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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 s

• 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.
    • dragonwriter 4y ago
      > 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 Factually, they don't. They just have to issue the regulations and enforce them, and if people, disagree, then they have to explain their rationale in the ensuing litigation. Just as Congress doesn't need to explain their Constitutional authority when passing a law, either.
      • mike_d 4y ago
        > Just as Congress doesn't need to explain their Constitutional authority when passing a law They don't because it is clearly written down in checks notes the constitution. Factually, our government doesn't operate on whims and feelings or work it out in the courts later. All laws must show a clear linage to the enumerated powers of congress.
        • whateveracct 4y ago
          The SEC has powers delineated by the legislation that creates it too. Again, they aren't acting with omnipotent power. Push come to shove, they'll go to court where they will explain their position. Coinbase can try to counter their arguments then if they wish to.
        • dragonwriter 4y ago
          > They don't because it is clearly written down in checks notes the constitution. Often, it is not. But they don't have to (except as a fairly recent, self-imposed rule of the House of Representatives) explain any argument that it is, in advance, nor even when they do is the government bound to only that advance argument on its Constitutional justification. Similar, regulatory agencies , while they tend to identify their statutory authority when making regulatory actions, aren't required to justify their claims of authority in advance. When they are contested, it is resolved in the courts, whether its Congress or executive branch regulators. > Factually, our government doesn’t operate on whims and feelings or work it out in the courts later. Factually, that’s exactly what our government does a lot of the time. Ideally (in many people’s view) that’s not what it should do, but facts and ideals are different things.
• whateveracct 4y ago
  If a security inherently can't be regulated, then it can't be traded. Them's the brakes.