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We asked the SEC for reasonable crypto rules for Americans
- richwater 4y ago[flagged]
- pjkundert 4y agoWow, just what I want - money controlled by, um, you.
- polygamous_bat 4y agoSEC already has rules, hire lawyers to interpret them and decide what risk is worth taking and what's not. This is just another case of libertarian crocodile tears because government won't guarantee them against any and all sorts of business risks while letting them keep the fat profits. Like, if you are Coinbase, your primary product is a sort of regulatory arbitrage -- there is legal risk associated with it, and so one of your primary expenses would be an army of lawyers to decide where on the risk-reward curve you would want to be. The army of lawyers is too expensive? Buddy, no one is forcing you to be in this business. Just because you made profits in the earlier years with little to no regulation doesn't mean that government is bound to let you keep making that profit forever. Deal with it like a grown businessperson rather than whining.
- p0pcult 4y agoIt sounds like Coinbase did hire lawyers, and it sounds like SEC is getting heavily questioned in court--by the judge!--about hiw the SEC can enforce without disclosing why or what. https://twitter.com/BillHughesDC/status/1636069735006699523 https://twitter.com/BillHughesDC/status/1636069735006699523
- thallium205 4y agoIn the article they said they have spent millions on lawyers only to be met with silence.
- runako 4y agoNo dog in this fight, but making an investment of millions in some aspect of your business is also not a guarantee that you will see any traction, much less success, with that effort.
- polygamous_bat 4y agoThey are an 18B company whose business is providing an exchange for legally dubious tokens. Millions is literally chump change compared to that, because once again, their "product" is primarily legal arbitrage.
- joefigura 4y agoThe SEC literally approved their public listing two years ago. It's disingenuous to describe them as "an exchange for legally dubious tokens"
- polygamous_bat 4y agoIt's disingenuous to claim that once a company is approved for public listing all of their future operations are outside the jurisdiction of the SEC. What kind of world would that be?
- BLKNSLVR 4y agoI would guess that Coinbase, as a long-standing US-based exchange that is now publicly owned and therefore subject to various (stringent? not sure if I should laugh at that or not) business regulations, would be attempting to achieve / maintain legitimacy in the least under-handed way possible given the prevailing winds are already heavily cryptocurrency-skeptical. Clarity is what's being asked for. If the SEC deems some/all cryptocurrencies a security, then allow Coinbase (or whichever other exchanges) to file the paperwork required to exchange securities and we can all be on our way. But, it seems that the SEC doesn't actually have any process for that to happen. The paperwork either doesn't exist or the process has a gap whereby cryptocurrency security exchange requests hit a cliff with no bridge. As per Jesse Powell: “The ‘This is wrong but I won’t tell you how to do it right. Want to find out if X works? Try it and see what happens.’ approach does not help the industry nor consumers. We aren’t anti-regulation but we need a clear path to operate.”[0] "Oh man, all I had to do was fill out a form on a website and tell people that staking rewards come from staking? Wish I'd seen this video before paying a $30m fine and agreeing to permanently shut down the service in the US. How dumb do I look. Gosh."[1] Both sides are likely being somewhat disingenuous, but the SEC, given it's role, should never, ever, fucking be disingenuous. And given it's a government department with its... severely chequered... history, then I wouldn't be betting on it having it's i's dotted and t's crossed. Kraken and Coinbase were established in 2011 and 2012 respectively, so they've been run well enough as businesses to weather three or four cryptocurrency winters that have taken the lives of many others. In an industry with a dearth of trustworthiness[3], these two stand out from that crowd. [0]: https://www.coinreporter.io/2023/02/kraken-co-founder-jesse-powell-comments-on-staking-and-sec-settlement/ https://www.coinreporter.io/2023/02/kraken-co-founder-jesse-... [1]: https://twitter.com/jespow/status/1624177588074848256 https://twitter.com/jespow/status/1624177588074848256 [3]: Because traditional US and global finance is a such beacon of goodness and trust
- ETH_start 4y agoYour comment really reveals what is behind the embrace of this criminal abuse of securities law to punish crypto-based commerce: anti-libertarian dogmatism. You haven't responded to any of the arguments made by crypto advocates in good faith. You've completely ignored the evidence and rationale provided in the complaints, because ultimately the legality of the SEC's actions is irrelevant to you. What's relevant is constraining, punishing and banishing anything associated with libertarianism.
- nirushiv 4y agoI don’t think the “crypto isn’t a security” argument is going very far. The SEC has a very loose definition of a security - vaguely, something you buy with the expectation to make money from it appreciating - that is meant to capture unforeseen cases exactly like crypto. A single quote from someone isn’t changing years and millions of pieces of evidence of people using and promoting crypto almost entirely as a security by this definition.
- p0pcult 4y agoIs my house a security?
- TylerE 4y agoNo, because there’s no agreement, no other party, no expectation of bearing interest…
- p0pcult 4y agoWho is the other party in staked crypto?
- TylerE 4y agoCoin base? The other stakers?
- toolz 4y agoI don't need to consult coinbase or any other stakers to stake crypto. That would be a very broad definition for an agreement, one that's broad enough to maybe include housing, in reference to the GP comment.
- p0pcult 4y agoNo, neither of those groups do things to impact the value of the crypto in a way akin to managing or directing a company.
- Mizoguchi 4y agoIronically Gary Gensler chair of SEC has one of the best lectures on the fundamentals of money and crypto. Free on YouTube under the MIT's OpenCourseWare channel.
- coffeebeqn 4y agoYou can understand crypto and not be a true believer
- cmh89 4y agoMost people who understand crypto aren't true believers. The evangelists are generally people with the least amount of information and the most hype.
- xk_id 4y agoThis kind of mentality in 2023 verges towards conspiracy theory. It can’t even be proven to be baseless, because it relies on the semantic ambiguity of the phrase “true believer”. It’s really bizarre to see this form of irrational skepticism afflicting a tech person (presumably). Really says a lot about the extent of polarity amplification in society. Almost nobody is spared
- cmh89 4y agoWhat's irrational about my skepticism exactly?
- temp2022account 4y agoJust here as an anecdata-point, crypto understander (build a really, really dumb blockchain in python during HS) who doesn't think it'll be used for anything beyond a cool new datastructure/verifiable constraint mechanism for relational databases. The coins we see traded today are a short-term jousting match between people who don't know a blockchain from a linked list. You could replace them with an exchange of company coupons/points and see identical market effects.
- thallium205 4y agoVarious regulatory bodies are fighting over crypto as they want to be the one to regulate it. Coinbase is just stuck in the middle of the battle for control.
- Quindecillion 4y agoI thought they were pretty clear on where the line is drawn. Gary Gensler and Rostin Behnam consider Bitcoin a commodity in the crypto space, so would be regulated by the CFTC. Every other crypto (probably even Ethereum) is a security, and so falls under the SEC's jurisdiction. That's what they've been signalling for a while now.
- cdiddy2 4y agoit seems that they disagree on ethereum https://decrypt.co/123032/cftc-chair-says-ethereum-is-a-commodity-despite-genslers-bitcoin-only-position https://decrypt.co/123032/cftc-chair-says-ethereum-is-a-comm...
- justinzollars 4y agoThose that work at Coinbase would do better to run for congress, win, then insider trade securities. The SEC would leave them alone in this case because the SEC is a totally corrupt Government Bureaucracy. Brian Armstrong and staff could alternatively direct campaign contributions to the Democrats (I give to the Democrats every year) to ensure they would leave him alone.
- rnk 4y agoYeah, just follow the ftx/sbf strategy, that sure worked.
- joanne123 4y ago[dead]
- e63f67dd-065b 4y agoI think that the calls for SEC clarity are pretty disingenuous. From what I have gathered, the conversation typically goes like this: Industry: Please give us more regulatory clarity SEC: everything not BTC/ETH is a security, please register them (read: and we'll throw it into the trash because we don't like it) Industry: but these are clearly not securities, please give us more clarity SEC: everything not BTC/ETH is a security, please register them Industry: that's not an answer, we would like to trade crypto SEC: everything not BTC/ETH is a security, please register them So the SEC is clear, it's just that the clear answer the SEC is giving is not up to the tastes of industry. But the SEC is also constrained by politics in the sense of external pressure making them not want to crack down, and by internal politics of hard-to-win cases about proving Howey tests that take forever. So we have the current situation where the SEC has been very clear that it doesn't like any of the crypto stuff, but the industry pushes the boundaries and sits in the legal grey area where the SEC says it's not kosher but courts may or may not agree. Hence sporadic enforcement actions where they think they have a good case, which then leads to complaining (please more clarity), with the same response (none of this is legal, just because we haven't filed enforcement actions doesn't mean it's kosher). Edit: ETH is kinda borderline; there is semi-widespread consensus that BTC is not a security, and no such consensus for pretty much anything else. Edit 2: I don't mean the conversation literally. As far as I know there is no official stance on BTC, but one gets the sense that trying to argue in court that BTC is a security is a losing proposition, whereas <insert governance token for newnotscamcoin> is much closer to a winning case.
- nextaccountic 4y ago> everything not BTC/ETH What's special about BTC and ETH that sets it apart from other cryptocurrencies?
- izzydata 4y agoProbably that they have been registered with the SEC.
- Waterluvian 4y ago
- raincole 4y agoThe threats are well justified. It really reads like you (coinbase) is trying to get around SEC's regulations.
- michael_vo 4y agoEveryone I know uses the term “invest” or “speculate” when they buy any crypto asset. I haven’t met anyone use the term “diversify” when buying crypto like you would if you bought USD or EURO or bonds. I know someone who used all of their 200k medical loans to instead buy btc. Clearly individuals believe these to be securities with expectation of profit since there’s interest in the loan. The guy even bought it on binance under a fake name so he won’t be taxed. Whatever legal mumbo jumbo used by companies might be right. But the users and market treats these as securities - especially with all the derivatives built on top.
- TimJRobinson 4y agoIf I put my student loans into gold does that make gold a security? There's more to an asset being a security than just expectation of profit.
- MagicMoonlight 4y agoIf you bought it as part of a gold trading platform in the form of a product that represents gold instead of gold itself then yes
- fswd 4y agoDishonest, they tried to corner the crypto exchange market by raising the costs to do business by encouraging regulation. I'm so glad it bit them. Coinbase is an evil dishonest company that uses dark patterns to prevent users from getting their money out. Now they are pretending to be the victim. Please shut down coinbase and ban their execs from working with money.
- elil17 4y ago"I went to the police and asked them if it was okay for me to do crime. I got legal threats instead."
- 1vuio0pswjnm7 4y ago"In the meantime, Coinbase will continue to do what we do best: updating the financial system by building the most trusted products and services to advance our mission of creating more economic freedom and opportunity around the world." Is this equivalent to "We'll keep taking the public's money even when the SEC is investigating us and enforcement action appears imminent." Coinbase is a US-based company. When Paxos Trust received a Wells Notice last month, they stopped minting BUSD.
- cdiddy2 4y agoit might just mean focusing more outside of the US. they just announced expanding into Brazil yesterday for example.
- barbazoo 4y agoI'm getting more of a shifty vibe from that person, so I'm not sure what to believe.
- dang 4y agoRelated ongoing thread: Coinbase issued Wells notice by SEC - https://news.ycombinator.com/item?id=35267692 https://news.ycombinator.com/item?id=35267692
- libraryatnight 4y agoAt this point I just assume coinbase only exists because they were somehow stealing less obviously than the others. Or, they stopped stealing illegally just in time, have started hemorrhaging money and are praying they can get back to stealing legally by selling themselves as the responsible actor in an overwhelmingly corrupt space. There's a window here for them to solidify themselves in a gray space that just abuses people for money forever like MLMs, time shares, trailer parks, and tom selleck selling old people reverse mortgages.
- cortesoft 4y agoThey just haven’t been caught yet. The are just FTX a year ago.
- ivanmontillam 4y agoLook, for the most part, regulation is good. In theory. In practice what ends up happening is that regulators come in with measures "meant to protect the people" that also indirectly harm the early adopters. That's why enthusiasts aren't very enthusiastic of getting regulated. Regulators get a bad reputation because most of the time a regulation ends up like this; they are seen as killjoys. I am not keen on regulation because I cannot trust regulators to do a great job at preserving "the magic" of a technology. Yes, exchanging (and most of the time, losing) value into cryptoassets and scammers are a real thing, as much as money laundering and tax evasion; however, once the black suits come in[0], it's all downhill. I don't know the alternative, other than letting the code by-laws regulate itself. The very essence of what Bitcoin represents. -- [0]: I mean, the sad state of regulation nowadays, in which is protecting the best interests and power of the elites.
- ETH_start 4y agoRegulation of voluntary interaction violates the core principles of a free society but has become widely supported due to propagandistic tropes.
- dangus 4y agoNobody has any kind of inalienable right to their preferred business model. You want some new crypto rules to make your business more lucrative. Meanwhile, I want someone to explain to me how crypto is a necessary piece of our economy. The way I see it Coinbase should be thankful that crypto wasn't banned or classified as a gambling instrument.
- aww_dang 4y agoCryptocurrency's original selling points were: 0)Freedom from central bank hegemony 1)Decentralized infrastructure beyond the reach of regulators Coinbase is something of a collaborationist in this regard. They created a centralized platform and got in bed with US regulators. They've asked repeatedly for, "reasonable regulation". Reasonable people can disagree about these issues. I know many here are die hard cryptocurrency haters. However, there's no room for synthesis between the original premises of the cryptocurrency movement and "reasonable regulation". If regulators are not attacking cryptocurrency, is it really living up to the original ideals?
- TimJRobinson 4y agoMost people in crypto aren't worried about crypto dying, they're worried the USA is shooting themselves in the foot and missing out on a huge new industry because of incompetence.
- deleted 4y ago[deleted]
- ineedasername 4y ago>The U.S. crypto regulatory environment needs more guidance, not more enforcement It already has exceptionally little enforcement. Once it gains regulatory guidance is when actual enforcement of those policies can begin. Until that time, there are a lot of analogs in traditional finance to some of the services that Coinbase offers. At least cherry pick the best analogs and register them the same way a traditional financial instrument of that sort would be. (like the currency exchange). Concede some ground by registering a few of the coins as securities while fighting tooth & nail in the courts & politicians to address the differences needed in a regulatory agenda. This will show willingness to participate in the lawful regulatory framework even if you disagree with it-- a good citizen, so to speak. Over time this will create a working relationship rather than an adversarial one. Getting appropriate regulatory frameworks in place is going to be a game of inches, not quick homeruns, and a strategy that only includes the homerun approach is not going to work as well. Instead, Coinbase has communicated with the SEC its viewpoints but refuses to adopt the closes equivalent regulations. Violating (in the SEC's eyes) regulations under the reasoning that you don't like them and are trying to change them is just not an endearing course of action. If Coinbase had proactively approached the SEC with action and not just talk the amounted to "we disagree" ....... How about "We fundamentally disagree and believe the status quo justifies current processes but we want to show a willingness to engage, in principle, in the regulatory framework we have. Let's come up with a good first step as we work things out or let the courts decide or however we need to settle all of this"
- user3939382 4y agoIsn’t Coinbase the antithesis of everything crypto was designed to accomplish? If we’re going to have a centralized third-party controlling our money, why bother?
- jedberg 4y agoThe problem with both the SEC and the California equivalent is their chilling effects on new technologies. They send letters to companies saying "we think you're doing something bad", but don't tell them exactly what or file a lawsuit. Now the company is stuck. They can keep operating, but if they are found to actually be in violation, they can be fined all the way back to when they first got the letter. So their only real option is to just stop doing business until they get an actual lawsuit or another letter stating that the enforcement agency is no longer thinking about investigating them. I've personally been affected by this twice. Once the California regulator sent a letter to a crypto platform I was using, and they simply stopped allowing Californians to use the platform. I had to personally lobby on their behalf (along with them and many others) to the regulator to either sue them or release them from liability so I could get back on to the platform. They shouldn't be allowed to send these letters, or if they do, they should require specifics so the company can stop doing the specific thing(s) the regulator doesn't like.
- joanne123 4y ago[flagged]
- sub7 4y agoEnjoy the unbanked life Coinbase!
- WhereIsTheTruth 4y agoToo much money sleeping doing nothing, just luring and scamming people who want to get rich without effort.. That money would be better spent in energy R&D(nuclear/fusion), education, and in core infrastructures, etc.. What a waste of time and energy, literally, taking money hostage. Just today LinusTechTips youtube channel got hacked and guess by who? people who promote crypto scams.. that's the only purpose of these exchanges, to sell and facilitate scams
- rkagerer 4y agoWhat happened to the downvote buttons on this comment page?