7 ms·

Well, the SEC told everyone to register, but didn't actually tell them how they could. From what has been made public, it seems like the SEC strung Coinbase alo

by nickff 3y ago

Well, the SEC told everyone to register, but didn't actually tell them how they could. From what has been made public, it seems like the SEC strung Coinbase along for about two years, then said that their application was inadequate (without stating any criteria).

ceejayoz 3y ago
I promise you, a procedure to become a registered securities exchange exists (demonstrably, as registered securities exchanges exist widely) and Coinbase has enough people and money to find it. (I’m not the expert to hire for this, but https://www.investopedia.com/terms/s/sec-form-8-a.asp https://www.investopedia.com/terms/s/sec-form-8-a.asp looks promising.)
- everfree 3y ago
  The question is whether a procedure to become a registered exchange of crypto securities exists, and that promise seems to be a lot more dubious. Coinbase doesn't care if it can offer its customers shares of AAPL or TSLA. They care whether they can start brokering the types of securities that are found on public ledgers.
  - ceejayoz 3y ago
    The process is the same; securities are securities, crypto or otherwise. They don’t like that process, so they’re asking for a special one just for them. The SEC just said no.
    - everfree 3y ago
      My understanding is that the corporate framework that securities licenses require is literally impossible to satisfy when trading current public blockchain assets. As in, to trade crypto as a security on your exchange, you would need to walk up to every dev team of every crypto you wanted to trade and kindly ask them to KYC/AML every single user of the blockchain so that you could be in compliance. In practice this just means it's de-facto impossible for any centralized exchange to carry crypto securities.
      - KingOfCoders 3y ago
        "is literally impossible to satisfy" Then you can't be licensed. Simple. "But I really really really want to be licensed" "..."
        everfree 3y ago
        It doesn't mean that companies can't be licensed. It just means that they will move out of the USA (to another country that has strong financial infrastructure but sane securities laws like the UK), get licensed there, and exclude US customers from their platforms. Coinbase and a16z have already publicly stated that they have plans to set up international arms to hedge against US regulatory risk. So your statement "then you can't be licensed, simple", comes with the corollary of "the USA's strong fintech industry may move entirely offshore within the next decade." If everyone is cool with that, then yeah, go ahead and blanket ban all US residents from trading any financial instrument that's recorded on a public digital ledger.
        KingOfCoders 3y ago
        "It doesn't mean that companies can't be licensed" Licensed in this discussion obiviously meant the US. "Coinbase and a16z have already publicly stated that they have plans to set up international arms to hedge against US regulatory risk." Which is great for them I guess. "the USA's strong fintech industry" A tiny, and some might argue irrelevant, part of the US fintech industry is moving offshore. Crypto to me feels like fusion, it's super relevant, and you just wait some time, you'll see! and then there is another year and another decade and it is still not relevant.
        everfree 3y ago
        > A tiny, and some might argue irrelevant, part of the US fintech industry is moving offshore. You'd better be very sure of its irrelevancy before sending it all to the UK, where they're embracing it with a clear regulatory framework. If you are right, the US pushes a small ("irrelevant") amount of crime offshore. But in the off chance you are wrong, the USA risks losing their position as the world's financial superpower. This is not a gamble you want to take if there's even a very small chance that this technology could catch on. > Crypto to me feels like fusion, it's super relevant, and you just wait some time, you'll see! and then there is another year and another decade and it is still not relevant. It gets discussed multiple times per week on Hacker News. It's talked about constantly in congress. It's beginning to polarize people so much that it creates single issue voters in both directions. The word "NFT" has been etched into the public's consciousness as a meme. Banks and central governments are issuing bonds and other paper on public blockchains. The US is itself planning a version of the US dollar with a design inspired by distributed ledger technology. More than 1 in 5 Americans own cryptocurrency now. I don't know what measure of "relevant" you are using, but it's obviously very different from mine.
  - 8note 3y ago
    Public ledgers? When did the government start running ledgers?
  - JumpCrisscross 3y ago
    > question is whether a procedure to become a registered exchange of crypto securities exists Yes, same as the others. What doesn’t exist is registration per Coinbase’s model of integrated broker, custodian and exchange. We specifically outlawed that in 1934 because it did precisely what crypto did in almost exactly the same time frame in the period stretching from 1918 (post-WWI) through the 20s’ boom years into 1933.

by nickff 3y ago

ceejayoz 3y ago

I promise you, a procedure to become a registered securities exchange exists (demonstrably, as registered securities exchanges exist widely) and Coinbase has enough people and money to find it. (I’m not the expert to hire for this, but https://www.investopedia.com/terms/s/sec-form-8-a.asp https://www.investopedia.com/terms/s/sec-form-8-a.asp looks promising.)

everfree 3y ago
The question is whether a procedure to become a registered exchange of crypto securities exists, and that promise seems to be a lot more dubious. Coinbase doesn't care if it can offer its customers shares of AAPL or TSLA. They care whether they can start brokering the types of securities that are found on public ledgers.
- ceejayoz 3y ago
  The process is the same; securities are securities, crypto or otherwise. They don’t like that process, so they’re asking for a special one just for them. The SEC just said no.
  - everfree 3y ago
    My understanding is that the corporate framework that securities licenses require is literally impossible to satisfy when trading current public blockchain assets. As in, to trade crypto as a security on your exchange, you would need to walk up to every dev team of every crypto you wanted to trade and kindly ask them to KYC/AML every single user of the blockchain so that you could be in compliance. In practice this just means it's de-facto impossible for any centralized exchange to carry crypto securities.
    - KingOfCoders 3y ago
      "is literally impossible to satisfy" Then you can't be licensed. Simple. "But I really really really want to be licensed" "..."
      - everfree 3y ago
        It doesn't mean that companies can't be licensed. It just means that they will move out of the USA (to another country that has strong financial infrastructure but sane securities laws like the UK), get licensed there, and exclude US customers from their platforms. Coinbase and a16z have already publicly stated that they have plans to set up international arms to hedge against US regulatory risk. So your statement "then you can't be licensed, simple", comes with the corollary of "the USA's strong fintech industry may move entirely offshore within the next decade." If everyone is cool with that, then yeah, go ahead and blanket ban all US residents from trading any financial instrument that's recorded on a public digital ledger.
        KingOfCoders 3y ago
        "It doesn't mean that companies can't be licensed" Licensed in this discussion obiviously meant the US. "Coinbase and a16z have already publicly stated that they have plans to set up international arms to hedge against US regulatory risk." Which is great for them I guess. "the USA's strong fintech industry" A tiny, and some might argue irrelevant, part of the US fintech industry is moving offshore. Crypto to me feels like fusion, it's super relevant, and you just wait some time, you'll see! and then there is another year and another decade and it is still not relevant.
        everfree 3y ago
        > A tiny, and some might argue irrelevant, part of the US fintech industry is moving offshore. You'd better be very sure of its irrelevancy before sending it all to the UK, where they're embracing it with a clear regulatory framework. If you are right, the US pushes a small ("irrelevant") amount of crime offshore. But in the off chance you are wrong, the USA risks losing their position as the world's financial superpower. This is not a gamble you want to take if there's even a very small chance that this technology could catch on. > Crypto to me feels like fusion, it's super relevant, and you just wait some time, you'll see! and then there is another year and another decade and it is still not relevant. It gets discussed multiple times per week on Hacker News. It's talked about constantly in congress. It's beginning to polarize people so much that it creates single issue voters in both directions. The word "NFT" has been etched into the public's consciousness as a meme. Banks and central governments are issuing bonds and other paper on public blockchains. The US is itself planning a version of the US dollar with a design inspired by distributed ledger technology. More than 1 in 5 Americans own cryptocurrency now. I don't know what measure of "relevant" you are using, but it's obviously very different from mine.
- 8note 3y ago
  Public ledgers? When did the government start running ledgers?
- JumpCrisscross 3y ago
  > question is whether a procedure to become a registered exchange of crypto securities exists Yes, same as the others. What doesn’t exist is registration per Coinbase’s model of integrated broker, custodian and exchange. We specifically outlawed that in 1934 because it did precisely what crypto did in almost exactly the same time frame in the period stretching from 1918 (post-WWI) through the 20s’ boom years into 1933.