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Coinbase issued Wells notice by SEC

reuters.com

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Re: Coinbase issued Wells notice by SEC

#311

Post by RC_ITR »

humanizersequel wrote: post #308
RC_ITR wrote: post #306

Earlier quoted context omitted.

From the 10-k: We operate staking nodes on certain blockchain networks utilizing customers’ crypto assets and pass through the rewards received to those customers, less a service fee. In other cases, upon customers’ instructions, we may delegate our customers’ assets to third-party service providers that are unaffiliated with us. Some networks may further require customer assets to be transferred into smart contracts…

For posterity's sake, if you insist on replying to me in two seperate threads, here is an excerpt from my reply there: ...probably moot if these "third party service providers" are just doing the busywork of interacting with the protocol, on behalf of Coinbase, on behalf of the user. I grant that this involves a kind of custody management you don't see in other non-securitized IT services, but as long as everything i…

You maintain your position of what?

That it's not a loan or it's not a security? Or both?

Re: Coinbase issued Wells notice by SEC

#312

Post by ETH_start »

peripitea wrote: post #287
ETH_start wrote: post #247

Earlier quoted context omitted.

Pretty much all of them: they go out of their way to state it is not an investment. Taken the GNT token, used in the Golem network, for example: https://assets.website-files.com/62446d07873fde065cbcb8d5/62...

Just reading this and I don't understand how anyone would say this passes the Howey Test. This is clearly a security. The only possible debate is whether there is an expectation of profit, but I can't see anyone seriously entertaining that debate -- there was an ICO! What do you think the median person buying into that ICO was expecting? "I'm going to spend a few thousands dollars on this token that might have utilit…

If this is a security, then so is pokemon.

This is a token sale. It never called itself an "ICO".

The whitepaper never once claimed the token is expected to profit its owners, and repeatedly warns of the risk of loss. It explicitly says the paper is not an investment prospectus as well.

>>What do you think the median person buying into that ICO was expecting? "I'm going to spend a few thousands dollars on this token that might have utility in this project in a few years"?? Come on.

If it turned out that the median person buying Pokemon cards were doing it for the purpose of deriving a profit, that wouldn't turn Pokemon cards into securities.

Re: Coinbase issued Wells notice by SEC

#313

Post by humanizersequel »

RC_ITR wrote: post #310
humanizersequel wrote: post #307

Earlier quoted context omitted.

>we may delegate our customers’ assets to third-party service providers Interesting — an aside, I did not realize just how many protocols are supported on Coinbase Earn, otherwise I would have simply gone through each to see — but probably moot if these "third party service providers" are just doing the busywork of interacting with the protocol, on behalf of Coinbase, on behalf of the user. I grant that this involves…

>but probably moot if these "third party service providers" are just doing the busywork of interacting with the protocol, on behalf of Coinbase, on behalf of the user. I'm sorry, you can't just use the word protocol to change the first principles of the interaction. A bank is just doing the busywork of interacting with a borrower on behalf of me. >Nobody can "stake better" and expect more rewards out of it. This is s…

>you can't just use the word protocol to change the first principles of the interaction. A bank is just doing the busywork of interacting with a borrower on behalf of me

Unless Coinbase Earn is fraudulent — maybe it is, I don't know — I would argue you can and should. In the case of Ethereum, Coinbase is providing an IT service. In the case of [other protocol], Coinbase is hiring a contractor to provide an IT service on their behalf. For any reasonable understanding of what financial lending is, there is no "borrowing" here.

>Staking isn't nothing, it's an activity that requires skill, otherwise, why does it even exist? Shouldn't a centralized computer just do all the staking/validating if that's the case?

These claims demonstrate a profound, ignorance of how these protocols work — something I'm calling into attention not to berate you personally, but so that people who stumble across this thread later appropriately discount your claims.

Re: Coinbase issued Wells notice by SEC

#314

Post by humanizersequel »

RC_ITR wrote: post #311
humanizersequel wrote: post #308

Earlier quoted context omitted.

For posterity's sake, if you insist on replying to me in two seperate threads, here is an excerpt from my reply there: ...probably moot if these "third party service providers" are just doing the busywork of interacting with the protocol, on behalf of Coinbase, on behalf of the user. I grant that this involves a kind of custody management you don't see in other non-securitized IT services, but as long as everything i…

You maintain your position of what? That it's not a loan or it's not a security? Or both?

There are no loans directly involved in the functionality of the Coinbase Earn product, and staking-as-a-service is just that: an IT service, not a security.

Re: Coinbase issued Wells notice by SEC

#315

Post by adastra22 »

headsoup wrote: post #100
codehalo wrote: post #77

Earlier quoted context omitted.

It's not clear yet that the SEC has any jurisdiction over cryptocurrencies. At this point, their rulings are empty, and perhaps it will be decided in court.

I suppose so long as cryptocurrencies aren't interacting with the dollar markets at all that makes sense...

No interaction with the dollar market is required to be a security.

Re: Coinbase issued Wells notice by SEC

#316

Post by hef19898 »

mrguyorama wrote: post #303
hef19898 wrote: post #292

Earlier quoted context omitted.

Shows that aerospace, read the development, certification and production of aircraft, is different from aviation, as in the use of said aircraft. Guess which side I am on.

But "Airspace access" IS controlled by the FAA? If I want to fly a plane into the sky over the US, I have to ask the FAA for permission. I'm trying to understand what you were alluding to in your previous comment.

That a) I know a lot more about the aircraft building bit than I do about the flying bit and b) I was wrong about what the FAA does when it comes to air traffic and flight plans. Reason being, once an aircraft is sold it usually isn't my job to worry about it anymore.

Re: Coinbase issued Wells notice by SEC

#317

Post by [deleted] »

jefftk wrote: post #251
pavlov wrote: post #192

Earlier quoted context omitted.

Regulations and court precedents about what’s a security have been published since the 1930s. Lots of people have tried to work around it. Crypto isn’t the first attempt to create pseudo-securities where the layers of ownership and control are obfuscated. The rules aren’t really that complicated — it’s just that crypto people have a hard time facing the fact that practically everything in crypto meets the definition…

The IRS gives lots of detailed guidance [1] on how to file your taxes, including specifically for cryptocurrency [2]. The SEC has given very little guidance here, mostly just repeating their normal non-cryptocurrency guidance in a way that wouldn't be informative to a securities lawyer [3], and especially hasn't addressed the way their current rules are incompatible with crypto. That Etherium, for example, has existe…

[deleted]

Re: Coinbase issued Wells notice by SEC

#318

Post by femiagbabiaka »

robocat wrote: post #201
femiagbabiaka wrote: post #86

Earlier quoted context omitted.

The entire executive staff has been purely selling for months. xD

Citation? Or where do I look for that information?

https://twitter.com/unusual_whales/status/163868446695584972...

Re: Coinbase issued Wells notice by SEC

#319

Post by femiagbabiaka »

ryan_lane wrote: post #212
femiagbabiaka wrote: post #86

Earlier quoted context omitted.

The entire executive staff has been purely selling for months. xD

Execs are required to be on schedules, and the norm for employees being paid in equity is to sell to diversify. There's nothing abnormal about this.

Just look at the timing of when buying stopped: https://twitter.com/unusual_whales/status/163868446695584972...

Re: Coinbase issued Wells notice by SEC

#320

Post by RC_ITR »

humanizersequel wrote: post #314
RC_ITR wrote: post #311

Earlier quoted context omitted.

You maintain your position of what? That it's not a loan or it's not a security? Or both?

There are no loans directly involved in the functionality of the Coinbase Earn product, and staking-as-a-service is just that: an IT service, not a security.

We’ll time and this argument are a flat circle then.

I guess my final question is: do you think there is any risk to a user of those third party service providers going under and not returning capital (either due to slashing risk or normal business risk)?

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