Securities are legal and Coinbase is a licensed broker dealer which means they are allowed to sell securities if they are registered with the SEC. The SEC is saying that crypto is a security while simultaneously not allowing them to be registered as a security. So they are treating it like a security from an enforcement perspective, but not from a regulatory perspective. They can't have it both ways. It must either b…
The SEC isn't saying that crypto is a security. It's saying that some crypto tokens are securities, and that Coinbase is trading at least one of those tokens. It doesn't matter how much Coinbase wants a particular token to not be a security, or whether they had 30 meetings, or 300 meetings where they ask for that token to not be a security. If it passes the Howie test, it's a security.
> asked for further clarification on their existing practices, couldn't get that, That's not right. They got clarification they just didn't like the answer.
https://finance.yahoo.com/news/coinbase-says-just-no-way-to-... "When we ask specific questions: How do we get to a path to registration? There's never an answer," Shirzad said.
I asked the DEA how to get a path to register to be able to sell fentanyl to anyone, they didn't have any answer so I just opened up shop.
Sure, but I don't think it should be the government's prerogative to shut down businesses either, just on the grounds that regulators find the industry annoying. If people want to buy their silly crypto trinkets I don't see how moving it behind the curtain of a brokerage actually helps anyone. I mean, the whole SEC thing is a bit of theater: they can't actually do anything to protect against frauds and scams and bad…
"Find the industry annoying" is an interesting way to characterize a regulatory agency that has investigated a situation and determined that it breaks the law .
Uh, that's not at all how I would characterize the situation. There was no real investigation - the determination that crypto assets are securities is really a philosophical one. Like a court determining whether a tomato is a fruit or a vegetable.
And again, the implication here is that anyone buying and selling a crypto asset outside of a brokerage is breaking the law. According to the grounds the SEC is using here, if I wanted your Dogecoin there would be no legal way for us to transfer it without involving a brokerage firm.
Securities are legal and Coinbase is a licensed broker dealer which means they are allowed to sell securities if they are registered with the SEC. The SEC is saying that crypto is a security while simultaneously not allowing them to be registered as a security. So they are treating it like a security from an enforcement perspective, but not from a regulatory perspective. They can't have it both ways. It must either b…
If your coin meets the Howie test it’s a security and must be registered with the SEC. If you go to the SEC and say “hey, please register my security so I can scam some people”, and they say no, your security doesn’t stop being a security, it’s just not a registered security. Going on to cry about them then prosecuting you for operating an unregistered securities exchange is purile.
Your example is idiotic because nobody is claiming that Coinbase is a scam (if they were the FBI would handle it, not the SEC), and because they are a licensed broker dealer. If particular crypto token is a scam, then they can say "you can't register token X because it's a scam." But they aren't saying that. They are just saying you can't register any tokens at all. If they can't be registered as securities, then how can they be securities?
https://finance.yahoo.com/news/coinbase-says-just-no-way-to-... "When we ask specific questions: How do we get to a path to registration? There's never an answer," Shirzad said.
I asked the DEA how to get a path to register to be able to sell fentanyl to anyone, they didn't have any answer so I just opened up shop.
Terrible analogy. fentanyl requires a prescription to get access to it. There are well defined processes for this.
Until the SEC defines what sort of requirements there are to purchase crypto (like the FDA has [0]), coinbase isn't doing anything illegal by selling it.
SEC doesn't give legal advice because they don't make the laws. Want legal advice? Talk to a lawyer. But if your council tells you it's OK to push some boundaries then don't be surprised if you get slapped. And if you don't like getting slapped then you can go to court. Which is exactly what is happening. Seems like the system is working as intended.
The SEC enforces the law, and it should be totally normal for them to say "this is how we plan to enforce this law". By not saying so, they create a lot of unnecessary churn. Imagine you are outside a store, and there is a police officer outside. You ask them "If I go inside and take some bread off the shelf and walk out without paying, is that ok?". Should the officer say "talk to a lawyer" or should they say "I wou…
You wouldn’t need to ask the SEC that hypothetical because you can see their long history of bringing cases against “bread thieves” and (correctly) infer that they would bring a similar suit against you for the same or similar conduct. To the extent you think your hypothetical situation differs enough from the case history that you and your lawyers are genuinely unsure (or, more commonly, genuinely believe they wouldn’t charge you) then you can ask them via a No Action Letter which is basically a formal way of asking them “What would you do if I did XYZ?” The risk, of course, is that they’ll tell you they would view XYZ as a violation of federal securities laws and take action accordingly. There’s also the risk that they’ll change their mind— it’s not a promise or even a permanent reprieve. It’s just one “police officer” telling one person how they would hypothetically respond to that one fact pattern at that one moment in time. The next “officer” might take an entirely different view.
Nonsense. The SEC, like all regulatory agencies, provides legal guidance and interpretations in order that people may follow the law. Here is a link to them doing just that: https://www.sec.gov/rules/interp.shtml
That’s not even remotely the same as showing up at their office and asking them to apply the law to your specific scenario. That’s what lawyers do. And if your lawyers are unsure they can ask the SEC via the No Action letter process. For CoinBase to say “well we had a bunch of meetings and we asked them to explain the law to us” is disingenuous because of course they’re not going to get an answer that way. That’s not…
> they can ask the SEC via the No Action letter process
So you admit that they do give legal advice. Thank you.
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.
> No, coinbase is trying to trade unregulated securities
And why are those securities (if they are actually securities, which Gensler and the SEC can't even agree on), available to purchase and not regulated? Someone else in this thread just compared this to buying fentanyl. It isn't like there is the FDA giving out spec sheets on drugs.
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.
Well, it's not just their business. The SEC is telegraphing that they want to label all cryptocurrencies as securities. Without action from congress the entire technology is practically dead. No one is going to contribute to Ethereum if they have to log into a Schwab account to buy Ether.
So, you’re saying that Coinbase knowingly offered unregistered security. And acknowledged that’s not legal. The fact the SEC refuses these securities to be registered doesn’t negate the illegal offering of unregistered securities.
If you look at the recent SEC filing, they present evidence Coinbase likely knew what they were doing was illegal and coached companies wanting to list coins on the exchange on how to remove “problematic language” from their promotional material that might make it too obvious they were selling unregistered securities.
Advising people that you do business with to not do certain things because you think they might violate the law is not the smoking gun that you think it is.