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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
Plenty of people are buying those tokens so that they can participate in their respective ecosystems as developers.
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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.
the real answer is that the CFTC should just be abolished and folded into the SEC. the only reason crypto people want to be regulated byt he CFTC is that they are way less competent at catching fraud than the SEC.
Coinbase are muppets.
https://podcasts.google.com/feed/aHR0cHM6Ly91bmNoYWluZWQubGl...
How much of this is actually opaque regulation, and how much is "we don't like the rules the SEC has, so we are going to do our best to not understand them"?
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Coinbase has asked them many times though. The article even mentions this. They met 30 times to seek clarity on the rules.
Armstrong says they did, and says they met to discuss things like this. We will see what happened in reality during the course of the court case. I don't think it is wise to trust the words of any crypto actors.
If there is no guidance you can build an organization that could be destroyed arbitrarily in one day. SEC had enough time...
I don't want to exaggerate but it seems like the financial establishment is really worried, and not precisely about money laundering and corruption. Those use everything as a tool, it does not matter if it is crypto or your "5 star" bank.
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Coinbase has asked them many times though. The article even mentions this. They met 30 times to seek clarity on the rules.
The SEC doesn’t give out legal advice.
The goal should be legal compliance and productive companies.
Not clarifying what you will or will not prosecute simply creates unnecessary fear and distrust of the system. Think of all the crime that would not be committed if only the SEC said it was criminal before hand. Maybe thousands of people wouldn’t have lost money to crypto scams if there were greater clarity.
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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.
The sec is not a supervisory agency, they’re a regulator meaning they step in after the fact for investor protections. The sec had plenty of open sessions where folks in the industry would ask for guidance and yet it was not gotten because they don’t tell the capital or crypto markets what should be in the markets they’re here to pull down the things that shouldn’t be. The sec allows “junk bonds” if you disclose the…
The difference is that most volume in crypto is fake, and the price is controlled by a small cartel of exchange owners and an $82B Bahamian counterfeiting operation whose 'bank' is run by the creator of Inspector Gadget. That's the risk that's not disclosed.
Coinbase and Armstrong tried for months to get the SEC to tell them if their Earn/Staking product constituted a security, and they declined to answer. Serving a Welles Notice makes it clear Gensler is a bad faith regulator https://podcasts.google.com/feed/aHR0cHM6Ly91bmNoYWluZWQubGl...