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

Coinbase issued Wells notice by SEC

reuters.com

Post reply on HN
Print view View original

171–180 of 327 posts

Re: Coinbase issued Wells notice by SEC

#171

Post by aardvarkr »

thepasswordis wrote: post #148

I can take my money and put it into a slot machine, gamble it on horses, gamble it on sports games. I can buy useless thousand dollar sneakers, I can buy pokemon cards. I can waste my money on absurdly overpriced art, give it to scammy non-profits, donate it to scammy spoiler political candidates. In some states I can use my money to hire hookers, or buy drugs. But if I want to buy crypto, all of a sudden that is a p…

Gee wiz, it’s not like “rug pulls” exist. That’s definitely not a thing that would ever happen and no way would there ever need to be regulation to prevent gullible people from being scammed.

Re: Coinbase issued Wells notice by SEC

#172

Post by aardvarkr »

thepasswordis wrote: post #161
keyanp wrote: post #155

Earlier quoted context omitted.

Everyone knows what they are doing when gambling etc But nowadays crypto is being pitched as an investment to the layperson who doesn’t understand the risks and isn’t being told those risks by the exchanges. It’s those folks the SEC is trying to protect. That and prevention of larger market issues that can arise from unregulated financial services, ie FTX

>Everyone knows what they are doing when gambling etc No they absolutely do not.

Gambling is a pretty easy concept to understand, and it’s been with all of us since we were kids. Person A wagers an amount that a certain outcome will occur. Person B accepts that wager and agreed to the terms of the wager. If every kid on the playground can understand how a bet works I guarantee adults can too.

Re: Coinbase issued Wells notice by SEC

#173

Post by HWR_14 »

joefigura wrote: post #165
thepasswordis wrote: post #159

Earlier quoted context omitted.

Are sneakers, pokemon cards, and art collections regulated? What if I buy some sneakers thinking I'm going to flip them and then I lose money?

No. They aren't investment contracts. They're just sneakers. The SEC regulates the market for investment contracts (securities). The CFTC regulates the market for commodities. The legal point is that the SEC says Coinbase is a securities market, but haven't made a specific accusation, and Coinbase disagrees. But if some digital assets are securities, then the SEC definitely has jurisdiction. Nobody regulates the poke…

The securities/commodities division is so strange, I find it hard to parse. Like, I understand "shares of stock" are different from "corn". Sure. But then you get into strange things and it's unclear which they are.

Re: Coinbase issued Wells notice by SEC

#174

Post by beaned »

joefigura wrote: post #163
1vuio0pswjnm7 wrote: post #129

Earlier quoted context omitted.

In the blog past Coinbase General Counsel asks for "guidance". The guidance for future "crypto entrepreneurs" is going to come from the outcomes of these enforcement actions. CryptoExpert: "We want guidance. We want regulation." SEC: "Your product/service is a security." CryptoExpert: "No it's not!" Damodoran called cryptocurrency "currency made by the paranoid for the paranoid." [paraphrase] Let's be honest, coopera…

It doesn't seem like the SEC has actually said what Coinbase is doing that is a security, or published regulations on how to determine which digital assets are securities and which are not "The SEC staff told us they have identified potential violations of securities law, but little more. We asked the SEC specifically to identify which assets on our platforms they believe may be securities, and they declined to do so…

How can you possibly be a fair "enforcer" of a law that you refuse to specify?

Re: Coinbase issued Wells notice by SEC

#175

Post by HWR_14 »

aardvarkr wrote: post #150
Taek wrote: post #135

Earlier quoted context omitted.

If you take the SECs view on how securities work, everything from a house to a baseball card to a GPU is a security.

In 1946, SEC v W.J. Howey Co. (328 U.S. 293) ruled the meaning of “security” as used in the provision of § 2(1) of the Securities Act of 1933 defining “security” as : “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 profits solely from the efforts of the promoter or…

I understand (1) and (3) seems somewhat self-explanatory (although the quotes around "solely" give me pause.) But I don't understand "common enterprise" at all.

Re: Coinbase issued Wells notice by SEC

#176

Post by HWR_14 »

Alex3917 wrote: post #75
iramiller wrote: post #64

Earlier quoted context omitted.

Well the SEC certainly has one point of view. Unfortunately the CFTC has another view and they both can’t be right so which part of the federal governance applies here? https://www.cftc.gov/digitalassets/index.htm This ambiguity is why clarity is needed. In the famous words of Matt Levine everything is securities fraud. It seems obvious that some legal clarity is actually required here.

> Unfortunately the CFTC has another view and they both can’t be right Of course they can. Whether something is a commodity has absolutely nothing to do with whether something is a security. They are completely orthogonal concepts.

Wait, what? I thought a commodity was corn and a security was stock and everything in this discussion was about arguing which it was closer to.

What is a commodity then?

Re: Coinbase issued Wells notice by SEC

#177

Post by trompetenaccoun »

joefigura wrote: post #157
thepasswordis wrote: post #148

I can take my money and put it into a slot machine, gamble it on horses, gamble it on sports games. I can buy useless thousand dollar sneakers, I can buy pokemon cards. I can waste my money on absurdly overpriced art, give it to scammy non-profits, donate it to scammy spoiler political candidates. In some states I can use my money to hire hookers, or buy drugs. But if I want to buy crypto, all of a sudden that is a p…

The SEC's position is that some crypto coins are securities. Gambling, hookers, political donations, and non-profit donations are all regulated. Securities are regulated even more tightly because it's *really* easy to commit fraud and fleece people of their money by lying about investments. Capitalism works because most people trust that they can make investments without being defrauded. With hookers, non-profit dona…

That isn't what the argument is about. Neither does Coinbase argue the SEC is in charge of regulating what isn't a security, nor do even other branches of the government agree. The CFTC says they're in charge of regulating most cryptocurrencies.

Re: Coinbase issued Wells notice by SEC

#178

Post by trompetenaccoun »

HWR_14 wrote: post #176
Alex3917 wrote: post #75

Earlier quoted context omitted.

> Unfortunately the CFTC has another view and they both can’t be right Of course they can. Whether something is a commodity has absolutely nothing to do with whether something is a security. They are completely orthogonal concepts.

Wait, what? I thought a commodity was corn and a security was stock and everything in this discussion was about arguing which it was closer to. What is a commodity then?

The above is obviously false. This is why you should not learn about finance and economics on HN, many users have no idea what they write. Something is either a security or a commodity, these are legal terms and treated differently by law. The status may be undermined but it can not be both.

Re: Coinbase issued Wells notice by SEC

#179

Post by Auracle »

aardvarkr wrote: post #172
thepasswordis wrote: post #161

Earlier quoted context omitted.

>Everyone knows what they are doing when gambling etc No they absolutely do not.

Gambling is a pretty easy concept to understand, and it’s been with all of us since we were kids. Person A wagers an amount that a certain outcome will occur. Person B accepts that wager and agreed to the terms of the wager. If every kid on the playground can understand how a bet works I guarantee adults can too.

I’ve talked with otherwise intelligent people that thought they were coming out ahead on pull tabs or Magic the Gathering cards.

Investing in crypto is also easy to understand. It’s speculation and the price might drop to 0.

It’s the psychology of both that are harder to deal with.

Re: Coinbase issued Wells notice by SEC

#180

Post by ETH_start »

lelanthran wrote: post #154
thepasswordis wrote: post #148

I can take my money and put it into a slot machine, gamble it on horses, gamble it on sports games. I can buy useless thousand dollar sneakers, I can buy pokemon cards. I can waste my money on absurdly overpriced art, give it to scammy non-profits, donate it to scammy spoiler political candidates. In some states I can use my money to hire hookers, or buy drugs. But if I want to buy crypto, all of a sudden that is a p…

> I can take my money and put it into a slot machine, gamble it on horses, gamble it on sports games. I can buy useless thousand dollar sneakers, I can buy pokemon cards. I can waste my money on absurdly overpriced art, give it to scammy non-profits, donate it to scammy spoiler political candidates. > In some states I can use my money to hire hookers, or buy drugs. > But if I want to buy crypto, all of a sudden that…

A huge number of crypto projects never advertised their tokens as an investment, and explicitly and repeatedly stated that they are not investments and should not be expected to appreciate, yet the SEC still charged them with promoting an unregistered security.
Post reply on HN