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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

#361

Post by andreygrehov »

anonymouskimmer wrote: post #326
andreygrehov wrote: post #94

Earlier quoted context omitted.

Dude, I made that comment in response to your "My coworker lost $X0,000 over Celsius" to highlight the fact that not everyone's circle is losing money. > Coinbase is doing the same thing as Celsius, Voyager, and FTX with their Earn / Staking products. And now the SEC is suing them over it. Why can't SEC work with Coinbase before suing them? Again, Coinbase has been seeking help from SEC for years. Brian Armstrong, th…

> Why can't SEC work with Coinbase before suing them? Again, Coinbase has been seeking help from SEC for years. How has Coinbase been "seeking help"? They are a company, they should be going to the SEC with all of the particulars of each of their investment items and saying to the SEC "We believe we have met your standards of fiduciary duty on these items that appear to be securities, have we?" They shouldn't be sayi…

They filed a petition which SEC failed to address. The result is Coinbase suing SEC. Now, SEC sues Coinbase back. Seriously, wtf? SEC needs a massive slap on their hands. If they lack expertise and don't have enough knowledge (literally), then whoever works there should go "back to school" (figuratively speaking), learn all the ins and outs of crypto, and only after consider joining the SEC as an employee.

https://assets.ctfassets.net/c5bd0wqjc7v0/5PWsXaPsqQ61gA9wlF...

    Coinbase brings this mandamus action to seek modest, but meaningful and time-sensitive, relief: a writ requiring the Securities and Exchange Commission (SEC or Commission) to act on Coinbase’s pending rulemaking petition to provide clarity for the crypto industry. Coinbase does not ask the Court to instruct the agency how to respond. It simply requests that the Court order the SEC to respond at all. The Commission has repeatedly demonstrated that its mind is made up to deny the petition. But the Commission’s delay in formally announcing that decision has enabled it to improperly delay judicial review at a critical moment for the industry.

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

#362

Post by [deleted] »

CuriousCosmic wrote: post #229
mrcode007 wrote: post #191

Earlier quoted context omitted.

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 re…

[deleted]

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

#363

Post by arcticbull »

JumpCrisscross wrote: post #238
whimsicalism wrote: post #162

Earlier quoted context omitted.

> I think it's more a case that anyone who was involved in crypto early, and who has actually taken the time to understand the technology, has realised about a decade ago that crypto currencies are mostly useless. I don't know what it is about crypto that makes HN commentators want to make the most ridiculous, put-downy statements without evidence to back it up. Crypto is not mostly useless, it is just that people do…

> Crypto is not mostly useless, it is just that people don't like the uses Crypto has legitimate use as a rebel medium. It’s also plagued with criminality. Its promoters had a decade to clean up its act and refuse to self regulate. That’s soured the public’s mood towards the whole enterprise. If crypto’s benefits are niche, its development should be niche. And if its sole beneficiaries are people in failing foreign c…

> Crypto has legitimate use as a rebel medium.

This only applies to literally one or two cryptocurrencies, stuff like Monero. They're very much the exception to the rule. Most cryptocurrencies like Bitcoin and Ethereum just publish the entire ledger which is constantly being pulled in by the PLA, the SEC, the FBI and myriad other law enforcement authorities the world over. Not to mention Chainalysis.

If the government that's oppressing you is capable enough to oppress you they're more than capable enough to, in the fullness of time, deanonymize your transactions and send you directly to jail for them. You're not just defending against the current start of the art tech but all future improvements - against an adversary with dramatically more resources than you have.

Illicit transactions on public ledgers are simply prosecution futures. People get jail time constantly for crypto transactions.

If I were a dissident in a country like the PRC hypothetically, I'd run like hell from crypto. Talk about asking for trouble.

That's before we even get to the point of how you plan to acquire these currencies without the government noticing.

They have a use: gambling and speculation at a massive decentralized offshore casino. Coinbase and Kraken are the cage. Binance, for example, and DeFi are the table games.

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

#364

Post by revbed »

paulddraper wrote: post #220
vkou wrote: post #123

Earlier quoted context omitted.

> We don't tax people on the FMV of gold when they dig it out of the ground. Why shouldn't we? We tax people on the FMV of something valuable created out of thin air, why should gold be an exception?

> We tax people on the FMV of something valuable created out of thin air, There are income taxes which apply when goods or services are sold. There are sales taxes when goods are purchased. There are property taxes when goods are owned. Nothing gets taxed on creation.

And there are excise taxes when goods are created.

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

#365

Post by esonoi »

Demmme wrote: post #77
butlerm wrote: post #48

If you look up the definitions of "security", "financial instrument", "commodity", and "currency", it is pretty clear that a plain vanilla crypto-currency like Bitcoin is no ordinary security nor a financial instrument. It is not a claim on something else, even less so than a traditional bank note. It is more like a commodity. Since when is "aluminum" a security? A crypto currency business however may be engaged in t…

I read them and concluded that Bitcoin fits currency very well. While googling those terms I also found that gold is defined as a currency in the open market. I'm pretty sure the us sec will figure it out for us

Gold is not a currency, it is a commodity that is similar enough to a currency (meaning it can substitute as a currency). ISO 4217 includes precious metals that it explicitly states are not currencies.

Currencies do not exist outside a monetary system. If I sell you something, and accept skittles as payment, that does not make skittles a currency.

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

#366

Post by marcell »

johndhi wrote: post #124

Question: is it even possible to register as a security? If you do, what follows? So if SOL for example were to register somewhere, what would they need to do, and what would I need to do to buy it?

Registering a security means basically an IPO. The burden is very high and is out of reach for crypto startups that have little revenue and under $1 million in funding.

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

#367

Post by Yizahi »

drexlspivey wrote: post #331
TimPC wrote: post #2

Crypto companies think they don't trade securities which is clearly wrong and contradicted by their own advertising. People buy crypto without a real use for crypto because they think they can sell it for more later. Everyone under the sun knows this. It's obviously a security and failing to register should be met by SEC cases like this one.

SEC is supposed to tell them what is a security and what isn’t so they can refrain from selling them. Exchanges have been asking for clarification over and over. So far the only thing the SEC said on the subject is that BTC in not a security but nothing about the other cryptos. In the absence of regulatory clarity Coinbase have devised their own framework to classify what tokens aren’t securities and proceeded to lis…

When tokenbro industry invented a very convoluted asset class they expected government to say "Oh, it's really hard to understand and classify it, that's why we won't do it at all. You guys can do whatever you want now.". But actually they said "Oh, it's really hard to understand and classify it, that's why we will have to do it the long and painful way, and you guys can wait for us or not. But if you want to operate before the decision is reached - it's on you if you break the law.".

Apparently a really convoluted business plan is not an inherent human right, if it is masking law infringement in he mean time. Who knew, right?:)

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

#368

Post by yieldcrv »

reaperman wrote: post #358
majormajor wrote: post #320

Earlier quoted context omitted.

Why would a sneaker fall under the terms they're using to define a security if not every digital token does?

They wouldn't. 'yieldcrv is not demonstrating knowledge of the Howey test, and appears to be heavily focused on a narrower reading, "buying something with the expectation of increased future value" -- which they're setting up as a strawman's Howey's test. Sneakers would not meet the Howey Test: An investment contract exists if there is an "investment of money in a common enterprise with a reasonable expectation of pr…

that’s an interesting use of strawman to invalidate the observation

The howey test doesn’t need all prongs satisfied and avoidance is based on probability only

The SEC and securities industry has enjoyed a symbiosis for 70 years, where things that blurred the lines didnt exist, were never imagined, or were never challenged. Challenging one challenges them all.

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

#369

Post by dragontamer »

andreygrehov wrote: post #361
anonymouskimmer wrote: post #326

Earlier quoted context omitted.

> Why can't SEC work with Coinbase before suing them? Again, Coinbase has been seeking help from SEC for years. How has Coinbase been "seeking help"? They are a company, they should be going to the SEC with all of the particulars of each of their investment items and saying to the SEC "We believe we have met your standards of fiduciary duty on these items that appear to be securities, have we?" They shouldn't be sayi…

They filed a petition which SEC failed to address. The result is Coinbase suing SEC. Now, SEC sues Coinbase back. Seriously, wtf? SEC needs a massive slap on their hands. If they lack expertise and don't have enough knowledge (literally), then whoever works there should go "back to school" (figuratively speaking), learn all the ins and outs of crypto, and only after consider joining the SEC as an employee. https://as…

https://www.sec.gov/news/press-release/2023-102

> “We allege that Coinbase, despite being subject to the securities laws, commingled and unlawfully offered exchange, broker-dealer, and clearinghouse functions,” said SEC Chair Gary Gensler. “In other parts of our securities markets, these functions are separate. Coinbase’s alleged failures deprive investors of critical protections, including rulebooks that prevent fraud and manipulation, proper disclosure, safeguards against conflicts of interest, and routine inspection by the SEC. Further, as we allege, Coinbase never registered its staking-as-a-service program as required by the securities laws, again depriving investors of critical disclosure and other protections.”

Seems rather straightforward to me given this press release.

Quit comingling functions. Bring your exchange to proper legal structure in the USA. Split the broker-dealer and clearinghouse functions off.

And quit operating Coinbase Earn, which is an obvious security by any other name. Either that, or properly register Coinbase Earn as a security before offering it as a product to the public. If you are to keep operating Coinbase Earn, then bring it under security regulations, which means reporting upon your assets and such under whatever filing system you want (probably bonds?)

Its... not even that hard to read the SEC complaint. Just read it, the complaint is right there for all of us to see.

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

#370

Post by paulddraper »

revbed wrote: post #364
paulddraper wrote: post #220

Earlier quoted context omitted.

> We tax people on the FMV of something valuable created out of thin air, There are income taxes which apply when goods or services are sold. There are sales taxes when goods are purchased. There are property taxes when goods are owned. Nothing gets taxed on creation.

And there are excise taxes when goods are created.

Excise taxes are a product-specific sales tax.

For example, on gasoline. The tax occurs at the pump, not at the refinery.

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