21 ms·

US SEC sues Coinbase, one day after suing Binance

588 points by jen20 3y ago

TimPC 3y ago
Crypto companies think they don't trade securities which is clearly wrong and contradicted by their own advertising. People buy crypto without a real use for crypto because they think they can sell it for more later. Everyone under the sun knows this. It's obviously a security and failing to register should be met by SEC cases like this one.
- pnpnp 3y ago
  Isn’t it true that the SEC wouldn’t let Coinbase register since they said Bitcoin _isn’t_ a security? It’s my understanding that Coinbase tried.
  - dragontamer 3y ago
    Article discusses Coinbase Earn, which was a staking service providing APY yields. Is that not an unregistered financial product? That's also the kind of financial product directly behind FTX, Voyager, Gemini, and Lunacoin / Celsius collapses. So we have direct evidence of a particular produce (staking) that is both unregistered and dangerous. That many Americans lost money over.
    - hirako2000 3y ago
      Gemini didn't collapse, and an evidence takes a bit more clarity to be treated as such. Luna is.. a coin Can't you get APY returns as a retail customer with pretty much any high street banks? In what ways is that less dangerous than going through a crypto exchange: by the fact the SEC is actively criminalising the activity rather than issuing licenses so that some customer protection via the justice system remains out there for this sort of market. You mentioned FTX, that's a good example, an exchange run by a con goofy looking artist, that achieved such massive penetration even on the US market was made possible exactly because it is so cumbersome or impossible for a legit business to get a license, the crypto affiliated threats making it also difficult for normal banks to do any sort of business with crypto entities. All that being said, sure, if they don't have a license they can be sued for their earn products. The only clear distinctions, the one thing the name mentioned and many others still running
      - dragontamer 3y ago
        Ehhh, I got confused over the myriad of collapsed companies. Perhaps I shouldn't try to get better memory, but instead cryptocoin companies need to stop collapsing. Its getting difficult to remember each company's situation on an individual basis. Gemini was sued by SEC for running unregulated securities and was forced to shut down Gemini Earn months ago. Whatever, but its just another example of the kind of products the SEC is clearly looking at. > Luna is.. a coin Lunacoin supported Terra, and Celsius was backing its staking product with Terra coins. Are... you unaware of the connection between Luna and Celsius? I wrote "Lunacoin / Celsius" for a reason. This didn't even happen that long ago, so I guess I assumed people would know where I was going. I'm trying to describe the scope of unregistered, unregulated, super-dangerous "staking" schemes that collapsed over the last year. The names I discussed are all related to staking.
        hirako2000 3y ago
        I'm aware, I'm just pointing out luna is a coin. It's a bit hard to assimilate it to business entities running unregistered financial products on the US soil. My understanding is that Celsius or any lender that gets exposed to a token value collapsing can quickly get itself in serious muds since loans have a collateral, and in crypto those are often crypto tokens. Anyhow that's my recollection of what happened to Celsius, i could be wrong. I don't think the problem the SEC is invoking is "dangerous" investments. I'm not sure who would be entitled to make the difference. You could stake eth and that would be one of the safest positions to take in the crypto space. Actually anybody can, whether the SEC sees it as OK, via centralised exchanges for those who can access them or decentralized exchanges for those who can't. But then of course eth could drop 95% in value by next year and the yield would mean nothing to compensate. It could go the other way and go the other way. Does it make it a dangerous product? A security illegal to trade without a license which the SEC wouldn't grant a license to offer as a product to anyone? Because it's dangerous or because it's a security having drastic volatility? More volatile than Gamespot shares not so long ago? Does it make gamespot so dangerous it should be banned from trading as a security? And one last one, what is more dangerous, owning eth tokens staked for long term returns, or some treasury bonds issued by a country that is systematically on the verge of defaulting on its unbearable debt? And who's to say? I don't think the SEC has any legitimacy left to be taken seriously, it let SBF runs business inside and outside the US soil for years, embezzling well over 10B dollars, whether he is innocent or an idiot crook the ridicule crown goes to the SEC for not having seen anything suspect until after the empire entirely collapsed. About having flimsy memories, it's OK but it discounts serious weight throwing incorrect facts when attacking a type of trading activity as a whole. Your argument did read like because so many collapsed, the whole thing must be flagged as a failure. Anyhow, coinbase, kraken, binance, gemini, kucoin and many others have been operating for years just fine, and are successful, profitable businesses to this day despite all the obstacles regulators and the press threw at them. Anyhow back to the main point, I'm with you earn products if unregistered are non compliant with regulations, so the SEC can have its case and continue to pretend it's doing its job.
    - andreygrehov 3y ago
      > That many Americans lost money over. This requires a citation with data points, eg how many Americans lost money, how much money did they lose, etc. Because, what if there are more Americans who've made money than those who have lost? > SEC said Coinbase has since at least 2019 made billions of dollars by handling cryptocurrency transactions, while evading the disclosure requirements meant to protect investors This is a pure framing - it doesn't matter how much money Coinbase made. Otherwise, it means that if you don't make _billions_, you can conveniently avoid the disclosure requirements intended to protect investors. So really, they should've written something like: "Coinbase has been facilitating cryptocurrency transactions since at least 2019, while evading the disclosure requirements intended to protect investors". While I do understand that these are the legal requirements, the protect investors "narrative" (khm-khm, requirement) is a joke. People lose money trading stocks / options / etc every day. To me, as a consumer, there is zero difference between trading AAPL on TD Ameritrade App vs trading crypto through Coinbase App. How's TD Ameritrade protecting me from losing money?
      - itake 3y ago
        > Because, what if there are more Americans who've made money than those who have lost? Why does this matter? Even if Americans are scamming foreigners (0 Americans losing money), that doesn’t make this legal. The difference between aapl and coinbase is there is regulatory audits of the books and required publications about the health of the security. There are rules about insider trading and insurance protections if a brokerage mishandles your money (see Blockfi).
        andreygrehov 3y ago
        > Why does this matter? Because the parent said "that many Americans lost money over". Plus the SEC is "protecting investors". So I'm asking, what if there are more people who've made money over those who lost? Does that mean life's good? Coinbase has been pretty transparent about their operations. Not only transparent, they've publicly mentioned several times how frustrated they are dealing with SEC, the organization that is slow to come up with various legal requirements for the cryptocurrency industry. In a way, Coinbase helps the SEC to raise their own bar.
    - pa7x1 3y ago
      Minor clarification. Coinbase Earn is a lending product, you lend to Coinbase and you receive interest. The same applies to Celsius, it provided interest on money they borrowed. Coinbase also offers staking as a service, the SEC is also going after this. But both of the above are different from actual Proof of Stake, as conceived by Ethereum. The SEC has made no mention of this in neither of the 2 current lawsuits. Unfortunately many of these products misused the term to whitewash or as a marketing gimmick.
  - strangescript 3y ago
    If you opened an exchange and did nothing but trade bitcoin, and only bitcoin, you would be free and clear, but there is no real money in that. Coinbase argued a few years ago they were losing to competition because their competitors could do a lot of gray area stuff they couldn't to do being a US-based traded company. Getting listed on Coinbase used to be the gold standard of a trusted, respectable crypto, but they at some point decided screw it and just embraced the coming legal challenges.
    - pnpnp 3y ago
      Interesting! I hadn’t looked at it this way.
  - Ekaros 3y ago
    Bitcoin itself might not be. Even many other currencies might not. But what other "products" they are running? Those could and probably would fall under various classifications.
    - pnpnp 3y ago
      Ah, of course. I forgot that they have many other offerings.
    - TimPC 3y ago
      Honestly bitcoin not being a security has been one of the biggest mistakes the SEC has made over the past decade. They gave that guidance and are stuck with it now. But the argument for it being a commodity is pretty weak and being a security would be useful from a regulatory framework. I think it's pretty clear bitcoin needs as much or more regulation than a typical stock or bond and is a more likely source of fraud or problems than typical stocks or bonds are.
- krunck 3y ago
  That's odd. All these years I thought I was exchanging dollars for Bitcoin for spending it. Thanks for setting me straight.
  - _fizz_buzz_ 3y ago
    I know lots of people that own bitcoin. I haven't met anybody that uses bitcoin to spend it on anything. It still makes front page news on reddit if someone does groceries with crypto: https://old.reddit.com/r/CryptoCurrency/comments/13a9q3r/yes_i_did_it_again_i_went_to_the_supermarket_here/ https://old.reddit.com/r/CryptoCurrency/comments/13a9q3r/yes... People write articles if a house gets sold with bitcoin: https://finbold.com/house-in-portugal-sold-for-3-bitcoins-in-a-historic-first-ever-direct-sale/ https://finbold.com/house-in-portugal-sold-for-3-bitcoins-in... Spending bitcoin on "stuff" basically doesn't exist. It's a rounding error.
    - achillean 3y ago
      As a vendor that tried accepting crypto I can confirm that it's basically non-existent. And the few transactions that do take place have a lot more issues than regular payments: https://blog.shodan.io/accepting-crypto-a-vendor-perspective/ https://blog.shodan.io/accepting-crypto-a-vendor-perspective...
    - dopa42365 3y ago
      It's almost as if people don't actually want a multiple dollar transaction fee that can take an hour (or more) to process. That may be acceptable when you use bitcoin (or more likely Monero) to buy whatever your heart desires, but is absolutely not usable for regular purchases.
- throw1234651234 3y ago
  It's absolutely unclear what the SEC is doing here at all. Why is ALGO a security and ETH is not? They do the same thing. What are the implications of this lawsuit? Completely unclear. This is vague and unhelpful. edit: Keep downvoting - the fact, with a clear example, remains.
  - pjc50 3y ago
    Howey test.
  - tromp 3y ago
    I think ETH should have been classified as one too, due to its ICO. Making an exemption for that was a mistake...
    - WinstonSmith84 3y ago
      Let's ask Gensler what are his thoughts about ETH then https://twitter.com/sassal0x/status/1648338351832064003 https://twitter.com/sassal0x/status/1648338351832064003 Oh wait ... :-)
      - throw1234651234 3y ago
        That's amazing on the level of refusal to answer a simple question.
    - simpsond 3y ago
      The primary use cases of ETH are changing state of the network and collateral for state change validation. Requester pays to effect change and some ETH is burnt and some goes to validators to incentivize operation. What other security does that? I don’t expect profit when using it to change state of the network.
  - EscapeFromNY 3y ago
    When was ETH declared as not a security? I don't remember hearing anything about that. The SEC says only BTC is a commodity: https://www.axios.com/2022/06/28/bitcoin-is-the-only-coin-the-sec-chair-will-call-a-commodity https://www.axios.com/2022/06/28/bitcoin-is-the-only-coin-th... The CFTC says only BTC is a commodity: https://cryptoslate.com/cftc-chair-rostin-behnam-snubs-ethereum-claims-only-bitcoin-is-a-commodity/ https://cryptoslate.com/cftc-chair-rostin-behnam-snubs-ether... People keep saying that regulation is unclear, when let's be honest, it's perfectly clear. Just not what a lot of people wanted to hear.
- gonzo41 3y ago
  What's the use of crypto again? Because I think it's kinda useless. Just like NFT's
  - taeric 3y ago
    I could ask the same for a lot of things, though? Time shares, collectible card games, collectibles at large, fashion at large, etc. Not that I can or will wholly defend crypto. That just doesn't seem like a relevant complaint. I do question the desire for everlasting permanence of the blockchain. I know we like to keep real estate deed records and such going back as far as we can, but even there we have limited utility of that. Encasing it in a technical solution that expands to cover more transactions does feel limited in usefulness. Largely ironic/funny that it makes it incredibly unsuited to criminal use.
    - jakear 3y ago
      > Time shares They bring the probability that you will be harassed by police/landowners/elements/civilians when residing in an area way down. Personally, I take the harassment and sleep on the street. But it's not easy and many would pay not to. > collectible card games You have fun when you play them. People pay to have fun. > collectibles at large Idk some people just get weird addictions. I put collectables at large in the same bucket as crypto, no defense there. > fashion at large Looking good is more likely to get you laid. People like getting laid, and will pay for it.
      - taeric 3y ago
        Do note that the SEC's argument is usually along the lines of "if anybody is buying this to make money, then it is potentially a security." The "common enterprise" part makes it a bit different, but only a bit. Also note that time shares typically are securities, in my understanding. In contrast to a house, which is not. My argument there wasn't to identify some other things that are or are not securities, but "things that are kinda useless." In the case of timeshares, I'd say they are actively more harm than good.
  - 3y ago
- throw0101c 3y ago
  > Crypto companies think they don't trade securities […] I think the main debate is whether they are (in the US) securities under the SEC or commodities under the CFTC. Though there may be related products and funds that are being traded.
- isp 3y ago
  > Crypto companies think they don't trade securities To quote the Binance Chief "Compliance" Officer: "we are operating as a fking unlicensed securities exchange in the USA bro" Source: Quoted in the filing yesterday where SEC sued Binance > 111. As Binance’s CCO bluntly admitted to another Binance compliance officer in December 2018, “we are operating as a fking unlicensed securities exchange in the USA bro.” https://www.sec.gov/files/litigation/complaints/2023/comp-pr2023-101.pdf https://www.sec.gov/files/litigation/complaints/2023/comp-pr...
  - asveikau 3y ago
    I hear if you add "bro" to a statement it makes you immune from prosecution.
  - EA-3167 3y ago
    It's almost unbelievable that someone would put something so monumentally incriminating in writing, but there it is. Those boys are doomed.
    - Analemma_ 3y ago
      A bunch of people have speculated that this was a CYA move. I mean, if you get hired as the Compliance Officer for a company which clearly has no interest in compliance and only hired you to give a facade of respectability, you probably want to have a paper trail indicating "I clearly communicated that this was against the law, and they ignored me" for when the cops inevitably come.
      - jahewson 3y ago
        Nothing says “innocent” like observing your criminality before getting right back to participating in the crime.
        ceejayoz 3y ago
        It could, if you're a whistleblower/informant. The SEC's bounty program makes it a pretty good idea. https://www.sec.gov/whistleblower https://www.sec.gov/whistleblower
- dcow 3y ago
  There are two modalities to crypto and the law needs to treat them differently. Running a node on a crypto currency network does not generate securities. It generates commodities. We don't tax people on the FMV of gold when they dig it out of the ground. But, speculating on the price of gold by creating a virtual token/contract/etc. and selling that, well that’s obviously a security. Just because people buy gold speculatively does make it a security. So buying bitcoin or chia (no longer eth) is still buying a commodity. Anything else, yeah, seems like it passes the sniff test for a security.
  - vkou 3y ago
    > We don't tax people on the FMV of gold when they dig it out of the ground. Why shouldn't we? We tax people on the FMV of something valuable created out of thin air, why should gold be an exception?
    - lottin 3y ago
      It isn't exempt. The miner will have to pay VAT when they try to sell the gold.
    - paulddraper 3y ago
      > We tax people on the FMV of something valuable created out of thin air, There are income taxes which apply when goods or services are sold. There are sales taxes when goods are purchased. There are property taxes when goods are owned. Nothing gets taxed on creation.
      - revbed 3y ago
        And there are excise taxes when goods are created.
        paulddraper 3y ago
        Excise taxes are a product-specific sales tax. For example, on gasoline. The tax occurs at the pump, not at the refinery.
- spaceman_2020 3y ago
  What about tokens that are used to pay the network, like Ethereum? If you want to use any chain that uses Ethereum, either as a L1 or L2, you need ETH.
- api 3y ago
  A security represents ownership in something. This is just gambling. It's more like an unregulated casino than an unlicensed stock exchange.
- zamfi 3y ago
  > People buy crypto without a real use for crypto because they think they can sell it for more later. That's not what makes something a security -- many things fit into that template that aren't securities: collectibles, commodities, etc.
- thesausageking 3y ago
  If that's true, then why did the SEC approve Coinbase's IPO and not doing anything about it until years later? Even in spite of Coinbase meeting with the SEC hundreds of times and testifying before congress. This is a complete change in their stance by the SEC.
  - thisgoesnowhere 3y ago
    Because the SECs role in IPOs have nothing to do with wether or not you are breaking securities law. They are just testing that you are not lying in your public financial declarations.
    - thesausageking 3y ago
      You're saying that the SEC knowingly allowed Coinbase to become a public company, have insiders dump billions in stock on the public, and then continue to operate a completely illegal business for another 2 years without taking any action at all? Not even issuing any guidance which Coinbase requested from them dozens of times? If so, that would be a huge scandal and the SEC should be investigated immediately. A much simpler explanation is that crypto was largely ignored by regulators, including the very shady parts like FTX, for most of Coinbase's life. When FTX imploded, lawmakers turned on crypto and put pressure on the SEC to attack the industry. This is why there's been a whole series of actions by them in the last 6 months.
      - donedeals 3y ago
        Typically IPO approvals include a carve out that says this approval cannot bed used a defense in a SEC action. CB will still use it as an argument.
- drexlspivey 3y ago
  SEC is supposed to tell them what is a security and what isn’t so they can refrain from selling them. Exchanges have been asking for clarification over and over. So far the only thing the SEC said on the subject is that BTC in not a security but nothing about the other cryptos. In the absence of regulatory clarity Coinbase have devised their own framework to classify what tokens aren’t securities and proceeded to list them. I don’t know how you can blame them. It’s the SEC’s job to tell them what they can trade and what they can’t but they refuse to do it.
  - TylerE 3y ago
    They did tell them - Howey test etc, Coinbase just didn't like the answer and thus has been pretending they didn't hear it.
    - drexlspivey 3y ago
      Please point to where the SEC has made any official statement defining which crypto is and isn't a security.
      - TylerE 3y ago
        That's not how it works. They say what a security is. It's not their job to be babysit. Corps wishing to play in this field are expected to understand the basic foundations.
  - Yizahi 3y ago
    When tokenbro industry invented a very convoluted asset class they expected government to say "Oh, it's really hard to understand and classify it, that's why we won't do it at all. You guys can do whatever you want now.". But actually they said "Oh, it's really hard to understand and classify it, that's why we will have to do it the long and painful way, and you guys can wait for us or not. But if you want to operate before the decision is reached - it's on you if you break the law.". Apparently a really convoluted business plan is not an inherent human right, if it is masking law infringement in he mean time. Who knew, right?:)
- EricDeb 3y ago
  People buy houses, dont live in them, purely to sell them for more later.
- redox99 3y ago
  Some cryptocurrencies may or may not be securities. Gary Gensler himself has said that Bitcoin is not a security.
- ryukoposting 3y ago
  In the 90s people bought Beanie Babies because they thought they could sell them for more later. Are Beanie Babies securities?
datadeft 3y ago
The end of an era.
- danielschonfeld 3y ago
  [flagged]
  - BowBun 3y ago
    Considering the EU is unable step up, I think you'll miss the enemy we knew after all is said and done (if there is a significant shift in the leading powers). I'm not wearing rose-tinted glasses about the past (I'm not American), but the up-and-coming alternatives seem real scary.
    - WinstonSmith84 3y ago
      The EU is the same as the US: pretending to be the land of free but effectively controlled by interests, driven by hidden agendas. Some other countries don't try to pretend to be free nor pretend to work for the people, and maybe less hypocrisy is not worse (China or India). A healthy balance of competition between world powers is much welcomed.
  - WinstonSmith84 3y ago
    logical assumption. There has never been a blockchain era yet.
  - wellthisisgreat 3y ago
    lol I am pretty sure the GP is talking about the era of crypto swindlers who rode the good ideas of liberty, financial diversification, and such into the ground and will all hopefully pay for it
- soco 3y ago
  The era of the few crypto billionaires and the crowd of regular Joe money-losers. Ah, those times.
adamsmith143 3y ago
Always interesting how crypto prices tank after legal action is announced against exchanges. Isn't the whole point to be decentralized in the first place? Hard to believe the whole dip is due to people wanting to get their tokens off the exchanges.
- jrm4 3y ago
  Well, there is no "whole point," right? You could roughly divide the crypto world into "true believers" and "people who just want to get rich." The latter overwhelmingly dominate price and volume, and moreover it's the "whales," i.e. a relatively small number of parties. I suppose I'm something of a "true believer," but what I may want or think is best doesn't matter in the face of the working crypto technology. The incentives are in place and to an extent we just have to sit back and see what happens.
- nfRfqX5n 3y ago
  looks like the price barely changed
  - adamsmith143 3y ago
    ? Bitcoin is down 5% since Binance was sued...
- awaythrow483 3y ago
  Price is up today
seydor 3y ago
I think it was always 100% clear that cryptocurrencies can't live within the confines of the laws of a sovereign state. Why people registered their exchanges along with the rest of the banking system ? it made zero sense from the start, as does the whole idea that cryptos can be traded in regulated capitalism. Bitcoin needs its own country (or planet) with nukes and all.
- jrm4 3y ago
  Not that I agree with the own planet thing; but yes -- it's odd. All of this was 100% predictable and should have been expected by everyone. The stated purpose of crypto was to get around this; its weird to see crypto fans "get mad" at e.g. the SEC. It's like getting mad at a shark for going after bleeding prey; it's just what was always going to happen.
  - hirako2000 3y ago
    Mad because some entrepreneurs makes the effort to build legitimate business entities, and what certain governments find to do is any scheme to keep them out of legitimity. Not that crypto fans would care all that much about these businesses, but there is a need to onramp and offramp given transactions are made in their vast majority in fiat. An exchange run as a business having at least a lot at stake in ensuring continuity is one of the decent ways to get on with crypto. If it was my call I would skip the perp and earn products to stay clear of regulators when operating in the US, but there must be stories behind closed doors that we don't easily get to know would be my guess.
    - seydor 3y ago
      it's not like these onramps served the real purpose of digital currency. People don't buy bitcoin in order to pay for services, they buy it to speculate. Bitcoin could succeed even without onramps; digital workers can easily accept bitcoin if they care, which over time will be traded with goods in the physical world with other people who care. That's grass roots deployment, not VC-backed "legitimate" ponzi exchanges. I do however understand why people are mad. To me it seems that crypto is to GenZ what Real estate was to boomers. It's about building generational wealth in a time of extreme inequality where most other avenues have been closed. It may come back for that, but it has to be built outside the confines of state-regulated money systems
menthe 3y ago
There is a well-documented public history of Coinbase taunting the SEC - they had it coming. - https://www.coinbase.com/blog/the-sec-has-told-us-it-wants-to-sue-us-over-lend-we-have-no-idea-why https://www.coinbase.com/blog/the-sec-has-told-us-it-wants-t... - https://www.coinbase.com/blog/coinbase-does-not-list-securities-end-of-story https://www.coinbase.com/blog/coinbase-does-not-list-securit... - https://www.coinbase.com/blog/coinbases-staking-services-are-not-securities-and-heres-why https://www.coinbase.com/blog/coinbases-staking-services-are... - https://www.coinbase.com/blog/we-asked-the-sec-for-reasonable-crypto-rules-for-americans-we-got-legal https://www.coinbase.com/blog/we-asked-the-sec-for-reasonabl... - https://www.coinbase.com/blog/coinbase-takes-another-formal-step-to-seek-regulatory-clarity-from-sec-for https://www.coinbase.com/blog/coinbase-takes-another-formal-... - https://www.coinbase.com/blog/coinbase-responds-to-the-secs-wells-notice https://www.coinbase.com/blog/coinbase-responds-to-the-secs-... Better yet: https://www.coinbase.com/blog/icymi-coinbase-and-the-sec https://www.coinbase.com/blog/icymi-coinbase-and-the-sec
- butlerm 3y ago
  None of those posts except the last looks like taunting the SEC to me, but rather keeping the public and their customer base in particular up to date on a live regulatory issue that may present a risk to their business. That is the type of thing the SEC requires (at least of publicly traded companies) not discourages.
- chroma 3y ago
  If criticizing a regulatory body causes them to go after you, then that regulatory body is corrupt and should be dismantled and replaced with something else.
  - deleted 3y ago
    [deleted]
  - dymk 3y ago
    Taunt and criticize are two different verbs
paulpauper 3y ago
Crypto is like the worst investment ever: huge legal risk, does not hedge inflation, not a safeguard in crisis, does not benefit from tech/ai boom, does not generate profits. Only downside, no upside, no strengths, only weaknesses. the chart is only one direction: down The obvious weakness of bitcoin relative to QQQ demonstrates this. A daytrading pair trade method that shorts Bitcoin in market hours and goes long qqq would have cleaned house over the past year, including a huge win yesterday. i was running this and made a lot. Who goes against the fed. government and wins? big tobacco couldn't do it. neither could the auto industry.
- EddieEngineers 3y ago
  This is true when it’s going down and false when it’s going up. Do the same analysis of previous years during bull crypto markets and does this hold up?
  - paulpauper 3y ago
    bitcoin's performance since late 2017 lags QQQ. the rolling 5-year returns have gotten way worse. Much of the gains were from pre-2018. many people five years ago were predicting six-figures by now, nowhere even close.
    - flanfly 3y ago
      I'm not sure what you mean. BTC is up 29x since 2017 while QQQ is up 1.8x
      - paulpauper 3y ago
        it went up 20x in 2017. i said late 2017. it peaked at 20k in dec 2017.
        awaythrow483 3y ago
        As pointed out above, complete fallacy. You are cherry picking a handful of dates that support your argument and those dates are completely arbitrary.
shp0ngle 3y ago
Well, there is your regulatory clarity, Coinbase.
butlerm 3y ago
If you look up the definitions of "security", "financial instrument", "commodity", and "currency", it is pretty clear that a plain vanilla crypto-currency like Bitcoin is no ordinary security nor a financial instrument. It is not a claim on something else, even less so than a traditional bank note. It is more like a commodity. Since when is "aluminum" a security? A crypto currency business however may be engaged in trading of crypto currencies which are negotiable financial instruments, and a stable coin that is a claim on a traditional currency is an example of that. A stable coin bears a direct relationship to a bank note. It is a claim on something else. It is not really an investment though, so not much of a security. And then of course there are more creative negotiable financial instruments which are definitely securities. Options, derivatives, swaps, futures, and the like. The Supreme Court has a broader definition of securities, that involves a promoted investment in a "common enterprise", but it is unclear that a commodity currency really is a common enterprise like a corporation is for example. It seems unlikely to me that Bitcoin as such would even meet that definition of a security. But other products offered by crypto currency exchanges might.
- dforrestwilson 3y ago
  Getting sued to fall under govt regulation - and therefore gaining imprimatur - seems like exactly what these exchanges should want. We never regulated Beanie Babies.
  - mmastrac 3y ago
    I don't think Beanie Babies collectors tended towards the libertarian part of the axis, however.
  - strangescript 3y ago
    I mean, that makes some assumptions about the overall outcomes here.
  - bannedbybros 3y ago
    [dead]
- 3y ago
mrkramer 3y ago
Grace period of unregulated crypto is over. Brace yourself, SEC is coming!
- detrites 3y ago
  The SEC issues fines. To them it's taking a cut, to Binance etc, it's operating expenses. These "enforcements" are more like protection money paid to gangsters. The SEC could have created clarity a decade ago. It's not in their interest to do so, plain and simple. They are incentivised financially, to persist in creating a lack of clarity, and then randomly "enforcing" inconsistently to extract multi-millions off of effectively approved profits. If / when they refer cases to the DoJ, it's different. But, typically they don't, because typically most of the players they're going after are doing their best to comply with the "uncompliable" landscape they are facing. Or - they're FTX. And let's just remember that, always. The SEC, effectively, gave FTX a green light. Maybe the most damaging crypto fail in history likely an outright fraud, of massive proportions and where was the SEC? That's what we're dealing with here.
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  - foodjinn 3y ago
    Also worth pointing out the SEC's involvement in the subprime mortgage collapse.
calny 3y ago
The actual complaint: https://storage.courtlistener.com/recap/gov.uscourts.nysd.599908/gov.uscourts.nysd.599908.1.0.pdf https://storage.courtlistener.com/recap/gov.uscourts.nysd.59...
blondie9x 3y ago
It took them way to long to act on crypto. The damage was already done. Trillions of wealth has been destroyed by crypto.
- loeg 3y ago
  Levine has talked about this a bit. It's much easier to be a harsh regulator after the crash than on the way up.
retrocryptid 3y ago
My experience with Coinbase led me to ask people "where do I sign up for the class action law suit?" so this is welcome news.
- sebzim4500 3y ago
  That's interesting. What did Coinbase do to you exactly?
  - retrocryptid 3y ago
    Took US Dollars ostensibly to purchase bitcoin. A year later when bitcoin had appreciated, I asked for them to sell the bitcoin and give me US dollars back. They said "no" and said that I fundamentally misunderstood what an exchange was. It exchanges US Dollars into Bitcoin, it does not convert Bitcoin into US dollars.
johndhi 3y ago
Question: is it even possible to register as a security? If you do, what follows? So if SOL for example were to register somewhere, what would they need to do, and what would I need to do to buy it?
- SpicyLemonZest 3y ago
  There’s no fundamental reason it would be impossible. Solana Labs would need to file a registration statement with the SEC (https://www.sec.gov/education/smallbusiness/goingpublic/registrationstatement https://www.sec.gov/education/smallbusiness/goingpublic/regi...) including among other things a description of its business practices and audited financial statements. Once they did that, you would be able to buy and sell it at any registered exchange who’s willing to list it. Coinbase, maybe, if they’re willing to accept the costs and regulations involved.
  - arctek 3y ago
    Except that it would exclude a raft of non-US citizens then, i.e. any sanctioned country, Coinbase would also need to become registered as an ATS and their current settlement and clearing processes would need to be re-engineered from the ground up. For all intents and purposes you cannot register a cryptocurrency with the SEC and then go on trading it anywhere publicly - it doesn't exist. There's only been a few projects that managed to avoid this: Enigma for example moved to a decentralized network and changed their coin over (so it was magically no longer a security according to the SEC) and the SEC just fined them and made them issue refunds for the project raise.
    - JumpCrisscross 3y ago
      > it would exclude a raft of non-US citizens then, i.e. any sanctioned country This lays bare the problem with the status quo. Wanting to profit off sanctions busting isn’t a sympathetic pitch.
      - dbmikus 3y ago
cultureswitch 3y ago
And there we go. The promise of a form of cash outside of USA government control is terrifying to the USA government. And well, most other governments too. It is pretty obvious that when the USA government goes after crypto exchanges, what matters is to get the exchange shut down. The actual justification for doing so is an afterthought. I'm torn on the issue of whether dematerialized privacy-preserving cash (and yeah, I know crypto exchanges had very little to do with that) is even a good thing to begin with. To me the strongest argument for it is that the crimes that would be facilitated by that are already trivial, as long as you're rich enough. You don't need Monero when you can "sell" a Monet in exchange for services instead. It is incredibly hypocritical of governments to complain that privacy-preserving currencies enable criminals when they have done literally nothing to stop the numerous convenient ways to launder money that are accessible only to rich and powerful people.
- gitfan86 3y ago
  That is putting the cart before the horse. The USA is not a libertarian government. Why did anyone think that it was a good idea to invest in products that would only survive in a libertarian government?
  - cultureswitch 3y ago
    Invest? I think investing in crypto is purely based on greater fool theory. Doesn't mean there aren't any legitimate uses for cryptocurrency, let alone the blockchain technology. In this sense, why should Coinbase and a currency exchange booth in some airport be considered any different? Of course, Coinbase doesn't quite operate statelessly like that, and to me that's the issue here.
  - x86x87 3y ago
    Lol. What is the US government?
- sealeck 3y ago
  I think part of it might be that the only use case for which crypto really works is for drug dealers to safely conduct transactions. I believe in the right to privacy, but I believe in it as an extension of a personal right to self-expression. Freedom to practice your religion, to date whomever you want, etc (provided it doesn't hurt others), sure. Freedom to hold 10^9 USD secretly so that you don't have to pay tax on it and can peddle drugs, not really.
eggy 3y ago
I know their are legalities I am not an expert in on finance, but my conspiracy theorist is bubbling up given the failed crypto bank, the SEC suing Binance and Coinbase, and the US and world government move for traceable, government managed and controlled digital currencies. I was at the first HOPE in 1994[1] at the Penn Hotel in NYC when Eric Hughes (known for the Cypherpunk Manifesto) and others gave a talk on cryptography and how it would be part of a future of privacy and security for anonymous banking etc. I was so enthused about getting rid of the middle man (a minimum of 4 or 5 entities process your latte purchase at Starbucks and take a cut as well as track you and your data trail). Government doesn't like this. "What do you have to hide?" is a tired defense of prying eyes. Yes, there were a lot of bad fish in the pool, but the goal was and is still good in my book. [1] https://youtu.be/v5kayD5IQQU https://youtu.be/v5kayD5IQQU
- throitallaway 3y ago
  It's gotten to the point where political candidates (and politicians) have to cover their tracks when paying for things, lest they be criticized for their choices. If you ever want to run for office you'd better never use a credit card at a porn shop, McDonald's (it's unhealthy), etc. This applies to data that insurance companies harvest from as well. I used to be one of those people that said "I have nothing to hide and the conveniences outweigh the negatives", but I'm getting more and more cynical on data dragnets as I'm growing older.
- timerol 3y ago
  Do you pay cash at Starbucks?
  - eggy 3y ago
    Sometimes, but I have been avoiding Starbucks unless I am 'renting' office space there. For a quick coffee the bodega, deli, or Dunkin. Some retailers have made it hard to pay cash by installing card only systems. Others have long lines for cashiers and self-checkouts sometimes only take card. It's painful to see young kids struggle with making change, because they are so used to the phone/computer figuring it all out for them.
alphanullmeric 3y ago
Trust the government fiercely to defend their right to other people’s wallets and prevent individuals from risking their money how they want.
jmyeet 3y ago
Here's my take on crypto: 1. Despite any theoretical applications, all applications of crypto thus far have been to bypass laws. Some of these might be moral (eg avoiding currency controls in some countries like Venezuela) but mostly it's just illegal stuff; 2. No one is really interested in applications. They're "hodling" [sic] because of Bitcoin FOMO. They want in on the next Bitcoin. 3. Scams and rug pulls are rife in crypto. Taken with (2), this implies that people who think they're getting rich in crypto are only going to do so by scamming or rug pulling other people who will be left holding the bag; 4. Despite all the claims about verifiability, somehow the crypto space still needs strong government intervention to deter and prosecute scammers, criminals and thieves. That's another big L for the libertarians and goldbugs-turned-crypto-bros out there; 5. NFTs are the next level scam about crypto and really only exist to sell more crypto; 6. A lot of otherwise smart people have fooled themselves into thinking that their knowledge, skills and experience with some other area somehow magically translates into finance; 7. A whole bunch more snake oil salesmen are happy to sell others this lie; 8. The desire and desperation to get rich by many "hodlers" causes them to fool themselves into thinking there's any value in crypto; 9. Reversability of transactions and the ability to change the money supply volume are features not bugs; and 10. What underpins the US dollar is, ultimately, the full might of the US government and military as well as trust. Crypto too is ultimately still built on trust but has nothing else behind it. It actually seemed to me that Coinbase was the one company operating legitimately. I haven't read the complaint so I'm not sure how much merit the charges have. We shall see.
- strbean 3y ago
  > 1. Despite any theoretical applications, all applications of crypto thus far have been to bypass laws. Not so: https://en.wikipedia.org/wiki/Bitcoin_in_El_Salvador https://en.wikipedia.org/wiki/Bitcoin_in_El_Salvador
modeless 3y ago
The specific crypto tokens they are classifying as securities are: SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH, and NEXO. Of course they say "not limited to" to hedge their bets, but those are the ones they specifically mention. This is the exact "regulatory clarity" Coinbase has been asking for, but the SEC prefers to sit on their hands for years (while investors are "harmed") and then sue, rather than actually tell Coinbase what they think up front. Sure seems self-serving to me, rather than anything like a genuine interest in protecting investors.
- x86x87 3y ago
  Hah. Protecting investors. What a bunch of croc. This was never about protecting investors. If it was they would have issues the guidance 5 years ago. This is about blowing up crypto in general by removing the on/off ramps (ie the exchanges). Also: mandatory crypto is bad for the environment and it consumes more power than the whole country of Argentina! /s But nobody seems to care or talk about how much power crapGPT is consuming. The future they tell me
  - mjburgess 3y ago
    This is such a dangerous attitude. The reason regulators have waited years, despite the facts of the matter being legally obvious, is not wanting to be blamed for blowing up the whole ponzi house-of-cards. They've waited until enough such houses blew up on their own, that they feel "the facts have been demonstrated". If you want to know why they didnt "blow up crypto", "five years ago", its because of you -- and this attitude. Without it, vast swathes of online grifts that have ruined peoeple's lives wouldve been blown out the water by now.
    - modeless 3y ago
      The whole point of the regulation is to stop it from blowing up and harming investors. If they wait until after then they have failed at their job.
    - foodjinn 3y ago
awaythrow483 3y ago
Bitcoin up 2% on the news despite people in this thread explicitly saying "it made crypto price tank" in the thread
- paulpauper 3y ago
  umm...check what it did yesterday.
  - awaythrow483 3y ago
    This is an article about the SEC coinbase announcement. That happened today. So I'm not talking about what happened yesterday, I'm talking about what happened today, because that is what is relevant to the article we are discussing. so, ummmmm..... like..... bruh. go check what it did today
ForHackernews 3y ago
Alternative headline: Coinbase and Binance enter the "finding out" phase of unlicensed securities dealing
- x86x87 3y ago
  Alternative alternative headline: the SEC wants to have their cake and eat it too while "protecting" "investors"
I_am_tiberius 3y ago
I don't understand why even the hackernews community doesn't see that this is all a political strategy to make sure the digital dollar can exist.
- __tmk__ 3y ago
  I doubt the USG is competent enough to have a masterplan like that. This just seems to me like the actions of a person (Gary Gensler) who personally dislikes cryptocurrencies and who is trying to establish himself as a political player through his "bold actions".
- zarriak 3y ago
  None of the time that libertarian beliefs could protect civil liberties is it ever taken seriously. It exists solely to launder corporate protections and deregulation. Nothing significant happen to the NSA after the Snowden leaks, nothing significant happened to the FISA court. Also I don’t get how something like CBDC ever exists because of how powerful Visa is.
shrimpx 3y ago
Well, if it ends up in the Supreme Court, my bet is this particular scotus will rule against the “administrative state”, “overreaching” SEC.
dontupvoteme 3y ago
Curious how authoritarian hackernews is - is this just a knee jerk reaction to annoying cryptobros? Sounds like a board of police officers/retired army men right now commenting on how "that boy had it coming"
- timerol 3y ago
  It's a long-simmering annoyance at the decline of the cryptocurrency ecosystem: from the really cool technology underlying Bitcoin, to exciting whitepapers with different solutions to hard problems on other coins, to intractable whitepapers designed to create hype for coins that do nothing, to the clear creation of exchanges as places to gamble, to the sidelining of anyone in the cryptocurrency world trying to solve any problem other than "get rich quick", to the collapse of FTX. All through it the definition of a security has been clear, but Coinbase et al has pretended that the issue is "regulatory clarity" and not "we are operating as a fking unlicensed securities exchange in the USA bro". Very rarely a cool use case for cryptocurrency will come up, but the marketing is now entirely "invest and make money!", which is some combination of tedious and scammy, depending on who it's coming from.
  - dontupvoteme 3y ago
    That checks out. I got out of crypto a long time ago, back around when people were creating doge based coins for a laugh, i can imagine it only got a lot worse.
transducers 3y ago
https://en.m.wikipedia.org/wiki/Brian_P._Brooks https://en.m.wikipedia.org/wiki/Brian_P._Brooks He is apparently BAM CEO (B) of the SEC’s Binance lawsuit [0], and also worked at Coinbase (to setup compliance) [1]. I was reading up on his activities on his wiki page and rather impressed. Was a comptroller of the Currency for a while in 2020, too. He’s still sitting on the board of another company that’s in block chains (BitFury [2] does infrastructure) and apparently a lot of “vision” related stuff [3] [0]: https://news.ycombinator.com/item?id=36202663 https://news.ycombinator.com/item?id=36202663 [1]: https://en.m.wikipedia.org/wiki/Brian_P._Brooks#Coinbase https://en.m.wikipedia.org/wiki/Brian_P._Brooks#Coinbase “”” After working at Fannie Mae, Brooks was Chief Legal Officer of Coinbase from 2018 to 2020. Coinbase is an $8 billion Silicon Valley startup that is one of the largest digital currency platforms in the world. At Coinbase, he was responsible for the company's legal, compliance, internal audit, government relations, and global intelligence groups. “”” [2]: https://bitfury.com/ https://bitfury.com/ [3[]: https://www.axelera.ai/ https://www.axelera.ai/ I got a chuckle from the “democratizing edge AI” since they are selling surveillance AI for the edge. Reminded me of Washington Post’s masthead. Are they being ironic? /g
CodeWriter23 3y ago
Looks like the US Govt is going to eliminate the competition before replacing US Currency with its own crypto, likely developed and administered by a third party because the government sucks at building stuff.
- fintechie 3y ago
  And apparently that 3rd party just forked Avalanche.... https://cointelegraph.com/news/federal-reserve-s-fednow-will-integrate-with-metal-blockchain https://cointelegraph.com/news/federal-reserve-s-fednow-will...
deleted 3y ago
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1vuio0pswjnm7 3y ago
HN commenters do not get to decide whether anything is a security. Neither does the SEC. The Courts get to decide. The SEC appears ready to accept what the Courts decide.

588 points by jen20 3y ago

Crypto companies think they don't trade securities which is clearly wrong and contradicted by their own advertising. People buy crypto without a real use for crypto because they think they can sell it for more later. Everyone under the sun knows this. It's obviously a security and failing to register should be met by SEC cases like this one.

pnpnp 3y ago
Isn’t it true that the SEC wouldn’t let Coinbase register since they said Bitcoin _isn’t_ a security? It’s my understanding that Coinbase tried.
- dragontamer 3y ago
  Article discusses Coinbase Earn, which was a staking service providing APY yields. Is that not an unregistered financial product? That's also the kind of financial product directly behind FTX, Voyager, Gemini, and Lunacoin / Celsius collapses. So we have direct evidence of a particular produce (staking) that is both unregistered and dangerous. That many Americans lost money over.
  - hirako2000 3y ago
    Gemini didn't collapse, and an evidence takes a bit more clarity to be treated as such. Luna is.. a coin Can't you get APY returns as a retail customer with pretty much any high street banks? In what ways is that less dangerous than going through a crypto exchange: by the fact the SEC is actively criminalising the activity rather than issuing licenses so that some customer protection via the justice system remains out there for this sort of market. You mentioned FTX, that's a good example, an exchange run by a con goofy looking artist, that achieved such massive penetration even on the US market was made possible exactly because it is so cumbersome or impossible for a legit business to get a license, the crypto affiliated threats making it also difficult for normal banks to do any sort of business with crypto entities. All that being said, sure, if they don't have a license they can be sued for their earn products. The only clear distinctions, the one thing the name mentioned and many others still running
    - dragontamer 3y ago
      Ehhh, I got confused over the myriad of collapsed companies. Perhaps I shouldn't try to get better memory, but instead cryptocoin companies need to stop collapsing. Its getting difficult to remember each company's situation on an individual basis. Gemini was sued by SEC for running unregulated securities and was forced to shut down Gemini Earn months ago. Whatever, but its just another example of the kind of products the SEC is clearly looking at. > Luna is.. a coin Lunacoin supported Terra, and Celsius was backing its staking product with Terra coins. Are... you unaware of the connection between Luna and Celsius? I wrote "Lunacoin / Celsius" for a reason. This didn't even happen that long ago, so I guess I assumed people would know where I was going. I'm trying to describe the scope of unregistered, unregulated, super-dangerous "staking" schemes that collapsed over the last year. The names I discussed are all related to staking.
      - hirako2000 3y ago
        I'm aware, I'm just pointing out luna is a coin. It's a bit hard to assimilate it to business entities running unregistered financial products on the US soil. My understanding is that Celsius or any lender that gets exposed to a token value collapsing can quickly get itself in serious muds since loans have a collateral, and in crypto those are often crypto tokens. Anyhow that's my recollection of what happened to Celsius, i could be wrong. I don't think the problem the SEC is invoking is "dangerous" investments. I'm not sure who would be entitled to make the difference. You could stake eth and that would be one of the safest positions to take in the crypto space. Actually anybody can, whether the SEC sees it as OK, via centralised exchanges for those who can access them or decentralized exchanges for those who can't. But then of course eth could drop 95% in value by next year and the yield would mean nothing to compensate. It could go the other way and go the other way. Does it make it a dangerous product? A security illegal to trade without a license which the SEC wouldn't grant a license to offer as a product to anyone? Because it's dangerous or because it's a security having drastic volatility? More volatile than Gamespot shares not so long ago? Does it make gamespot so dangerous it should be banned from trading as a security? And one last one, what is more dangerous, owning eth tokens staked for long term returns, or some treasury bonds issued by a country that is systematically on the verge of defaulting on its unbearable debt? And who's to say? I don't think the SEC has any legitimacy left to be taken seriously, it let SBF runs business inside and outside the US soil for years, embezzling well over 10B dollars, whether he is innocent or an idiot crook the ridicule crown goes to the SEC for not having seen anything suspect until after the empire entirely collapsed. About having flimsy memories, it's OK but it discounts serious weight throwing incorrect facts when attacking a type of trading activity as a whole. Your argument did read like because so many collapsed, the whole thing must be flagged as a failure. Anyhow, coinbase, kraken, binance, gemini, kucoin and many others have been operating for years just fine, and are successful, profitable businesses to this day despite all the obstacles regulators and the press threw at them. Anyhow back to the main point, I'm with you earn products if unregistered are non compliant with regulations, so the SEC can have its case and continue to pretend it's doing its job.
  - andreygrehov 3y ago
    > That many Americans lost money over. This requires a citation with data points, eg how many Americans lost money, how much money did they lose, etc. Because, what if there are more Americans who've made money than those who have lost? > SEC said Coinbase has since at least 2019 made billions of dollars by handling cryptocurrency transactions, while evading the disclosure requirements meant to protect investors This is a pure framing - it doesn't matter how much money Coinbase made. Otherwise, it means that if you don't make _billions_, you can conveniently avoid the disclosure requirements intended to protect investors. So really, they should've written something like: "Coinbase has been facilitating cryptocurrency transactions since at least 2019, while evading the disclosure requirements intended to protect investors". While I do understand that these are the legal requirements, the protect investors "narrative" (khm-khm, requirement) is a joke. People lose money trading stocks / options / etc every day. To me, as a consumer, there is zero difference between trading AAPL on TD Ameritrade App vs trading crypto through Coinbase App. How's TD Ameritrade protecting me from losing money?
    - itake 3y ago
      > Because, what if there are more Americans who've made money than those who have lost? Why does this matter? Even if Americans are scamming foreigners (0 Americans losing money), that doesn’t make this legal. The difference between aapl and coinbase is there is regulatory audits of the books and required publications about the health of the security. There are rules about insider trading and insurance protections if a brokerage mishandles your money (see Blockfi).
      - andreygrehov 3y ago
        > Why does this matter? Because the parent said "that many Americans lost money over". Plus the SEC is "protecting investors". So I'm asking, what if there are more people who've made money over those who lost? Does that mean life's good? Coinbase has been pretty transparent about their operations. Not only transparent, they've publicly mentioned several times how frustrated they are dealing with SEC, the organization that is slow to come up with various legal requirements for the cryptocurrency industry. In a way, Coinbase helps the SEC to raise their own bar.
  - pa7x1 3y ago
    Minor clarification. Coinbase Earn is a lending product, you lend to Coinbase and you receive interest. The same applies to Celsius, it provided interest on money they borrowed. Coinbase also offers staking as a service, the SEC is also going after this. But both of the above are different from actual Proof of Stake, as conceived by Ethereum. The SEC has made no mention of this in neither of the 2 current lawsuits. Unfortunately many of these products misused the term to whitewash or as a marketing gimmick.
- strangescript 3y ago
  If you opened an exchange and did nothing but trade bitcoin, and only bitcoin, you would be free and clear, but there is no real money in that. Coinbase argued a few years ago they were losing to competition because their competitors could do a lot of gray area stuff they couldn't to do being a US-based traded company. Getting listed on Coinbase used to be the gold standard of a trusted, respectable crypto, but they at some point decided screw it and just embraced the coming legal challenges.
  - pnpnp 3y ago
    Interesting! I hadn’t looked at it this way.
- Ekaros 3y ago
  Bitcoin itself might not be. Even many other currencies might not. But what other "products" they are running? Those could and probably would fall under various classifications.
  - pnpnp 3y ago
    Ah, of course. I forgot that they have many other offerings.
  - TimPC 3y ago
    Honestly bitcoin not being a security has been one of the biggest mistakes the SEC has made over the past decade. They gave that guidance and are stuck with it now. But the argument for it being a commodity is pretty weak and being a security would be useful from a regulatory framework. I think it's pretty clear bitcoin needs as much or more regulation than a typical stock or bond and is a more likely source of fraud or problems than typical stocks or bonds are.
krunck 3y ago
That's odd. All these years I thought I was exchanging dollars for Bitcoin for spending it. Thanks for setting me straight.
- _fizz_buzz_ 3y ago
  I know lots of people that own bitcoin. I haven't met anybody that uses bitcoin to spend it on anything. It still makes front page news on reddit if someone does groceries with crypto: https://old.reddit.com/r/CryptoCurrency/comments/13a9q3r/yes_i_did_it_again_i_went_to_the_supermarket_here/ https://old.reddit.com/r/CryptoCurrency/comments/13a9q3r/yes... People write articles if a house gets sold with bitcoin: https://finbold.com/house-in-portugal-sold-for-3-bitcoins-in-a-historic-first-ever-direct-sale/ https://finbold.com/house-in-portugal-sold-for-3-bitcoins-in... Spending bitcoin on "stuff" basically doesn't exist. It's a rounding error.
  - achillean 3y ago
    As a vendor that tried accepting crypto I can confirm that it's basically non-existent. And the few transactions that do take place have a lot more issues than regular payments: https://blog.shodan.io/accepting-crypto-a-vendor-perspective/ https://blog.shodan.io/accepting-crypto-a-vendor-perspective...
  - dopa42365 3y ago
    It's almost as if people don't actually want a multiple dollar transaction fee that can take an hour (or more) to process. That may be acceptable when you use bitcoin (or more likely Monero) to buy whatever your heart desires, but is absolutely not usable for regular purchases.
throw1234651234 3y ago
It's absolutely unclear what the SEC is doing here at all. Why is ALGO a security and ETH is not? They do the same thing. What are the implications of this lawsuit? Completely unclear. This is vague and unhelpful. edit: Keep downvoting - the fact, with a clear example, remains.
- pjc50 3y ago
  Howey test.
- tromp 3y ago
  I think ETH should have been classified as one too, due to its ICO. Making an exemption for that was a mistake...
  - WinstonSmith84 3y ago
    Let's ask Gensler what are his thoughts about ETH then https://twitter.com/sassal0x/status/1648338351832064003 https://twitter.com/sassal0x/status/1648338351832064003 Oh wait ... :-)
    - throw1234651234 3y ago
      That's amazing on the level of refusal to answer a simple question.
  - simpsond 3y ago
    The primary use cases of ETH are changing state of the network and collateral for state change validation. Requester pays to effect change and some ETH is burnt and some goes to validators to incentivize operation. What other security does that? I don’t expect profit when using it to change state of the network.
- EscapeFromNY 3y ago
  When was ETH declared as not a security? I don't remember hearing anything about that. The SEC says only BTC is a commodity: https://www.axios.com/2022/06/28/bitcoin-is-the-only-coin-the-sec-chair-will-call-a-commodity https://www.axios.com/2022/06/28/bitcoin-is-the-only-coin-th... The CFTC says only BTC is a commodity: https://cryptoslate.com/cftc-chair-rostin-behnam-snubs-ethereum-claims-only-bitcoin-is-a-commodity/ https://cryptoslate.com/cftc-chair-rostin-behnam-snubs-ether... People keep saying that regulation is unclear, when let's be honest, it's perfectly clear. Just not what a lot of people wanted to hear.
gonzo41 3y ago
What's the use of crypto again? Because I think it's kinda useless. Just like NFT's
- taeric 3y ago
  I could ask the same for a lot of things, though? Time shares, collectible card games, collectibles at large, fashion at large, etc. Not that I can or will wholly defend crypto. That just doesn't seem like a relevant complaint. I do question the desire for everlasting permanence of the blockchain. I know we like to keep real estate deed records and such going back as far as we can, but even there we have limited utility of that. Encasing it in a technical solution that expands to cover more transactions does feel limited in usefulness. Largely ironic/funny that it makes it incredibly unsuited to criminal use.
  - jakear 3y ago
    > Time shares They bring the probability that you will be harassed by police/landowners/elements/civilians when residing in an area way down. Personally, I take the harassment and sleep on the street. But it's not easy and many would pay not to. > collectible card games You have fun when you play them. People pay to have fun. > collectibles at large Idk some people just get weird addictions. I put collectables at large in the same bucket as crypto, no defense there. > fashion at large Looking good is more likely to get you laid. People like getting laid, and will pay for it.
    - taeric 3y ago
      Do note that the SEC's argument is usually along the lines of "if anybody is buying this to make money, then it is potentially a security." The "common enterprise" part makes it a bit different, but only a bit. Also note that time shares typically are securities, in my understanding. In contrast to a house, which is not. My argument there wasn't to identify some other things that are or are not securities, but "things that are kinda useless." In the case of timeshares, I'd say they are actively more harm than good.
- 3y ago
throw0101c 3y ago
> Crypto companies think they don't trade securities […] I think the main debate is whether they are (in the US) securities under the SEC or commodities under the CFTC. Though there may be related products and funds that are being traded.
isp 3y ago
> Crypto companies think they don't trade securities To quote the Binance Chief "Compliance" Officer: "we are operating as a fking unlicensed securities exchange in the USA bro" Source: Quoted in the filing yesterday where SEC sued Binance > 111. As Binance’s CCO bluntly admitted to another Binance compliance officer in December 2018, “we are operating as a fking unlicensed securities exchange in the USA bro.” https://www.sec.gov/files/litigation/complaints/2023/comp-pr2023-101.pdf https://www.sec.gov/files/litigation/complaints/2023/comp-pr...
- asveikau 3y ago
  I hear if you add "bro" to a statement it makes you immune from prosecution.
- EA-3167 3y ago
  It's almost unbelievable that someone would put something so monumentally incriminating in writing, but there it is. Those boys are doomed.
  - Analemma_ 3y ago
    A bunch of people have speculated that this was a CYA move. I mean, if you get hired as the Compliance Officer for a company which clearly has no interest in compliance and only hired you to give a facade of respectability, you probably want to have a paper trail indicating "I clearly communicated that this was against the law, and they ignored me" for when the cops inevitably come.
    - jahewson 3y ago
      Nothing says “innocent” like observing your criminality before getting right back to participating in the crime.
      - ceejayoz 3y ago
        It could, if you're a whistleblower/informant. The SEC's bounty program makes it a pretty good idea. https://www.sec.gov/whistleblower https://www.sec.gov/whistleblower
dcow 3y ago
There are two modalities to crypto and the law needs to treat them differently. Running a node on a crypto currency network does not generate securities. It generates commodities. We don't tax people on the FMV of gold when they dig it out of the ground. But, speculating on the price of gold by creating a virtual token/contract/etc. and selling that, well that’s obviously a security. Just because people buy gold speculatively does make it a security. So buying bitcoin or chia (no longer eth) is still buying a commodity. Anything else, yeah, seems like it passes the sniff test for a security.
- vkou 3y ago
  > We don't tax people on the FMV of gold when they dig it out of the ground. Why shouldn't we? We tax people on the FMV of something valuable created out of thin air, why should gold be an exception?
  - lottin 3y ago
    It isn't exempt. The miner will have to pay VAT when they try to sell the gold.
  - paulddraper 3y ago
    > We tax people on the FMV of something valuable created out of thin air, There are income taxes which apply when goods or services are sold. There are sales taxes when goods are purchased. There are property taxes when goods are owned. Nothing gets taxed on creation.
    - revbed 3y ago
      And there are excise taxes when goods are created.
      - paulddraper 3y ago
        Excise taxes are a product-specific sales tax. For example, on gasoline. The tax occurs at the pump, not at the refinery.
spaceman_2020 3y ago
What about tokens that are used to pay the network, like Ethereum? If you want to use any chain that uses Ethereum, either as a L1 or L2, you need ETH.
api 3y ago
A security represents ownership in something. This is just gambling. It's more like an unregulated casino than an unlicensed stock exchange.
zamfi 3y ago
> People buy crypto without a real use for crypto because they think they can sell it for more later. That's not what makes something a security -- many things fit into that template that aren't securities: collectibles, commodities, etc.
thesausageking 3y ago
If that's true, then why did the SEC approve Coinbase's IPO and not doing anything about it until years later? Even in spite of Coinbase meeting with the SEC hundreds of times and testifying before congress. This is a complete change in their stance by the SEC.
- thisgoesnowhere 3y ago
  Because the SECs role in IPOs have nothing to do with wether or not you are breaking securities law. They are just testing that you are not lying in your public financial declarations.
  - thesausageking 3y ago
    You're saying that the SEC knowingly allowed Coinbase to become a public company, have insiders dump billions in stock on the public, and then continue to operate a completely illegal business for another 2 years without taking any action at all? Not even issuing any guidance which Coinbase requested from them dozens of times? If so, that would be a huge scandal and the SEC should be investigated immediately. A much simpler explanation is that crypto was largely ignored by regulators, including the very shady parts like FTX, for most of Coinbase's life. When FTX imploded, lawmakers turned on crypto and put pressure on the SEC to attack the industry. This is why there's been a whole series of actions by them in the last 6 months.
    - donedeals 3y ago
      Typically IPO approvals include a carve out that says this approval cannot bed used a defense in a SEC action. CB will still use it as an argument.
drexlspivey 3y ago
SEC is supposed to tell them what is a security and what isn’t so they can refrain from selling them. Exchanges have been asking for clarification over and over. So far the only thing the SEC said on the subject is that BTC in not a security but nothing about the other cryptos. In the absence of regulatory clarity Coinbase have devised their own framework to classify what tokens aren’t securities and proceeded to list them. I don’t know how you can blame them. It’s the SEC’s job to tell them what they can trade and what they can’t but they refuse to do it.
- TylerE 3y ago
  They did tell them - Howey test etc, Coinbase just didn't like the answer and thus has been pretending they didn't hear it.
  - drexlspivey 3y ago
    Please point to where the SEC has made any official statement defining which crypto is and isn't a security.
    - TylerE 3y ago
      That's not how it works. They say what a security is. It's not their job to be babysit. Corps wishing to play in this field are expected to understand the basic foundations.
- Yizahi 3y ago
  When tokenbro industry invented a very convoluted asset class they expected government to say "Oh, it's really hard to understand and classify it, that's why we won't do it at all. You guys can do whatever you want now.". But actually they said "Oh, it's really hard to understand and classify it, that's why we will have to do it the long and painful way, and you guys can wait for us or not. But if you want to operate before the decision is reached - it's on you if you break the law.". Apparently a really convoluted business plan is not an inherent human right, if it is masking law infringement in he mean time. Who knew, right?:)
EricDeb 3y ago
People buy houses, dont live in them, purely to sell them for more later.
redox99 3y ago
Some cryptocurrencies may or may not be securities. Gary Gensler himself has said that Bitcoin is not a security.
ryukoposting 3y ago
In the 90s people bought Beanie Babies because they thought they could sell them for more later. Are Beanie Babies securities?

datadeft 3y ago

The end of an era.

danielschonfeld 3y ago
[flagged]
- BowBun 3y ago
  Considering the EU is unable step up, I think you'll miss the enemy we knew after all is said and done (if there is a significant shift in the leading powers). I'm not wearing rose-tinted glasses about the past (I'm not American), but the up-and-coming alternatives seem real scary.
  - WinstonSmith84 3y ago
    The EU is the same as the US: pretending to be the land of free but effectively controlled by interests, driven by hidden agendas. Some other countries don't try to pretend to be free nor pretend to work for the people, and maybe less hypocrisy is not worse (China or India). A healthy balance of competition between world powers is much welcomed.
- WinstonSmith84 3y ago
  logical assumption. There has never been a blockchain era yet.
- wellthisisgreat 3y ago
  lol I am pretty sure the GP is talking about the era of crypto swindlers who rode the good ideas of liberty, financial diversification, and such into the ground and will all hopefully pay for it
soco 3y ago
The era of the few crypto billionaires and the crowd of regular Joe money-losers. Ah, those times.

adamsmith143 3y ago

Always interesting how crypto prices tank after legal action is announced against exchanges. Isn't the whole point to be decentralized in the first place? Hard to believe the whole dip is due to people wanting to get their tokens off the exchanges.

jrm4 3y ago
Well, there is no "whole point," right? You could roughly divide the crypto world into "true believers" and "people who just want to get rich." The latter overwhelmingly dominate price and volume, and moreover it's the "whales," i.e. a relatively small number of parties. I suppose I'm something of a "true believer," but what I may want or think is best doesn't matter in the face of the working crypto technology. The incentives are in place and to an extent we just have to sit back and see what happens.
nfRfqX5n 3y ago
looks like the price barely changed
- adamsmith143 3y ago
  ? Bitcoin is down 5% since Binance was sued...
awaythrow483 3y ago
Price is up today

seydor 3y ago

I think it was always 100% clear that cryptocurrencies can't live within the confines of the laws of a sovereign state. Why people registered their exchanges along with the rest of the banking system ? it made zero sense from the start, as does the whole idea that cryptos can be traded in regulated capitalism. Bitcoin needs its own country (or planet) with nukes and all.

jrm4 3y ago
Not that I agree with the own planet thing; but yes -- it's odd. All of this was 100% predictable and should have been expected by everyone. The stated purpose of crypto was to get around this; its weird to see crypto fans "get mad" at e.g. the SEC. It's like getting mad at a shark for going after bleeding prey; it's just what was always going to happen.
- hirako2000 3y ago
  Mad because some entrepreneurs makes the effort to build legitimate business entities, and what certain governments find to do is any scheme to keep them out of legitimity. Not that crypto fans would care all that much about these businesses, but there is a need to onramp and offramp given transactions are made in their vast majority in fiat. An exchange run as a business having at least a lot at stake in ensuring continuity is one of the decent ways to get on with crypto. If it was my call I would skip the perp and earn products to stay clear of regulators when operating in the US, but there must be stories behind closed doors that we don't easily get to know would be my guess.
  - seydor 3y ago
    it's not like these onramps served the real purpose of digital currency. People don't buy bitcoin in order to pay for services, they buy it to speculate. Bitcoin could succeed even without onramps; digital workers can easily accept bitcoin if they care, which over time will be traded with goods in the physical world with other people who care. That's grass roots deployment, not VC-backed "legitimate" ponzi exchanges. I do however understand why people are mad. To me it seems that crypto is to GenZ what Real estate was to boomers. It's about building generational wealth in a time of extreme inequality where most other avenues have been closed. It may come back for that, but it has to be built outside the confines of state-regulated money systems

menthe 3y ago

There is a well-documented public history of Coinbase taunting the SEC - they had it coming. - https://www.coinbase.com/blog/the-sec-has-told-us-it-wants-to-sue-us-over-lend-we-have-no-idea-why https://www.coinbase.com/blog/the-sec-has-told-us-it-wants-t... - https://www.coinbase.com/blog/coinbase-does-not-list-securities-end-of-story https://www.coinbase.com/blog/coinbase-does-not-list-securit... - https://www.coinbase.com/blog/coinbases-staking-services-are-not-securities-and-heres-why https://www.coinbase.com/blog/coinbases-staking-services-are... - https://www.coinbase.com/blog/we-asked-the-sec-for-reasonable-crypto-rules-for-americans-we-got-legal https://www.coinbase.com/blog/we-asked-the-sec-for-reasonabl... - https://www.coinbase.com/blog/coinbase-takes-another-formal-step-to-seek-regulatory-clarity-from-sec-for https://www.coinbase.com/blog/coinbase-takes-another-formal-... - https://www.coinbase.com/blog/coinbase-responds-to-the-secs-wells-notice https://www.coinbase.com/blog/coinbase-responds-to-the-secs-... Better yet: https://www.coinbase.com/blog/icymi-coinbase-and-the-sec https://www.coinbase.com/blog/icymi-coinbase-and-the-sec

butlerm 3y ago
None of those posts except the last looks like taunting the SEC to me, but rather keeping the public and their customer base in particular up to date on a live regulatory issue that may present a risk to their business. That is the type of thing the SEC requires (at least of publicly traded companies) not discourages.
chroma 3y ago
If criticizing a regulatory body causes them to go after you, then that regulatory body is corrupt and should be dismantled and replaced with something else.
- deleted 3y ago
  [deleted]
- dymk 3y ago
  Taunt and criticize are two different verbs

paulpauper 3y ago

Crypto is like the worst investment ever: huge legal risk, does not hedge inflation, not a safeguard in crisis, does not benefit from tech/ai boom, does not generate profits. Only downside, no upside, no strengths, only weaknesses. the chart is only one direction: down The obvious weakness of bitcoin relative to QQQ demonstrates this. A daytrading pair trade method that shorts Bitcoin in market hours and goes long qqq would have cleaned house over the past year, including a huge win yesterday. i was running this and made a lot. Who goes against the fed. government and wins? big tobacco couldn't do it. neither could the auto industry.

EddieEngineers 3y ago
This is true when it’s going down and false when it’s going up. Do the same analysis of previous years during bull crypto markets and does this hold up?
- paulpauper 3y ago
  bitcoin's performance since late 2017 lags QQQ. the rolling 5-year returns have gotten way worse. Much of the gains were from pre-2018. many people five years ago were predicting six-figures by now, nowhere even close.
  - flanfly 3y ago
    I'm not sure what you mean. BTC is up 29x since 2017 while QQQ is up 1.8x
    - paulpauper 3y ago
      it went up 20x in 2017. i said late 2017. it peaked at 20k in dec 2017.
      - awaythrow483 3y ago
        As pointed out above, complete fallacy. You are cherry picking a handful of dates that support your argument and those dates are completely arbitrary.

shp0ngle 3y ago

Well, there is your regulatory clarity, Coinbase.

butlerm 3y ago

If you look up the definitions of "security", "financial instrument", "commodity", and "currency", it is pretty clear that a plain vanilla crypto-currency like Bitcoin is no ordinary security nor a financial instrument. It is not a claim on something else, even less so than a traditional bank note. It is more like a commodity. Since when is "aluminum" a security? A crypto currency business however may be engaged in trading of crypto currencies which are negotiable financial instruments, and a stable coin that is a claim on a traditional currency is an example of that. A stable coin bears a direct relationship to a bank note. It is a claim on something else. It is not really an investment though, so not much of a security. And then of course there are more creative negotiable financial instruments which are definitely securities. Options, derivatives, swaps, futures, and the like. The Supreme Court has a broader definition of securities, that involves a promoted investment in a "common enterprise", but it is unclear that a commodity currency really is a common enterprise like a corporation is for example. It seems unlikely to me that Bitcoin as such would even meet that definition of a security. But other products offered by crypto currency exchanges might.

dforrestwilson 3y ago
Getting sued to fall under govt regulation - and therefore gaining imprimatur - seems like exactly what these exchanges should want. We never regulated Beanie Babies.
- mmastrac 3y ago
  I don't think Beanie Babies collectors tended towards the libertarian part of the axis, however.
- strangescript 3y ago
  I mean, that makes some assumptions about the overall outcomes here.
- bannedbybros 3y ago
  [dead]
3y ago

mrkramer 3y ago

Grace period of unregulated crypto is over. Brace yourself, SEC is coming!

detrites 3y ago
The SEC issues fines. To them it's taking a cut, to Binance etc, it's operating expenses. These "enforcements" are more like protection money paid to gangsters. The SEC could have created clarity a decade ago. It's not in their interest to do so, plain and simple. They are incentivised financially, to persist in creating a lack of clarity, and then randomly "enforcing" inconsistently to extract multi-millions off of effectively approved profits. If / when they refer cases to the DoJ, it's different. But, typically they don't, because typically most of the players they're going after are doing their best to comply with the "uncompliable" landscape they are facing. Or - they're FTX. And let's just remember that, always. The SEC, effectively, gave FTX a green light. Maybe the most damaging crypto fail in history likely an outright fraud, of massive proportions and where was the SEC? That's what we're dealing with here.
- deleted 3y ago
  [deleted]
- deleted 3y ago
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- foodjinn 3y ago
  Also worth pointing out the SEC's involvement in the subprime mortgage collapse.

calny 3y ago

The actual complaint: https://storage.courtlistener.com/recap/gov.uscourts.nysd.599908/gov.uscourts.nysd.599908.1.0.pdf https://storage.courtlistener.com/recap/gov.uscourts.nysd.59...

blondie9x 3y ago

It took them way to long to act on crypto. The damage was already done. Trillions of wealth has been destroyed by crypto.

loeg 3y ago
Levine has talked about this a bit. It's much easier to be a harsh regulator after the crash than on the way up.

retrocryptid 3y ago

My experience with Coinbase led me to ask people "where do I sign up for the class action law suit?" so this is welcome news.

sebzim4500 3y ago
That's interesting. What did Coinbase do to you exactly?
- retrocryptid 3y ago
  Took US Dollars ostensibly to purchase bitcoin. A year later when bitcoin had appreciated, I asked for them to sell the bitcoin and give me US dollars back. They said "no" and said that I fundamentally misunderstood what an exchange was. It exchanges US Dollars into Bitcoin, it does not convert Bitcoin into US dollars.

johndhi 3y ago

Question: is it even possible to register as a security? If you do, what follows? So if SOL for example were to register somewhere, what would they need to do, and what would I need to do to buy it?

SpicyLemonZest 3y ago
There’s no fundamental reason it would be impossible. Solana Labs would need to file a registration statement with the SEC (https://www.sec.gov/education/smallbusiness/goingpublic/registrationstatement https://www.sec.gov/education/smallbusiness/goingpublic/regi...) including among other things a description of its business practices and audited financial statements. Once they did that, you would be able to buy and sell it at any registered exchange who’s willing to list it. Coinbase, maybe, if they’re willing to accept the costs and regulations involved.
- arctek 3y ago
  Except that it would exclude a raft of non-US citizens then, i.e. any sanctioned country, Coinbase would also need to become registered as an ATS and their current settlement and clearing processes would need to be re-engineered from the ground up. For all intents and purposes you cannot register a cryptocurrency with the SEC and then go on trading it anywhere publicly - it doesn't exist. There's only been a few projects that managed to avoid this: Enigma for example moved to a decentralized network and changed their coin over (so it was magically no longer a security according to the SEC) and the SEC just fined them and made them issue refunds for the project raise.
  - JumpCrisscross 3y ago
    > it would exclude a raft of non-US citizens then, i.e. any sanctioned country This lays bare the problem with the status quo. Wanting to profit off sanctions busting isn’t a sympathetic pitch.
    - dbmikus 3y ago

cultureswitch 3y ago

And there we go. The promise of a form of cash outside of USA government control is terrifying to the USA government. And well, most other governments too. It is pretty obvious that when the USA government goes after crypto exchanges, what matters is to get the exchange shut down. The actual justification for doing so is an afterthought. I'm torn on the issue of whether dematerialized privacy-preserving cash (and yeah, I know crypto exchanges had very little to do with that) is even a good thing to begin with. To me the strongest argument for it is that the crimes that would be facilitated by that are already trivial, as long as you're rich enough. You don't need Monero when you can "sell" a Monet in exchange for services instead. It is incredibly hypocritical of governments to complain that privacy-preserving currencies enable criminals when they have done literally nothing to stop the numerous convenient ways to launder money that are accessible only to rich and powerful people.

gitfan86 3y ago
That is putting the cart before the horse. The USA is not a libertarian government. Why did anyone think that it was a good idea to invest in products that would only survive in a libertarian government?
- cultureswitch 3y ago
  Invest? I think investing in crypto is purely based on greater fool theory. Doesn't mean there aren't any legitimate uses for cryptocurrency, let alone the blockchain technology. In this sense, why should Coinbase and a currency exchange booth in some airport be considered any different? Of course, Coinbase doesn't quite operate statelessly like that, and to me that's the issue here.
- x86x87 3y ago
  Lol. What is the US government?
sealeck 3y ago
I think part of it might be that the only use case for which crypto really works is for drug dealers to safely conduct transactions. I believe in the right to privacy, but I believe in it as an extension of a personal right to self-expression. Freedom to practice your religion, to date whomever you want, etc (provided it doesn't hurt others), sure. Freedom to hold 10^9 USD secretly so that you don't have to pay tax on it and can peddle drugs, not really.

eggy 3y ago

I know their are legalities I am not an expert in on finance, but my conspiracy theorist is bubbling up given the failed crypto bank, the SEC suing Binance and Coinbase, and the US and world government move for traceable, government managed and controlled digital currencies. I was at the first HOPE in 1994[1] at the Penn Hotel in NYC when Eric Hughes (known for the Cypherpunk Manifesto) and others gave a talk on cryptography and how it would be part of a future of privacy and security for anonymous banking etc. I was so enthused about getting rid of the middle man (a minimum of 4 or 5 entities process your latte purchase at Starbucks and take a cut as well as track you and your data trail). Government doesn't like this. "What do you have to hide?" is a tired defense of prying eyes. Yes, there were a lot of bad fish in the pool, but the goal was and is still good in my book. [1] https://youtu.be/v5kayD5IQQU https://youtu.be/v5kayD5IQQU

throitallaway 3y ago
It's gotten to the point where political candidates (and politicians) have to cover their tracks when paying for things, lest they be criticized for their choices. If you ever want to run for office you'd better never use a credit card at a porn shop, McDonald's (it's unhealthy), etc. This applies to data that insurance companies harvest from as well. I used to be one of those people that said "I have nothing to hide and the conveniences outweigh the negatives", but I'm getting more and more cynical on data dragnets as I'm growing older.
timerol 3y ago
Do you pay cash at Starbucks?
- eggy 3y ago
  Sometimes, but I have been avoiding Starbucks unless I am 'renting' office space there. For a quick coffee the bodega, deli, or Dunkin. Some retailers have made it hard to pay cash by installing card only systems. Others have long lines for cashiers and self-checkouts sometimes only take card. It's painful to see young kids struggle with making change, because they are so used to the phone/computer figuring it all out for them.

alphanullmeric 3y ago

Trust the government fiercely to defend their right to other people’s wallets and prevent individuals from risking their money how they want.

jmyeet 3y ago

Here's my take on crypto: 1. Despite any theoretical applications, all applications of crypto thus far have been to bypass laws. Some of these might be moral (eg avoiding currency controls in some countries like Venezuela) but mostly it's just illegal stuff; 2. No one is really interested in applications. They're "hodling" [sic] because of Bitcoin FOMO. They want in on the next Bitcoin. 3. Scams and rug pulls are rife in crypto. Taken with (2), this implies that people who think they're getting rich in crypto are only going to do so by scamming or rug pulling other people who will be left holding the bag; 4. Despite all the claims about verifiability, somehow the crypto space still needs strong government intervention to deter and prosecute scammers, criminals and thieves. That's another big L for the libertarians and goldbugs-turned-crypto-bros out there; 5. NFTs are the next level scam about crypto and really only exist to sell more crypto; 6. A lot of otherwise smart people have fooled themselves into thinking that their knowledge, skills and experience with some other area somehow magically translates into finance; 7. A whole bunch more snake oil salesmen are happy to sell others this lie; 8. The desire and desperation to get rich by many "hodlers" causes them to fool themselves into thinking there's any value in crypto; 9. Reversability of transactions and the ability to change the money supply volume are features not bugs; and 10. What underpins the US dollar is, ultimately, the full might of the US government and military as well as trust. Crypto too is ultimately still built on trust but has nothing else behind it. It actually seemed to me that Coinbase was the one company operating legitimately. I haven't read the complaint so I'm not sure how much merit the charges have. We shall see.

strbean 3y ago
> 1. Despite any theoretical applications, all applications of crypto thus far have been to bypass laws. Not so: https://en.wikipedia.org/wiki/Bitcoin_in_El_Salvador https://en.wikipedia.org/wiki/Bitcoin_in_El_Salvador

modeless 3y ago

The specific crypto tokens they are classifying as securities are: SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH, and NEXO. Of course they say "not limited to" to hedge their bets, but those are the ones they specifically mention. This is the exact "regulatory clarity" Coinbase has been asking for, but the SEC prefers to sit on their hands for years (while investors are "harmed") and then sue, rather than actually tell Coinbase what they think up front. Sure seems self-serving to me, rather than anything like a genuine interest in protecting investors.

x86x87 3y ago
Hah. Protecting investors. What a bunch of croc. This was never about protecting investors. If it was they would have issues the guidance 5 years ago. This is about blowing up crypto in general by removing the on/off ramps (ie the exchanges). Also: mandatory crypto is bad for the environment and it consumes more power than the whole country of Argentina! /s But nobody seems to care or talk about how much power crapGPT is consuming. The future they tell me
- mjburgess 3y ago
  This is such a dangerous attitude. The reason regulators have waited years, despite the facts of the matter being legally obvious, is not wanting to be blamed for blowing up the whole ponzi house-of-cards. They've waited until enough such houses blew up on their own, that they feel "the facts have been demonstrated". If you want to know why they didnt "blow up crypto", "five years ago", its because of you -- and this attitude. Without it, vast swathes of online grifts that have ruined peoeple's lives wouldve been blown out the water by now.
  - modeless 3y ago
    The whole point of the regulation is to stop it from blowing up and harming investors. If they wait until after then they have failed at their job.
  - foodjinn 3y ago

awaythrow483 3y ago

Bitcoin up 2% on the news despite people in this thread explicitly saying "it made crypto price tank" in the thread

paulpauper 3y ago
umm...check what it did yesterday.
- awaythrow483 3y ago
  This is an article about the SEC coinbase announcement. That happened today. So I'm not talking about what happened yesterday, I'm talking about what happened today, because that is what is relevant to the article we are discussing. so, ummmmm..... like..... bruh. go check what it did today

ForHackernews 3y ago

Alternative headline: Coinbase and Binance enter the "finding out" phase of unlicensed securities dealing

x86x87 3y ago
Alternative alternative headline: the SEC wants to have their cake and eat it too while "protecting" "investors"

I_am_tiberius 3y ago

I don't understand why even the hackernews community doesn't see that this is all a political strategy to make sure the digital dollar can exist.

__tmk__ 3y ago
I doubt the USG is competent enough to have a masterplan like that. This just seems to me like the actions of a person (Gary Gensler) who personally dislikes cryptocurrencies and who is trying to establish himself as a political player through his "bold actions".
zarriak 3y ago
None of the time that libertarian beliefs could protect civil liberties is it ever taken seriously. It exists solely to launder corporate protections and deregulation. Nothing significant happen to the NSA after the Snowden leaks, nothing significant happened to the FISA court. Also I don’t get how something like CBDC ever exists because of how powerful Visa is.

shrimpx 3y ago

Well, if it ends up in the Supreme Court, my bet is this particular scotus will rule against the “administrative state”, “overreaching” SEC.

dontupvoteme 3y ago

Curious how authoritarian hackernews is - is this just a knee jerk reaction to annoying cryptobros? Sounds like a board of police officers/retired army men right now commenting on how "that boy had it coming"

timerol 3y ago
It's a long-simmering annoyance at the decline of the cryptocurrency ecosystem: from the really cool technology underlying Bitcoin, to exciting whitepapers with different solutions to hard problems on other coins, to intractable whitepapers designed to create hype for coins that do nothing, to the clear creation of exchanges as places to gamble, to the sidelining of anyone in the cryptocurrency world trying to solve any problem other than "get rich quick", to the collapse of FTX. All through it the definition of a security has been clear, but Coinbase et al has pretended that the issue is "regulatory clarity" and not "we are operating as a fking unlicensed securities exchange in the USA bro". Very rarely a cool use case for cryptocurrency will come up, but the marketing is now entirely "invest and make money!", which is some combination of tedious and scammy, depending on who it's coming from.
- dontupvoteme 3y ago
  That checks out. I got out of crypto a long time ago, back around when people were creating doge based coins for a laugh, i can imagine it only got a lot worse.

transducers 3y ago

https://en.m.wikipedia.org/wiki/Brian_P._Brooks https://en.m.wikipedia.org/wiki/Brian_P._Brooks He is apparently BAM CEO (B) of the SEC’s Binance lawsuit [0], and also worked at Coinbase (to setup compliance) [1]. I was reading up on his activities on his wiki page and rather impressed. Was a comptroller of the Currency for a while in 2020, too. He’s still sitting on the board of another company that’s in block chains (BitFury [2] does infrastructure) and apparently a lot of “vision” related stuff [3] [0]: https://news.ycombinator.com/item?id=36202663 https://news.ycombinator.com/item?id=36202663 [1]: https://en.m.wikipedia.org/wiki/Brian_P._Brooks#Coinbase https://en.m.wikipedia.org/wiki/Brian_P._Brooks#Coinbase “”” After working at Fannie Mae, Brooks was Chief Legal Officer of Coinbase from 2018 to 2020. Coinbase is an $8 billion Silicon Valley startup that is one of the largest digital currency platforms in the world. At Coinbase, he was responsible for the company's legal, compliance, internal audit, government relations, and global intelligence groups. “”” [2]: https://bitfury.com/ https://bitfury.com/ [3[]: https://www.axelera.ai/ https://www.axelera.ai/ I got a chuckle from the “democratizing edge AI” since they are selling surveillance AI for the edge. Reminded me of Washington Post’s masthead. Are they being ironic? /g

CodeWriter23 3y ago

Looks like the US Govt is going to eliminate the competition before replacing US Currency with its own crypto, likely developed and administered by a third party because the government sucks at building stuff.

fintechie 3y ago
And apparently that 3rd party just forked Avalanche.... https://cointelegraph.com/news/federal-reserve-s-fednow-will-integrate-with-metal-blockchain https://cointelegraph.com/news/federal-reserve-s-fednow-will...

deleted 3y ago

[deleted]

1vuio0pswjnm7 3y ago

HN commenters do not get to decide whether anything is a security. Neither does the SEC. The Courts get to decide. The SEC appears ready to accept what the Courts decide.