against USD, they're expecting it to rise against something.

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

#133

Post by fallingknife »

bitvoid wrote: post #111
clarkmoody wrote: post #98

Earlier quoted context omitted.

How many drugs had FDA approval that was later retracted after much harm was done?

If the FDA didn't exist, how many more harmful drugs would there be? Would those harmful drugs that had approval retracted still be out there being prescribed? Just because the FDA is not perfect does not mean that it's a net negative.

Easy to have the best of both worlds, though. FDA can continue to collect and publish data on safety and efficacy of medications which is incredibly useful and absolutely worth the tax money. But if you want to take something not approved, then they should have no right to tell you that you can't take the risk.

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

#134

Post by Nursie »

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.

Have you not been on the verge of getting a payout for the best part of a decade now?

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

#135

Post by soks86 »

westurner wrote: post #108
hanniabu wrote: post #54

Earlier quoted context omitted.

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

Presumably Coinbase and Kraken had to register as banks to offer FDIC-insured accounts (and debit cards)? Non-Security Deposits are interest-bearing products that are not securities. Non-Security Deposits: CD Certificates of Deposit, MMA Money Market Accounts, Treasury Bills, Savings accounts, Checking Accounts Do banks require SEC registration to offer interest-bearing Non-Security Deposit products? Have banks ever…

They absolutely are not banks or none of this would be happening.

This also is about unregistered securities and not interest bearing accounts although that too is an issue because they're not banks.

edit: They're Money Services Businesses and that's it. They might have some state-level lending licenses but I'm fuzzy on that.

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

#136

Post by paulddraper »

pmulard wrote: post #94
jongjong wrote: post #80

Earlier quoted context omitted.

The SEC has no place in a free market. If people trust a company which co-mingles funds, they should be punished for misplacing their trust. Both the scammer and the scammed deserve a share of the punishment. Life naturally punishes the scammed already and teaches them a lesson at the same time... Without the help of the SEC... How good is that?! If my startup fails because I hired the wrong people, I take the full b…

The FDA has no place in a free market. If people trust a company which poisons their food, they should be punished for misplacing their trust. Both the scammer and the scammed deserve a share of the punishment. Life naturally punishes the scammed already and teaches them a lesson at the same time... Without the help of the FDA... How good is that?! -- I'd much rather pool our money into a commission that does this fo…

Yes

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

#137

Post by throwaway1249 »

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.

This is completely false, what's your source? Also, it has never been the case. I recall that at some point around 2015, about 4/9 persons with commit access to the github repository (please note that this is a far fetched attempt to find out a metric for "controlled") were co-founders or employees at Blockstream, but right now I am not sure there are more than four or five, out of ~30.

Sources:

https://github.com/orgs/bitcoin/people

https://bitcoin.stackexchange.com/questions/35907/bitcoin-no...

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

#138

Post by lmm »

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…

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

The sentiment is an integral part of the established legal pattern - the Howey test is about "expectation of profit".

Even if based purely on vibes, I think the man on the Clapham omnibus might well say: someone buying Bitcoin today, or Ethereum in 2018, is not expecting to profit from the efforts of their respective dev team, whereas someone buying Ethereum today is expecting to profit from the efforts of their dev team. (I mean, I didn't even know Bitcoin still had a dev team - isn't it basically "finished" at this point, and has been for years?)

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

#139

Post by landemva »

lmm wrote: post #132
landemva wrote: post #126

Earlier quoted context omitted.

> I feel pretty good about considering stable coins securities. Take that further to airline points and Chipotle points. If the stablecoin does not provide returns to the holder, how is it an investment contract?

> Take that further to airline points and Chipotle points. No-one is holding those with an "expectation of profit". Whereas essentially the only use of "stablecoins" is as investment schemes; even if someone isn't expecting the value of their stablecoin to rise against USD, they're expecting it to rise against something.

Stablecoins are supposed to be stable, and not rise or fall. There is no expectation of profit for a stablecoin like USDC. And USDC doesn't pay interest. People use it for stability and for payments.

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

#140

Post by IggleSniggle »

nateabele wrote: post #117
bitvoid wrote: post #111

Earlier quoted context omitted.

If the FDA didn't exist, how many more harmful drugs would there be? Would those harmful drugs that had approval retracted still be out there being prescribed? Just because the FDA is not perfect does not mean that it's a net negative.

That's the hypothetical half of the equation. The tangible, measurable half is how many people the FDA has killed by denying access to life-saving treatments. A number of studies[0] have been conducted on this topic. [0] https://www.fdareview.org/issues/theory-evidence-and-example...

Right, of course. Any preventative treatment is difficult to justify, as it's a risk waylaid, whereas treating symptoms has a visible direct impact on problems faced today; nevermind that it costs 500x as much and has worse outcomes.
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