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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.
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.
https://www.banking.senate.gov/newsroom/minority/toomey-secs...
Earlier quoted context omitted.
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.
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.
That's one way of looking at it. The other way of looking at it is that everyone who went to the SEC and asked them if they could do something was told absolutely not. The people who didn't ask seemed to be getting away with it. So everyone stopped asking. However that didn't change the facts of the situation. At some point even the mightiest ostrich must get rekt.
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.
It's "regulation-by-enforcement". Instead of defining clear rules, the SEC just waits and brings actions against the activities it doesn't want to happen. Sen Toomey and others have called out Gensler for doing this: https://www.banking.senate.gov/newsroom/minority/toomey-secs...
This is how a lot of safety regulation comes about - from a disaster or a problem that previously nobody knew or understood.
The SEC is likely operating under this sort of outlook.
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
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.
Earlier quoted context omitted.
That's one way of looking at it. The other way of looking at it is that everyone who went to the SEC and asked them if they could do something was told absolutely not. The people who didn't ask seemed to be getting away with it. So everyone stopped asking. However that didn't change the facts of the situation. At some point even the mightiest ostrich must get rekt.
Coinbase has asked them many times though. The article even mentions this. They met 30 times to seek clarity on the rules.
Earlier quoted context omitted.
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
What was unique about the initial distribution of Bitcoin when compared to other cryptocurrencies?
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.