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No, it feels like my reaction is akin to basic government accountability and asking why enforcement is so inconsistent. Coinbase isn't complaining that the law

by SilasX 5y ago

No, it feels like my reaction is akin to basic government accountability and asking why enforcement is so inconsistent. Coinbase isn't complaining that the law exists -- as in the Twitter thread, they're happy to comply with the law, so long as they know what it is! Your analogy isn't very good. Offering a long-term financial product isn't like a one-off instance of speeding where it only last a few minutes. It's more like group A getting ticketed every day for speeding while going with the flow of traffic, and group B never gets ticketed for doing the exact same thing, and, oh, group B makes more donations to the police. Your reaction is akin to someone who sees that going on, and says it's okay because police don't catch every speeder. "As long there aren't accidents: mission accomplished." Believe me, I get the concept of not catching everyone. Letting a financial product persist for one company but not another isn't that! And: >The SEC didn't say that everyone else could do it. Yeah ... they did. By not prosecuting the others who have already started doing it, and been doing longer, or clarifying what's different, or at least saying "oh don't worry, they're going down too". If I'm wrong here, it's for reasons other than not understanding the concept of not catching every violation.

arcticbull 5y ago
> No, it feels like my reaction is akin to basic government accountability and asking why enforcement is so inconsistent. Coinbase isn't complaining that the law exists -- as in the Twitter thread, they're happy to comply with the law, so long as they know what it is! I'm sorry - they know what it is. Any lawyer will tell you exactly what it is. It's the Howey test, it's been the law of the land for 70 years and the SEC issued guidance on how it applies to digital assets. [1] Literally the first page of the Securities Act of 1933 explains that lending products are securities. Brian is feigning ignorance on twitter while acting indignant that someone told him no. His lawyers told him no. The SEC told him no. He said I'm gonna do it anyways. They said see you in court. He follows up with a late-night twitter rant, roughly "how could the SEC do this? how could a lending product possibly be a security?!" [edit] The man literally owns an SEC registered broker-dealer lol. [edit] Even Preston Byrne from Anderson Kill tweeted today that it was obviously a security. That's the most libertarian cypto-sympathizer attorney on the face of the earth. > Your reaction is akin to someone who sees that going on, and says it's okay because police don't catch every speeder. "As long there aren't accidents: mission accomplished." Regulators don't act day 1, legal proceedings take time. You're saying "because they took the usual amount of time everyone should be allowed to do whatever they want - or they should sue them all, all at the same time." Nope. That's not how this game works. They can't stop everyone at the same time, and they can't jump them on day 1. They're not omnipotent, and they certainly don't have unlimited resources. What Brian wants isn't to work with regulators, its for regulators to let him do whatever he wants on his terms and on his schedule. That's not the same thing. [1] https://www.sec.gov/files/dlt-framework.pdf https://www.sec.gov/files/dlt-framework.pdf
- SilasX 5y ago
  >It's the Howey test, it's been the law of the land for 70 years and the SEC issued guidance on how it applies to digital assets. Did you miss where I said the issue is that they're being treated differently? I spent at least two paragraphs on the concept. Even if it's "obviously" a security by the Howey test, that doesn't explain why others get a free pass, or why they can't confirm that's their reasoning, or why others aren't being treated the same, or a why they can't confirm they intend to treat others the same. Repeating the same argument doesn't advance the conversation! See also this comment: https://news.ycombinator.com/item?id=28459949 https://news.ycombinator.com/item?id=28459949 >Regulators don't act day 1, legal proceedings take time. Again, I understand this concept, it's just a red herring. they're on day 180 with Gemini and day -30 with Coinbase. Saying it takes time is just an easy soundbite for you to parrot, not an actual explanation for the discrepancy, just like "we can't catch all speeders" isn't an explanation for the patterns in which you let speeders go. >[edit] Even Preston Byrne from Anderson Kill tweeted today that it was obviously a security lol. That's the most libertarian cypto-sympathizer attorney on the face of the earth. Which of my arguments is that relevant to?
  - arcticbull 5y ago
    We may be talking past eachother so let's re-state our points of alignment. 1. Coinbase Lend is clearly a security. 2. ...because it fails the Howey test. 3. ...for reasons that are clear and self-evident. 4. ...and Coinbase, as a registered broker-dealer would know or be expected to know that in advance. [note: for 1-4 see Anderson Kill] 5. There's a few people offering similar products. 6. They're all doing crime. Here's where we seem to disagree. 1. Coinbase should be told by the SEC exactly why it fails the Howey test. No. It clearly fails, and the SEC isn't required to provide their opinion of why outside the court of law. It is up to the SEC and Coinbase to present their arguments to a judge. The resolution will form precedent. 2. Coinbase is being treated differently in some way, and that's bad. The first person charged for anything is obviously being treated differently, until the others are charged. That's not bad, that's bad luck. See the speeding cars anaology. 3. The first person to commit a crime has some obligation to be charged first. No, they don't. Usually police and regulators go after who they have the strongest case against in no particular order. The resolution gives them a weapon they can use against those they have a weaker case against. 4. All criminals committing the same crime should be charged together or at the same time. No, there's no expectation of that, or precedent of that. In fact its usually easier when the cases are separate. 5. This is taking a long time because some other offerings have been on the market for 6 months. The SEC just went after Bitconnect. That was in 2016. The wheels of justice turn slow. You'll have a point if after Coinbase is convicted the SEC leaves everyone else alone. Until then its safe to assume they're being made an example of, and with that example the SEC is going to come by and knock some heads together.

by SilasX 5y ago

arcticbull 5y ago

> No, it feels like my reaction is akin to basic government accountability and asking why enforcement is so inconsistent. Coinbase isn't complaining that the law exists -- as in the Twitter thread, they're happy to comply with the law, so long as they know what it is! I'm sorry - they know what it is. Any lawyer will tell you exactly what it is. It's the Howey test, it's been the law of the land for 70 years and the SEC issued guidance on how it applies to digital assets. [1] Literally the first page of the Securities Act of 1933 explains that lending products are securities. Brian is feigning ignorance on twitter while acting indignant that someone told him no. His lawyers told him no. The SEC told him no. He said I'm gonna do it anyways. They said see you in court. He follows up with a late-night twitter rant, roughly "how could the SEC do this? how could a lending product possibly be a security?!" [edit] The man literally owns an SEC registered broker-dealer lol. [edit] Even Preston Byrne from Anderson Kill tweeted today that it was obviously a security. That's the most libertarian cypto-sympathizer attorney on the face of the earth. > Your reaction is akin to someone who sees that going on, and says it's okay because police don't catch every speeder. "As long there aren't accidents: mission accomplished." Regulators don't act day 1, legal proceedings take time. You're saying "because they took the usual amount of time everyone should be allowed to do whatever they want - or they should sue them all, all at the same time." Nope. That's not how this game works. They can't stop everyone at the same time, and they can't jump them on day 1. They're not omnipotent, and they certainly don't have unlimited resources. What Brian wants isn't to work with regulators, its for regulators to let him do whatever he wants on his terms and on his schedule. That's not the same thing. [1] https://www.sec.gov/files/dlt-framework.pdf https://www.sec.gov/files/dlt-framework.pdf

SilasX 5y ago
>It's the Howey test, it's been the law of the land for 70 years and the SEC issued guidance on how it applies to digital assets. Did you miss where I said the issue is that they're being treated differently? I spent at least two paragraphs on the concept. Even if it's "obviously" a security by the Howey test, that doesn't explain why others get a free pass, or why they can't confirm that's their reasoning, or why others aren't being treated the same, or a why they can't confirm they intend to treat others the same. Repeating the same argument doesn't advance the conversation! See also this comment: https://news.ycombinator.com/item?id=28459949 https://news.ycombinator.com/item?id=28459949 >Regulators don't act day 1, legal proceedings take time. Again, I understand this concept, it's just a red herring. they're on day 180 with Gemini and day -30 with Coinbase. Saying it takes time is just an easy soundbite for you to parrot, not an actual explanation for the discrepancy, just like "we can't catch all speeders" isn't an explanation for the patterns in which you let speeders go. >[edit] Even Preston Byrne from Anderson Kill tweeted today that it was obviously a security lol. That's the most libertarian cypto-sympathizer attorney on the face of the earth. Which of my arguments is that relevant to?
- arcticbull 5y ago
  We may be talking past eachother so let's re-state our points of alignment. 1. Coinbase Lend is clearly a security. 2. ...because it fails the Howey test. 3. ...for reasons that are clear and self-evident. 4. ...and Coinbase, as a registered broker-dealer would know or be expected to know that in advance. [note: for 1-4 see Anderson Kill] 5. There's a few people offering similar products. 6. They're all doing crime. Here's where we seem to disagree. 1. Coinbase should be told by the SEC exactly why it fails the Howey test. No. It clearly fails, and the SEC isn't required to provide their opinion of why outside the court of law. It is up to the SEC and Coinbase to present their arguments to a judge. The resolution will form precedent. 2. Coinbase is being treated differently in some way, and that's bad. The first person charged for anything is obviously being treated differently, until the others are charged. That's not bad, that's bad luck. See the speeding cars anaology. 3. The first person to commit a crime has some obligation to be charged first. No, they don't. Usually police and regulators go after who they have the strongest case against in no particular order. The resolution gives them a weapon they can use against those they have a weaker case against. 4. All criminals committing the same crime should be charged together or at the same time. No, there's no expectation of that, or precedent of that. In fact its usually easier when the cases are separate. 5. This is taking a long time because some other offerings have been on the market for 6 months. The SEC just went after Bitconnect. That was in 2016. The wheels of justice turn slow. You'll have a point if after Coinbase is convicted the SEC leaves everyone else alone. Until then its safe to assume they're being made an example of, and with that example the SEC is going to come by and knock some heads together.