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Coinbase CEO: we're preparing to go to court with the U.S. SEC

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Re: Coinbase CEO: we're preparing to go to court with the U.S. SEC

#11

Post by ascendantlogic »

VWWHFSfQ wrote: post #2

Sounds like the free lunch is over. Maybe my view is too simplistic, but Coinbase facilitates the sale of "assets" that the buyer expects to increase in value. By definition, that's a security, right?

This is the crux of the endless argument. People speculate on currencies via Forex, are those securities? Is oil a security? People buy into oil, gold, etc hoping to sell later for a profit. Both the CFTC and SEC have claimed they have purview over crypto and there has been absolutely no clarity from lawmakers on it.

Re: Coinbase CEO: we're preparing to go to court with the U.S. SEC

#13

Post by arcticbull »

VWWHFSfQ wrote: post #2

Sounds like the free lunch is over. Maybe my view is too simplistic, but Coinbase facilitates the sale of "assets" that the buyer expects to increase in value. By definition, that's a security, right?

The definition of a security is found in the application of the Howey test. The SEC has a nice long explanation of how you apply Howey to crypto. Basically every token is a security. Always has been. With the possible exception of Bitcoin due to the way it was initially distributed. [1]

[1] https://www.sec.gov/files/dlt-framework.pdf

Re: Coinbase CEO: we're preparing to go to court with the U.S. SEC

#14

Post by snacktaster »

0zemp1c wrote: post #7

I actually agree with Armstrong here - the SEC has had plenty of time to assess the market for crypto products and offer clear rules...it almost feels like the indecisiveness is an intentional policy used to cow the industry.

The slowness and deliberateness of USA regulators to respond is what has enabled the worldwide crypto economy to flourish in the first place. You think they should have just banned it CCP-style?

This is more akin to "You can have your fun but don't go crazy. But as soon as we start seeing your investors getting scammed we're going to step in."

Re: Coinbase CEO: we're preparing to go to court with the U.S. SEC

#15

Post by maxfurman »

rasengan wrote: post #4
VWWHFSfQ wrote: post #2

Sounds like the free lunch is over. Maybe my view is too simplistic, but Coinbase facilitates the sale of "assets" that the buyer expects to increase in value. By definition, that's a security, right?

> Coinbase facilitates the sale of "assets" that the buyer expects to increase in value. By definition, that's a security, right? In terms of outdated US regulation based on some farm land, yes.

Whether or not the regulation is outdated, it is the law of the land in the US at the moment and is relevant to enforcement actions by the SEC. This definition of security will determine Coinbase's success or failure in court.

Re: Coinbase CEO: we're preparing to go to court with the U.S. SEC

#16

Post by ascendantlogic »

lumost wrote: post #6
traveler01 wrote: post #3

Earlier quoted context omitted.

Depends on what you consider a "Security". Are "Securities" meant to be used as currencies?

Are virtual currencies actually being used as currencies? I've been long BTC for ~10 years, I've only made a few small novelty purchases through BTC. Based on any ads I've seen for crypto from coinbase, along with the tools they've built into their app - the primary use case for crypto appears to be as a security.

Bitcoin was originally meant to be used as a currency. Ethereum was meant to be the oil that powered the smart contract network. I guess the question is, what matters more: the intent by the creators or what the end users choose to do with it?

Re: Coinbase CEO: we're preparing to go to court with the U.S. SEC

#17

Post by sebzim4500 »

burkaman wrote: post #10
ericpauley wrote: post #5

Earlier quoted context omitted.

Yes and no. Gold isn’t a security, for instance. Unfortunately (for coinbase) ICOs and related grifts pretty clearly meet both the spirit and the letter of the SEC’s definition.

The other part of the definition is that it can be easily bought and sold on an exchange. I think if there were an exchange for physical gold then it would be considered a security.

> I think if there were an exchange for physical gold then it would be considered a security.

I don't think that if you were to make an exchange that made it easy to trade physical gold (rather than deriviatives) the SEC would suddenly determine that gold was a security.

Re: Coinbase CEO: we're preparing to go to court with the U.S. SEC

#18

Post by sebzim4500 »

this_user wrote: post #9
traveler01 wrote: post #3

Earlier quoted context omitted.

Depends on what you consider a "Security". Are "Securities" meant to be used as currencies?

Just because you claim something is a currency, doesn't make it one, especially if it doesn't even exhibit the properties of a currency. But the question of what is a "security" has been clearly answered in 1946: > For purposes of the Securities Act, an investment contract (undefined by the Act) means a contract, transaction, or scheme whereby a person invests his money in a common enterprise and is led to expect pro…

A lot of people buy houses thinking they will increase in value. Good to know they've all been doing securities fraud.

Re: Coinbase CEO: we're preparing to go to court with the U.S. SEC

#19

Post by prottog »

burkaman wrote: post #10
ericpauley wrote: post #5

Earlier quoted context omitted.

Yes and no. Gold isn’t a security, for instance. Unfortunately (for coinbase) ICOs and related grifts pretty clearly meet both the spirit and the letter of the SEC’s definition.

The other part of the definition is that it can be easily bought and sold on an exchange. I think if there were an exchange for physical gold then it would be considered a security.

Exchange-traded commodity futures (including those for physical delivery of 100 troy ounces of gold) have existed for a long time and are regulated by the CFTC.

Re: Coinbase CEO: we're preparing to go to court with the U.S. SEC

#20

Post by sosuke »

ericpauley wrote: post #5
VWWHFSfQ wrote: post #2

Sounds like the free lunch is over. Maybe my view is too simplistic, but Coinbase facilitates the sale of "assets" that the buyer expects to increase in value. By definition, that's a security, right?

Yes and no. Gold isn’t a security, for instance. Unfortunately (for coinbase) ICOs and related grifts pretty clearly meet both the spirit and the letter of the SEC’s definition.

Is the relationship pretty much ICOs or tokens are a security and older options are like gold?

ie: BTC, LTC, Monero are gold but an ERC20 token is a security and Cardano is a security because it was an ICO? I don't know off hand if Ethereum was an ICO.

I keep thinking this but I can't remember seeing anyone suggest that each coin could be categorized differently. Is it possible we ended up splitting the crypto currency market into multiple groups?

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