7 ms·

Crypto Faces Legal Reckoning as SEC Prepares Action Against Coinbase

68 points by VagueMag 4y ago

jshawl 4y ago
https://archive.ph/6scOm https://archive.ph/6scOm
wankle 4y ago
I got coinbase phishing spam emails recently, I wonder if it's related somehow to them apparently being investigated. Also can't read the article, have to set up a free account. Their password field doesn't let Chrome suggest a strong password, it doesn't even let me create with with a $ sign.
- capableweb 4y ago
  > I got coinbase phishing spam emails recently Was it related to XRP and trying to trick you into being the first N user to sign up for some staking thing? I got that too, even if the email I received it on is not associated with Coinbase, and somehow that email managed to break through the spam filter although it was clearly spam.
api 4y ago
I wonder if this explains why crypto Twitter has been pushing unhinged doom scenarios and conspiracy theories and telling everyone to put everything into Bitcoin. Could be a mix of actual freakout and trying to pump crypto so insiders can exit… kind of part true believer reaction and part grift. It kind of reminds me of how a cult reacts when the authorities start coming around. It’s the end times! Double down! Brew up the kool aid!
- uejfiweun 4y ago
  Yeah, I've noticed the same thing... The Bitcoin "hype machine" seems to be running at max right now, but there's no particular reason, it's not like we have trillions of QE again. They say it's the banking crisis, but that seems like a nothingburger as well... My only conclusion is that it has to be some kind of pump-and-dump related to imminent legal action.
  - api 4y ago
    They’ve already tapped the unsophisticated retail investors and get rich quick fools, going so far as to saturate ad space at the superbowl and buy stadiums. Perhaps the last pump they have left is to fleece the true believers. In the end it eats it own.
- pavlov 4y ago
  Over the past three years VCs have invested billions into essentially worthless crypto companies. They’re now holding giant bags of tokens that need to be dumped on retail ASAP. If Coinbase’s shitcoin listing operation were shut down by the SEC, the VCs would lose their primary dumping endpoint to retail crypto buyers in the West. There’s an urgency to both pump up prices now and to pretend that the SEC action is nothing.
- deleted 4y ago
  [deleted]
uejfiweun 4y ago
I'd be more sympathetic to the "crypto industry" if it actually produced something that improved my life in any meaningful way.
- smoovb 4y ago
  Agree, the only things I support are issues that directly benefit me.
  - deleted 4y ago
    [deleted]
  - deleted 4y ago
    [deleted]
ESTheComposer 4y ago
This is such a farce of an article. "Coinbase has taken an increasingly defiant stance, publicly criticizing the SEC and urging regulators to write new rules for crypto rather than enforce existing ones." No, they're asking the SEC to provide evidence and the SEC has been ignoring them and trying to have everything be a security. "The firm has accused the SEC of stifling innovation and has spent millions of dollars lobbying Congress in hopes of bypassing regulators through new legislation." Again no, they're not trying to bypass regulators whatsoever. Coinbase has posted again and again and again that they want to be properly regulated including by the SEC, but the SEC refuses to work with them. It's extremely frustrating because people who know what's actually been going on can clearly see the bs, but most people who read this article (including a ton of the anti crypto crowd on HN) will just latch onto this as if it is truth.
- pavlov 4y ago
  The SEC doesn’t have to help a company which is actively skirting the law to craft its legal strategy. They do have to provide evidence to a court when they file an enforcement action. That’s how laws work.
  - ESTheComposer 4y ago
    The SEC can't declare everything a security, then enforce it without providing evidence or guidance to companies trying to be regulated, and then further make videos on twitter declaring that it's as easy as signing a form to be regulated (lying). I've seen you before in threads and I know you have a giant anti crypto slant, but try to use some logic and not just cower when you see government acronyms without questioning them
    - ESTheComposer 4y ago
      Also news flash to folks in these threads, the rest of the world is pretty much on board with crypto and making pretty big advancements. Whether people like it or not, this is here and it's staying (by definition you can't shut down things like Bitcoin). We either catch up as a country and allow innovation or we lost a pretty big future position.
TekMol 4y ago
If the SEC decides that crypto currencies are securities, would that mean that no US citizen could ever buy Crypto again? As I understand it, only registered securities can be traded in the USA. But how would a cryptocurrency be registered? Would Vitalik Buterin shoulder his rainbowunicorn bag, go to the SEC and say "Uhm, in 2015, I had this idea of a new protocol that kinda forms a distributed computer. And it has this thing called eth that is the gas for this, uhm, computer. And somehow people now People value this gas at $200B. Can I haz make it a security?".
- Animats 4y ago
  The SEC has had a consistent position. The Howey test applies.[1] Other than Bitcoin, which the SEC recognizes as not having an "issuer", crypto currencies would have to be registered by their issuer as securities. This means filing an S-1 form. An S-1 form tells who's behind the issue, their backgrounds, where the money is going, the business plan, and balance sheets. All filed under penalty of perjury. Every publicly traded company in the US has been through this process. Any US registered broker can trade any registered security. There are lots of restrictions that crypto companies don't like. You can't self deal. You can't wash trade. You can't clear your own transactions. Issuers, brokers, clearing services, and exchanges are different organizations. FBX argued to Congress that they didn't need all that separation of function. Now we know that was because it would have interfered with stealing the customers assets. [1] https://www.howeycoins.com https://www.howeycoins.com
  - mike_d 4y ago
    So you should be fully supportive of Coinbase and other crypto companies asking the SEC to show their work and publish an official statement with supporting evidence of why they believe Howey applies. If the SEC wants to regulate a currency (currently the domain of the CFTC and OCC) they either need to explain why they believe money is a security or have the Congress explicitly grant them the authority. The USDA for example can't all of the sudden decide they want to regulate forests because an edible plant might grow there.
    - 4y ago
Something1234 4y ago
As they freaking should. I can't get their export of tax data to line up for the cost basis vs the gains there were random nulls in it and I don't know how to fix it. All the crypto I had was bought on Coinbase, and it doesn't know the cost basis.
- DANmode 4y ago
  Hints for rebuilding: compare your wire-in dates with your Asset Purchase dates for a reasonable guess at price point.
colesantiago 4y ago
legitimately speaking there is no there there or anywhere with crypto but do you know what is everywhere with crypto? scams. here, there, everywhere, non stop ads trying to get you involved into the next crypto grift. I am so elated it is all completely coming to an end.
smoovb 4y ago
Here is the status of SEC's unfinished case with XRP crypto company: https://www.cnbc.com/2023/03/22/xrp-cryptocurrency-jumps-as-investors-hope-ripple-will-win-sec-case.html https://www.cnbc.com/2023/03/22/xrp-cryptocurrency-jumps-as-...
Mizoguchi 4y ago
I really enjoyed Gary Gensler lectures on blockchain, crypto currency and money in general and I still recommend them to anyone who wants to learn the fundamentals. https://ocw.mit.edu/courses/15-s12-blockchain-and-money-fall-2018/resources/session-1-introduction/ https://ocw.mit.edu/courses/15-s12-blockchain-and-money-fall... When I heard he was going to lead SEC I was very optimistic about the future of crypto and its regulation as Gensler seemed to have a very favorable view of (at least) Bitcoin. How naive...

68 points by VagueMag 4y ago

https://archive.ph/6scOm https://archive.ph/6scOm

I got coinbase phishing spam emails recently, I wonder if it's related somehow to them apparently being investigated. Also can't read the article, have to set up a free account. Their password field doesn't let Chrome suggest a strong password, it doesn't even let me create with with a $ sign.

capableweb 4y ago
> I got coinbase phishing spam emails recently Was it related to XRP and trying to trick you into being the first N user to sign up for some staking thing? I got that too, even if the email I received it on is not associated with Coinbase, and somehow that email managed to break through the spam filter although it was clearly spam.

api 4y ago

I wonder if this explains why crypto Twitter has been pushing unhinged doom scenarios and conspiracy theories and telling everyone to put everything into Bitcoin. Could be a mix of actual freakout and trying to pump crypto so insiders can exit… kind of part true believer reaction and part grift. It kind of reminds me of how a cult reacts when the authorities start coming around. It’s the end times! Double down! Brew up the kool aid!

uejfiweun 4y ago
Yeah, I've noticed the same thing... The Bitcoin "hype machine" seems to be running at max right now, but there's no particular reason, it's not like we have trillions of QE again. They say it's the banking crisis, but that seems like a nothingburger as well... My only conclusion is that it has to be some kind of pump-and-dump related to imminent legal action.
- api 4y ago
  They’ve already tapped the unsophisticated retail investors and get rich quick fools, going so far as to saturate ad space at the superbowl and buy stadiums. Perhaps the last pump they have left is to fleece the true believers. In the end it eats it own.
pavlov 4y ago
Over the past three years VCs have invested billions into essentially worthless crypto companies. They’re now holding giant bags of tokens that need to be dumped on retail ASAP. If Coinbase’s shitcoin listing operation were shut down by the SEC, the VCs would lose their primary dumping endpoint to retail crypto buyers in the West. There’s an urgency to both pump up prices now and to pretend that the SEC action is nothing.
deleted 4y ago
[deleted]

uejfiweun 4y ago

I'd be more sympathetic to the "crypto industry" if it actually produced something that improved my life in any meaningful way.

smoovb 4y ago
Agree, the only things I support are issues that directly benefit me.
- deleted 4y ago
  [deleted]
- deleted 4y ago
  [deleted]

ESTheComposer 4y ago

This is such a farce of an article. "Coinbase has taken an increasingly defiant stance, publicly criticizing the SEC and urging regulators to write new rules for crypto rather than enforce existing ones." No, they're asking the SEC to provide evidence and the SEC has been ignoring them and trying to have everything be a security. "The firm has accused the SEC of stifling innovation and has spent millions of dollars lobbying Congress in hopes of bypassing regulators through new legislation." Again no, they're not trying to bypass regulators whatsoever. Coinbase has posted again and again and again that they want to be properly regulated including by the SEC, but the SEC refuses to work with them. It's extremely frustrating because people who know what's actually been going on can clearly see the bs, but most people who read this article (including a ton of the anti crypto crowd on HN) will just latch onto this as if it is truth.

pavlov 4y ago
The SEC doesn’t have to help a company which is actively skirting the law to craft its legal strategy. They do have to provide evidence to a court when they file an enforcement action. That’s how laws work.
- ESTheComposer 4y ago
  The SEC can't declare everything a security, then enforce it without providing evidence or guidance to companies trying to be regulated, and then further make videos on twitter declaring that it's as easy as signing a form to be regulated (lying). I've seen you before in threads and I know you have a giant anti crypto slant, but try to use some logic and not just cower when you see government acronyms without questioning them
  - ESTheComposer 4y ago
    Also news flash to folks in these threads, the rest of the world is pretty much on board with crypto and making pretty big advancements. Whether people like it or not, this is here and it's staying (by definition you can't shut down things like Bitcoin). We either catch up as a country and allow innovation or we lost a pretty big future position.

TekMol 4y ago

If the SEC decides that crypto currencies are securities, would that mean that no US citizen could ever buy Crypto again? As I understand it, only registered securities can be traded in the USA. But how would a cryptocurrency be registered? Would Vitalik Buterin shoulder his rainbowunicorn bag, go to the SEC and say "Uhm, in 2015, I had this idea of a new protocol that kinda forms a distributed computer. And it has this thing called eth that is the gas for this, uhm, computer. And somehow people now People value this gas at $200B. Can I haz make it a security?".

Animats 4y ago
The SEC has had a consistent position. The Howey test applies.[1] Other than Bitcoin, which the SEC recognizes as not having an "issuer", crypto currencies would have to be registered by their issuer as securities. This means filing an S-1 form. An S-1 form tells who's behind the issue, their backgrounds, where the money is going, the business plan, and balance sheets. All filed under penalty of perjury. Every publicly traded company in the US has been through this process. Any US registered broker can trade any registered security. There are lots of restrictions that crypto companies don't like. You can't self deal. You can't wash trade. You can't clear your own transactions. Issuers, brokers, clearing services, and exchanges are different organizations. FBX argued to Congress that they didn't need all that separation of function. Now we know that was because it would have interfered with stealing the customers assets. [1] https://www.howeycoins.com https://www.howeycoins.com
- mike_d 4y ago
  So you should be fully supportive of Coinbase and other crypto companies asking the SEC to show their work and publish an official statement with supporting evidence of why they believe Howey applies. If the SEC wants to regulate a currency (currently the domain of the CFTC and OCC) they either need to explain why they believe money is a security or have the Congress explicitly grant them the authority. The USDA for example can't all of the sudden decide they want to regulate forests because an edible plant might grow there.
  - 4y ago

Something1234 4y ago

As they freaking should. I can't get their export of tax data to line up for the cost basis vs the gains there were random nulls in it and I don't know how to fix it. All the crypto I had was bought on Coinbase, and it doesn't know the cost basis.

DANmode 4y ago
Hints for rebuilding: compare your wire-in dates with your Asset Purchase dates for a reasonable guess at price point.

colesantiago 4y ago

legitimately speaking there is no there there or anywhere with crypto but do you know what is everywhere with crypto? scams. here, there, everywhere, non stop ads trying to get you involved into the next crypto grift. I am so elated it is all completely coming to an end.

smoovb 4y ago

Here is the status of SEC's unfinished case with XRP crypto company: https://www.cnbc.com/2023/03/22/xrp-cryptocurrency-jumps-as-investors-hope-ripple-will-win-sec-case.html https://www.cnbc.com/2023/03/22/xrp-cryptocurrency-jumps-as-...

Mizoguchi 4y ago

I really enjoyed Gary Gensler lectures on blockchain, crypto currency and money in general and I still recommend them to anyone who wants to learn the fundamentals. https://ocw.mit.edu/courses/15-s12-blockchain-and-money-fall-2018/resources/session-1-introduction/ https://ocw.mit.edu/courses/15-s12-blockchain-and-money-fall... When I heard he was going to lead SEC I was very optimistic about the future of crypto and its regulation as Gensler seemed to have a very favorable view of (at least) Bitcoin. How naive...