It took them way to long to act on crypto. The damage was already done. Trillions of wealth has been destroyed by crypto.
Levine has talked about this a bit. It's much easier to be a harsh regulator after the crash than on the way up.
US SEC sues Coinbase, one day after suing Binance
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Re: US SEC sues Coinbase, one day after suing Binance
#112Earlier quoted context omitted.
I've watched that interview, congress would ask a loaded question, framed in a fallacy[1], the chair would start answering it, and the congresscritter would interrupt him and throw a tantrum. Repeat 5x. It wasn't a good look. For the congresscritter. (I wonder how much money he's gotten from Sam, CZ, and Coinbase...) [1] The fallacy in question is the congresscritter's claim[2] that a security can't also be a commodi…
He wouldn't start answering. He was asked "yes or no, is ..." and would start hemming and hawing with words that were neither "yes" or "no."
Have you stopped beating your wife?
Yes or no. No hemming or hawing. It's a simple question, yes, or no?
----
Is it clear to you now that a simple yes or no question, couched in an incorrect assertion is not actually a simple yes-or-no question?
Re: US SEC sues Coinbase, one day after suing Binance
#113If you look up the definitions of "security", "financial instrument", "commodity", and "currency", it is pretty clear that a plain vanilla crypto-currency like Bitcoin is no ordinary security nor a financial instrument. It is not a claim on something else, even less so than a traditional bank note. It is more like a commodity. Since when is "aluminum" a security? A crypto currency business however may be engaged in t…
There was no ICO, it has an immutable fixed supply, it's not in perpetual startup mode, and not centrally controlled operationally and can't be bought back.
Re: US SEC sues Coinbase, one day after suing Binance
#114The end of an era.
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I would have written this comment 15 years ago, on the heels of an unnecessarily large military being abused to wage two poorly thought out elective wars. Continued market arbitrage away from wasteful US dominance seemed inevitable, just as the break up of the Soviet Union was.
Now, after economic integration with China has run its course and not produced democracy? After Russia's attack on Ukraine demonstrated that wildly irrational tin-pot dictators still exist, they had just been contained? It would seem that the USD empire is more valuable than I gave it credit for - it's the worst hegemon, except for all the others.
I still do hold hope of reducing the power of centralized entities in the long term. But real change like that has to happen from the bottom up due to fundamental conditions changing (eg individual adoption of cryptocurrencies), which is excruciatingly slow. If this is to be the trend, it will happen over many decades.
There is certainly the open question of whether China will surpass the US military and become a world reserve currency based on the draw of military might alone. But that doesn't have anything to do with decentralization, rather just a different centralizer.
PS treating the diminishing of US power as a foregone conclusion and framing it as a political question of whether the Republicans might "embrace change" (ie overtly facilitate the US's decline) seems like a terribly self-destructive paradigm.
Re: US SEC sues Coinbase, one day after suing Binance
#115If you look up the definitions of "security", "financial instrument", "commodity", and "currency", it is pretty clear that a plain vanilla crypto-currency like Bitcoin is no ordinary security nor a financial instrument. It is not a claim on something else, even less so than a traditional bank note. It is more like a commodity. Since when is "aluminum" a security? A crypto currency business however may be engaged in t…
Bitcoin might be classified as a commodity, but nearly every other crypto out there, especially anything with a premine or any sort of revenue sharing, is pretty clear cut a security.
Re: US SEC sues Coinbase, one day after suing Binance
#116If you look up the definitions of "security", "financial instrument", "commodity", and "currency", it is pretty clear that a plain vanilla crypto-currency like Bitcoin is no ordinary security nor a financial instrument. It is not a claim on something else, even less so than a traditional bank note. It is more like a commodity. Since when is "aluminum" a security? A crypto currency business however may be engaged in t…
I think the real crux of the issue is that these instruments were designed to be confusing to regulate and, alas, they're confusing to regulate. The error was in thinking that a confused regulator says "I don't understand what's going on here, carry on and rest easy" rather than what actually happens: "I don't understand what's going on here, and until I do -- on my schedule, not yours -- your business is always at r…
I don't think the pure commodity coins (layer 1 networks like btc, xch, etc) are confusing at all. You do work and get rewarded with a digital commodity. It’s exactly like digging up gold, or tapping a tree for maple syrup.
Then a bunch of crypto anarchists showed up and started speculating that these coins would be worth a lot in the future because we could topple the financial hegemony by their powers combined. Okay whatever, still commodity trading.
Then we started getting all these fake Ponzi coins that are standing in for something else. That’s a security.
What is possible with e.g. BTC is that it’s easy to trade at scale. A commodity that’s easy to trade isn't a security, but if you squint it kinda looks like one. Regardless, it’s not crypto’s fault that regulators are having a hard time understanding it. That’s the regulators’ and lawmakers' problem. (So elect people into power who are your peers, and who aren't 70 years old and have no hope of anything more than a cursory understanding world from the last 20 years.)
But, of course they’re not going to stand aside while people get scammed. Only the anarchists want that. The rest of us just want crypto to be treated fairly.
Re: US SEC sues Coinbase, one day after suing Binance
#117Crypto companies think they don't trade securities which is clearly wrong and contradicted by their own advertising. People buy crypto without a real use for crypto because they think they can sell it for more later. Everyone under the sun knows this. It's obviously a security and failing to register should be met by SEC cases like this one.
What about tokens that are used to pay the network, like Ethereum? If you want to use any chain that uses Ethereum, either as a L1 or L2, you need ETH.
Re: US SEC sues Coinbase, one day after suing Binance
#118Crypto is like the worst investment ever: huge legal risk, does not hedge inflation, not a safeguard in crisis, does not benefit from tech/ai boom, does not generate profits. Only downside, no upside, no strengths, only weaknesses. the chart is only one direction: down The obvious weakness of bitcoin relative to QQQ demonstrates this. A daytrading pair trade method that shorts Bitcoin in market hours and goes long qq…
Pretty much any short is way worse, unlimited downside! If you bought Bitcoin and stored it correctly you would be down less than 100%. Buying S&P 500 is probably less risky though.
Re: US SEC sues Coinbase, one day after suing Binance
#119If you look up the definitions of "security", "financial instrument", "commodity", and "currency", it is pretty clear that a plain vanilla crypto-currency like Bitcoin is no ordinary security nor a financial instrument. It is not a claim on something else, even less so than a traditional bank note. It is more like a commodity. Since when is "aluminum" a security? A crypto currency business however may be engaged in t…
They aren't claiming Bitcoin is a security. In fact they've made it pretty clear Bitcoin and maybe ETH are not.
They are claiming a bunch of the newer cryptos like SOL are, though.
Re: US SEC sues Coinbase, one day after suing Binance
#120If you look up the definitions of "security", "financial instrument", "commodity", and "currency", it is pretty clear that a plain vanilla crypto-currency like Bitcoin is no ordinary security nor a financial instrument. It is not a claim on something else, even less so than a traditional bank note. It is more like a commodity. Since when is "aluminum" a security? A crypto currency business however may be engaged in t…
SEC isn't suing Coinbase over Bitcoin. They're suing under two things:
1. Unregistered exchange for several tokens the SEC believes are securities:
> This includes, but is not limited to, the units of each of the crypto asset securities further described below—with trading symbols SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH, and NEXO—(the “Crypto Asset Securities”).
2. Unregistered sale of securities related to the staking program for XTZ, ETH, ATOM, ADA, SOL. This in particular has a full, point-by-point rationale for why they are defined as securities under the Howey test (in short, you deposit money, and the terms make clear that it's Coinbase's money at that point, not your money, so definitely an investment; staking involves a common enterprise; and it's clearly advertised as making you money based on Coinbase doing stuff with your investment).
Maybe Coinbase should have listened to its own advisors on how to tailor a prospectus to not meet the Howey test definition of a security... or maybe their advisors didn't do a good job in the first place!