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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

#81

Post by shrimpx »

overthrow wrote: post #70
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.

Gensler's view is clearly wrong, as there are tons of coins with the same properties as bitcoin, with no premine/ICO.

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

#82

Post by burkaman »

esperent wrote: post #30
burkaman wrote: post #10

Earlier quoted context omitted.

The other part of the definition is that it can be easily bought and sold on an exchange. I think if there were an exchange for physical gold then it would be considered a security.

There's loads of trading platforms that allow you to buy and sell gold. https://tradingplatforms.com/commodity/gold-trading/

But these are all about trading gold-related stocks and ETFs, which are securities, right? It's just the actual metal that isn't.

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

#84

Post by overthrow »

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...

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

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

Is that not a clear enough answer? I'm not saying Coinbase has to agree - but there's no way they didn't know he said this.

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

#85

Post by jcranmer »

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.…

The definition of securities in the US is governed by the Howey test, which is over 75 years old. It's a test which is very well-established in case law, with ample precedent that can be relied on to help fine-tune aspects like how "other" someone has to be in the "derived from the efforts of others" prong of the test. This isn't some vague unknowable thing.

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

#86

Post by bogwog »

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.…

I'm sure Starbucks would trade you a Double Frappe Latte for Apple Stock, if they had the facilities to accept it.

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

#87

Post by burkaman »

prottog wrote: post #19
burkaman wrote: post #10

Earlier quoted context omitted.

The other part of the definition is that it can be easily bought and sold on an exchange. I think if there were an exchange for physical gold then it would be considered a security.

Exchange-traded commodity futures (including those for physical delivery of 100 troy ounces of gold) have existed for a long time and are regulated by the CFTC.

Right, and those are securities, but gold itself is not a security because it's relatively difficult to trade.

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

#88

Post by elliekelly »

fallingknife wrote: post #72
elliekelly wrote: post #34

Earlier quoted context omitted.

The SEC doesn’t give out legal advice.

Nonsense. The SEC, like all regulatory agencies, provides legal guidance and interpretations in order that people may follow the law. Here is a link to them doing just that: https://www.sec.gov/rules/interp.shtml

That’s not even remotely the same as showing up at their office and asking them to apply the law to your specific scenario. That’s what lawyers do. And if your lawyers are unsure they can ask the SEC via the No Action letter process. For CoinBase to say “well we had a bunch of meetings and we asked them to explain the law to us” is disingenuous because of course they’re not going to get an answer that way. That’s not how the SEC works and that isn’t their job. Do you know why they didn’t go the No Action route? Because they knew the answer they’d get and they didn’t like it.

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

#89

Post by vkou »

chomp wrote: post #33

There's a few people picking sides here in the comments. Just reminding everybody that it's possible for two sides to be at issue; the SEC can be trying its best to apply its mandate in a world where technology has surpassed the law, and in a void of congressional action, and as a result giving very vague guidance so that it can squeeze its mandate into the crypto realm. And Coinbase can be purposely threading the ne…

Why would the SEC need congressional action to regulate securities (which is what some of the crypto tokens traded on exchanges are)?

Why would Coinbase think that it could run a securities brokerage, exchange, and clearing house without registering with the SEC?

Just because you've added '... But on the internet' to your business model does not require additional legislature to determine whether or not you are trading securities.

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

#90

Post by dgellow »

fallingknife wrote: post #61
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.

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 b…

So, you’re saying that Coinbase knowingly offered unregistered security. And acknowledged that’s not legal. The fact the SEC refuses these securities to be registered doesn’t negate the illegal offering of unregistered securities.
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