"Coinbase has taken an increasingly defiant stance, publicly criticizing the SEC and urging regulators to write new rules for crypto rather than enforce existing ones."
No, they're asking the SEC to provide evidence and the SEC has been ignoring them and trying to have everything be a security.
"The firm has accused the SEC of stifling innovation and has spent millions of dollars lobbying Congress in hopes of bypassing regulators through new legislation."
Again no, they're not trying to bypass regulators whatsoever. Coinbase has posted again and again and again that they want to be properly regulated including by the SEC, but the SEC refuses to work with them.
It's extremely frustrating because people who know what's actually been going on can clearly see the bs, but most people who read this article (including a ton of the anti crypto crowd on HN) will just latch onto this as if it is truth.
The SEC doesn’t have to help a company which is actively skirting the law to craft its legal strategy. They do have to provide evidence to a court when they file an enforcement action. That’s how laws work.
The SEC can't declare everything a security, then enforce it without providing evidence or guidance to companies trying to be regulated, and then further make videos on twitter declaring that it's as easy as signing a form to be regulated (lying).
I've seen you before in threads and I know you have a giant anti crypto slant, but try to use some logic and not just cower when you see government acronyms without questioning them
Also news flash to folks in these threads, the rest of the world is pretty much on board with crypto and making pretty big advancements. Whether people like it or not, this is here and it's staying (by definition you can't shut down things like Bitcoin).
We either catch up as a country and allow innovation or we lost a pretty big future position.
LOL. It’s totally fine to miss out on the latest wave in Ponzi innovation.
The “rest of the world” is certainly not on board with crypto. China and India are blocking large parts of it. EU has new legislation in the pipeline. Even the Bahamas don’t seem quite as excited about crypto as they used to be…
Yeah yeah, I've heard this before (internet anyone?). EU does have new legislation which is great, it's something the US should have. China has been some activities but promoted others, and India has a corrupt banking system where you have to bribe officials to even get a license for anything, so not sure why you think that's a good example.
There are also many other European, Middle Eastern, African, and South American countries embracing and promoting crypto as a new payment system for various reasons.
The fact that you think it's just a ponzi shows how close minded you are and tbh not worth "debating" with.
I don’t see anyone in Finland paying for coffee with crypto. Or paying their employees. Or paying their mortgage. Or raising money for their company. You know, any of the many things that happen every day in the actual financial system; the things that make an actual economy work and produce wealth and wellbeing.
So what does crypto actually do, if it’s not used for anything productive even in the most crypto-friendly countries? The best that its proponents can offer seems to be “one day it could do X” and variations on “it will work when everybody does it right”, a position oddly similar to true believers in Communism.
Many years ago I used to be quite positive about crypto. Smart contracts sounded clever and useful. The more I looked at the technology and the people involved, the more obvious it became that it’s fundamentally deficient and controlled by scammers. Crypto has had many, many chances to prove itself, and as far as I’m concerned, it failed at everything and doesn’t deserve yet another chance.
How so? The KYC/AML attitude and invasive banks seem to make it basically impossible to function a business. Can't even use a cryptocurrency ATM without identifying yourself through a Finnish bank account and being a long-term resident, making them useless for travelers. Localbitcoins was originally one of the biggest services and it was destroyed by Finnish regulations: a "local" p2p trading service that hilariously banned people from even using cash because of the hostile Finnish environment
The source for those claims is "people, who asked not to be named". Could be literally anyone.
Meanwhile in the same article:
> That does not change [Visa]'s crypto strategy and focus, however, the spokesperson added.
and:
> A spokesperson for Mastercard said: "Our efforts continue to focus on the underlying blockchain technology and how that can be applied to help address current pain points and build more efficient systems."
Isn't it crazy how different those quotes are from the headline? I'd love to know who read those official company statements and then decided to write the headline with the claim from an anonymous nobody instead.
The OP’s original comment referred to the rest of the world, which I read as those outside the US. My understanding is that Visa and Mastercard are American companies with footprints outside the US yes, but they are still US companies.
>by definition you can't shut down things like Bitcoin)
Tomorrow, the US government could declare that no US company can do business with Bitcoin or enable someone to do business. Effectively declare sanctions (similar to North Korea) against the entire ecosystem.
Famously, the US banned alcohol and drugs and some states even banned homosexuality. In none of those cases did it work out as intended. The only meaningful outcome was the destruction of individual liberties. Hmm, maybe that was the real goal all along.
The courts have traditionally been very deferential to national security-based arguments. Whether you agree or not (I’m mixed), that’s the situation on the ground.
Nobody is on board with crypto. And while governments can't shut it down, they can strongly discourage people from putting money into it, by simply enforcing existing regulations, which is what I think governments will start to do now.
What world are you living in my friend? I can speak for India, definitely. Crypto is treated like gambling, it has been brought under anti money laundering laws. The biggest sporting league in the country has banned any crypto association and advertising.
It is just a decentralised ponzi. The sooner it fades away from mainstream discourse, the better. It will live on in the fringes of the internet for habitual gamblers to continue to bet on.
No they can't, which is why they've been taken to court in the past and will in the future again.
Also to your elected officials point, no not all of them are happy and have spoken out on both sides of the aisle, and even other agencies like the CFTC have come out against the SEC in the last year for trying to enforce by action instead of regulation
The chairman of the Commodities and Futures Trading Commission, Rostin Behnam, told the Senate Agriculture Committee on 09 March 2023 that Ethereum, the second-largest cryptocurrency next to Bitcoin, is a commodity. "We would not have allowed the Ether futures product to be listed on a CFTC exchange if we did not feel strongly that it was a commodity asset," he elaborated, stating that his agency has "serious legal defences" to support their case.
But it is not correct that "all the rest" are considered securities.
Also, the SEC does not determine what is and is not a security. That is determined in court. Gary Gensler can give guidance on what the SEC will take to court, but he is not the final word on what is a security.
Why shouldn't they just be considered currencies? It is something a group of people agree have value and they are willing to exchange with each other for goods and services.
The SEC does not care if you bring back Euros from vacation and they are worth more money when you find them in your backpack a year later and exchange them.
Not really. It's entirely reasonable to expect regulatory agencies to lay out in painstaking detail and with perfect clarity the necessary criteria for anyone to know what is or isn't within bounds, and not take 10y of mixed messages to do it.
Unfortunately for many people on HN, you should never start a business in a legally muddy sector and ask for clarification, because you should've known all along what the SEC was thinking or would've thought of!
To many people here whenever a crypto post is posted, it's unreasonable to ask for clarification from the officials who make and enforce the law.
Yeah this is bizarre. Imagine if a cop came up to you and told you to stop committing a crime. Being difficult and dismissing the assertion is going to land you in court. It’s your responsibility to know the law, and it’s certainly not the cop’s responsibility to spell out the public law for you before they can do their job. I don’t know what coinbase expected - actually I think they knew they had no case and are just delaying and trying to take the SEC down with them, given the attacks.
Your scenario is slightly off. It would be more like the cop stopping you and saying "you're breaking the law" and you asking "which law", and them saying "the law", and you asking "can you be more specific? Which law", and them saying "I'm taking you to court for breaking the law", and you're still asking "WHICH LAW?!?!?"
The SEC is saying "you might have securities, and your various businesses might violate our laws", and Coinbase asking "which ones and how?", and SEC basically twiddling their thumbs and saying, "fuck it, you're breaking the law", and Coinbase still asking "BUT WHICH ONES?!?!?"
Fun fact: If the cop told you "don't worry, you're not breaking the law, let me help you" it still wouldn't be entrapment or unusual if they subsequently went after you.
This is the US regulatory playbook unfortunately. Unlike in Europe and elsewhere, where regulators really try to be clear about what is and isn't ok, in the US the regulators seem to try to be as vague as possible and then just take action occasionally.
As such in new areas it does act to stifle innovation because people who are risk averse have to wait until someone else does something, the regulator enforces, it goes to court and the court decides.
When I worked at a fintech I actually was in a meeting with the OCC[1] and a prospective bank client we talked them through our plans and they said "when you get big enough you'll need to register with us and we'll have some requirements for you". We said we wanted to start that process right away and so asked for the requirements so we could start baking them into our software and they literally said "We'll call you when we think you're big enough. Until then we'll call you if we think you're in violation". They wouldn't tell us what the regulations were or how to proactively avoid breach.
This is entirely unlike other jurisdictions where you can generally find all the regulations on the regulator's website and in some cases (eg Singapore) the regulator will actively work with you on developing new regulation if they think what you're doing is innovative and valuable.
For example, here is the German crypto asset regulation. It's incredibly straightforward and easy to find. There is no grey area about what the regulator does and does not consider a security, what you can and cannot do and what existing national and EU regulation they consider to be included. [2]
[1] I should say this was not crypto related but this is a playbook that US financial regulators seem to adopt broadly
This seems to come down to whether you hold, or are willing to be convinced to agree with, the opinion that unelected politicians should have arbitrary decision-making power that pass/fail corporations.
just here to wish you good luck arguing with HN people on crypto. I've given up, there are a lot of interesting people writing on various topics but when it comes to Crypto, it's like coming into a MAGA group on Facebook and suggesting there is a better alternative to Trump. This doesn't end well lmao
> there are a lot of interesting people writing on various topics but when it comes to Crypto,
But when it comes to Crypto there's almost literally nothing interesting to come out of it except:
- scams
- ponzi schemes
- other get rich quick schemes
- schemes that ignore any and all reality
- schemes that are better done using almost literally any other technology (including Brainfuck and MS Access)
- Vitalik's long-winded essays that are either superficial takes on some distant future or technical reports on fixing something in ethereum
And yet for over 10 years now we've been hearing that "there are good and interesting things happening in crypto".
Edit: oh, there's some usefulness there as well: circumventing government rigulations to pay for something illegal, or to be an unregulated uninsured "at your own risk" alternative to Western Union or Moneygram
Yeah not sure why I try, you get some really heated people who live in a bubble and think crypto has never done anything whatsoever, or others who expect it to have replaced global finance in the mere 10 years it's been alive lol.
If the SEC decides that crypto currencies are securities, would that mean that no US citizen could ever buy Crypto again?
As I understand it, only registered securities can be traded in the USA. But how would a cryptocurrency be registered? Would Vitalik Buterin shoulder his rainbowunicorn bag, go to the SEC and say "Uhm, in 2015, I had this idea of a new protocol that kinda forms a distributed computer. And it has this thing called eth that is the gas for this, uhm, computer. And somehow people now People value this gas at $200B. Can I haz make it a security?".
The SEC has had a consistent position. The Howey test applies.[1]
Other than Bitcoin, which the SEC recognizes as not having an "issuer", crypto currencies would have to be registered by their issuer as securities. This means filing an S-1 form. An S-1 form tells who's behind the issue, their backgrounds, where the money is going, the business plan, and balance sheets. All filed under penalty of perjury. Every publicly traded company in the US has been through this process.
Any US registered broker can trade any registered security.
There are lots of restrictions that crypto companies don't like. You can't self deal. You can't wash trade. You can't clear your own transactions. Issuers, brokers, clearing services, and exchanges are different organizations. FBX argued to Congress that they didn't need all that separation of function. Now we know that was because it would have interfered with stealing the customers assets.
So you should be fully supportive of Coinbase and other crypto companies asking the SEC to show their work and publish an official statement with supporting evidence of why they believe Howey applies.
If the SEC wants to regulate a currency (currently the domain of the CFTC and OCC) they either need to explain why they believe money is a security or have the Congress explicitly grant them the authority.
The USDA for example can't all of the sudden decide they want to regulate forests because an edible plant might grow there.
> If the SEC wants to regulate a currency (currently the domain of the CFTC and OCC) they either need to explain why they believe money is a security
Factually, they don't. They just have to issue the regulations and enforce them, and if people, disagree, then they have to explain their rationale in the ensuing litigation.
Just as Congress doesn't need to explain their Constitutional authority when passing a law, either.
> Just as Congress doesn't need to explain their Constitutional authority when passing a law, either.
The House requires that, as a rule of the House.[1] Which is why, when you look up bills today, you'll see a "constitutional authority statement". It's mostly a reminder that, unlike state legislatures, Congress does not have a general police power. Most of Congress's regulatory authority derives from its power to regulate interstate commerce, which is pretty much everything commercial now.
> The House requires that, as a rule of the House.
Sure, but that is a self-imposed rule that is as easy for the House to change as it is for the House to pass anything else, so its effectively discretionary.
> Just as Congress doesn't need to explain their Constitutional authority when passing a law
They don't because it is clearly written down in checks notes the constitution.
Factually, our government doesn't operate on whims and feelings or work it out in the courts later. All laws must show a clear linage to the enumerated powers of congress.
> They don't because it is clearly written down in checks notes the constitution.
Often, it is not. But they don't have to (except as a fairly recent, self-imposed rule of the House of Representatives) explain any argument that it is, in advance, nor even when they do is the government bound to only that advance argument on its Constitutional justification.
Similar, regulatory agencies , while they tend to identify their statutory authority when making regulatory actions, aren't required to justify their claims of authority in advance. When they are contested, it is resolved in the courts, whether its Congress or executive branch regulators.
> Factually, our government doesn’t operate on whims and feelings or work it out in the courts later.
Factually, that’s exactly what our government does a lot of the time.
Ideally (in many people’s view) that’s not what it should do, but facts and ideals are different things.
The SEC has powers delineated by the legislation that creates it too.
Again, they aren't acting with omnipotent power. Push come to shove, they'll go to court where they will explain their position. Coinbase can try to counter their arguments then if they wish to.
It’s not at all clear the CFTC (lobbied hard by crypto companies and which has correspondingly been quite open to lightly regulated crypto) has jurisdiction over crypto over the SEC.
As they freaking should. I can't get their export of tax data to line up for the cost basis vs the gains there were random nulls in it and I don't know how to fix it. All the crypto I had was bought on Coinbase, and it doesn't know the cost basis.
I really enjoyed Gary Gensler lectures on blockchain, crypto currency and money in general and I still recommend them to anyone who wants to learn the fundamentals.
When I heard he was going to lead SEC I was very optimistic about the future of crypto and its regulation as Gensler seemed to have a very favorable view of (at least) Bitcoin.
I got coinbase phishing spam emails recently, I wonder if it's related somehow to them apparently being investigated.
Also can't read the article, have to set up a free account. Their password field doesn't let Chrome suggest a strong password, it doesn't even let me create with with a $ sign.
Was it related to XRP and trying to trick you into being the first N user to sign up for some staking thing?
I got that too, even if the email I received it on is not associated with Coinbase, and somehow that email managed to break through the spam filter although it was clearly spam.
I wonder if this explains why crypto Twitter has been pushing unhinged doom scenarios and conspiracy theories and telling everyone to put everything into Bitcoin.
Could be a mix of actual freakout and trying to pump crypto so insiders can exit… kind of part true believer reaction and part grift.
It kind of reminds me of how a cult reacts when the authorities start coming around. It’s the end times! Double down! Brew up the kool aid!
Over the past three years VCs have invested billions into essentially worthless crypto companies. They’re now holding giant bags of tokens that need to be dumped on retail ASAP.
If Coinbase’s shitcoin listing operation were shut down by the SEC, the VCs would lose their primary dumping endpoint to retail crypto buyers in the West. There’s an urgency to both pump up prices now and to pretend that the SEC action is nothing.
Yeah, I've noticed the same thing... The Bitcoin "hype machine" seems to be running at max right now, but there's no particular reason, it's not like we have trillions of QE again. They say it's the banking crisis, but that seems like a nothingburger as well... My only conclusion is that it has to be some kind of pump-and-dump related to imminent legal action.
They’ve already tapped the unsophisticated retail investors and get rich quick fools, going so far as to saturate ad space at the superbowl and buy stadiums. Perhaps the last pump they have left is to fleece the true believers. In the end it eats it own.
"Coinbase has taken an increasingly defiant stance, publicly criticizing the SEC and urging regulators to write new rules for crypto rather than enforce existing ones."
No, they're asking the SEC to provide evidence and the SEC has been ignoring them and trying to have everything be a security.
"The firm has accused the SEC of stifling innovation and has spent millions of dollars lobbying Congress in hopes of bypassing regulators through new legislation."
Again no, they're not trying to bypass regulators whatsoever. Coinbase has posted again and again and again that they want to be properly regulated including by the SEC, but the SEC refuses to work with them.
It's extremely frustrating because people who know what's actually been going on can clearly see the bs, but most people who read this article (including a ton of the anti crypto crowd on HN) will just latch onto this as if it is truth.