14 ms·

SEC asked Coinbase to halt trading in everything except bitcoin, CEO says

216 points by jlevett 3y ago

awb 3y ago
Public article: https://www.coindesk.com/policy/2023/07/31/sec-asked-coinbase-to-stop-trading-in-all-cryptocurrencies-other-than-bitcoin-before-suing-report/ https://www.coindesk.com/policy/2023/07/31/sec-asked-coinbas... > “They came back to us, and they said . . . we believe every asset other than bitcoin is a security,” Armstrong said according to the FT. “And, we said, well how are you coming to that conclusion, because that’s not our interpretation of the law. And they said, we’re not going to explain it to you, you need to delist every asset other than bitcoin.” > Armstrong said the SEC recommendation left us no choice but to head to court. > The SEC told the FT its enforcement division did not make formal requests for “companies to delist crypto assets.”
- yieldcrv 3y ago
  > “In the course of an investigation, the staff may share its own view as to what conduct may raise questions for the commission under the securities laws,” it added
- EGreg 3y ago
  Didn’t nearly all main SEC personnel publicly say that Ethereum is not a security? Hinman and SEC pushing him to say it: https://blockworks.co/news/sec-hinman-eth-not-security https://blockworks.co/news/sec-hinman-eth-not-security SEC chair Gary Gensler: https://decrypt.co/138334/gary-gensler-sec-ethereum-not-security-mit-2018?amp=1 https://decrypt.co/138334/gary-gensler-sec-ethereum-not-secu... SEC prev chair Jay Clayton: https://finance.yahoo.com/amphtml/news/us-sec-chairman-jay-clayton-175300070.html https://finance.yahoo.com/amphtml/news/us-sec-chairman-jay-c... Hester Pierce “crypto mom” ironically has never explicitly stated a position on Ethereum What are they going to do now, backtrack on their own public statements?
  - whaleofatw2022 3y ago
    I will note on top of what other commenters have said to this, that most (all?) Of those statements were made before Ethereum went to Proof Of Stake, which has implications for centralization and control.
  - saurik 3y ago
    They might believe their prior statements on the matter no longer apply since the transition to proof-of-stake? (I am not saying this is a good argument, but it is one I think I have seen people come up with.)
    - junofan 3y ago
      Yeah but their whole thing is that the specifics of the technology don’t change how securities laws apply. They’d likely claim both the miners and the stakers need to form an organization and have somebody responsible for compliance, if their proposed rules on altering the exchange definition is any indication.
  - McAtNite 3y ago
    I’ve have the unpleasant task of interacting with auditors from the SEC regularly in a heavily regulated industry. Trying to get any sort of real, factual guidelines from them is a fool’s errand. Their auditors views and interpretations vary wildly year to year, and they will not provide any written guidelines for their positions. Instead they insist it’s up to the discretion of the individual auditor. I’ve seen fairly reserved people in screaming matches by the end of it all, and concessions will eventually be made which seems strange for a regulatory body to do. All that is that say, they won’t backtrack on anything. They’ll simply say that those were the views of those people as individuals, and they are not reflective of the official stance of the regulatory body.
    - hsjqllzlfkf 3y ago
      I'm not doubting anything you're saying, but are there examples of such problematic behaviors in the public record?
- DANmode 3y ago
  The word "formal" is doing a lot of lifting, here.
  - JumpCrisscross 3y ago
    > word "formal" is doing a lot of lifting, here As is the headline's "CEO says." This article is based on the anecdotes of a person being sued by the SEC.
    - pavlov 3y ago
      CEO: "I can't believe they didn't give us a free pass even though we hired all these expensive lawyers and promised the SEC guys that we'd also give them cushy jobs in a few years. Truly the US has become hostile to world-changing innovation such as myself buying a $50 million house. Did I mention I've been selling a lot of my shares lately? I didn't? Good, don't print that."
      - wiz21c 3y ago
        [flagged]
    - deleted 3y ago
      [deleted]
- deleted 3y ago
  [deleted]
- rich_sasha 3y ago
  In fairness it sounds like, at least from the FT article, that they are saying "stop or we're suing". Which at least is a reasonable thing for a regulator to say. I'm not precluding who is right and wrong here, just that the form of the request is not crazy.
  - reaperman 3y ago
    In general, "stop or we're suing" is a reasonable thing for a regulator to say. But in this particular case "every cryptocurrency is a security, except Bitcoin" makes zero sense. Why wouldn't Bitcoin be a security? It would make infinitely more sense if they said "Going forward, our interpretation will be that all cryptocurrencies are securities, and you'll need to become a real brokerage/exchange. Do this or we're suing." That would provide space for reasonable people to disagree, work it out in the courts, lobby Congress to legislate around the topic, etc. But this version is non-sensical -- I simply can't imagine any reasonable persons would ever come to a meeting of the minds that Ethereum is a security but Bitcoin is not a security.
    - TedDoesntTalk 3y ago
      I agree. The only difference I can see is that Bitcoin never had the crazy fund-raising schemes and marketing blitzes that a lot of alt coins had. Same with the original ETH.
    - voxic11 3y ago
      A federal judge recently ruled that XRP was a security when sold in some contexts but not others. And what coinbase is doing (at least with their basic trading platform, I know they have more questionable stuff going on as well) sounds like it wouldn't be a security for any coins. > The court found that the “Programmatic Sales” did not satisfy Howey’s third prong because such buyers could not reasonably have expected that Ripple would use the proceeds of the sales to improve the XRP ecosystem and thereby cause an increase in the price of XRP. Citing SEC v. Telegram Group Inc., the court stated that this inquiry turns on the “promises and offers made to investors” and not each buyer’s motivation, making the blind bid/ask aspect of the transactions a key consideration. Ripple did not make any promises or offers because it did not know who was buying the XRP, and the purchasers did not know who was selling it. https://www.mondaq.com/unitedstates/fin-tech/1348902/sdny-rules-ripples-xrp-token-was--and-was-not--a-security https://www.mondaq.com/unitedstates/fin-tech/1348902/sdny-ru...
WhereIsTheTruth 3y ago
[flagged]
- rafaelero 3y ago
  You are so smart, sweetie. Keep doing that good job.
  - WhereIsTheTruth 3y ago
    Yeap, agent musk cover got blown up :)
j_crick 3y ago
No paywall version: https://archive.li/2023.07.31-040202/https://www.ft.com/content/1f873dd5-df8f-4cfc-bb21-ef83ed11fb4d https://archive.li/2023.07.31-040202/https://www.ft.com/cont...
Dylan16807 3y ago
So they asked this before suing, and since that includes Ethereum it was probably them reaching as far as they possibly could rather than being on firm grounds.
- TedDoesntTalk 3y ago
  “Ether, the second-largest cryptocurrency, which is fundamental to many industry projects, was absent from the regulator’s case against the exchange. It also did not feature in the list of 12 “crypto asset securities” specified in the SEC’s lawsuit against Binance.”
  - latchkey 3y ago
    2018: https://fortune.com/videos/watch/in-2018%2C-gary-gensler-said-bitcoin-and-other-coins-were-not-securities/df81d442-372d-4fad-9b49-355671fd2876 https://fortune.com/videos/watch/in-2018%2C-gary-gensler-sai... The other thing you need to look at is exactly what Paypal offers: Bitcoin, ETH, Litecoin, Bitcoin Cash. https://www.paypal.com/us/digital-wallet/manage-money/crypto https://www.paypal.com/us/digital-wallet/manage-money/crypto
  - Dylan16807 3y ago
    Yes, their lawsuit had a vastly reduced list. The lawsuit is erring in the opposite direction, or at least trying to.
- latchkey 3y ago
  Matt Levine covers this... https://www.bloomberg.com/opinion/articles/2023-06-07/when-is-a-token-not-a-security https://www.bloomberg.com/opinion/articles/2023-06-07/when-i... "Some of them did securities offerings, but by the time the SEC noticed they were too entrenched and decentralized and it would have been a pain for the SEC to go after them. Ethereum, most notably, very very clearly did an ICO in 2014, raising about $18.3 million by selling ETH tokens. If they did that today, or in late 2017, the SEC would have some serious questions. But by the time the SEC got around to cracking down on ICOs in 2017, Ethereum was big and decentralized and the SEC would have had a hard time, practically and legally, challenging its 2014 ICO. And so everyone sort of grudgingly concedes that ETH is not a security."
dataflow 3y ago
How in the world can BCH (Bitcoin Cash) be a security if BTC (Bitcoin) isn't?
- Vecr 3y ago
  It's newer, less well recognized in general, and as far as a government Bitcoin node is concerned it does not exist. Bitcoin's case on not being a security is possibly based on the low likelihood of future incompatible changes and its track record and age.
  - EgregiousCube 3y ago
    It's exactly the same age as Bitcoin. What's a government Bitcoin node?
    - duskwuff 3y ago
      > It's exactly the same age as Bitcoin. Don't be disingenuous. Bitcoin Cash didn't exist prior to 2017, when it forked from Bitcoin.
      - xref 3y ago
        …though the Bitcoin Cash blockchain has valid txns going back to 2009 just like BTC. Everyone wants answers that are black and white, cut and dry. The world is a lot more grey.
        tirpen 3y ago
        If anyone, using your definition of coin age, can create a 14 year old crypto currency instantly, then clearly your definition is not useful.
        JumpCrisscross 3y ago
        > though the Bitcoin Cash blockchain has valid txns going back to 2009 just like BTC By this logic, the U.S. dollar is millennia old, since it grafted onto an economy that used older currencies still on its adoption.
tw1984 3y ago
[flagged]
- Vecr 3y ago
  I'm not sure exactly why the US government thinks Bitcoin is not a security, but I think it's reasonable to speculate that the resistance to making incompatible changes, and hence the probable agreement between the government (the prosecutor) and the defendant to run compatible full nodes may have something to do with it. Etherium is different, more willing to change, has a central personality with more control, and is frankly harder to set up full nodes and independently verify. Imagine the prosecution explaining to the judge what a "beacon chain" is, and the defense showing command line output on the 4K TVs they brought in, trying to explain why it's been two weeks and their nodes is not synced yet.
  - hakfoo 3y ago
    I wonder if the "central personality" aspect is the key. Even the promise of massive wealth and clout has failed to unmask Satoshi, so it's largely seen as a self-managing system. There's no real figurehead you can say is responsible for it or able to steer it for personal gain at this point.
    - latchkey 3y ago
      Matt Levine talks about this in one of his pieces recently. https://www.bloomberg.com/opinion/articles/2023-06-07/when-is-a-token-not-a-security https://www.bloomberg.com/opinion/articles/2023-06-07/when-i... "Some of them did securities offerings, but by the time the SEC noticed they were too entrenched and decentralized and it would have been a pain for the SEC to go after them. Ethereum, most notably, very very clearly did an ICO in 2014, raising about $18.3 million by selling ETH tokens. If they did that today, or in late 2017, the SEC would have some serious questions. But by the time the SEC got around to cracking down on ICOs in 2017, Ethereum was big and decentralized and the SEC would have had a hard time, practically and legally, challenging its 2014 ICO. And so everyone sort of grudgingly concedes that ETH is not a security."
  - 3y ago
mtgentry 3y ago
Hate to take the SEC’s side, but once Coinbase started trading DOGE, they lost the moral high ground.
- Vervious 3y ago
  Well, in a libertarian world, the moral high ground is that we should be able to trade anything -- who is the SEC to tell us what we can't trade? It's almost like freedom of speech. Plus, I don't think consumers should be protected from dogecoin --- no layman in their right mind invests in doge with the expectation of profit (from common enterprise). Bitcoin is more of a security than doge will ever be.
  - CPLX 3y ago
    For the most part the SEC doesn’t tell you what you can and can’t trade. It does however have laws around registration of the security, who can and can’t purchase it under a given registration, disclosure rules, conflict of interest rules, and so on.
    - Vervious 3y ago
      > "It does however have laws around registration of the security" This sounds a lot like the SEC dictating what can and can't be traded in the modern day. We can't trade something if there isn't an exchange for it.
  - pavlov 3y ago
    > “no layman in their right mind invests in doge with the expectation of profit (from common enterprise)” Influencers pumping the coin on Twitter is a common enterprise. You don’t think people bought DOGE because they hoped those influencers would continue what they were doing?
    - Vervious 3y ago
      I mean, everyone hyping up kale as a supergreen on their social media doesn't make Kale --- the vegetable --- a security. Likewise, people shill GOLD on twitter all the time. Is gold a security? If kale and gold are securities under the current interpretation of the howey test, then the howey test needs to be rewritten.
Mengkudulangsat 3y ago
Fantastic, force every centralized exchange to stick to being on-ramps. This will a) Force people to learn self-custody & b) Force people to learn how to use decentralized exchanges.
- audunw 3y ago
  Or c) make most people avoid cryptocurrencies all together
  - siwatanejo 3y ago
    Bitcoin is not crypto.
    - tirpen 3y ago
      That's a wild take. Can you explain why not?
      - DANmode 3y ago
        Because they're having too much fun with the crowd bashing basically everything else in the space to realize that the "one true Scotsman" was in the room waiting the entire time.
      - Nursie 3y ago
        This is a common bitcoin meme now, mostly to try to disassociate bitcoin from the negative associations that the term cryptocurrency has accrued over the last few years. It allows bitcoin fans to say things like "Yes, I agree, cryptocurrency is a scam!" and follow that quickly with "But have you heard about Bitcoin?" It is, of course, nonsense. BTC effectively defines the term cryptocurrency, there is nothing about BTC which isn't found elsewhere in other cryptocurrencies, many of which are chain or code forks of BTC anyway. It's the biggest name, it was the first mover, but the claims that it is a separate phenomenon all of its own are relatively recent (or have increased markedly in recent months) and are IMHO hilarious.
ckardat123 3y ago
The CEO of Coinbase has sold more stock in his own company than usual the last couple of months: https://www.quiverquant.com/insiders/COIN https://www.quiverquant.com/insiders/COIN
- yieldcrv 3y ago
  Did you also notice that the price is 300% higher over the last couple of months?
  - ckardat123 3y ago
    I was speaking of sales in terms of share count, not dollar value.
    - colecut 3y ago
      300% up seems like a good time to sell more than usual
- latchkey 3y ago
  That mortgage isn't going to pay itself... https://www.wsj.com/amp/articles/crypto-ceo-brian-armstrong-buys-los-angeles-home-for-133-million-11641249787 https://www.wsj.com/amp/articles/crypto-ceo-brian-armstrong-...
- kklisura 3y ago
  Here's an excerpt from one of the latest reports from SEC [1] about CEO selling stock: > The transactions reported on this Form 4 were effected pursuant to a Rule 10b5-1 trading plan adopted by the Reporting Person on August 26, 2022, during an open trading window. [1] https://www.sec.gov/Archives/edgar/data/1679788/000120919123042896/xslF345X03/doc4.xml https://www.sec.gov/Archives/edgar/data/1679788/000120919123...
  - cma 3y ago
    Up until very recently, CEOs could always plan to sell then cancel or not based on insider information.
max_ 3y ago
>The SEC said its enforcement division did not make formal requests for “companies to delist crypto assets”. So Coinbase didn't comply, as they had no legal obligation.
- pavlov 3y ago
  And now they’ve been sued by the SEC. Sounds like the process is working as intended. If you don’t want to heed the SEC’s informal advice, the question can be eventually sorted out by the court.
  - mattdesl 3y ago
    The SEC suit is for Coinbase’s staking-as-a-service, not all their trading activity. EDIT: I was mistaken! Apparently they are being sued for the combined brokers, exchange, and clearing agency activities; in addition to their staking-as-a-service activities. https://www.sec.gov/files/litigation/complaints/2023/comp-pr2023-102.pdf https://www.sec.gov/files/litigation/complaints/2023/comp-pr...
    - pavlov 3y ago
      No, the latest SEC lawsuit against Coinbase is for running an unregistered securities exchange, broker and clearing house: https://www.forbes.com/sites/emilymason/2023/06/06/coinbase-hit-with-sec-suit-that-identifies-37-billion-of-crypto-tokens-as-securities/ https://www.forbes.com/sites/emilymason/2023/06/06/coinbase-... This is the very heart of Coinbase’s operations. If they’re found to be a securities exchange, they won’t be allowed to mingle the broker and clearing house functions, and the company would have to be split.
      - mattdesl 3y ago
        Thanks for the correction. No such thing as safe CEX under the SEC, I guess. I do wonder what they imagine a legally-registered CEX would look like... only accredited investors can purchase and transfer crypto? Or, if it were up to Gensler, Coinbase would only sell Bitcoin?
max_ 3y ago
Why is it so difficult to just recognise crypto currencies as it's own new asset class?
- deleted 3y ago
  [deleted]
- Barrin92 3y ago
  because there's no need to do that. Most cryptocurrencies meet the Howey test which is used to judge if something is a security. It needs to require investment, be a common enterprise, and the expectation of profits. Most cryptocurrencies are just token offering schemes that meet those criteria, a few like Bitcoin can make the case they're not securities. the crypto 'industry' wants a new asset class to avoid scrutiny, don't see much reason to give them one.
  - tornato7 3y ago
    Sure, regulate them as securities, but the problem is the SEC has made it nearly impossible to actually register a cryptocurrency as a security. https://policy.paradigm.xyz/writing/secs-path-to-registration-part-i https://policy.paradigm.xyz/writing/secs-path-to-registratio...
    - martin8412 3y ago
      [flagged]
    - Barrin92 3y ago
      Doesn't seem that way to me. all you need to do is to file an S-1. The issue is an entirely different one which is obvious when you look at the case studies in the second post. >"Paragon Coin Inc. (“Paragon”) was a Delaware company that raised $12 million from their 2017 ICO of “PRG Tokens” as part of a scheme to integrate blockchain technology to the cannabis industry." The "PRG Token" is just a share in the company. This is a security you should only be able to buy on a registered exchange. The business obviously failed because blockchain in the cannabis industry is utterly useless, the company went broke, and the actual plan off selling their worthless tokens on a random internet platform didn't work out. So the SEC literally just did its job. None of the companies mentioned on that site has anything resembling an actual business model, the point is merely to defraud public investors on opaque exchanges. In every single case the SEC almost certainly prevented harm being done to the public. This article makes an excellent case for maintaining the status quo.
1vuio0pswjnm7 3y ago
Looks like 12ft.io has stopped working.
- siwatanejo 3y ago
  Try archive.is: https://archive.is/https://www.ft.com/content/1f873dd5-df8f-4cfc-bb21-ef83ed11fb4d https://archive.is/https://www.ft.com/content/1f873dd5-df8f-...
- 1vuio0pswjnm7 3y ago
  It's working again.
gmerc 3y ago
Crypto Bros on Linkedin: Bitcoin is surging, don’t miss the boat. It’s been like that for months the now - dodgy crypto is positively getting murdered, finally, by regulators and as a result the die hards who don’t want to leave it behind are moving to the reserve currency of the economy, BTC.
neonate 3y ago
https://archive.ph/8i8bi https://archive.ph/8i8bi
Animats 3y ago
That article is full of quotes from Coinbase management. For comparison, here's the SEC statement.[1] Another way to look at this is that the SEC offered Coinbase the opportunity to stop doing something illegal and walk away before the SEC brought the hammer down. That was a pretty good offer. These are criminal offenses. Coinbase didn't. So, hammer time: Washington D.C., June 6, 2023 — The Securities and Exchange Commission today charged Coinbase, Inc. with operating its crypto asset trading platform as an unregistered national securities exchange, broker, and clearing agency. The SEC also charged Coinbase for failing to register the offer and sale of its crypto asset staking-as-a-service program." Much of the US crypto industry had two great hopes for getting away with it. First, that they could get Congress to legalize what they were doing. Second, that they could get the Commodity Futures Trading Commission, instead of the Securities and Exchage Commission, to regulate crypto. The first possibility disappeared politically after the FTX scams were exposed, FTX went bankrupt, and politicians who accepted their campaign donations were in political trouble. The second disappeared when the SEC and the CFTC, with help from the Justice Department and the FBI, all landed on Binance, and started asking hard questions about where the customer's money was. These companies are in deep trouble for a very simple and classic form of financial crime - treating the customer's money as their own. This is not about "tech". This is not about "crypto". This is not about "financial innovation". This is about plain old theft. [1] https://www.sec.gov/news/press-release/2023-102 https://www.sec.gov/news/press-release/2023-102
- TedDoesntTalk 3y ago
  > treating the customer's money as their own There is zero evidence that Coinbase does that. Notably, they are publicly traded with audited financial statements every quarter, unlike FTX, Binance, and friends.
  - bob-09 3y ago
    We'll see if any evidence turns up in court. I think it's a good thing that Coinbase has audited statements to review and that the SEC is scrutinizing them. If Coinbase is cooperative and absolved thanks to their diligence, they'll be further cemented as the standard for others in the industry to follow as regulators play catch up.
deleted 3y ago
[deleted]
hsjqllzlfkf 3y ago
I hate crypto bros and crypto land, it's a cesspool of scammers with almost zero value to it. That said, isn't it a bit concerning that we have an agency that both writes AND enforces the laws? Why is this aspect unlike everywhere else in society?
- sokoloff 3y ago
  The FAA does this as well (and it works reasonably well). I’m less familiar with the details, but it seems like the FTC, FDA, EPA, and OSHA all have significant rule-making and rule-enforcing power as well.
- Sparkyte 3y ago
  SEC only writes regulations not laws. They can't uphold penalty unless they can enforce regulations with laws. So when they write a regulation it has a law backed by the government supporting the regulation. It can be overturned at anytime if found that it imposes on laws or constitutions.
nathias 3y ago
what if the SEC was the real criminals all along?
- pavlov 3y ago
  Sure, any moment now we’ll find out that FTX and Terraform Labs and all the other jailed and fugitive crypto founders were just victims of the SEC’s machinations.
  - nathias 3y ago
    'What is the robbing of a bank compared to the founding of a bank?'
  - DANmode 3y ago
    You think Coinbase is on par with FTX?!
lysecret 3y ago
People worry about the classification into security or not, precisely because securities, if unregulated are a perfect vehicle for scams! Let me rephrase the howey test for you: “Hey just buy this thing from me, and trust me that I will do something great with your money and eventually return it to you, I promise!” Well, surprisingly there is a looong history of people exploiting a system like this to scam people. We learned, we have to regulate that kind of thing.
- oblio 3y ago
  You don't get it. Regulation is always bad and dumb people falling for scams... that's just their problem :-)
- GoblinSlayer 3y ago
  Then everything is a security, because you can exchange anything for money while saying words.
  - Terretta 3y ago
    Saying certain words, yes. The “Howey Test” referenced by GP is based on a ruling from SEC v. W.J. Howey Co., which reached the Supreme Court in 1946: An investment contract exists if there is an "investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others." https://www.investopedia.com/terms/h/howey-test.asp https://www.investopedia.com/terms/h/howey-test.asp If the words sound like that, careful.
- TekMol 3y ago
  No. "trust me that I will do something great with your money and eventually return it to you, I promise" is not part of the deal when you buy a token. 1: Some of the deals are "Someone built this thing which is now out of their control. But this thing can be used with these tokes. Want some?". 2: Some of the deals are "I built this thing which is now out of my control. But this thing can be used with these tokes. Want some?". 3: Some of the deals are "I built this thing which is now kinda out of my control. I might be able to change it later, but only if the community stays behind me. Anyhow, this thing can be used with these tokes. Want some?". The SEC argues that many tokens fall into category 3 and that 3 is close enough to a security that the SEC should have a say in this.
sairamkunala 3y ago
Wait! Why not bitcoin?
Sparkyte 3y ago
Saw this like 10 years ago. Crypto is a scam or well a vehicle for scams. SEC should have been on this sooner.
- deleted 3y ago
  [deleted]
koolba 3y ago
> The SEC said its enforcement division did not make formal requests for “companies to delist crypto assets”. > “In the course of an investigation, the staff may share its own view as to what conduct may raise questions for the commission under the securities laws,” it added. That’s insane. The lesson here is that if you get any communication from the SEC, document it and reply back asking if that’s an official communication of the SEC or just the meaningless “view” of a staff member.
mihaic 3y ago
By actual activity, it seems to me like anything besides maybe ETH is actually a security. I can't find a reason to single out BTC here, other than it being the oldest and by far more well known.
- DANmode 3y ago
  ICO via email
  - mihaic 3y ago
    Could you elaborate with a verb? I'm not sure what you mean.
    - DANmode 3y ago
      ETH began by selling ETH for BTC via email. This was one of the first ICOs, before the phrase.
wslh 3y ago
As an insider in Web3, the reality of blockchain platforms/foundations is that, majorly, they benefit a very specific group of investors, incumbents, and the governance is super centralized. Basic cronysm hidden beyond the decentralization placeholder, building super-advanced technologies that almost always has some more milestone to be delivered or adopted. Hundreds of similar ZK*, VMs, etc. I don'like to like the SEC and I think a confrontation between the SEC, Coinbase, and other incumbents is positive. On the other hand I know that majorly the decentralization blah blah blah is just a distraction trick, that fraudsters execute faster than entrepreneurs in this space. Finally, the real winner for transactions right now is Tether, the top used centralized stable coin in the ecosystem which volume greatly surpasses the top cryptocurrencies like Bitcoin and Ethereum. This is a fact.
- mrd3v0 3y ago
  I'm sorry but this largely reads like an advertisement. "As an expert I recommend this product!" with no backing of facts or actual informative explanation. Which is worrying considering the nature of cryptographic currencies that is being full of shady scams.
  - wslh 3y ago
    Where is the advertisement? What am I advertising?
  - yieldcrv 3y ago
    you think that was an advertisement for Tether simply because it was mentioned? that wasn’t a recommendation it was an observation which is easily corroborated responses to crypto asset posts are such a weird blindspot in this tech centric community for over a decade now, when does the conversation evolve? why don't we talk about Solidity versions here, or design patterns, or node software here. such an obvious forum for it but instead we get these non-sequitur responses
    - codehalo 3y ago
      It is because of a simple human affliction: Getting old.
simple-thoughts 3y ago
Here’s my issue with coinbase. If I send my crypto to coinbase, I no longer own my crypto. Coinbase now owns it and can do whatever they like with it. But they market themselves as providing crypto services and as selling crypto when in fact they are just selling numbers in their internal database. So users of Coinbase are clearly being defrauded. They think they own crypto but they don’t.
- dgrin91 3y ago
  Wait till you hear about the DTCC
  - simple-thoughts 3y ago
    Difference is securities are heavily regulated, it’s a weird system but works. With crypto self custody is not only possible but preferred
kinakomochidayo 3y ago
This is all moot now of course, after the XRP ruling, that secondary sales of assets don’t make them securities. The underlying assets are also not securities.

216 points by jlevett 3y ago

awb 3y ago

Public article: https://www.coindesk.com/policy/2023/07/31/sec-asked-coinbase-to-stop-trading-in-all-cryptocurrencies-other-than-bitcoin-before-suing-report/ https://www.coindesk.com/policy/2023/07/31/sec-asked-coinbas... > “They came back to us, and they said . . . we believe every asset other than bitcoin is a security,” Armstrong said according to the FT. “And, we said, well how are you coming to that conclusion, because that’s not our interpretation of the law. And they said, we’re not going to explain it to you, you need to delist every asset other than bitcoin.” > Armstrong said the SEC recommendation left us no choice but to head to court. > The SEC told the FT its enforcement division did not make formal requests for “companies to delist crypto assets.”

yieldcrv 3y ago
> “In the course of an investigation, the staff may share its own view as to what conduct may raise questions for the commission under the securities laws,” it added
EGreg 3y ago
Didn’t nearly all main SEC personnel publicly say that Ethereum is not a security? Hinman and SEC pushing him to say it: https://blockworks.co/news/sec-hinman-eth-not-security https://blockworks.co/news/sec-hinman-eth-not-security SEC chair Gary Gensler: https://decrypt.co/138334/gary-gensler-sec-ethereum-not-security-mit-2018?amp=1 https://decrypt.co/138334/gary-gensler-sec-ethereum-not-secu... SEC prev chair Jay Clayton: https://finance.yahoo.com/amphtml/news/us-sec-chairman-jay-clayton-175300070.html https://finance.yahoo.com/amphtml/news/us-sec-chairman-jay-c... Hester Pierce “crypto mom” ironically has never explicitly stated a position on Ethereum What are they going to do now, backtrack on their own public statements?
- whaleofatw2022 3y ago
  I will note on top of what other commenters have said to this, that most (all?) Of those statements were made before Ethereum went to Proof Of Stake, which has implications for centralization and control.
- saurik 3y ago
  They might believe their prior statements on the matter no longer apply since the transition to proof-of-stake? (I am not saying this is a good argument, but it is one I think I have seen people come up with.)
  - junofan 3y ago
    Yeah but their whole thing is that the specifics of the technology don’t change how securities laws apply. They’d likely claim both the miners and the stakers need to form an organization and have somebody responsible for compliance, if their proposed rules on altering the exchange definition is any indication.
- McAtNite 3y ago
  I’ve have the unpleasant task of interacting with auditors from the SEC regularly in a heavily regulated industry. Trying to get any sort of real, factual guidelines from them is a fool’s errand. Their auditors views and interpretations vary wildly year to year, and they will not provide any written guidelines for their positions. Instead they insist it’s up to the discretion of the individual auditor. I’ve seen fairly reserved people in screaming matches by the end of it all, and concessions will eventually be made which seems strange for a regulatory body to do. All that is that say, they won’t backtrack on anything. They’ll simply say that those were the views of those people as individuals, and they are not reflective of the official stance of the regulatory body.
  - hsjqllzlfkf 3y ago
    I'm not doubting anything you're saying, but are there examples of such problematic behaviors in the public record?
DANmode 3y ago
The word "formal" is doing a lot of lifting, here.
- JumpCrisscross 3y ago
  > word "formal" is doing a lot of lifting, here As is the headline's "CEO says." This article is based on the anecdotes of a person being sued by the SEC.
  - pavlov 3y ago
    CEO: "I can't believe they didn't give us a free pass even though we hired all these expensive lawyers and promised the SEC guys that we'd also give them cushy jobs in a few years. Truly the US has become hostile to world-changing innovation such as myself buying a $50 million house. Did I mention I've been selling a lot of my shares lately? I didn't? Good, don't print that."
    - wiz21c 3y ago
      [flagged]
  - deleted 3y ago
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deleted 3y ago
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rich_sasha 3y ago
In fairness it sounds like, at least from the FT article, that they are saying "stop or we're suing". Which at least is a reasonable thing for a regulator to say. I'm not precluding who is right and wrong here, just that the form of the request is not crazy.
- reaperman 3y ago
  In general, "stop or we're suing" is a reasonable thing for a regulator to say. But in this particular case "every cryptocurrency is a security, except Bitcoin" makes zero sense. Why wouldn't Bitcoin be a security? It would make infinitely more sense if they said "Going forward, our interpretation will be that all cryptocurrencies are securities, and you'll need to become a real brokerage/exchange. Do this or we're suing." That would provide space for reasonable people to disagree, work it out in the courts, lobby Congress to legislate around the topic, etc. But this version is non-sensical -- I simply can't imagine any reasonable persons would ever come to a meeting of the minds that Ethereum is a security but Bitcoin is not a security.
  - TedDoesntTalk 3y ago
    I agree. The only difference I can see is that Bitcoin never had the crazy fund-raising schemes and marketing blitzes that a lot of alt coins had. Same with the original ETH.
  - voxic11 3y ago
    A federal judge recently ruled that XRP was a security when sold in some contexts but not others. And what coinbase is doing (at least with their basic trading platform, I know they have more questionable stuff going on as well) sounds like it wouldn't be a security for any coins. > The court found that the “Programmatic Sales” did not satisfy Howey’s third prong because such buyers could not reasonably have expected that Ripple would use the proceeds of the sales to improve the XRP ecosystem and thereby cause an increase in the price of XRP. Citing SEC v. Telegram Group Inc., the court stated that this inquiry turns on the “promises and offers made to investors” and not each buyer’s motivation, making the blind bid/ask aspect of the transactions a key consideration. Ripple did not make any promises or offers because it did not know who was buying the XRP, and the purchasers did not know who was selling it. https://www.mondaq.com/unitedstates/fin-tech/1348902/sdny-rules-ripples-xrp-token-was--and-was-not--a-security https://www.mondaq.com/unitedstates/fin-tech/1348902/sdny-ru...

WhereIsTheTruth 3y ago

[flagged]

rafaelero 3y ago
You are so smart, sweetie. Keep doing that good job.
- WhereIsTheTruth 3y ago
  Yeap, agent musk cover got blown up :)

j_crick 3y ago

No paywall version: https://archive.li/2023.07.31-040202/https://www.ft.com/content/1f873dd5-df8f-4cfc-bb21-ef83ed11fb4d https://archive.li/2023.07.31-040202/https://www.ft.com/cont...

Dylan16807 3y ago

So they asked this before suing, and since that includes Ethereum it was probably them reaching as far as they possibly could rather than being on firm grounds.

TedDoesntTalk 3y ago
“Ether, the second-largest cryptocurrency, which is fundamental to many industry projects, was absent from the regulator’s case against the exchange. It also did not feature in the list of 12 “crypto asset securities” specified in the SEC’s lawsuit against Binance.”
- latchkey 3y ago
  2018: https://fortune.com/videos/watch/in-2018%2C-gary-gensler-said-bitcoin-and-other-coins-were-not-securities/df81d442-372d-4fad-9b49-355671fd2876 https://fortune.com/videos/watch/in-2018%2C-gary-gensler-sai... The other thing you need to look at is exactly what Paypal offers: Bitcoin, ETH, Litecoin, Bitcoin Cash. https://www.paypal.com/us/digital-wallet/manage-money/crypto https://www.paypal.com/us/digital-wallet/manage-money/crypto
- Dylan16807 3y ago
  Yes, their lawsuit had a vastly reduced list. The lawsuit is erring in the opposite direction, or at least trying to.
latchkey 3y ago
Matt Levine covers this... https://www.bloomberg.com/opinion/articles/2023-06-07/when-is-a-token-not-a-security https://www.bloomberg.com/opinion/articles/2023-06-07/when-i... "Some of them did securities offerings, but by the time the SEC noticed they were too entrenched and decentralized and it would have been a pain for the SEC to go after them. Ethereum, most notably, very very clearly did an ICO in 2014, raising about $18.3 million by selling ETH tokens. If they did that today, or in late 2017, the SEC would have some serious questions. But by the time the SEC got around to cracking down on ICOs in 2017, Ethereum was big and decentralized and the SEC would have had a hard time, practically and legally, challenging its 2014 ICO. And so everyone sort of grudgingly concedes that ETH is not a security."

dataflow 3y ago

How in the world can BCH (Bitcoin Cash) be a security if BTC (Bitcoin) isn't?

Vecr 3y ago
It's newer, less well recognized in general, and as far as a government Bitcoin node is concerned it does not exist. Bitcoin's case on not being a security is possibly based on the low likelihood of future incompatible changes and its track record and age.
- EgregiousCube 3y ago
  It's exactly the same age as Bitcoin. What's a government Bitcoin node?
  - duskwuff 3y ago
    > It's exactly the same age as Bitcoin. Don't be disingenuous. Bitcoin Cash didn't exist prior to 2017, when it forked from Bitcoin.
    - xref 3y ago
      …though the Bitcoin Cash blockchain has valid txns going back to 2009 just like BTC. Everyone wants answers that are black and white, cut and dry. The world is a lot more grey.
      - tirpen 3y ago
        If anyone, using your definition of coin age, can create a 14 year old crypto currency instantly, then clearly your definition is not useful.
      - JumpCrisscross 3y ago
        > though the Bitcoin Cash blockchain has valid txns going back to 2009 just like BTC By this logic, the U.S. dollar is millennia old, since it grafted onto an economy that used older currencies still on its adoption.

tw1984 3y ago

[flagged]

Vecr 3y ago
I'm not sure exactly why the US government thinks Bitcoin is not a security, but I think it's reasonable to speculate that the resistance to making incompatible changes, and hence the probable agreement between the government (the prosecutor) and the defendant to run compatible full nodes may have something to do with it. Etherium is different, more willing to change, has a central personality with more control, and is frankly harder to set up full nodes and independently verify. Imagine the prosecution explaining to the judge what a "beacon chain" is, and the defense showing command line output on the 4K TVs they brought in, trying to explain why it's been two weeks and their nodes is not synced yet.
- hakfoo 3y ago
  I wonder if the "central personality" aspect is the key. Even the promise of massive wealth and clout has failed to unmask Satoshi, so it's largely seen as a self-managing system. There's no real figurehead you can say is responsible for it or able to steer it for personal gain at this point.
  - latchkey 3y ago
    Matt Levine talks about this in one of his pieces recently. https://www.bloomberg.com/opinion/articles/2023-06-07/when-is-a-token-not-a-security https://www.bloomberg.com/opinion/articles/2023-06-07/when-i... "Some of them did securities offerings, but by the time the SEC noticed they were too entrenched and decentralized and it would have been a pain for the SEC to go after them. Ethereum, most notably, very very clearly did an ICO in 2014, raising about $18.3 million by selling ETH tokens. If they did that today, or in late 2017, the SEC would have some serious questions. But by the time the SEC got around to cracking down on ICOs in 2017, Ethereum was big and decentralized and the SEC would have had a hard time, practically and legally, challenging its 2014 ICO. And so everyone sort of grudgingly concedes that ETH is not a security."
- 3y ago

mtgentry 3y ago

Hate to take the SEC’s side, but once Coinbase started trading DOGE, they lost the moral high ground.

Vervious 3y ago
Well, in a libertarian world, the moral high ground is that we should be able to trade anything -- who is the SEC to tell us what we can't trade? It's almost like freedom of speech. Plus, I don't think consumers should be protected from dogecoin --- no layman in their right mind invests in doge with the expectation of profit (from common enterprise). Bitcoin is more of a security than doge will ever be.
- CPLX 3y ago
  For the most part the SEC doesn’t tell you what you can and can’t trade. It does however have laws around registration of the security, who can and can’t purchase it under a given registration, disclosure rules, conflict of interest rules, and so on.
  - Vervious 3y ago
    > "It does however have laws around registration of the security" This sounds a lot like the SEC dictating what can and can't be traded in the modern day. We can't trade something if there isn't an exchange for it.
- pavlov 3y ago
  > “no layman in their right mind invests in doge with the expectation of profit (from common enterprise)” Influencers pumping the coin on Twitter is a common enterprise. You don’t think people bought DOGE because they hoped those influencers would continue what they were doing?
  - Vervious 3y ago
    I mean, everyone hyping up kale as a supergreen on their social media doesn't make Kale --- the vegetable --- a security. Likewise, people shill GOLD on twitter all the time. Is gold a security? If kale and gold are securities under the current interpretation of the howey test, then the howey test needs to be rewritten.

Mengkudulangsat 3y ago

Fantastic, force every centralized exchange to stick to being on-ramps. This will a) Force people to learn self-custody & b) Force people to learn how to use decentralized exchanges.

audunw 3y ago
Or c) make most people avoid cryptocurrencies all together
- siwatanejo 3y ago
  Bitcoin is not crypto.
  - tirpen 3y ago
    That's a wild take. Can you explain why not?
    - DANmode 3y ago
      Because they're having too much fun with the crowd bashing basically everything else in the space to realize that the "one true Scotsman" was in the room waiting the entire time.
    - Nursie 3y ago
      This is a common bitcoin meme now, mostly to try to disassociate bitcoin from the negative associations that the term cryptocurrency has accrued over the last few years. It allows bitcoin fans to say things like "Yes, I agree, cryptocurrency is a scam!" and follow that quickly with "But have you heard about Bitcoin?" It is, of course, nonsense. BTC effectively defines the term cryptocurrency, there is nothing about BTC which isn't found elsewhere in other cryptocurrencies, many of which are chain or code forks of BTC anyway. It's the biggest name, it was the first mover, but the claims that it is a separate phenomenon all of its own are relatively recent (or have increased markedly in recent months) and are IMHO hilarious.

ckardat123 3y ago

The CEO of Coinbase has sold more stock in his own company than usual the last couple of months: https://www.quiverquant.com/insiders/COIN https://www.quiverquant.com/insiders/COIN

yieldcrv 3y ago
Did you also notice that the price is 300% higher over the last couple of months?
- ckardat123 3y ago
  I was speaking of sales in terms of share count, not dollar value.
  - colecut 3y ago
    300% up seems like a good time to sell more than usual
latchkey 3y ago
That mortgage isn't going to pay itself... https://www.wsj.com/amp/articles/crypto-ceo-brian-armstrong-buys-los-angeles-home-for-133-million-11641249787 https://www.wsj.com/amp/articles/crypto-ceo-brian-armstrong-...
kklisura 3y ago
Here's an excerpt from one of the latest reports from SEC [1] about CEO selling stock: > The transactions reported on this Form 4 were effected pursuant to a Rule 10b5-1 trading plan adopted by the Reporting Person on August 26, 2022, during an open trading window. [1] https://www.sec.gov/Archives/edgar/data/1679788/000120919123042896/xslF345X03/doc4.xml https://www.sec.gov/Archives/edgar/data/1679788/000120919123...
- cma 3y ago
  Up until very recently, CEOs could always plan to sell then cancel or not based on insider information.

max_ 3y ago

>The SEC said its enforcement division did not make formal requests for “companies to delist crypto assets”. So Coinbase didn't comply, as they had no legal obligation.

pavlov 3y ago
And now they’ve been sued by the SEC. Sounds like the process is working as intended. If you don’t want to heed the SEC’s informal advice, the question can be eventually sorted out by the court.
- mattdesl 3y ago
  The SEC suit is for Coinbase’s staking-as-a-service, not all their trading activity. EDIT: I was mistaken! Apparently they are being sued for the combined brokers, exchange, and clearing agency activities; in addition to their staking-as-a-service activities. https://www.sec.gov/files/litigation/complaints/2023/comp-pr2023-102.pdf https://www.sec.gov/files/litigation/complaints/2023/comp-pr...
  - pavlov 3y ago
    No, the latest SEC lawsuit against Coinbase is for running an unregistered securities exchange, broker and clearing house: https://www.forbes.com/sites/emilymason/2023/06/06/coinbase-hit-with-sec-suit-that-identifies-37-billion-of-crypto-tokens-as-securities/ https://www.forbes.com/sites/emilymason/2023/06/06/coinbase-... This is the very heart of Coinbase’s operations. If they’re found to be a securities exchange, they won’t be allowed to mingle the broker and clearing house functions, and the company would have to be split.
    - mattdesl 3y ago
      Thanks for the correction. No such thing as safe CEX under the SEC, I guess. I do wonder what they imagine a legally-registered CEX would look like... only accredited investors can purchase and transfer crypto? Or, if it were up to Gensler, Coinbase would only sell Bitcoin?

max_ 3y ago

Why is it so difficult to just recognise crypto currencies as it's own new asset class?

deleted 3y ago
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Barrin92 3y ago
because there's no need to do that. Most cryptocurrencies meet the Howey test which is used to judge if something is a security. It needs to require investment, be a common enterprise, and the expectation of profits. Most cryptocurrencies are just token offering schemes that meet those criteria, a few like Bitcoin can make the case they're not securities. the crypto 'industry' wants a new asset class to avoid scrutiny, don't see much reason to give them one.
- tornato7 3y ago
  Sure, regulate them as securities, but the problem is the SEC has made it nearly impossible to actually register a cryptocurrency as a security. https://policy.paradigm.xyz/writing/secs-path-to-registration-part-i https://policy.paradigm.xyz/writing/secs-path-to-registratio...
  - martin8412 3y ago
    [flagged]
  - Barrin92 3y ago
    Doesn't seem that way to me. all you need to do is to file an S-1. The issue is an entirely different one which is obvious when you look at the case studies in the second post. >"Paragon Coin Inc. (“Paragon”) was a Delaware company that raised $12 million from their 2017 ICO of “PRG Tokens” as part of a scheme to integrate blockchain technology to the cannabis industry." The "PRG Token" is just a share in the company. This is a security you should only be able to buy on a registered exchange. The business obviously failed because blockchain in the cannabis industry is utterly useless, the company went broke, and the actual plan off selling their worthless tokens on a random internet platform didn't work out. So the SEC literally just did its job. None of the companies mentioned on that site has anything resembling an actual business model, the point is merely to defraud public investors on opaque exchanges. In every single case the SEC almost certainly prevented harm being done to the public. This article makes an excellent case for maintaining the status quo.

1vuio0pswjnm7 3y ago

Looks like 12ft.io has stopped working.

siwatanejo 3y ago
Try archive.is: https://archive.is/https://www.ft.com/content/1f873dd5-df8f-4cfc-bb21-ef83ed11fb4d https://archive.is/https://www.ft.com/content/1f873dd5-df8f-...
1vuio0pswjnm7 3y ago
It's working again.

gmerc 3y ago

Crypto Bros on Linkedin: Bitcoin is surging, don’t miss the boat. It’s been like that for months the now - dodgy crypto is positively getting murdered, finally, by regulators and as a result the die hards who don’t want to leave it behind are moving to the reserve currency of the economy, BTC.

neonate 3y ago

https://archive.ph/8i8bi https://archive.ph/8i8bi

Animats 3y ago

That article is full of quotes from Coinbase management. For comparison, here's the SEC statement.[1] Another way to look at this is that the SEC offered Coinbase the opportunity to stop doing something illegal and walk away before the SEC brought the hammer down. That was a pretty good offer. These are criminal offenses. Coinbase didn't. So, hammer time: Washington D.C., June 6, 2023 — The Securities and Exchange Commission today charged Coinbase, Inc. with operating its crypto asset trading platform as an unregistered national securities exchange, broker, and clearing agency. The SEC also charged Coinbase for failing to register the offer and sale of its crypto asset staking-as-a-service program." Much of the US crypto industry had two great hopes for getting away with it. First, that they could get Congress to legalize what they were doing. Second, that they could get the Commodity Futures Trading Commission, instead of the Securities and Exchage Commission, to regulate crypto. The first possibility disappeared politically after the FTX scams were exposed, FTX went bankrupt, and politicians who accepted their campaign donations were in political trouble. The second disappeared when the SEC and the CFTC, with help from the Justice Department and the FBI, all landed on Binance, and started asking hard questions about where the customer's money was. These companies are in deep trouble for a very simple and classic form of financial crime - treating the customer's money as their own. This is not about "tech". This is not about "crypto". This is not about "financial innovation". This is about plain old theft. [1] https://www.sec.gov/news/press-release/2023-102 https://www.sec.gov/news/press-release/2023-102

TedDoesntTalk 3y ago
> treating the customer's money as their own There is zero evidence that Coinbase does that. Notably, they are publicly traded with audited financial statements every quarter, unlike FTX, Binance, and friends.
- bob-09 3y ago
  We'll see if any evidence turns up in court. I think it's a good thing that Coinbase has audited statements to review and that the SEC is scrutinizing them. If Coinbase is cooperative and absolved thanks to their diligence, they'll be further cemented as the standard for others in the industry to follow as regulators play catch up.

deleted 3y ago

[deleted]

hsjqllzlfkf 3y ago

I hate crypto bros and crypto land, it's a cesspool of scammers with almost zero value to it. That said, isn't it a bit concerning that we have an agency that both writes AND enforces the laws? Why is this aspect unlike everywhere else in society?

sokoloff 3y ago
The FAA does this as well (and it works reasonably well). I’m less familiar with the details, but it seems like the FTC, FDA, EPA, and OSHA all have significant rule-making and rule-enforcing power as well.
Sparkyte 3y ago
SEC only writes regulations not laws. They can't uphold penalty unless they can enforce regulations with laws. So when they write a regulation it has a law backed by the government supporting the regulation. It can be overturned at anytime if found that it imposes on laws or constitutions.

nathias 3y ago

what if the SEC was the real criminals all along?

pavlov 3y ago
Sure, any moment now we’ll find out that FTX and Terraform Labs and all the other jailed and fugitive crypto founders were just victims of the SEC’s machinations.
- nathias 3y ago
  'What is the robbing of a bank compared to the founding of a bank?'
- DANmode 3y ago
  You think Coinbase is on par with FTX?!

lysecret 3y ago

People worry about the classification into security or not, precisely because securities, if unregulated are a perfect vehicle for scams! Let me rephrase the howey test for you: “Hey just buy this thing from me, and trust me that I will do something great with your money and eventually return it to you, I promise!” Well, surprisingly there is a looong history of people exploiting a system like this to scam people. We learned, we have to regulate that kind of thing.

oblio 3y ago
You don't get it. Regulation is always bad and dumb people falling for scams... that's just their problem :-)
GoblinSlayer 3y ago
Then everything is a security, because you can exchange anything for money while saying words.
- Terretta 3y ago
  Saying certain words, yes. The “Howey Test” referenced by GP is based on a ruling from SEC v. W.J. Howey Co., which reached the Supreme Court in 1946: An investment contract exists if there is an "investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others." https://www.investopedia.com/terms/h/howey-test.asp https://www.investopedia.com/terms/h/howey-test.asp If the words sound like that, careful.
TekMol 3y ago
No. "trust me that I will do something great with your money and eventually return it to you, I promise" is not part of the deal when you buy a token. 1: Some of the deals are "Someone built this thing which is now out of their control. But this thing can be used with these tokes. Want some?". 2: Some of the deals are "I built this thing which is now out of my control. But this thing can be used with these tokes. Want some?". 3: Some of the deals are "I built this thing which is now kinda out of my control. I might be able to change it later, but only if the community stays behind me. Anyhow, this thing can be used with these tokes. Want some?". The SEC argues that many tokens fall into category 3 and that 3 is close enough to a security that the SEC should have a say in this.

sairamkunala 3y ago

Wait! Why not bitcoin?

Sparkyte 3y ago

Saw this like 10 years ago. Crypto is a scam or well a vehicle for scams. SEC should have been on this sooner.

deleted 3y ago
[deleted]

koolba 3y ago

> The SEC said its enforcement division did not make formal requests for “companies to delist crypto assets”. > “In the course of an investigation, the staff may share its own view as to what conduct may raise questions for the commission under the securities laws,” it added. That’s insane. The lesson here is that if you get any communication from the SEC, document it and reply back asking if that’s an official communication of the SEC or just the meaningless “view” of a staff member.

mihaic 3y ago

By actual activity, it seems to me like anything besides maybe ETH is actually a security. I can't find a reason to single out BTC here, other than it being the oldest and by far more well known.

DANmode 3y ago
ICO via email
- mihaic 3y ago
  Could you elaborate with a verb? I'm not sure what you mean.
  - DANmode 3y ago
    ETH began by selling ETH for BTC via email. This was one of the first ICOs, before the phrase.

wslh 3y ago

As an insider in Web3, the reality of blockchain platforms/foundations is that, majorly, they benefit a very specific group of investors, incumbents, and the governance is super centralized. Basic cronysm hidden beyond the decentralization placeholder, building super-advanced technologies that almost always has some more milestone to be delivered or adopted. Hundreds of similar ZK*, VMs, etc. I don'like to like the SEC and I think a confrontation between the SEC, Coinbase, and other incumbents is positive. On the other hand I know that majorly the decentralization blah blah blah is just a distraction trick, that fraudsters execute faster than entrepreneurs in this space. Finally, the real winner for transactions right now is Tether, the top used centralized stable coin in the ecosystem which volume greatly surpasses the top cryptocurrencies like Bitcoin and Ethereum. This is a fact.

mrd3v0 3y ago
I'm sorry but this largely reads like an advertisement. "As an expert I recommend this product!" with no backing of facts or actual informative explanation. Which is worrying considering the nature of cryptographic currencies that is being full of shady scams.
- wslh 3y ago
  Where is the advertisement? What am I advertising?
- yieldcrv 3y ago
  you think that was an advertisement for Tether simply because it was mentioned? that wasn’t a recommendation it was an observation which is easily corroborated responses to crypto asset posts are such a weird blindspot in this tech centric community for over a decade now, when does the conversation evolve? why don't we talk about Solidity versions here, or design patterns, or node software here. such an obvious forum for it but instead we get these non-sequitur responses
  - codehalo 3y ago
    It is because of a simple human affliction: Getting old.

simple-thoughts 3y ago

Here’s my issue with coinbase. If I send my crypto to coinbase, I no longer own my crypto. Coinbase now owns it and can do whatever they like with it. But they market themselves as providing crypto services and as selling crypto when in fact they are just selling numbers in their internal database. So users of Coinbase are clearly being defrauded. They think they own crypto but they don’t.

dgrin91 3y ago
Wait till you hear about the DTCC
- simple-thoughts 3y ago
  Difference is securities are heavily regulated, it’s a weird system but works. With crypto self custody is not only possible but preferred

kinakomochidayo 3y ago

This is all moot now of course, after the XRP ruling, that secondary sales of assets don’t make them securities. The underlying assets are also not securities.