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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
by yokem55 4y ago
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 means they are providing a pooling operation on top of what the protocol expects. Does that pooling make their activites a security?
But the SEC is not providing any kind of clear lines on any of this to identify where there is a line when "IT services" becomes a security.
- 8note 4y agoIsn't it quite simple? Apply the Howey test. Very obviously yes. Both pooling and non-pooling are securities
- RC_ITR 4y ago>- 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?
- d110af5ccf 4y agoWhen it comes to staking, who is being lent to? It doesn't seem like a loan to me at all.
- RC_ITR 4y agoValidators. It's being lent to validators. Do you not know the mechanics of staking? If so: https://solana.com/staking https://solana.com/staking
- humanizersequel 4y ago> 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 The bank is quite literally writing multiple loans and selling a security. I fail to see how providing tools for customers to more easily put up their tokens as collateral for the privilege of writing new chunks of data to a blockchain (and reaping the rewards) is at all equivalent to either activity. I admit that the name "Coinbase Earn" and the marketing material could be construed as misleading (but not that misleading).
- RC_ITR 4y agoWait, temporarily giving someone currency that they eventually give back to you is more or less the definition of a loan, no? And Coinbase is doing the work of abstracting that process into a single instrument (Coinbase earn)? Because that’s securitization.
- humanizersequel 4y ago>temporarily giving someone currency that they eventually give back to you is more or less the definition of a loan... And Coinbase is doing the work of abstracting that process into a single instrument (Coinbase earn)? Because that’s securitization. This is not a specific enough definition. I don't think my checking account is a security, despite the fact that I am loaning my bank money which they eventually give back.
- RC_ITR 4y agoWait, don't play fast and loose here. I defined a loan. because you said: >The bank is quite literally writing multiple loans. I was establishing that Coinbase is also making loans. Then, I said >Coinbase is doing the work of abstracting that process into a single instrument (Coinbase earn)? Because that’s securitization. Because that (pooling multiple loans and sharing the proceeds of those multiple loans with lenders) is securitization.
- 4y ago