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Coinbase issued Wells notice by SEC

reuters.com

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Re: Coinbase issued Wells notice by SEC

#61

Post by codehalo »

bardworx wrote: post #37
onlyrealcuzzo wrote: post #22

Earlier quoted context omitted.

Why is Bitcoin not a security but if I fork Bitcoin it is a security?

Predominantly, from my understanding, it’s because: 1. Bitcoin was classified as “currency” by Clayton. 2. It’s the closest to being decentralized so no “organization will benefit from the work of others”. 3. Growth of Bitcoin wasn’t initially speculative but as a use of currency, which is different from whatever token you fork as its goal would be for speculative trading, failing the Howey test.

Nothing you said here makes a fork of the bitcoin code with a completely different genesis block (or ANY fork at ANY block of the bitcoin chain) a security.

Re: Coinbase issued Wells notice by SEC

#62

Post by arcticbull »

onlyrealcuzzo wrote: post #22
overthrow wrote: post #19

Earlier quoted context omitted.

Yep, Gensler has outright said that “everything else other than bitcoin is a security.”[1] There's no chance Coinbase isn't aware of this. I don't know what they hope to accomplish by pretending otherwise. [1]: https://cryptoslate.com/sec-chair-gensler-confirms-everythin...

Why is Bitcoin not a security but if I fork Bitcoin it is a security?

I was under the impression it was due to the initial distribution mechanism. It was all open mine, no presale. Basically everything else has had a presale or premine. I could be wrong, because if that were the justification forks should qualify too by virtue of inheriting the chain history.

Re: Coinbase issued Wells notice by SEC

#63

Post by pazimzadeh »

humanizersequel wrote: post #41
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…

>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.

They enabled that pretty recently for me. A few weeks ago?

Re: Coinbase issued Wells notice by SEC

#64

Post by iramiller »

Alex3917 wrote: post #39
yokem55 wrote: post #20

Earlier quoted context omitted.

Well, it is something of a he said/she said between Coinbase and the SEC. But the Judge in the Voyager bankruptcy case had similar concerns about the clarity provided by the SEC - https://twitter.com/BillHughesDC/status/1636069735006699523

> Well, it is something of a he said/she said between Coinbase and the SEC. Not really. The law has been exactly the same since the 1940s. Apparently though Coinbase has decided to go all in on SBF's strategy of pretending to be too dumb to understand the law. Coinbase arguing that they should be allowed to sell illegal unregistered securities because the SEC said they could sell securities is like CVS arguing that s…

Well the SEC certainly has one point of view.

Unfortunately the CFTC has another view and they both can’t be right so which part of the federal governance applies here?

https://www.cftc.gov/digitalassets/index.htm

This ambiguity is why clarity is needed. In the famous words of Matt Levine everything is securities fraud.

It seems obvious that some legal clarity is actually required here.

Re: Coinbase issued Wells notice by SEC

#65

Post by d110af5ccf »

RC_ITR wrote: post #49
yokem55 wrote: post #45

Earlier quoted context omitted.

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?

When it comes to staking, who is being lent to? It doesn't seem like a loan to me at all.

Re: Coinbase issued Wells notice by SEC

#66

Post by NotYourLawyer »

latchkey wrote: post #25

In case you're wondering if the system is rigged, she obviously knew this was coming... https://www.coindesk.com/business/2023/02/23/cathie-woods-ar... and then yesterday... so convenient... https://www.businessinsider.in/stock-market/news/cathie-wood... Down 8.16% today... https://finance.yahoo.com/quote/COIN/

Why would you think she knew this specifically was coming?

Re: Coinbase issued Wells notice by SEC

#67

Post by TylerE »

nonethewiser wrote: post #54
cududa wrote: post #14

Earlier quoted context omitted.

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…

If the SEC won’t identify the alleged security then I think it’s different than what you’d characterize. The SEC should have a more collaborative spirit and share so that Coinbase can follow regulations or make their case. If the SEC is actually withholding this information they are acting in bad faith and operating more like a mob shaking someone down.

Or coin base could actually hire and listen to them like a business trying to operate legitimately and honestly.

Instead it’s the usual crypto playbook of “move fast and break things” and then play dumb.

Re: Coinbase issued Wells notice by SEC

#68

Post by adastra22 »

codehalo wrote: post #58
adastra22 wrote: post #32

Earlier quoted context omitted.

> Please describe what mechanism, ETH for example, includes that differentiates it from BTC in some way. The presale.

There is no "presale" in the Ethereum code.

Why would that be relevant? It happened, that’s all that matters.

Edit: the context of this is the question of whether Ethereum is a security. The SEC has already ruled that it is, and the ruling came down to the fact that it had a presale (via the Howey test).

Re: Coinbase issued Wells notice by SEC

#69

Post by d110af5ccf »

sonotathrowaway wrote: post #42
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…

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.

Counterpoint: the anti-crypto crowd frequently condescends about these topics yet fails to provide rigorous explanations of how various laws apply when pressed.

Re: Coinbase issued Wells notice by SEC

#70

Post by giancarlostoro »

nonethewiser wrote: post #54
cududa wrote: post #14

Earlier quoted context omitted.

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…

If the SEC won’t identify the alleged security then I think it’s different than what you’d characterize. The SEC should have a more collaborative spirit and share so that Coinbase can follow regulations or make their case. If the SEC is actually withholding this information they are acting in bad faith and operating more like a mob shaking someone down.

They probably follow regulations better than most organizations far as I can tell. Other exchanges dont even bother to setup IRS friendly downloads. I'm inclined to believe that CoinBase wants to be compliant but SEC is sending over incompetent people to communicate. This is where the Bobs firing the guy who talks to the engineer between the customer and the engineers is a mistake. You need people persons who can just tell you exactly what you need to hear.
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