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Coinbase CEO: we're preparing to go to court with the U.S. SEC
- VWWHFSfQ 3y agoSounds like the free lunch is over. Maybe my view is too simplistic, but Coinbase facilitates the sale of "assets" that the buyer expects to increase in value. By definition, that's a security, right?
- traveler01 3y agoDepends on what you consider a "Security". Are "Securities" meant to be used as currencies?
- lumost 3y agoAre virtual currencies actually being used as currencies? I've been long BTC for ~10 years, I've only made a few small novelty purchases through BTC. Based on any ads I've seen for crypto from coinbase, along with the tools they've built into their app - the primary use case for crypto appears to be as a security.
- PretzelPirate 3y agoI pay for POAPs on Ethereum using Eth. There's no expectation of profit by owning one since anyone who actively participates in the event can get one, but they're fun collectibles. Because of POAPs, I use Eth as a currency all the time.
- ascendantlogic 3y agoBitcoin was originally meant to be used as a currency. Ethereum was meant to be the oil that powered the smart contract network. I guess the question is, what matters more: the intent by the creators or what the end users choose to do with it?
- lumost 3y agoI have yet to see any coin be used in a manner that doesn’t devolve to a security. While there were many projects to do other things with crypto - they all still sell tokens on exchanges. I’d find the claim that crypto isn’t meant as a security more convincing if the crypto traded at 0 dollars.
- nyolfen 3y agoi run a small retail shop that sells digital goods for btc. i bought a book with btc two months ago. more convincingly, it's widely used for remittances and as a store of value in countries with debased currencies -- this is a powerful tool for ordinary citizens in countries like venezuela, argentina etc to discipline central banks who would otherwise steal their savings.
- mrguyorama 3y agoIn japan, there exist a bunch of businesses that buy your pachinko prizes and give you cash. It's a standard thing that happens pretty much anywhere with pachinko machines. Yet it would be absurd to call those toys "A currency". A currency requires more usage than occasional barter.
- deleted 3y ago[deleted]
- nyolfen 3y agowhat threshold would you find convincing? it performs all conventionally defined functions of money, it is legally recognized as money in some jurisdictions, it is useful as a store of value and medium of exchange. japanese yen might as well be 'toy' to me since i can't pay taxes with it. at this point i feel like i'm arguing about the utility of automobiles with an equestrian in 1920.
- this_user 3y agoJust because you claim something is a currency, doesn't make it one, especially if it doesn't even exhibit the properties of a currency. But the question of what is a "security" has been clearly answered in 1946: > 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. A lot of these coins are attached to some such scheme by a 3rd party, therefore they should be considered securities. This may even apply to most NFTs. Source: https://supreme.justia.com/cases/federal/us/328/293/ https://supreme.justia.com/cases/federal/us/328/293/
- sebzim4500 3y agoA lot of people buy houses thinking they will increase in value. Good to know they've all been doing securities fraud.
- prottog 3y agoIf there was a startup called Homebase that was in the business of serving as an exchange where people could trade houses, the SEC might be interested ;-)
- sebzim4500 3y agoLast time this was discussed here people were suggesting that BTC was not a security but BCH was, despite being basically the same thing, and certainly both being exchanged on Coinbase.
- arcticbull 3y agoYou can google this stuff you know? Real estate does not fall under the securities umbrella. This is well established legal precedent, covered under Howey, the Securities Act, the Securities Exchange Act subsequent rulings. Real estate fails the Howey test because there is no common enterprise. https://www.compliancebuilding.com/2010/11/04/what-is-a-security-is-real-estate-a-security/ https://www.compliancebuilding.com/2010/11/04/what-is-a-secu...
- rasengan 3y ago> Coinbase facilitates the sale of "assets" that the buyer expects to increase in value. By definition, that's a security, right? In terms of outdated US regulation based on some farm land, yes.
- maxfurman 3y agoWhether or not the regulation is outdated, it is the law of the land in the US at the moment and is relevant to enforcement actions by the SEC. This definition of security will determine Coinbase's success or failure in court.
- WrtCdEvrydy 3y agoI'm surprised homes are not qualified as "securities" at this point. Home prices must go up :D
- ericpauley 3y agoYes and no. Gold isn’t a security, for instance. Unfortunately (for coinbase) ICOs and related grifts pretty clearly meet both the spirit and the letter of the SEC’s definition.
- burkaman 3y agoThe other part of the definition is that it can be easily bought and sold on an exchange. I think if there were an exchange for physical gold then it would be considered a security.
- sebzim4500 3y ago> I think if there were an exchange for physical gold then it would be considered a security. I don't think that if you were to make an exchange that made it easy to trade physical gold (rather than deriviatives) the SEC would suddenly determine that gold was a security.
- prottog 3y agoExchange-traded commodity futures (including those for physical delivery of 100 troy ounces of gold) have existed for a long time and are regulated by the CFTC.
- burkaman 3y agoRight, and those are securities, but gold itself is not a security because it's relatively difficult to trade.
- deleted 3y ago[deleted]
- esperent 3y agoThere's loads of trading platforms that allow you to buy and sell gold. https://tradingplatforms.com/commodity/gold-trading/ https://tradingplatforms.com/commodity/gold-trading/
- ascendantlogic 3y agoThis is the crux of the endless argument. People speculate on currencies via Forex, are those securities? Is oil a security? People buy into oil, gold, etc hoping to sell later for a profit. Both the CFTC and SEC have claimed they have purview over crypto and there has been absolutely no clarity from lawmakers on it.
- adgjlsfhk1 3y agothe real answer is that the CFTC should just be abolished and folded into the SEC. the only reason crypto people want to be regulated byt he CFTC is that they are way less competent at catching fraud than the SEC.
- elliekelly 3y agoThis is absolutely the answer. The NFA/CFTC have been having a quiet turf war with the SEC for a decade now in an attempt to thwart the obvious and hopefully inevitable solution you’ve suggested.
- arcticbull 3y agoThe definition of a security is found in the application of the Howey test. The SEC has a nice long explanation of how you apply Howey to crypto. Basically every token is a security. Always has been. With the possible exception of Bitcoin due to the way it was initially distributed. [1] [1] https://www.sec.gov/files/dlt-framework.pdf https://www.sec.gov/files/dlt-framework.pdf
- deadbolt 3y agoWhat was unique about the initial distribution of Bitcoin when compared to other cryptocurrencies?
- arcticbull 3y agoNo pre-mine, no pre-sale, no original ledger. The software was written, and the 'satoshi wallet' was actually open mined.
- WrtCdEvrydy 3y agono pre-mine I believe.
- j0hnyl 3y agoHow can it be proved that people are buying tokens like Eth/Solana because they expect those tokens to go up in value? Plenty of people are buying those tokens so that they can participate in their respective ecosystems as developers.
- elliekelly 3y agoAnd some Howey-in-the-Hills investors may have just wanted to eat their oranges. First and foremost they’ll look to what was said in selling the tokens: “join a crypto community!” vs “start your crypto portfolio”.
- j0hnyl 3y agoYou have a point however, I don't think anyone is buying Eth now based on the initial ICO messaging.
- jcranmer 3y agoThe Howey test requires that a security be (1) an investment of money (2) in a common enterprise (3) with the expectation of profit (4) to be derived from the efforts of others. Cryptocurrencies very clearly meet (1) and (2). Many tokens are likely to meet (3), but it's not universal. But (4) is where you have the most room to argue. I don't know what Coinbase offers for sale. But I'm certain that least some of the tokens it supports are going to be defined as securities under the Howey test. Hell, if Coinbase offers the ability to use your tokens for staking, I'm pretty sure that alone qualifies as a security, even if the token itself isn't necessarily a security. (Coinbase disagrees that staking constitutes a security, but their reasoning is extremely motivated and I do not find it persuasive.)
- latchkey 3y ago> I don't know what Coinbase offers for sale. https://www.coinbase.com/price/poocoin https://www.coinbase.com/price/poocoin
- johnrob 3y agoIf you want to transfer the asset to another party (the main purpose of crypto currency), that requires effort from the community of miners. Would that satisfy the condition?
- SAI_Peregrinus 3y agoCoinbase offers a "staking service" where they run the node to perform validations (4) using your staked currency (1) on the Ethereum blockchain (2) and promise to give you a share of any profits (3).
- 0zemp1c 3y agoI actually agree with Armstrong here - the SEC has had plenty of time to assess the market for crypto products and offer clear rules...it almost feels like the indecisiveness is an intentional policy used to cow the industry.
- arcticbull 3y agoThat's one way of looking at it. The other way of looking at it is that everyone who went to the SEC and asked them if they could do something was told absolutely not. The people who didn't ask seemed to be getting away with it. So everyone stopped asking. However that didn't change the facts of the situation. At some point even the mightiest ostrich must get rekt.
- jedberg 3y agoCoinbase has asked them many times though. The article even mentions this. They met 30 times to seek clarity on the rules.
- Alex3917 3y agoThis reminds me a lot of a different Armstrong repeatedly saying that he couldn’t be doping because he was the most drug-tested athlete in history. In reality, the law is perfectly clear and hasn’t changed in decades, so what would giving clarity even mean?
- mfer 3y agoClarity can include explaining how some laws apply in situations relevant to Coinbase or crypto currencies. Sometimes dots need to be connected.
- latchkey 3y agoIf the law is perfectly clear, is ETH a security or a commodity? Gensler can't even answer that question. https://twitter.com/sassal0x/status/1648338351832064003 https://twitter.com/sassal0x/status/1648338351832064003
- Workaccount2 3y agoHow much of this is actually opaque regulation, and how much is "we don't like the rules the SEC has, so we are going to do our best to not understand them"?
- PretzelPirate 3y agoSEC Commissioner Hester M Peirce has written multiple times about how the SEC isn't doing their job to provide clear regulation to the industry. From what she's written, it really is that the SEC won't engage and provide regulatory clarity while publicly saying that these companies just need to talk to them to get that clarity.
- rumdonut 3y agoI get the strong sense of the latter. It’s not actually the SEC that decides what’s illegal or not - these charges they speak of are for the judicial branch to decide on. I don’t follow crypto much, but it sounds to me like there isn’t a legal ruling precedent yet for crypto securities (hence Coinbase’s broadcast lack of certainty), so how could the SEC even give a guidance as to what’s illegal or not when they don’t know yet? But it’s definitely their duty to find out and establish that legal precedent. Given Coinbase is thinking about moving out of the country, I suspect they actually do think it’s not going to go in their favor, and might be trying to publicly blame it on the SEC versus admit they could have an illegal business model. Even in that case, I don’t understand the complaint because they got a good run - if the SEC had been faster and clearer up front, that party may never have happened.
- agentgumshoe 3y agoAll of it from what I understand. I think the gist is Coinbase are saying "our product is special and not something you regulate." The SEC is saying it is not a special product, we'll regulate it as we already do. Saying you're using Monopoly money instead of real dollars (but then actually using real dollars to determine value) doesn't magically create new regulatory worlds.
- overthrow 3y agoGensler has publicly said “everything other than Bitcoin” is a security. https://cryptoslate.com/sec-chair-gensler-confirms-everything-other-than-bitcoin-is-a-security-implications-and-analysis/ https://cryptoslate.com/sec-chair-gensler-confirms-everythin... I'm not saying Coinbase has to agree with that decision, but it's a little silly they're posturing to the public like they're unaware. It's not exactly a secret. If they disagree then going to court is probably their only move.
- chomp 3y agoThere's a few people picking sides here in the comments. Just reminding everybody that it's possible for two sides to be at issue; the SEC can be trying its best to apply its mandate in a world where technology has surpassed the law, and in a void of congressional action, and as a result giving very vague guidance so that it can squeeze its mandate into the crypto realm. And Coinbase can be purposely threading the needle in an area they know could probably be interpreted as being SEC regulated. In my opinion, Congress is the problem here, and their inaction is going to cause this to get duked out in the court, when it didn't have to be so.
- vkou 3y agoWhy would the SEC need congressional action to regulate securities (which is what some of the crypto tokens traded on exchanges are)? Why would Coinbase think that it could run a securities brokerage, exchange, and clearing house without registering with the SEC? Just because you've added '... But on the internet' to your business model does not require additional legislature to determine whether or not you are trading securities.
- linuxftw 3y agoYou're getting downvoted, but you're 100% correct.
- latchkey 3y ago> Why would Coinbase think that it could run a securities brokerage, exchange, and clearing house without registering with the SEC? Coinbase is a public company on NASDAQ. They are about as registered with the SEC, as possible. Update: cause I'm getting downvotes. See below. The point that I'm making is that if this company is acting illegally, then why is it still trading?
- twic 3y agoThe registration under discussion here is registration as a broker-dealer, or an exchange, or whatever, not as a listed company.
- throwaway4good 3y agoWhere would he move his business to? And why would it matter as his customers are still mostly in the US?
- encryptluks2 3y ago[dead]
- agentgumshoe 3y ago"Can we do illegal stuff please?" No "Can you explain why we can't do illegal stuff please?" No, that should be obvious. Coinbase are muppets.
- treypitt 3y agoCoinbase and Armstrong tried for months to get the SEC to tell them if their Earn/Staking product constituted a security, and they declined to answer. Serving a Welles Notice makes it clear Gensler is a bad faith regulator https://podcasts.google.com/feed/aHR0cHM6Ly91bmNoYWluZWQubGlic3luLmNvbS91bmNoYWluZWQ/episode/MGRiNmU3YzYtYzlkNC0xMWVkLTliNzctYTcwNjJiOTMwNWVj?sa=X&ved=0CAgQuIEEahgKEwiguMrw3rP-AhUAAAAAHQAAAAAQ8wI https://podcasts.google.com/feed/aHR0cHM6Ly91bmNoYWluZWQubGl...
- tehlike 3y agoWhy did sec need anything to say when it was clear the product was a security from the beginning?
- 888666 3y agoIf it's so clear, and people disagree, wouldn't it be common sense to just say it? Declining to comment makes no sense here.
- tehlike 3y agoIsn't howey test fairly clear as to what it is?
- landoftheice 3y ago[dead]
- landoftheice 3y ago[dead]
- humanizersequel 3y agoBecause it isn't clear the product is a security at all. Coinbase earn is an IT service where Coinbase (or a contractor representing them) interacts with a protocol on your behalf in exchange for a cut of the proceeds.
- exabrial 3y agoCan I pay for a Starbucks Double Frap Latte with Apple stock? Probably not, Apple stock is a security, not a currency... I'm sure someone has tried. But can I use Apple Stock as an investment vehicle? Yes. Conversely, can I pay for said surgary drink in DodgeCoin? Well no, you can't, but not for the same reasons. Starbucks doesn't have the facilities to accept DodgeCoin. Can you use it as an investment vehicle? Yes. And that is crux the problem. Because the answer is {"No", "Yes"}, the SEC has determined that these things (crypto) are regulated as Securities. The problem is it's far more nuanced than that. Just because everyone is using them as securities instead of currencies, does that make them securities?
- traveler01 3y agoThat's what I get. If people are investing into crypto, would that make it securities? For example, if I exchange some EURO for some US Dollar in Europe to avoid the EURO devaluation am I investing? That's basically what you do with cryptocurrencies.
- jcranmer 3y agoThe definition of securities in the US is governed by the Howey test, which is over 75 years old. It's a test which is very well-established in case law, with ample precedent that can be relied on to help fine-tune aspects like how "other" someone has to be in the "derived from the efforts of others" prong of the test. This isn't some vague unknowable thing.
- bogwog 3y agoI'm sure Starbucks would trade you a Double Frappe Latte for Apple Stock, if they had the facilities to accept it.
- Sohcahtoa82 3y agoCryptocurrencies are a currency that people are using as an investment. > Conversely, can I pay for said surgary drink in DodgeCoin? Well no, you can't, but not for the same reasons. Starbucks doesn't have the facilities to accept DodgeCoin I can't pay for my Starbucks in the USA using Euros, but that doesn't make the Euro not a currency. IMO, anybody trying to call a cryptocurrency a security is arguing in bad faith. A security has to represent something of value. A stock gives you a tiny fraction of ownership of a company. Cryptocurrencies give you nothing. They have no underlying value.
- darksaints 3y agoThe SEC are constantly stepping out of bounds and refuse to offer clear guidance on the security vs non-security issue. There is a pretty clear reason for this...they have long had a turf war with the CFTC, and if they admit something is not a security, that instrument is no longer within their jurisdiction. The SEC chairman has even publicly admitted that he doesn't think the CFTC needs to exist, and that the SEC should handle all fin regulation. A recent example of this was when they wanted regulatory authority over forex, so they banned any brokerage that handled securities from allowing forex trading as well. The SEC has lost four out of the last five Supreme Court cases on cryptocurrency. They are out of their depth. Regulatory authority should be handed to the CFTC. They are more than competent enough to be able to clearly state when a cryptocurrency is acting as a security, and have shown that they are the more rational side in this turf war.
- intrasight 3y ago"Coinbase could theoretically be forced to separate the exchange and broker portions of the business." Probably the right outcome. And of course they can choose to move overseas. I assume that will be their decision.
- johndhi 3y agoThis story is INCREDIBLY interesting on a lot of levels. Here's one level: Paul Grewal, the 'head lawyer' referred to in the underlying articles, is a former United States federal (magistrate) judge. He was the judge who oversaw part of the Apple v. Samsung patent cases, some of the biggest technology cases litigated in history. In other words, he's basically as respected in the legal community as you can possibly imagine, and he made the controversial move of exiting the judiciary to go back into private practice. And now he's clashing with an administrative agency in a public, confident, perhaps brazen way. Coinbase essentially hired the absolute best person to challenge the government on this point. It's sort of like wanting to hire a good basketball coach and hiring Michael Jordan, or something. It's very interesting to watch from the sidelines, because not only is the legality of crypto at stake, but this guy's amazing career feels at stake, too, like he's betting his name on this.
- shrimpx 3y ago> Michael Jordan Phil Jackson, maybe
- iudqnolq 3y agoHe's not betting his name as much as you think. It's normal for lawyers to continue having excellent careers after losing significant cases. (Also for full clarity magistrate judge is the lowest level in the federal system. Not that that isn't impressive, though)
- johndhi 3y agoTechnically I'd say administrative law judges are a lower rung than US Magistrates, but yes, fair enough. To be clear, though, Grewal was a magistrate in one of the most important districts (Northern District of California) on some of the most important cases in history.
- iudqnolq 3y agoGood points. I'm not sure if this is right but I wasn't thinking of ALJs as being in the "federal system", which I admit isn't a precise term. In terms of distinguished prior careers I'd say that's less than plenty of current lawyers though. One example could be Neal Katyal, who has agued all kinds of shit before the supreme court.
- olalonde 3y ago> Furthermore, under current securities law, securities exchanges are not permitted to offer services directly to retail customers I wonder who lobbied for that regulation...
- ncann 3y agoHere's Matt Levine's column on this: ------------------------------------- Coinbase Chief Legal Officer Paul Grewal wrote a blog post: The SEC staff told us they have identified potential violations of securities law, but little more. We asked the SEC specifically to identify which assets on our platforms they believe may be securities, and they declined to do so. Today’s Wells notice also comes after Coinbase provided multiple proposals to the SEC about registration over the course of months, all of which the SEC ultimately refused to respond to. … The Wells notice comes out of the investigation that we disclosed last summer. Shortly after that investigation began, the SEC asked us if we would be interested in discussing a potential resolution that would include registering some portion of our business with the SEC. We said absolutely yes. Specifically, the SEC asked us to provide our views on what a registration path for Coinbase could look like – because there is no existing way for a crypto exchange to register. We developed and proposed two different registration models. We spent millions of dollars on legal support to build these proposals and repeatedly asked for the SEC’s feedback. We got none. We also reiterated that we stand by our listings process – we don’t list securities today – and repeatedly invited the SEC to raise any questions about any asset at all on our platform. They raised none. … Regulatory uncertainty in the crypto industry is getting worse. Instead of developing a regulatory framework for crypto, the SEC is continuing to regulate by enforcement only. I sympathize with all of this, and I have written similar things. It is truly hard to fit the particular features of crypto into the existing US system for regulating securities, and a conscientious securities regulator with an interest in crypto regulation would sit down and write rules explaining how a project could register its crypto securities, how a crypto exchange could list crypto securities, etc. (Obviously Coinbase’s proposal to write those rules for the SEC is kind of self-interested, but sure in general regulation proceeds with industry input.) On the other hand I think that the SEC’s response is straightforward and obvious: There absolutely are existing, reasonably clear rules about how you register securities. Yes, you’re right, it’s impossible for crypto tokens to follow those rules. Oh well! Guess that means crypto exchanges are illegal. The position of Coinbase — and of the crypto industry more broadly — is “look, SEC, if you want to have a flourishing system of legally compliant, safe, trustworthy crypto assets, you will need to work with us a little bit to write new rules,” and the position of the SEC is “no, we don’t want that, we want all of you to go away forever.” If Bernie Madoff came to the SEC and said “if you want a higher class of more trustworthy Ponzi schemes, you will need to write a few new rules adapting the disclosure regime to Ponzi schemes,” the SEC would have said “no we absolutely do not want that, we want much less Ponzi scheming, and we certainly do not want to give our approval to Ponzi schemes by writing rules for them.” One gets the sense the attitude to crypto is similar. On the other hand Coinbase is an SEC-registered public company with an SEC-registered broker-dealer license! The approval is kind of already there! The SEC’s attitude to crypto is extremely negative, but it is only slowly getting around to doing anything about it — and in particular it is only slowly getting around to going after big respectable crypto firms like Coinbase. And in the interim, those firms have had time to get bigger and more respectable, with the SEC’s quiet acquiescence. Here again I think the explanation is obvious but unsatisfying. I wrote last month: I submit to you that the main fact of crypto regulation in early 2023 is that regulators feel really burned by the events of 2022, and particularly by the collapse of FTX. “We want to work with these nice smart young people who are building the financial system of the future, and I am sure that with their advice we can write smart regulations that protect consumers while still fostering innovation” was a totally normal thing for regulators (except the SEC) to think and say in 2021. But now it is not! Now too many of those smart young people are under indictment or giving interviews from undisclosed locations; too much customer money is gone. If you run a crypto exchange and you want to set up a meeting with regulators to talk about how to write regulations to prevent a repeat of the recent crypto collapses, they will not trust you, because that is what FTX was saying too. There is not much goodwill left. … When crypto is popular and exciting and going up, if you are a regulator who says “no, we must stop this,” you look like a killjoy. Investors want to put their money into stuff that is going up, and they are mad at you for stopping them. Politicians like the stuff that is going up, and hold hearings about how you’re stifling innovation. Crypto founders are rich and popular and criticize you on Twitter and get a lot of likes and retweets. Your own regulatory employees, who have an eye on their next private-sector jobs, want to be leaders in crypto innovation rather than just banning everything. When crypto is going down and so many projects are evaporating in fraud and bankruptcy, you can kind of say “I told you so.” There is just a lot more appetite to regulate, or I guess just to shut everything down. “You are stifling innovation,” the indicted founder of a bankrupt crypto firm can say, but nobody cares. This is unsatisfying, first of all, from a rule-of-law perspective: The SEC used a light touch in regulating crypto on the way up, which encouraged a lot of companies (like Coinbase) to get into crypto, invest a lot of resources, hire a lot of people and build big businesses. (And which encouraged lots of people to invest in crypto, on the theory that if it was really bad the SEC would have stopped it.) If the SEC now says that was all illegal, it seems harsh and arbitrary. As Armstrong says, the SEC had plenty of opportunities to object to Coinbase in the past; it didn’t, and Coinbase relied on the SEC’s acceptance in building its business. The answer — “we would have objected in 2021, but crypto was cool then and people would have gotten mad at us for getting in the way, but now crypto is bad and we can do whatever we want” — does not feel like great regulatory procedure. It is also bad substantive regulation — bad consumer protection — to encourage crypto on the way up and crack down on after the crash. Stopping people from investing in crypto after they’ve lost all their money doesn’t do them any good! You want to stop the crash! You want to “take away the punch bowl just as the party gets going,” but that is easy to say and hard, politically, to do. When the party is over and everyone is nursing a crushing hangover, no one cares what you do with the punch bowl. “Ugh that punch bowl, get it out of here, what even was in that,” they will retch.
- latchkey 3y agoGensler not able to clearly articulate an answer to a simple question presented in a multiple of ways: https://twitter.com/sassal0x/status/1648338351832064003 https://twitter.com/sassal0x/status/1648338351832064003
- colechristensen 3y agoGood. It’s about time these things get established as law one way or the other. Court cases are necessary to see where crypto and regulations fit and what if any new legislation is needed.
- legitster 3y agoI think the situation can be summed up nicely by Matt Levine: > "There is a traditional financial system, and crypto has built a different system, and the SEC has pretty much everywhere said “nah, you gotta follow the traditional system.” And crypto people have said “well we can’t really do that because ...” and the SEC has said “shh, shh, we don’t care.” Barring an act of congress to change the purview of the SEC, I don't think there is much to stop them. Maybe there was a chance before the FTX debacle and fallout - but I think now the SEC sees the industry as weak enough to strangle with a pillow. Good and bad, regulators act as white blood cells for the systems they regulate. Their obsession is always going to be to root out abnormalities and protect the host.
- rchaud 3y ago> “We think the most onerous outcome could be that, if various crypto assets are deemed securities, Coinbase would therefore need to register as a securities exchange, in order to keep offering trading in those assets,” Barclays added. All this, plus talk of leaving the country, just to avoid registering as a securities exchange?
- throwaway5959 3y agoFor once I’d like the US government to take one of these “break the law now and rewrite the laws later” companies to task.
- RobLach 3y agoI think from all angles this is going to be a money pit.