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Coinbase CEO: we're preparing to go to court with the U.S. SEC

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Re: Coinbase CEO: we're preparing to go to court with the U.S. SEC

#61

Post by fallingknife »

arcticbull wrote: post #8
0zemp1c wrote: post #7

I actually agree with Armstrong here - the SEC has had plenty of time to assess the market for crypto products and offer clear rules...it almost feels like the indecisiveness is an intentional policy used to cow the industry.

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.

Securities are legal and Coinbase is a licensed broker dealer which means they are allowed to sell securities if they are registered with the SEC. The SEC is saying that crypto is a security while simultaneously not allowing them to be registered as a security. So they are treating it like a security from an enforcement perspective, but not from a regulatory perspective. They can't have it both ways. It must either be a security, in which case the SEC can regulate it, and it can be legally sold by brokers, or it is not a security, in which case the SEC can fuck off because it isn't in their jurisdiction. They are trying to have it both ways, and that is clearly acting in bad faith.

Re: Coinbase CEO: we're preparing to go to court with the U.S. SEC

#62

Post by 888666 »

tehlike wrote: post #50
treypitt wrote: post #45

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...

Why did sec need anything to say when it was clear the product was a security from the beginning?

If it's so clear, and people disagree, wouldn't it be common sense to just say it? Declining to comment makes no sense here.

Re: Coinbase CEO: we're preparing to go to court with the U.S. SEC

#63

Post by traveler01 »

exabrial wrote: post #56

Can I pay for a Starbucks Double Frap Latte with Apple stock? Probably not, Apple stock is a security, not a currency... I'm sure someone has tried. But can I use Apple Stock as an investment vehicle? Yes. Conversely, can I pay for said surgary drink in DodgeCoin? Well no, you can't, but not for the same reasons. Starbucks doesn't have the facilities to accept DodgeCoin. Can you use it as an investment vehicle? Yes.…

That's what I get. If people are investing into crypto, would that make it securities? For example, if I exchange some EURO for some US Dollar in Europe to avoid the EURO devaluation am I investing? That's basically what you do with cryptocurrencies.

Re: Coinbase CEO: we're preparing to go to court with the U.S. SEC

#64

Post by rasengan »

treypitt wrote: post #45

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...

It makes more sense for this to be adjudicated by the court systems rather than an individual in an agency like the SEC. That is too much power for the SEC after all and we really need those separations in the US -- it's literally the foundation of the US.

Anyway, the fault here is with the US congress (all of the so-called elected representatives) since they haven't drafted legislation to clear said uncertainties now in over 10+ years. Gary Gensler is doing his job, no matter how difficult it is at this time. Congress people yelling at Gensler for example is akin to a boss yelling at his employee for an outcome that was determined by the system the boss created.

When congress isn't aligned with people (whether to draft legislation for or against cryptocurrencies) one doesn't need to go so far to determine what that person's agenda actually is -- if it's not the people's agenda, it's wrong.

Re: Coinbase CEO: we're preparing to go to court with the U.S. SEC

#65

Post by traveler01 »

0zemp1c wrote: post #7

I actually agree with Armstrong here - the SEC has had plenty of time to assess the market for crypto products and offer clear rules...it almost feels like the indecisiveness is an intentional policy used to cow the industry.

Dangerous to side with crypto stuff on Hackernews...

Re: Coinbase CEO: we're preparing to go to court with the U.S. SEC

#67

Post by fallingknife »

chii wrote: post #25
thesausageking wrote: post #22

Earlier quoted context omitted.

It's "regulation-by-enforcement". Instead of defining clear rules, the SEC just waits and brings actions against the activities it doesn't want to happen. Sen Toomey and others have called out Gensler for doing this: https://www.banking.senate.gov/newsroom/minority/toomey-secs...

The problem is that you can't know what isn't good until you see evidence of bad coming out - then you rule that it shouldn't be allowed. This is how a lot of safety regulation comes about - from a disaster or a problem that previously nobody knew or understood. The SEC is likely operating under this sort of outlook.

The SEC has no power to decide that crypto shouldn't be allowed. That would require legislation from congress. Legislation that is not forthcoming. The SEC is currently doing an end run around this fact by saying that it is a security (which is explicitly legal) but that it can't be registered (which effectively means nobody can sell it). It is a naked power grab by an unelected bureaucracy.

Re: Coinbase CEO: we're preparing to go to court with the U.S. SEC

#68

Post by johndhi »

This story is INCREDIBLY interesting on a lot of levels.

Here's one level: Paul Grewal, the 'head lawyer' referred to in the underlying articles, is a former United States federal (magistrate) judge. He was the judge who oversaw part of the Apple v. Samsung patent cases, some of the biggest technology cases litigated in history.

In other words, he's basically as respected in the legal community as you can possibly imagine, and he made the controversial move of exiting the judiciary to go back into private practice. And now he's clashing with an administrative agency in a public, confident, perhaps brazen way.

Coinbase essentially hired the absolute best person to challenge the government on this point. It's sort of like wanting to hire a good basketball coach and hiring Michael Jordan, or something.

It's very interesting to watch from the sidelines, because not only is the legality of crypto at stake, but this guy's amazing career feels at stake, too, like he's betting his name on this.

Re: Coinbase CEO: we're preparing to go to court with the U.S. SEC

#69

Post by mason55 »

rekttrader wrote: post #32
arcticbull wrote: post #8

Earlier quoted context omitted.

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…

> Heck, you can buy VIX for CDS... let’s think about that for a second... that’s a mortgage, packed into a portfolio

Are you thinking MBS maybe? CDS is credit default swap, has nothing to do with mortgages

Re: Coinbase CEO: we're preparing to go to court with the U.S. SEC

#70

Post by overthrow »

Workaccount2 wrote: post #12

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"?

Gensler has publicly said “everything other than Bitcoin” is a security.

https://cryptoslate.com/sec-chair-gensler-confirms-everythin...

I'm not saying Coinbase has to agree with that decision, but it's a little silly they're posturing to the public like they're unaware. It's not exactly a secret.

If they disagree then going to court is probably their only move.

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