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US SEC sues Coinbase, one day after suing Binance

reuters.com

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Re: US SEC sues Coinbase, one day after suing Binance

#221

Post by x86x87 »

gitfan86 wrote: post #139
cultureswitch wrote: post #125

And there we go. The promise of a form of cash outside of USA government control is terrifying to the USA government. And well, most other governments too. It is pretty obvious that when the USA government goes after crypto exchanges, what matters is to get the exchange shut down. The actual justification for doing so is an afterthought. I'm torn on the issue of whether dematerialized privacy-preserving cash (and yea…

That is putting the cart before the horse. The USA is not a libertarian government. Why did anyone think that it was a good idea to invest in products that would only survive in a libertarian government?

Lol. What is the US government?

Re: US SEC sues Coinbase, one day after suing Binance

#222

Post by arcticbull »

whimsicalism wrote: post #211
sealeck wrote: post #208

Earlier quoted context omitted.

Is it really surprising that the chair of the SEC cannot just dispense SEC positions without consulting with lawyers?

Has Gensler never consulted lawyers on the status of ethereum prior to this hearing? It should be easy yes or no from the lawyers, I'm hearing that the law is incredibly clear and not really prone to misinterpretation so it shouldn't be an issue. Or maybe Gensler's lawyers are "extremely inexperienced" if they couldn't figure out such an obvious issue?

You're not answering the question. Why do you think Gensler in official capacity should just dispense one-off soundbite determinations at the request of some clown grilling him?

> It should be easy yes or no from the lawyers...

When has that ever been the case, and why should it be the case now?

[edit] The law is not just what's written but the entirely of case law. The SEC has provided a framework for analysis of securities in the context of crypto. It's here. [1] And it builds on the DAO report, here. [2]

[1] https://www.sec.gov/files/dlt-framework.pdf

[2] https://www.sec.gov/litigation/investreport/34-81207.pdf

Re: US SEC sues Coinbase, one day after suing Binance

#224

Post by whimsicalism »

arcticbull wrote: post #222
whimsicalism wrote: post #211

Earlier quoted context omitted.

Has Gensler never consulted lawyers on the status of ethereum prior to this hearing? It should be easy yes or no from the lawyers, I'm hearing that the law is incredibly clear and not really prone to misinterpretation so it shouldn't be an issue. Or maybe Gensler's lawyers are "extremely inexperienced" if they couldn't figure out such an obvious issue?

You're not answering the question. Why do you think Gensler in official capacity should just dispense one-off soundbite determinations at the request of some clown grilling him? > It should be easy yes or no from the lawyers... When has that ever been the case, and why should it be the case now? [edit] The law is not just what's written but the entirely of case law. The SEC has provided a framework for analysis of se…

It is not at all surprising to me that he would refuse to answer the question, but the precise reason he is doing that is so that the SEC has freedom of movement to regulate without being pinned down by public statements he has made in front of congress. But that entire notion belies the idea that the regulations are super clear or predictable. The whole reason for this kind of maneuver is because the regulations are not clear or predictable.

I have no doubt he has discussed the status of ethereum with SEC lawyers before.

Re: US SEC sues Coinbase, one day after suing Binance

#225

Post by whimsicalism »

nradov wrote: post #205
whimsicalism wrote: post #158

Earlier quoted context omitted.

It is not obvious a priori how regulators will treat tokens or which ones will be permissible.

In general if you're thinking of doing something in a gray area of federal law or regulations then you can write a formal letter to the competent regulatory agency and request an opinion. But you have to be extremely specific and pose your questions in ways that can be answered with a clear yes or no; you can't expect a useful response to a vague request for clarifications or definitions. If the agency does give you…

Yes, see for instance prediction markets in the US.

Re: US SEC sues Coinbase, one day after suing Binance

#226

Post by arcticbull »

whimsicalism wrote: post #224
arcticbull wrote: post #222

Earlier quoted context omitted.

You're not answering the question. Why do you think Gensler in official capacity should just dispense one-off soundbite determinations at the request of some clown grilling him? > It should be easy yes or no from the lawyers... When has that ever been the case, and why should it be the case now? [edit] The law is not just what's written but the entirely of case law. The SEC has provided a framework for analysis of se…

It is not at all surprising to me that he would refuse to answer the question, but the precise reason he is doing that is so that the SEC has freedom of movement to regulate without being pinned down by public statements he has made in front of congress. But that entire notion belies the idea that the regulations are super clear or predictable. The whole reason for this kind of maneuver is because the regulations are…

> It is not at all surprising to me that he would refuse to answer the question, but the precise reason he is doing that is so that the SEC has freedom of movement to regulate without being pinned down by public statements he has made in front of congress.

Because they're a legal body and what they say off hand is precedent, so of course they have to be measured and thoughtful. This was a shameful display, but not by Gensler.

> I have no doubt he has discussed the status of ethereum with SEC lawyers before.

Me too, but again, I refer you to the DAO Report and the Framework for “Investment Contract” Analysis of Digital Assets

> But that entire notion belies the idea that the regulations are super clear or predictable. The whole reason for this kind of maneuver is because the regulations are not clear or predictable.

They're quite clear, and the whole reason for this kind of maneuver is showboating and pandering. Based on this thread it seems to be working.

In a similar vein I'm confident that Brian and his attorneys have spoken and concluded that they're almost 100% certain to be securities, and for that reason, they chose to avoid working with the SEC at all costs at every point along the way. But of course that determination would undermine the business, so off to court we go.

Re: US SEC sues Coinbase, one day after suing Binance

#227

Post by awaythrow483 »

paulpauper wrote: post #187
awaythrow483 wrote: post #175

Bitcoin up 2% on the news despite people in this thread explicitly saying "it made crypto price tank" in the thread

umm...check what it did yesterday.

This is an article about the SEC coinbase announcement. That happened today. So I'm not talking about what happened yesterday, I'm talking about what happened today, because that is what is relevant to the article we are discussing.

so, ummmmm..... like..... bruh. go check what it did today

Re: US SEC sues Coinbase, one day after suing Binance

#228

Post by jdminhbg »

dymk wrote: post #88
chroma wrote: post #82

Earlier quoted context omitted.

If criticizing a regulatory body causes them to go after you, then that regulatory body is corrupt and should be dismantled and replaced with something else.

Taunt and criticize are two different verbs

Don't think "taunt" is the correct verb here, but it doesn't even matter. Taunting government officials is protected speech in the US.

Re: US SEC sues Coinbase, one day after suing Binance

#229

Post by CuriousCosmic »

mrcode007 wrote: post #191
whimsicalism wrote: post #184

Earlier quoted context omitted.

Interesting, maybe you should let Gensler know that the law is much more obvious than he appears to realize [0] [0]: https://youtu.be/VhA1dZXeao0?t=58

Under the Howey test, the rules are clear. "The test is whether the scheme involves an investment of money in a common enterprise with profits to come solely from the efforts of others. If that test be satisfied, it is immaterial whether the enterprise is speculative or non-speculative or whether there is a sale of property with or without intrinsic value." I think it is plausible that all pure staking initiatives wi…

> investment of money in a common enterprise with profits to come solely from the efforts of others

This is where I see the "staking makes a cryptocurrency a security" fall apart. There are a handful of definitions for "staking" and some of them definitely meet the criteria of "a common enterprise with profits to come solely from the efforts of others" however many do not.

1. Ethereum's staking at a protocol level requires you to run a staking node and you are paid for what is basically an SLA between you and the network and you only get paid if your node maintains a certain uptime, is kept up to date, and operates correctly. That I don't believe meets the criteria as it requires direct, sustained effort from you the operator (even if it's generally low effort).

2. Cardano's (or Tezos') staking is similar. Stake pool operators are effectively the same as Ethereum's stake node operators. But even delegators (who aren't required to stay online) still provide a service in that they are picking the stake pools who then fill the SLAs. If they pick pools that can't meet the requirements then the delegators don't get paid until they can find one that does.

3. Meanwhile you have networks like Algorand where participation in consensus does not effect staking rewards and you never have to perform a service to get paid out by the network. Those would meet the criteria by my understanding.

4. And then you have all the DeFi "staking" which is better described as lending or liquidity pooling. You aren't doing anything proof of stake related but are just lending out capital as an investment.

I can't speak on other networks but generally I found that networks fell into one of those 4 categories. The first two only pay people who provide a service back to the network while with those like the third, even if you can provide a service back to the network, you aren't required to to be able to get paid. And then the fourth category is just a security outright.

Edit (because I forgot to mention it): With regards to Coinbase's staking program, it's in a weird spot. With those you aren't directly staking but you are outsourcing the responsibility to a 3rd part (coinbase) to stake for you. I wouldn't be opposed to considering this type of custodial staking as meeting the criteria to be a security but I don't think proof of stake at a protocol level constitutes "a common enterprise with profits to come solely from the efforts of others" as they require work on behalf of the participants to get paid out.

Re: US SEC sues Coinbase, one day after suing Binance

#230

Post by adsfgiodsnrio »

EddieEngineers wrote: post #42
paulpauper wrote: post #36

Crypto 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…

This is true when it’s going down and false when it’s going up. Do the same analysis of previous years during bull crypto markets and does this hold up?

Winning lottery tickets are a good investment. Losing tickets are a bad one.
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