4 ms·

> clear requirements in black and white terms of what is and isn’t acceptable. I’ll give you the benefit of the doubt and assume you have been misled by this f

> clear requirements in black and white terms of what is and isn’t acceptable. I’ll give you the benefit of the doubt and assume you have been misled by this frequently made claim. It’s just not true. The requirements have been clearly stated for a long time, they’re just not what people in the crypto space want to hear, so they pretend the guidance and law doesn’t exist. This document dates from 2019 and lays out in detail what constitutes a security wrt cryptocurrency from the SEC’s perspective. They’ve been quite clear about this for a long time. The relevant case law has been settled for 70 years. https://www.sec.gov/corpfin/framework-investment-contract-analysis-digital-assets https://www.sec.gov/corpfin/framework-investment-contract-an... The SEC has repeatedly and publicly stated in no uncertain terms, what the definition of a security is and also identified specific coins traded on coinbase that they believe to be securities. Here’s an example from last year from an insider trading case. https://www.sec.gov/litigation/complaints/2022/comp-pr2022-127.pdf https://www.sec.gov/litigation/complaints/2022/comp-pr2022-1... > For example, on November 12, 2021, Ishan learned that Coinbase would soon announce the listing of the crypto asset POWR. As alleged further below, POWR was a crypto asset security > A digital token or crypto asset is a crypto asset security if it meets the definition of a security, which the Securities Act defines to include “investment contract,” i.e., if it constitutes an investment of money, in a common enterprise, with a reasonable expectation of profit derived from the efforts of others. > Coinbase planned to announce the listing of crypto asset AMP on its platform. As alleged further below, AMP was a crypto asset security. > Coinbase intended to announce on July 14 that the RLY token would be listed on its platform. As alleged further below, RLY was a crypto asset security. Rather than accept those statements and obey the law coinbase chose to ramp up the PR offensive instead. The real issue is that cryptocurrency companies hoped they had found a loophole —they wish the law and SEC guidance weren’t what it is, and they keep dishonestly claiming a lack of clarity exists in the hope that doing so will change things.

kjs3 3y ago
I wish I could upvote this a couple of dozen times, because it's really the core of the issue. All this "the SEC won't give us guidance" is theater.
- cududa 3y ago
  And the fact that it's stuck so well is what troubles me so much. The Securities Exchange Act is about a hundred years old and written in a way a laymen can understand the gist of it. It's a security. Just because you called it something else doesn't mean there aren't laws or guidance on how to register it. They just don't want to. Everyone into crypto parrots the "they won't give us guidance" line without even doing 5 minutes of research.
  - mrguyorama 3y ago
    Because they don't care what the truth is, they are HEAVILY invested in crypto going up so they can cash out, and this whole "being explicitly illegal" thing is a threat to that.
    - kjs3 3y ago
      Matt Levine at Bloomberg has some very entertaining coverage of the whole mess. Recommended.
  - kjs3 3y ago
    It's troubling, but shouldn't be surprising. It's that old "a lie told enough times..." approach to corporate governance, and it's just the latest in a long line of "if I can break the rules without serious consequence long enough, I get to win" business plan. The players repeat "is NOT" every time someone points to the very easy to find rules and says "there it is" and the and uncritical torches and pitchfork mob get spun into a frenzy about the bad old SEC.
paulddraper 3y ago
> The SEC has repeatedly and publicly stated in no uncertain terms, what the definition of a security is and also identified specific coins The head of the SEC was asked point blank multiple times if a little thing called "Etherium" was a security. He refused over and over the opportunity to be clear and certain. https://www.youtube.com/watch?v=VhA1dZXeao0 https://www.youtube.com/watch?v=VhA1dZXeao0
- mrguyorama 3y ago
  Fun story, it literally doesn't matter what Mr Gensler says or doesn't say, the related law exists on paper. Gensler doesn't make the rules. The SEC is tasked with enforcing the rules. If your company wants to know what is and isn't a security, that's up to your legal department to put together a working theory, one you think could win in court if the SEC sues you. Judges are the only people who get to clarify law without writing new law. Gensler could be fired tomorrow and the only change would be the case getting dropped, but that wouldn't make Coinbase and others compliant, any different than states with legal marijuana are compliant with the law.
  - paulddraper 3y ago
    > Gensler doesn't make the rules. He literally does. Hence the "SEC Rulemaking Process." [1] [1] https://www.sec.gov/oig/reportspubs/aboutoigaudit347finhtm https://www.sec.gov/oig/reportspubs/aboutoigaudit347finhtm
    - mrguyorama 3y ago
      The very first sentence of that executive summary actually lays it out nicely: The SEC is bound by the law that congress writes, including the laws around securities. Gensler can only make rules that are in alignment with the relevant laws. The Howey test and securities laws are actually pretty much out of his jurisdiction, and more importantly, his individual and personal opinion about whether or not BTC or ETH are securities literally doesn't matter. This is just the reality of operating in a grey area. If you believe you are in compliance with the law, and the regulators disagree or otherwise are giving you a hard time, then the matter WILL be settled by the courts or congress. Importantly, if Gensler comes out tomorrow and says "No tokens are securities, trade anything you want, we won't go after anyone", that isn't binding, and it doesn't change the law, and the next head of the SEC is still free to take you to court for being in violation of the law.

kjs3 3y ago

I wish I could upvote this a couple of dozen times, because it's really the core of the issue. All this "the SEC won't give us guidance" is theater.

cududa 3y ago
And the fact that it's stuck so well is what troubles me so much. The Securities Exchange Act is about a hundred years old and written in a way a laymen can understand the gist of it. It's a security. Just because you called it something else doesn't mean there aren't laws or guidance on how to register it. They just don't want to. Everyone into crypto parrots the "they won't give us guidance" line without even doing 5 minutes of research.
- mrguyorama 3y ago
  Because they don't care what the truth is, they are HEAVILY invested in crypto going up so they can cash out, and this whole "being explicitly illegal" thing is a threat to that.
  - kjs3 3y ago
    Matt Levine at Bloomberg has some very entertaining coverage of the whole mess. Recommended.
- kjs3 3y ago
  It's troubling, but shouldn't be surprising. It's that old "a lie told enough times..." approach to corporate governance, and it's just the latest in a long line of "if I can break the rules without serious consequence long enough, I get to win" business plan. The players repeat "is NOT" every time someone points to the very easy to find rules and says "there it is" and the and uncritical torches and pitchfork mob get spun into a frenzy about the bad old SEC.

paulddraper 3y ago

> The SEC has repeatedly and publicly stated in no uncertain terms, what the definition of a security is and also identified specific coins The head of the SEC was asked point blank multiple times if a little thing called "Etherium" was a security. He refused over and over the opportunity to be clear and certain. https://www.youtube.com/watch?v=VhA1dZXeao0 https://www.youtube.com/watch?v=VhA1dZXeao0

mrguyorama 3y ago
Fun story, it literally doesn't matter what Mr Gensler says or doesn't say, the related law exists on paper. Gensler doesn't make the rules. The SEC is tasked with enforcing the rules. If your company wants to know what is and isn't a security, that's up to your legal department to put together a working theory, one you think could win in court if the SEC sues you. Judges are the only people who get to clarify law without writing new law. Gensler could be fired tomorrow and the only change would be the case getting dropped, but that wouldn't make Coinbase and others compliant, any different than states with legal marijuana are compliant with the law.
- paulddraper 3y ago
  > Gensler doesn't make the rules. He literally does. Hence the "SEC Rulemaking Process." [1] [1] https://www.sec.gov/oig/reportspubs/aboutoigaudit347finhtm https://www.sec.gov/oig/reportspubs/aboutoigaudit347finhtm
  - mrguyorama 3y ago
    The very first sentence of that executive summary actually lays it out nicely: The SEC is bound by the law that congress writes, including the laws around securities. Gensler can only make rules that are in alignment with the relevant laws. The Howey test and securities laws are actually pretty much out of his jurisdiction, and more importantly, his individual and personal opinion about whether or not BTC or ETH are securities literally doesn't matter. This is just the reality of operating in a grey area. If you believe you are in compliance with the law, and the regulators disagree or otherwise are giving you a hard time, then the matter WILL be settled by the courts or congress. Importantly, if Gensler comes out tomorrow and says "No tokens are securities, trade anything you want, we won't go after anyone", that isn't binding, and it doesn't change the law, and the next head of the SEC is still free to take you to court for being in violation of the law.