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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

#151

Post by mrguyorama »

nyolfen wrote: post #58
lumost wrote: post #6

Earlier quoted context omitted.

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.

i run a small retail shop that sells digital goods for btc. i bought a book with btc two months ago. more convincingly, it's widely used for remittances and as a store of value in countries with debased currencies -- this is a powerful tool for ordinary citizens in countries like venezuela, argentina etc to discipline central banks who would otherwise steal their savings.

In japan, there exist a bunch of businesses that buy your pachinko prizes and give you cash. It's a standard thing that happens pretty much anywhere with pachinko machines.

Yet it would be absurd to call those toys "A currency". A currency requires more usage than occasional barter.

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

#153

Post by vkou »

johndhi wrote: post #133
ProjectArcturis wrote: post #129

Earlier quoted context omitted.

This an existential issue for Coinbase, so it's not surprising they would shell out for the best lawyer they could get. And it's not surprising that Grewal would quit his judgeship for a payment that's probably more than 10x his annual salary. Grewal is risking very little. He'll be set for life regardless of how this turns out.

That's the thing -- it feels risky (at least for me, a lawyer) because being a federal judge is like the most coveted position in the world, and lawyers are incredibly serious people about maintaining their reputations and impartiality etc.

And? Lawyers have argued cases for the benefit of far worse groups than Coinbase, without tainting their reputations and impartiality.

It's not the case that a lawyer argues - everyone who needs legal representation deserves to have it, it's how a lawyer argues it.

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

#154

Post by dingusdew »

vkou wrote: post #150
SpicyLemonZest wrote: post #132

Earlier quoted context omitted.

The SEC isn't being coy at all. The current SEC chair has said repeatedly ever since he was appointed that most crypto assets are clearly securities under the existing law, and therefore crypto exchanges must register as securities exchanges. Crypto industry execs would just prefer to be unregulated, and are pretending to be confused about what the SEC wants to trick you into taking their side.

> Crypto industry execs would just prefer to be unregulated, and are pretending to be confused about what the SEC wants to trick you into taking their side. It's also why they are loudly calling for Congress to weigh in. They know that their business will be nuked from orbit the second the laws on the books will be applied to them, so they are hoping that Congress carves out an exemption for them.

[dead]

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

#155

Post by teacpde »

johndhi wrote: post #68

This story is INCREDIBLY interesting on a lot of levels. Here's one level: Paul Grewal, the 'head lawyer' referred to in the underlying articles, is a former United States federal (magistrate) judge. He was the judge who oversaw part of the Apple v. Samsung patent cases, some of the biggest technology cases litigated in history. In other words, he's basically as respected in the legal community as you can possibly im…

He was at Facebook before Coinbase, seems like he surely likes challenges.

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

#156

Post by ericpauley »

sosuke wrote: post #20
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.

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 curren…

It comes down to the Howie test. Matt Levine has written a fair bit on this: https://www.bloomberg.com/opinion/articles/2023-02-13/the-se...

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

#157

Post by Canada »

arcticbull wrote: post #13
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

By this logic every isn't every kickstarter is also a security? Aren't tickets for concerts are securities too?

Ethereum was like that. You give them bitcoins, and they promised to build this distributed computer that you can run programs on. They did, and when the computer was up and running, they gave the tokens that pay for the running of programs on the computer. They also offered additional tokens to those who participated in running the computer because that was necessary for the computer to run correctly.

If you bought it, were you planning on running programs or selling to other people who want to run programs at a profit?

Should it matter? If you pre-ordered GPUs from nvidia speculating that other people would want to buy them at a higher price later, would that make the GPUs a security too? Are concert tickets a security because scalpers buy them with intention to resell at a profit? Are the GPUs securities because you expect "the efforts of others" to release driver updates for the latest games, thus contributing to the value of the video cards you hold?

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

#158

Post by mthoms »

JohnFen wrote: post #135
wslh wrote: post #114

Earlier quoted context omitted.

I consider others and my company, good actors in the space: think about the space critically and giving transparent feedback and scenarios between the skepticism and the utopia.

And you may well be -- but I don't know you or your company, so I have no way of knowing. The space is generally so tainted that it's not unreasonable to assume the people in it aren't exactly good until proven otherwise.

>The space is generally so tainted that it's not unreasonable to assume the people in it aren't exactly good until proven otherwise.

I could say the exact same about the finance, defence, and health insurance sectors.

For over 40 years, I've only ever heard bad news about those industries. Still, it would be wrong to assume every single individual actor in those spaces is a bad actor; I know that bad news is widely reported in the media, and good news rarely is.

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

#159

Post by legitster »

rchaud wrote: post #137
legitster wrote: post #127

Earlier quoted context omitted.

I think part of the issue here is that the SEC is being decidedly coy. The remedy they are seeking is for the industry to essentially end itself. I think it's fine to say that the SEC is trying it's best to apply a mandate and them seeking guidance from congress are all good ideas, but them beating around the bush and attempting some subterfuge is not a good look for a regulatory agency.

> The remedy they are seeking is for the industry to essentially end itself. Or in other words "register as securities exchange".

... which would require ditching all of their customers and establishing a brokerage. We're talking about a fundamentally different business that is not distinguishable from any existing business. Coinbase as we know it would be dead.

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

#160

Post by linuxftw »

latchkey wrote: post #120
twic wrote: post #112

Earlier quoted context omitted.

The registration under discussion here is registration as a broker-dealer, or an exchange, or whatever, not as a listed company.

Tom Anderson, of myspace? Wow. Hi! Let me direct you to this: https://finance.yahoo.com/news/coinbase-says-just-no-way-to-... The whole point here is that Coinbase is acting in good faith by trying to do things "the right way"... including becoming a public company and trying to register in whatever compliance ways they can. All the way to announcing that they will go to court over all of this. All because their exis…

No, coinbase is trying to trade unregulated securities and asking the SEC to give them the OK before hand so they don't end up in court. Predictably, the SEC's not going to do that.
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