Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Coinbase issued Wells notice by SEC

reuters.com

Post reply on HN
Print view View original

41–50 of 327 posts

Re: Coinbase issued Wells notice by SEC

#41

Post by humanizersequel »

cududa wrote: post #30
stickfigure wrote: post #21

Earlier quoted context omitted.

If it's so clear to you, maybe you can answer the question?

I’m not an expert or a lawyer but it seems pretty clear. Going by what the SEC has literally told them: Coinbase taking money from depositors, loaning it out, and giving the depositors interest from the loan, is a security product. Page 1 of the Securities Exchange Act of 1934: https://www.govinfo.gov/content/pkg/COMPS-1885/pdf/COMPS-188... It… really doesn’t seem complicated. The SEC told Coinbase they’d be in viola…

>Coinbase taking money from depositors, loaning it out, and giving the depositors interest from the loan, is a security product.

What Coinbase product does this? I was under the impression all of "Coinbase earn" was just staking-as-a-service.

Re: Coinbase issued Wells notice by SEC

#42

Post by sonotathrowaway »

cududa wrote: post #30
stickfigure wrote: post #21

Earlier quoted context omitted.

If it's so clear to you, maybe you can answer the question?

I’m not an expert or a lawyer but it seems pretty clear. Going by what the SEC has literally told them: Coinbase taking money from depositors, loaning it out, and giving the depositors interest from the loan, is a security product. Page 1 of the Securities Exchange Act of 1934: https://www.govinfo.gov/content/pkg/COMPS-1885/pdf/COMPS-188... It… really doesn’t seem complicated. The SEC told Coinbase they’d be in viola…

It’s really hard to convince a Bitcoin stan that labeling something as “crypto” doesn’t bypass all laws.

Coinbase lawyers understand it perfectly well, Coinbase PR understands that their fans aren’t able too.

Re: Coinbase issued Wells notice by SEC

#43

Post by shukantpal »

cududa wrote: post #30
stickfigure wrote: post #21

Earlier quoted context omitted.

If it's so clear to you, maybe you can answer the question?

I’m not an expert or a lawyer but it seems pretty clear. Going by what the SEC has literally told them: Coinbase taking money from depositors, loaning it out, and giving the depositors interest from the loan, is a security product. Page 1 of the Securities Exchange Act of 1934: https://www.govinfo.gov/content/pkg/COMPS-1885/pdf/COMPS-188... It… really doesn’t seem complicated. The SEC told Coinbase they’d be in viola…

This Wells notice is not about Coinbase lending out money but rather about staked assets. Coinbase is not doing any lending.

Re: Coinbase issued Wells notice by SEC

#44

Post by cududa »

Animats wrote: post #38
cududa wrote: post #30

Earlier quoted context omitted.

I’m not an expert or a lawyer but it seems pretty clear. Going by what the SEC has literally told them: Coinbase taking money from depositors, loaning it out, and giving the depositors interest from the loan, is a security product. Page 1 of the Securities Exchange Act of 1934: https://www.govinfo.gov/content/pkg/COMPS-1885/pdf/COMPS-188... It… really doesn’t seem complicated. The SEC told Coinbase they’d be in viola…

Right. How could "Coinbase Earn" not be a security?

Based on comments here, because they called it “staking as a service”.

But apparently that nomenclature bypasses this very clear and explicit definition

“The term ‘‘exchange’’ means any organization, associa- tion, or group of persons, whether incorporated or unincor- porated, which constitutes, maintains, or provides a market place or facilities for bringing together purchasers and sellers of securities or for otherwise performing with respect to securi- ties the functions commonly performed by a stock exchange as that term is generally understood, and includes the market place and the market facilities maintained by such exchange.”

Re: Coinbase issued Wells notice by SEC

#45

Post by yokem55 »

cududa wrote: post #30
stickfigure wrote: post #21

Earlier quoted context omitted.

If it's so clear to you, maybe you can answer the question?

I’m not an expert or a lawyer but it seems pretty clear. Going by what the SEC has literally told them: Coinbase taking money from depositors, loaning it out, and giving the depositors interest from the loan, is a security product. Page 1 of the Securities Exchange Act of 1934: https://www.govinfo.gov/content/pkg/COMPS-1885/pdf/COMPS-188... It… really doesn’t seem complicated. The SEC told Coinbase they’d be in viola…

When it comes to the staking side of things - Coinbase's position is that they are simply providing a technical service to their customers to do something that their customer's could do themselves. There isn't a borrower that Coinbase is lending the coins to. It is a protocol that locks them up.

Where this gets messy is with things like Eth when they stake amounts less then 32 Eth from a customer, which inherently means they are providing a pooling operation on top of what the protocol expects. Does that pooling make their activites a security?

But the SEC is not providing any kind of clear lines on any of this to identify where there is a line when "IT services" becomes a security.

Re: Coinbase issued Wells notice by SEC

#46

Post by dragonwriter »

idiotsecant wrote: post #29
dragonwriter wrote: post #27

Earlier quoted context omitted.

> Please describe what mechanism, ETH for example, includes that differentiates it from BTC in some way. On what legal basis do you insist that the differentiation must be by inclusion of a “mechanism”?

Ok...do you have some other proposal by which we can judge systems that use mechanisms to do things?

> Ok…do you have some other proposal by which we can judge systems that use mechanisms to do things?

The way we tend to judge whether things fit into legal categories is by the criteria specified in the controlling law (including relevant statutes, administrative regulations, and case law.)

While cryptocurrency enthusiasts are fond of an approach where the mechanism is all that is relevant, mechanisms may be all, part, or none of what is relevant in law. While only tangentially relevant here, an amusing example in securities law is what something is commonly called can be relevant, even decisive, because the definition of a ‘security’ in statute includes (but is not limited to) ‘any interest or instrument commonly known as a “security”’. 15 U.S. Code § 77b(a)(1)

Re: Coinbase issued Wells notice by SEC

#47

Post by pbreit »

cududa wrote: post #14
tzm wrote: post #5

> "We asked the SEC specifically to identify which assets on our platforms they believe may be securities, and they declined to do so." Sums up the case quite well.

No it doesn’t. They’ve literally told them in the past when they were creating financial products that they were securities. Their entire schtik is to say “We called it something different so it’s not a security.” SEC: “Yes it is.” Coinbase: “The SEC won’t engage with us and tell us what aspects of our business is a security.” SEC: “1) that’s not how securities law works, you’re the one that has to hire lawyers 2) we…

So which assets on coinbase do you believe are securities?

Re: Coinbase issued Wells notice by SEC

#48

Post by [deleted] »

cududa wrote: post #30
stickfigure wrote: post #21

Earlier quoted context omitted.

If it's so clear to you, maybe you can answer the question?

I’m not an expert or a lawyer but it seems pretty clear. Going by what the SEC has literally told them: Coinbase taking money from depositors, loaning it out, and giving the depositors interest from the loan, is a security product. Page 1 of the Securities Exchange Act of 1934: https://www.govinfo.gov/content/pkg/COMPS-1885/pdf/COMPS-188... It… really doesn’t seem complicated. The SEC told Coinbase they’d be in viola…

[deleted]

Re: Coinbase issued Wells notice by SEC

#49

Post by RC_ITR »

yokem55 wrote: post #45
cududa wrote: post #30

Earlier quoted context omitted.

I’m not an expert or a lawyer but it seems pretty clear. Going by what the SEC has literally told them: Coinbase taking money from depositors, loaning it out, and giving the depositors interest from the loan, is a security product. Page 1 of the Securities Exchange Act of 1934: https://www.govinfo.gov/content/pkg/COMPS-1885/pdf/COMPS-188... It… really doesn’t seem complicated. The SEC told Coinbase they’d be in viola…

When it comes to the staking side of things - Coinbase's position is that they are simply providing a technical service to their customers to do something that their customer's could do themselves. There isn't a borrower that Coinbase is lending the coins to. It is a protocol that locks them up. Where this gets messy is with things like Eth when they stake amounts less then 32 Eth from a customer, which inherently me…

>- Coinbase's position is that they are simply providing a technical service to their customers to do something that their customer's could do themselves.

Sure, I could write multiple mortgages and roll them up into an MBS myself too, isn't the bank just doing the technical work there too?

Re: Coinbase issued Wells notice by SEC

#50

Post by sebzim4500 »

overthrow wrote: post #36
latchkey wrote: post #31

Earlier quoted context omitted.

IMHO, the timing is far too convenient for someone who has had a terribly performing fund. You'd think she would have sold tomorrow instead.

A broken calendar is right once a year.

Unless you also look at the day of the week, in which case it is right every 7 years.
Post reply on HN