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It seems like a massive regulatory failure to let Coinbase IPO if there are the sort of glaring issues they claim. Coinbase has a market cap of around $10 billi

It seems like a massive regulatory failure to let Coinbase IPO if there are the sort of glaring issues they claim. Coinbase has a market cap of around $10 billion, and is owned by retail investors as part of standard index funds. If it goes to zero tomorrow because of the SEC, that is billions of dollars in losses that could have been avoided by more responsible regulatory behavior. Meanwhile insiders will have cashed in through salary, stock sales, etc.

shagie 3y ago
Here is Coinbase's S1 - https://d18rn0p25nwr6d.cloudfront.net/CIK-0001679788/699359de-d974-4ad9-b7f6-5031f2f432d3.pdf https://d18rn0p25nwr6d.cloudfront.net/CIK-0001679788/699359d... And the S1A https://d18rn0p25nwr6d.cloudfront.net/CIK-0001679788/c9475761-bae4-4556-b8f3-b6d74e47b5f0.pdf https://d18rn0p25nwr6d.cloudfront.net/CIK-0001679788/c947576... In particular: > Bitcoin sparked a revolution by proving the ability to create digital scarcity: a unique and finite digital asset whose ownership could be proven with certainty. This innovation laid the foundation for an open financial system. Today, all forms of value – from those natively created online such as in-game digital goods to traditional securities like equities and bonds – can be represented digitally, as crypto assets. Like the bits of data that power the internet, these crypto assets can be dynamically transmitted, stored, and programmed to serve the needs of an increasingly digital and globally interconnected economy. > Today, we enable customers around the world to store their savings in a wide range of crypto assets, including Bitcoin and USD Coin, and to instantly transfer value globally with the tap of a finger on a smartphone. We provide companies with new ways to transact, incentivize, and reward their users, from offering compounding rewards on savings that pay out by the second to compensating users for virtually completing tasks through global micropayments. The claim is that they're selling assets and traditional securities that are represented digitally. And they acknowledge the risks of future regulation: > • We are subject to an extensive and highly-evolving regulatory landscape and any adverse changes to, or our failure to comply with, any laws and regulations could adversely affect our brand, reputation, business, operating results, and financial condition. > ... > • A particular crypto asset’s status as a “security” in any relevant jurisdiction is subject to a high degree of uncertainty and if we are unable to properly characterize a crypto asset, we may be subject to regulatory scrutiny, investigations, fines, and other penalties, and our business, operating results, and financial condition may be adversely affected. The 'i's are dotted and the 't's are crossed. Is the SEC to evaluate those future possibilities that the assets they claim (in addition to Bitcoin) may be considered securities? Coinbase said its a risk and, well, yep - it is.
rodgerd 3y ago
> It seems like a massive regulatory failure to let Coinbase IPO if there are the sort of glaring issues they claim Did you read the article? Specifically the part where it explains why the SEC does not evaluate the business models of companies?
- friend_and_foe 3y ago
  I did... the article lists several examples with the claim that the SEC cannot be expected to understand every business under the sun before approving a public sale, completely ignoring the fact that in this case, knowing if a company is operating as an unregistered securities exchange is their supposed expertise and reason to exist. Did you read it?
  - growse 3y ago
    Do you think that if the SEC thinks that Coinbase is operating some sort of unregulated securities exchange, that they should bring some sort of enforcement action?
    - bb88 3y ago
      Also do you think that if Coinbase admitted that the SEC might take adverse regulatory action in the S1, should anyone be surprised when the SEC actually does?
    - friend_and_foe 3y ago
      Yes, but I think first, they ought to tell us what their criteria is in no uncertain terms.
      - Eisenstein 3y ago
        Sorry but law enforcement entities do not have a mandate for, nor are they required to, tell you specifically whether an act is expressly legal or illegal if you ask them. Call a police department and ask them if you are allowed to bury your recently deceased relative on your property. They will tell you to get a lawyer. If they feel like arresting you for illegal disposal of human remains you can't use the defense 'but I asked them and they wouldn't tell me'.

shagie 3y ago

Here is Coinbase's S1 - https://d18rn0p25nwr6d.cloudfront.net/CIK-0001679788/699359de-d974-4ad9-b7f6-5031f2f432d3.pdf https://d18rn0p25nwr6d.cloudfront.net/CIK-0001679788/699359d... And the S1A https://d18rn0p25nwr6d.cloudfront.net/CIK-0001679788/c9475761-bae4-4556-b8f3-b6d74e47b5f0.pdf https://d18rn0p25nwr6d.cloudfront.net/CIK-0001679788/c947576... In particular: > Bitcoin sparked a revolution by proving the ability to create digital scarcity: a unique and finite digital asset whose ownership could be proven with certainty. This innovation laid the foundation for an open financial system. Today, all forms of value – from those natively created online such as in-game digital goods to traditional securities like equities and bonds – can be represented digitally, as crypto assets. Like the bits of data that power the internet, these crypto assets can be dynamically transmitted, stored, and programmed to serve the needs of an increasingly digital and globally interconnected economy. > Today, we enable customers around the world to store their savings in a wide range of crypto assets, including Bitcoin and USD Coin, and to instantly transfer value globally with the tap of a finger on a smartphone. We provide companies with new ways to transact, incentivize, and reward their users, from offering compounding rewards on savings that pay out by the second to compensating users for virtually completing tasks through global micropayments. The claim is that they're selling assets and traditional securities that are represented digitally. And they acknowledge the risks of future regulation: > • We are subject to an extensive and highly-evolving regulatory landscape and any adverse changes to, or our failure to comply with, any laws and regulations could adversely affect our brand, reputation, business, operating results, and financial condition. > ... > • A particular crypto asset’s status as a “security” in any relevant jurisdiction is subject to a high degree of uncertainty and if we are unable to properly characterize a crypto asset, we may be subject to regulatory scrutiny, investigations, fines, and other penalties, and our business, operating results, and financial condition may be adversely affected. The 'i's are dotted and the 't's are crossed. Is the SEC to evaluate those future possibilities that the assets they claim (in addition to Bitcoin) may be considered securities? Coinbase said its a risk and, well, yep - it is.

rodgerd 3y ago

> It seems like a massive regulatory failure to let Coinbase IPO if there are the sort of glaring issues they claim Did you read the article? Specifically the part where it explains why the SEC does not evaluate the business models of companies?

friend_and_foe 3y ago
I did... the article lists several examples with the claim that the SEC cannot be expected to understand every business under the sun before approving a public sale, completely ignoring the fact that in this case, knowing if a company is operating as an unregistered securities exchange is their supposed expertise and reason to exist. Did you read it?
- growse 3y ago
  Do you think that if the SEC thinks that Coinbase is operating some sort of unregulated securities exchange, that they should bring some sort of enforcement action?
  - bb88 3y ago
    Also do you think that if Coinbase admitted that the SEC might take adverse regulatory action in the S1, should anyone be surprised when the SEC actually does?
  - friend_and_foe 3y ago
    Yes, but I think first, they ought to tell us what their criteria is in no uncertain terms.
    - Eisenstein 3y ago
      Sorry but law enforcement entities do not have a mandate for, nor are they required to, tell you specifically whether an act is expressly legal or illegal if you ask them. Call a police department and ask them if you are allowed to bury your recently deceased relative on your property. They will tell you to get a lawyer. If they feel like arresting you for illegal disposal of human remains you can't use the defense 'but I asked them and they wouldn't tell me'.