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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 Did you read the article? Specifically the

> 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'.
      - junofan 3y ago
        Come on. The SEC is also a regulatory agency. Your police department isn’t.
        Eisenstein 3y ago
        This changes what, exactly? Are you suggesting that the government act as a free lawyer to everyone asking? Example: 'Would it be fraud if I bought an Amazon gift card with my credit card and sold it for cash since that would be a cash advance but it went through as a regular purchase?' Would you expect that the FTC answer that question for you in a binding way?
        throwaway6977 3y ago
        In a rational world I would absolutely expect the authorities that bind me to answer basic questions about following the rules.
        Eisenstein 3y ago
        You want to hand judicial authority to regulatory agencies?
        throwaway6977 3y ago
        I don't think I said that. You seem to be setting up a(nother) false dichotomy here as if there can only be one end of the spectrum or the other, with no grey area or nuance in-between.
        Eisenstein 3y ago
        What is a grey area for 'makes a binding ruling regarding interpretation of law'?
        throwaway6977 3y ago
    - simiones 3y ago
      But they have, repeatedly, haven't they? Crypto coins except for Bitcoin are securities, and must be treated as such. Any business allowing for their trade must behave like any other securities trade business.
      - PretzelPirate 3y ago
        They haven't said that all coins other than Bitcoin are securities. They've said that most coins are securities, and former SEC members have said that Eth isn't a security, but the current SEC isn't commenting on Eth at all. They have muddied the waters with their public comments. Hopefully these lawsuits will provide better clarity or we'll have to wait on pending legislation to provide clarity on how the US views decentralized asset classification.
Dylan16807 3y ago
"If the SEC was in the business of making merit-based judgments on companies before they IPOed, they would need to somehow have expertise in everything from industrial filtration to financial management to projection technology to biotech to the manufacture of skincare products, bandages, and mouthwash. It’s simply not feasible, much less desirable." Yeah that part doesn't make sense. A "merit-based judgement" that requires that kind of expertise is obviously not what is being asked for! The request is for them to look at [sufficiently big] securities [or possibly-securities], in the exact same way they would look at them post-IPO, using their normal realm of expertise.
- growse 3y ago
  It's perfectly reasonable that the Coinbase S1 doesn't include any descriptions of activities that are illegal, and for Coinbase to subsequently start doing illegal things. They even list this risk in the S1! The SEC saying your S1 and IPO offering is probably kosher isn't a carte blanche to then do whatever you want without continued regulatory oversight.
  - chimeracoder 3y ago
    > It's perfectly reasonable that the Coinbase S1 doesn't include any descriptions of activities that are illegal, and for Coinbase to subsequently start doing illegal things. They even list this risk in the S1! It's also possible for the Coinbase S1 to contain descriptions of things that are currently not known to be illegal, and which subsequently become illegal, without any changes on Coinbase's part. They also list this risk in the S1 as well!
- lancewiggs 3y ago
  Their job is to make sure that the IPO document discloses everything material so that investors can make an informed decision. That’s it. In this case they would’ve been content with the disclosure that the entire business was at risk of being regulated, which is what’s happening here.
  - Dylan16807 3y ago

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'.
    - junofan 3y ago
      Come on. The SEC is also a regulatory agency. Your police department isn’t.
      - Eisenstein 3y ago
        This changes what, exactly? Are you suggesting that the government act as a free lawyer to everyone asking? Example: 'Would it be fraud if I bought an Amazon gift card with my credit card and sold it for cash since that would be a cash advance but it went through as a regular purchase?' Would you expect that the FTC answer that question for you in a binding way?
        throwaway6977 3y ago
        In a rational world I would absolutely expect the authorities that bind me to answer basic questions about following the rules.
        Eisenstein 3y ago
        You want to hand judicial authority to regulatory agencies?
        throwaway6977 3y ago
        I don't think I said that. You seem to be setting up a(nother) false dichotomy here as if there can only be one end of the spectrum or the other, with no grey area or nuance in-between.
        Eisenstein 3y ago
        What is a grey area for 'makes a binding ruling regarding interpretation of law'?
        throwaway6977 3y ago
  - simiones 3y ago
    But they have, repeatedly, haven't they? Crypto coins except for Bitcoin are securities, and must be treated as such. Any business allowing for their trade must behave like any other securities trade business.
    - PretzelPirate 3y ago
      They haven't said that all coins other than Bitcoin are securities. They've said that most coins are securities, and former SEC members have said that Eth isn't a security, but the current SEC isn't commenting on Eth at all. They have muddied the waters with their public comments. Hopefully these lawsuits will provide better clarity or we'll have to wait on pending legislation to provide clarity on how the US views decentralized asset classification.

Dylan16807 3y ago

"If the SEC was in the business of making merit-based judgments on companies before they IPOed, they would need to somehow have expertise in everything from industrial filtration to financial management to projection technology to biotech to the manufacture of skincare products, bandages, and mouthwash. It’s simply not feasible, much less desirable." Yeah that part doesn't make sense. A "merit-based judgement" that requires that kind of expertise is obviously not what is being asked for! The request is for them to look at [sufficiently big] securities [or possibly-securities], in the exact same way they would look at them post-IPO, using their normal realm of expertise.

growse 3y ago
It's perfectly reasonable that the Coinbase S1 doesn't include any descriptions of activities that are illegal, and for Coinbase to subsequently start doing illegal things. They even list this risk in the S1! The SEC saying your S1 and IPO offering is probably kosher isn't a carte blanche to then do whatever you want without continued regulatory oversight.
- chimeracoder 3y ago
  > It's perfectly reasonable that the Coinbase S1 doesn't include any descriptions of activities that are illegal, and for Coinbase to subsequently start doing illegal things. They even list this risk in the S1! It's also possible for the Coinbase S1 to contain descriptions of things that are currently not known to be illegal, and which subsequently become illegal, without any changes on Coinbase's part. They also list this risk in the S1 as well!
lancewiggs 3y ago
Their job is to make sure that the IPO document discloses everything material so that investors can make an informed decision. That’s it. In this case they would’ve been content with the disclosure that the entire business was at risk of being regulated, which is what’s happening here.
- Dylan16807 3y ago