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This is a press release - nothing more. A CYA from the SEC in case something blows up tomorrow. It's not a cease and desist letter to the exchange operators - s

This is a press release - nothing more. A CYA from the SEC in case something blows up tomorrow. It's not a cease and desist letter to the exchange operators - so on balance, this is good news for them. I think the SEC is not confident that the courts will support their position, and so the next best option is.... a press release.

ivraatiems 9y ago
Did you notice the list of enforcement actions at the bottom of the page? The SEC can't just blanket C&D every single crypto exchange; they have to go one at a time. This is a clear message that they're going to do just that, especially when coupled with all the enforcement they're doing.
- not_that_noob 9y ago
  Those are for Bitfunder and the like, where the issues are more about fraud than about the correct classification of coin offerings. There is no enforcement action against Coinbase for example. If the SEC was that confident in its position, then they would have gone after Coinbase, and we would have heard about it on CNBC first. This is a tacit admission from the SEC that they don't have much of a legal basis to stand on for such enforcement.
  - vkou 9y ago
    Coinbase doesn't trade in ICOs. Bitcoin is probably not a security. Something like tether or filecoin probably is.
smacktoward 9y ago
That's not how any of this works. What you're looking at is not a press release, it is what's called "administrative guidance" (https://en.wikipedia.org/wiki/Administrative_guidance https://en.wikipedia.org/wiki/Administrative_guidance) -- a regulatory agency laying out its interpretation of how existing laws and regulations apply to a given situation. Regulators do this to remove ambiguity, so regulated parties know what the agency expects them to do in order to stay on the right side of the law. In this specific case, the SEC is advising crypto-based operations calling themselves "exchanges" that this is a word that has a special legal meaning, and that therefore if they want to continue calling themselves "exchanges" they either need to comply with the same licensing requirements that apply to other "national securities exchanges," or demonstrate a good reason why those requirements don't apply to them. (And not just to crypto in general, to their specific operation in particular.) The reason this matters is because, now that the SEC has officially gone on the record with this statement, crypto exchanges can't say they weren't warned if they continue using the term and the SEC comes after them later. This statement is their warning that they need to either get licensed or stop calling themselves exchanges. If they choose to do nothing and just keep on calling themselves exchanges, and the SEC takes them to court over it, they won't be able to argue that they didn't know what they were required to do to use that term. The SEC has just told them what they need to do. The ambiguity has been removed.
- shkkmo 9y ago
  > In this specific case, the SEC is advising crypto-based operations calling themselves "exchanges" that this is a word that has a special legal meaning, Really? I didn't get that reading at all. The discussion of the use of the word "exchange" is under the guidance for investors, not the guidance for trading platforms. The guidance for trading platforms specifically talks about which assets are being traded and how determining what type of registration is required (national security exchange, ATS, broker-dealer, transfer agent, etc...) "A number of these platforms provide a mechanism for trading assets that meet the definition of a "security" under the federal securities laws. If a platform offers trading of digital assets that are securities and operates as an "exchange," as defined by the federal securities laws, then the platform must register with the SEC as a national securities exchange or be exempt from registration. "
  - smacktoward 9y ago
    It's possible I'm misreading the specific requirements -- I am not a securities lawyer, my HN comments are not legal advice, etc. If you are operating one of these platforms, the issuance of this document is a good reason to have a chat with a qualified attorney to figure out exactly how it affects your business. But that just underlines my main point, which was that this document is a lot more than just a press release.
    - shkkmo 9y ago
      I definitely agree with your main point, (and I am also not a lawyer)
      - paulie_a 9y ago
        Off topic but can we drop the "I am not a lawyer" thing in forums? It is not necessary. Do you really think your random internet comment will be considered legal advice?

ivraatiems 9y ago

Did you notice the list of enforcement actions at the bottom of the page? The SEC can't just blanket C&D every single crypto exchange; they have to go one at a time. This is a clear message that they're going to do just that, especially when coupled with all the enforcement they're doing.

not_that_noob 9y ago
Those are for Bitfunder and the like, where the issues are more about fraud than about the correct classification of coin offerings. There is no enforcement action against Coinbase for example. If the SEC was that confident in its position, then they would have gone after Coinbase, and we would have heard about it on CNBC first. This is a tacit admission from the SEC that they don't have much of a legal basis to stand on for such enforcement.
- vkou 9y ago
  Coinbase doesn't trade in ICOs. Bitcoin is probably not a security. Something like tether or filecoin probably is.

smacktoward 9y ago

That's not how any of this works. What you're looking at is not a press release, it is what's called "administrative guidance" (https://en.wikipedia.org/wiki/Administrative_guidance https://en.wikipedia.org/wiki/Administrative_guidance) -- a regulatory agency laying out its interpretation of how existing laws and regulations apply to a given situation. Regulators do this to remove ambiguity, so regulated parties know what the agency expects them to do in order to stay on the right side of the law. In this specific case, the SEC is advising crypto-based operations calling themselves "exchanges" that this is a word that has a special legal meaning, and that therefore if they want to continue calling themselves "exchanges" they either need to comply with the same licensing requirements that apply to other "national securities exchanges," or demonstrate a good reason why those requirements don't apply to them. (And not just to crypto in general, to their specific operation in particular.) The reason this matters is because, now that the SEC has officially gone on the record with this statement, crypto exchanges can't say they weren't warned if they continue using the term and the SEC comes after them later. This statement is their warning that they need to either get licensed or stop calling themselves exchanges. If they choose to do nothing and just keep on calling themselves exchanges, and the SEC takes them to court over it, they won't be able to argue that they didn't know what they were required to do to use that term. The SEC has just told them what they need to do. The ambiguity has been removed.

shkkmo 9y ago
> In this specific case, the SEC is advising crypto-based operations calling themselves "exchanges" that this is a word that has a special legal meaning, Really? I didn't get that reading at all. The discussion of the use of the word "exchange" is under the guidance for investors, not the guidance for trading platforms. The guidance for trading platforms specifically talks about which assets are being traded and how determining what type of registration is required (national security exchange, ATS, broker-dealer, transfer agent, etc...) "A number of these platforms provide a mechanism for trading assets that meet the definition of a "security" under the federal securities laws. If a platform offers trading of digital assets that are securities and operates as an "exchange," as defined by the federal securities laws, then the platform must register with the SEC as a national securities exchange or be exempt from registration. "
- smacktoward 9y ago
  It's possible I'm misreading the specific requirements -- I am not a securities lawyer, my HN comments are not legal advice, etc. If you are operating one of these platforms, the issuance of this document is a good reason to have a chat with a qualified attorney to figure out exactly how it affects your business. But that just underlines my main point, which was that this document is a lot more than just a press release.
  - shkkmo 9y ago
    I definitely agree with your main point, (and I am also not a lawyer)
    - paulie_a 9y ago
      Off topic but can we drop the "I am not a lawyer" thing in forums? It is not necessary. Do you really think your random internet comment will be considered legal advice?