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If I had to guess, the SEC is actually saying "you are offering many products, and _way too many of them_ are securities. We will not list them all because it w
by rtpg 4y ago
If I had to guess, the SEC is actually saying "you are offering many products, and _way too many of them_ are securities. We will not list them all because it would be way too much work. We will not list one because we don't want you to overfit on the example. We want you to actually do the analysis across all of your products".
I have to imagine the SEC and Coinbase are in fact talking directly on a more off the record basis here as well... but who knows.
I think the equivalent here is the IRS saying "look, these numbers look wrong to us. Please check them. We are not in the job of doing taxes for you".
- Taek 4y agoThe entire crypto industry has spent billions of dollars on compliance and the effective opinion of all the lawyers is "there's not enough guidance, anything you do that touches a token carries potential liability, and the SEC is refusing to lay down any sort of rules for what a compliant token looks like" Coinbase has plenty of lawyers and legal budget and would happily do an analysis if sufficient guidance actually existed to complete an analysis.
- 8note 4y agoIsnt it obvious? A compliant token is a security. Trying to play games to make them not securities is where crypto's lawyers are going wrong Crypto is looking for a hack that can make their stuff not securities, and the SEC isn't playing along
- panphora 4y agoExactly.
- junofan 4y agoWhat’s a compliant token? How can I register my token with the SEC?
- loeg 4y agohttps://www.investor.gov/introduction-investing/investing-basics/glossary/registration-under-securities-act-1933 https://www.investor.gov/introduction-investing/investing-ba...
- Taek 4y agoIf you take the SECs view on how securities work, everything from a house to a baseball card to a GPU is a security.
- aardvarkr 4y agoIn 1946, SEC v W.J. Howey Co. (328 U.S. 293) ruled the meaning of “security” as used in the provision of § 2(1) of the Securities Act of 1933 defining “security” as : “For purposes of the Securities Act, an investment contract (undefined by the Act) means a contract, transaction, or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party, it being immaterial whether the shares in the enterprise are evidenced by formal certificates or by nominal interests in the physical assets employed in the enterprise.” There are three components: 1. expectation of profits 2. a common enterprise 3. depends “solely” for its success on the efforts of others.
- HWR_14 4y agoI understand (1) and (3) seems somewhat self-explanatory (although the quotes around "solely" give me pause.) But I don't understand "common enterprise" at all.
- unicornmama 4y agoThe term "common enterprise" refers to the pooling of resources from multiple investors, who are united in their pursuit of a common goal or objective. So hyperbole above is false, real estate, in the simple sense, isn't regulated by the SEC.
- HWR_14 4y agoReal estate isn't. Investing in an LLC with some friends that buys an LLC is then a common enterprise. And if you are a hands off investor, then it's the shares are a security.
- rtpg 4y agoYou seem to know more about this, so I'm wondering: is "most tokens are really securities, but the way tokens work means you couldn't really make them compliant securities in the same way that my paper plane is a plane but I won't get FAA approval to sell it to American Airlines" a way of envisioning the world on this? Or are 'compliant securities' theoretically a possible thing in some vision of the world where compliance means something?
- junofan 4y agoSecurities regulators worldwide have devised processes for compliant crypto securities, so it is possible. It’s more like the guy running the FAA is a former Boeing exec and refuses to grant airspace authorization to rocketry startups.
- hef19898 4y agoThe FAA isn't in charge of airspace access anyway, is it?
- mrguyorama 4y agoWho do you file your flight plan with?
- hef19898 4y agoShows that aerospace, read the development, certification and production of aircraft, is different from aviation, as in the use of said aircraft. Guess which side I am on.
- mrguyorama 4y agoBut "Airspace access" IS controlled by the FAA? If I want to fly a plane into the sky over the US, I have to ask the FAA for permission. I'm trying to understand what you were alluding to in your previous comment.
- awb 4y ago> If I had to guess, the SEC is actually saying "you are offering many products, and _way too many of them_ are securities. We will not list them all because it would be way too much work. We will not list one because we don't want you to overfit on the example. We want you to actually do the analysis across all of your products". But to issue a Wells notice shouldn’t they have already performed this research? Seems like both parties benefit by saying something like: Products with X, Y or Z characteristics as defined by Laws 1, 2 & 3 are securities, including but not limited to products A, B and C, etc.
- tiedieconderoga 4y ago>I think the equivalent here is the IRS saying "look, these numbers look wrong to us. Please check them. We are not in the job of doing taxes for you". The IRS doesn't usually do that, though. If they suspect something might be fishy, they'll audit you and make you justify your reported return. If they can see that you're a terrible accountant, there's a good chance they'll just send a correction, usually in the form of an estimated bill, but sometimes in the form of an unexpected check. The dirty secret of American taxes is that unless you move a lot of money under the table, the IRS does already know how much you owe. But there are jobs that need protecting in the tax prep sector.
- deleted 4y ago[deleted]