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Robinhood Crypto Gets Wells Notice from US SEC
- edm0nd 3y agoSEC is a joke. Either nothing will happen at all OR they will get hit with a small fine.
- j0hnyl 3y agoNothing should happen. Treating crypto tokens as securities is absurd.
- Timber-6539 3y agoCrypto tokens fall into the definition of securities by SEC standards.
- lenerdenator 3y agoMaybe the way to view it would be as a gambling product, with the regulation that casinos encounter. Though I'm guessing most crypto users wouldn't enjoy that.
- smeej 3y agoAs the ongoing court case with Coinbase shows, though, part of the problem is that the SEC might not be using reasonable standards. It's letting the pitcher call the balls and strikes.
- lenerdenator 3y agoThe only reasonable standard the crypto true believers would accept from the US government is that cryptocurrency tokens and derivatives are 100% unregulated and nontaxable by any current or future statute.
- smeej 3y agoThat's a nice ad hominem attack you've made there, but it isn't actually unreasonable to argue that Bitcoin and certain other currencies like it are not securities. Heck, even the SEC has said as much. It's even more reasonable to argue that things like NFTs are more like digital baseball cards than securities.
- JumpCrisscross 3y ago> it isn't actually unreasonable to argue that Bitcoin and certain other currencies like it are not securities It’s not. But it’s clear the industry needs supervision, and it isn’t really worth the time drafting federal legislation. The SEC keeping the most egregious behaviour checked, e.g. policing positioning with retail investors, is the best worst option for now.
- smeej 3y agoThe CFTC seems to think it would be perfectly competent to handle the situation too. I don't think the only options are federal legislation or the (allegedly) overreaching SEC.
- JumpCrisscross 3y ago> CFTC seems to think it would be perfectly competent to handle the situation too The way these businesses are run, it probably does too. A good amount of effort in finance goes into avoiding unneeded regulatory duplication. But if you’re a you’re a bank you get both the FDIC and SEC, a public drug manufacturer the SEC and FDA; if you’re selling crypto through your brokerage app, the SEC and CFTC.
- smeej 3y agoPerhaps at the level of exchanges, sure, but for each individual token, it can't be both a commodity and a security at the same time, and the CFTC and SEC keep stepping on each other's toes.
- iamsam123 3y ago"Everything is Securities Fraud" - Matt Levine
- ajross 3y agoThere is no accusation of fraud here. What seems to be happening is, as with similar enforcement actions, Robinhood is being dinged for trading securities improperly, without ticking off the legal requirements for notification, tracking, authentication, etc... The idea that crypto assets aren't "securities" and thus not subject to SEC regulation is, and always has been, laughable. Virtually everyone trading these things is doing so to engage in arbitrage of fungible assets to make money. I mean, come on.
- siftrics 3y agoThe vast majority of arbitrage of fungible assets happens in commodities, not securities. The SEC regulates securities. The CFTC regulates commodities.
- jprete 3y agoOk, but these are clearly not commodities.
- shemnon42 3y agoClearly? What distinguishes them from beanie babies or used concert ticket stubs?
- siftrics 3y agoWhy not? It is highly litigated and still abundantly unclear whether certain cryptocurrencies are securities or commodities. That's the whole point of these legal battles. If it was clear, they would not be ongoing.
- pie420 3y ago
- droptablemain 3y agoAny idea what this could mean for those holding crypto on Robinhood?
- financetechbro 3y agoI doubt the SEC has a strong case here. I wouldn’t worry about anything for now
- lenerdenator 3y agoWhat makes you think this?
- financetechbro 2y agoRH has been working hard to get regulatory approval, similar to Coinbase. I don’t think anything drastic can be done if they are found to be in the wrong, considering they’ve been proactive with getting regulation in place
- bidandanswer 3y agoThey've been reprimanded by a federal judge for blatant extrajudicial power grabs like this one. None of their huge cases claiming various cryptocurrencies are securities have succeeded, except in the super cut-and-dry cases like ICOs and centralized schemes that clearly pass the Howey test.
- JumpCrisscross 3y ago> None of their huge cases claiming various cryptocurrencies are securities have succeeded A federal judge found the SEC has jurisdiction over crypto and is sending Coinbase’s case to a jury trial [1]. [1] https://www.cnbc.com/2024/03/27/sec-scores-big-win-in-lawsuit-against-crypto-exchange-coinbase.html https://www.cnbc.com/2024/03/27/sec-scores-big-win-in-lawsui...
- 3y ago
- nimbius 3y agoglad to see the same regulatory agency that snored through the gamestop fiasco has suddenly taken notice of the crypto wing of the same predatory fintech that should have faced a congressional hearing years ago.
- robbyiq999 3y agoDon't forget Gensler meeting with Sam Bankman-Fried; which actually blew up in everyones face and wasn't crypto's fault but an exchange run amok.
- miohtama 3y agoHere is some colour on the issue how the SEC sees the matter https://twitter.com/mattwalshinbos/status/1787466189737750609?s=46 https://twitter.com/mattwalshinbos/status/178746618973775060...
- JumpCrisscross 3y agoDoesn’t really explain why Robinhood thought the framework was unworkable, and why they thought throwing up their hands and ignoring the SEC would result in anything but enforcement.
- robbyiq999 3y agoI dont think cryptos are securities; especially given that they are decentralized, which is the whole point. Which would make these points of the howie test moot. > 2) In a common enterprise. + 4) Due to the managerial efforts of others. The expectation of profit is tricky, something like ethereum could argue that ethereum itself is used for network precipitation, gwei or gas. Also, wouldn't they have to out and say "PAY US FOR THESE AND WE WILL REWARD YOU WITH DOLLAR PROFITS" Also, isn't crypto just beanie baby tulip bulbs. Aren't those commodities?
- 1vuio0pswjnm7 2y agoNo Datadome Javascript: https://cc.bingj.com/cache.aspx?d=3675526860418&w=NaVLru25dt42I855jgUMV4HJ0aAxyLLs https://cc.bingj.com/cache.aspx?d=3675526860418&w=NaVLru25dt...