SEC sues Coinbase over exchange and staking programs, stock drops 12%

[erek]

Coinbase, and now Binance, Hmnm

"“The SEC’s reliance on an enforcement-only approach in the absence of clear rules for the digital asset industry is hurting America’s economic competitiveness and companies like Coinbase that have a demonstrated commitment to compliance,” Coinbase chief legal officer Paul Grewal told CNBC in a statement. “The solution is legislation that allows fair rules for the road to be developed transparently and applied equally, not litigation. In the meantime, we’ll continue to operate our business as usual.”

Coinbase’s institutional service, Prime, its retail exchange product, and its self-custody Wallet service all offered one or more crypto asset security, the SEC said in its complaint.

Coinbase’s staking program was also identified as a investment contract and as an unregistered security: The SEC had already taken similar action to force the closure of crypto exchange Kraken’s staking service.

The SEC described the staking program as a way for “investors to earn financial returns through Coinbase’s managerial efforts.” The SEC says the five “stakeable crypto assets” are considered securities under its interpretation of the law, an assessment that will no doubt be disputed by Coinbase.

The exchange had already received a Wells notice from the regulator earlier this year, a letter notifying a company when SEC action is pending. Coinbase had mounted a vigorous defense of its offerings, publicly litigating with the regulator and preparing for potential action with advertising campaigns and publicity.

The company has been identified by many in the crypto community as the only entity with the financial and institutional resources to go toe-to-toe with the SEC and Gensler. The company has a sophisticated presence and has advertised itself for years as a safer, regulated option compared to other exchanges.

But that same advertising has formed part of the SEC’s arguments against the exchange. Regulators alleged that the exchange actively solicits new clients, noting that “Coinbase expends hundreds of millions of dollars a year on marketing and sales to maintain and recruit new investors.”

Solicitation is one of the aspects the SEC uses to determine whether a company is operating as a broker or an exchange.

Another test that the SEC relies upon is the Howey test, which is used to determine whether an asset is an investment contract and therefore, a security. An asset is considered a security if it involves a three things: investment in a common enterprise, with the reasonable expectation of returns, through the work of others."

Source: https://www.cnbc.com/2023/06/06/sec...d-staking-programs-stock-drops-14percent.html

 

[techie81]

Of course, the government wants to (try) kill crypto and exchanges so they can control currency.

Looking at the current state of our fine banking institutions, look how well that is working out.

 

[Zarathustra[H]]

Good.

Take 'em down.

Take 'em all down.

Coinbase, Binance, FTX, Ripple, every last one of these abominations. Die die die die die.

I won't be happy until every last coin, Bitcoin included is at a value of zero, where ilthey belong.

 

[MrGuvernment]

Good.

Take 'em down.

Take 'em all down.

Coinbase, Binance, FTX, Ripple, every last one of these abominations. Die die die die die.

I won't be happy until every last coin, Bitcoin included is at a value of zero, where ilthey belong.

So you are also happy to bend right over and take CBDC's up the you know what, cause that is what is coming..."You will own nothing and like it" literally..

Oh, still want to run Windows 7 cause you dont want to upgrade to Windows 12 cause it has new eco feature, well, we are going to deduct a carbon tax from your pay check every day you continue to use it, as well as outdated hardware...

 

[LukeTbk]

"You will own nothing and like it" literally..

Not sure if bits on computer and globalism dream of cashless with 100% of the transaction being public-tracked with no national border are exactly the way to go.

we are going to deduct a carbon tax from your pay check every day you continue to use it, as well as outdated hardware...

Being paid in crypto making that particularly easy to do it seem (both the taxing and both knowing you did not bought windows 12 has it show directly from your wallet you did not and we know exactly how much you are paid as it is public).

 

[Zarathustra[H]]

So you are also happy to bend right over and take CBDC's up the you know what, cause that is what is coming..."You will own nothing and like it" literally..

Oh, still want to run Windows 7 cause you dont want to upgrade to Windows 12 cause it has new eco feature, well, we are going to deduct a carbon tax from your pay check every day you continue to use it, as well as outdated hardware...

I don't see how these have anything to do with each other.

I already haven't used cash except for the extreme rare exception in almost 20 years, so I don't see how CBDC's would impact me at all.

And yes, it is very important for a central bank to be able to enact monetary policy, which is why no cebtral-bank-less currency should ever be allowed to take hold.

Strictly regulated central bank monetary policy = good.

Wild Wild West snake oil salesmen with no accountability for their digital funny money = bad.

If I were in charge I'd stick a nail in the coffin right off the bat, and make any mining, holding or transacting in non-official state backed currencies illegal, and just crush the industry and make sure it never takes off.

 

[scojer]

Someone really hates digital currency.

 

[Mega6]

Crypto is classified by Washington as a security not a currency.
Federal digital currency fears are real and you can just look how china is and will use it's digital yuan.

 

[LukeTbk]

India is a big one in that field as well (digital rupee)

 

[GiGaBiTe]

And yes, it is very important for a central bank to be able to enact monetary policy, which is why no cebtral-bank-less currency should ever be allowed to take hold.

Strictly regulated central bank monetary policy = good.

What kind of fever dream is that, lmao. Strict central bank monetary policy? Yeah that worked out great for Zimbabwe and Venezuela. Zimbabwe's currency before it was abolished was so hyperinflated that the value of the paper it was printed on was worth thousands of times more than it was. People had to take literal wheelbarrows full of trillion dollar notes to the market when they wanted to buy food. Venezuela is in the same boat now. Germany was like that twice in the span of 20 odd years from two wars they started.

Currency, whether it be created by a government or independent person/group is all the same, it only holds value because a large group of people believe in it. ALL of it is funny money subject to speculation, and has been for thousands of years.

If I were in charge I'd stick a nail in the coffin right off the bat, and make any mining, holding or transacting in non-official state backed currencies illegal, and just crush the industry and make sure it never takes off.

And this is one of the reasons digital currency is so popular. People are not beholden to corrupt institutions. I've talked to quite a few people that have their survival thanks to digital currencies when their countries are hellholes and their fiat money is worthless or unattainable.

 

[LukeTbk]

I think people mix up a bit general digital currency with decentralized crypto currency, digital currency can be and are in some country centralized government fiat one,

And this is one of the reasons digital currency is so popular. People are not beholden to corrupt institutions. I've talked to quite a few people that have their survival thanks to digital currencies when their countries are hellholes and their fiat money is worthless or unattainable.

The value is obvious in many regions of the world, but in that regard significantly less in many countries with superb institutions, stability and government (relatively) and yet it (maybe less) still popular there.

Strict central bank monetary policy? Yeah that worked out great for Zimbabwe and Venezuela.

Well one could list a long list of thousand of not working well stories of decentralized cryptocurrencies (would it be rapid deflation or inflation).

Currency, whether it be created by a government or independent person/group is all the same, it only holds value because a large group of people believe in it. ALL of it is funny money subject to speculation, and has been for thousands of years.

Not exactly the same in that quite significant way, if you take the US dollar, many governments and specifically the national US goverment force their tax payment to be made in dollar :
https://www.irs.gov/individuals/international-taxpayers/foreign-currency-and-currency-exchange-rates

That many hundreds of peoples that have an use for a lot of dollars all the time, risking prison and so on, that why they say the US dollars is backed by the American tax payers. Tomorrow no one believe in the dollars anymore, people with tax to pay would still like if it is almost free dollars you are ready to sells them for little to pay their tax and now you have hundreds of millions of individuals, thousand of corporations that rise their hands also interested to pay all their due tax in exchange for some chickens if people are ready to give dollars away and up, dollars is worth quite a bit at the minimum all US dollar tax-contract due in the world.

Germany was like that twice in the span of 20 odd years from two wars they started.

Not sure if having to pay back France with your gold, immense war debt, terrible unrest and choc of the war is a good example of being the fault of the central bank policy versus the goverment (maybe that the points with no currency maybe a state could not do this ?)

 

[funkydmunky]

Germany was like that twice in the span of 20 odd years from two wars they started.

You mean the two wars they were forced into because of such "Globalist" practices?

 

[GiGaBiTe]

Well one could list a long list of thousand of not working well stories of decentralized cryptocurrencies (would it be rapid deflation or inflation).

Most definitely there are plenty of trash cryptocurrencies. My point to his was that just because a government regulates a currency, doesn't mean it's all rainbows and unicorns.

Not sure if having to pay back France with your gold, immense war debt, terrible unrest and choc of the war is a good example of being the fault of the central bank policy versus the goverment (maybe that the points with no currency maybe a state could not do this ?)

The government and the central bank are almost always one and the same. So if the government say make money machine go brrrrrr, the bank does it, or the government will find someone that will. In the case of both wars, Germany had the banks going brrrrrrrr 24/7 during to pay for everything. To be fair, so was everyone else at the time, war is expensive. The US and England were printing money like it was going out of style, and issuing bonds and pricing controls to try and keep inflation from going out of control.

 

[Red Falcon]

Good.

Take 'em down.

Take 'em all down.

Coinbase, Binance, FTX, Ripple, every last one of these abominations. Die die die die die.

I won't be happy until every last coin, Bitcoin included is at a value of zero, where ilthey belong.

Hope you realize that where this ends will be a central bank digital currency, and it will be controlled by every world government.
Cryptocurrency isn't going away, it is just in the process of changing hands.

 

[Zarathustra[H]]

Hope you realize that where this ends will be a central bank digital currency, and it will be controlled by every world government.
Cryptocurrency isn't going away, it is just in the process of changing hands.

I'm fine with that. My biggest problem with cryptocurrencies is that they are independent and run by a bunch of yahoos and snake oil salesmen, and unable to be controlled by monetary policy by a central bank.

Central bank control and monetary policy is absolutely cruycial to the proper functioning of the economy. No currency that is not subject to central bank control can be allowed to exist.

 

[Zarathustra[H]]

And this is one of the reasons digital currency is so popular. People are not beholden to corrupt institutions. I've talked to quite a few people that have their survival thanks to digital currencies when their countries are hellholes and their fiat money is worthless or unattainable.

That's not the failure of currency though. That's the failure of government. No currency will ever isolate you from this, and for proper functioning a currency absolutely must be subject to central bank and monetary policy control.

 

[t1337duder]

Coinbase sucks pretty hard as far as Bitcoin exchanges go. They were trying to charge me $20 in fees to send $30 of Bitcoin last time I used them.

That's not the failure of currency though. That's the failure of government. No currency will ever isolate you from this, and for proper functioning a currency absolutely must be subject to central bank and monetary policy control.

It's the same difference. Paper money is only valued because it's backed by the government and all of its might. If the government is FUBAR, why wouldn't you want to give people extra currency options? Or is there a reason you want people locked into a currency of a corrupt government?

Also I have to at the idea that the people running our banks and financial system are responsible for keeping our system together. They are obviously abusing the system in their own interest, which is why people don't want to be part of that system.

 

[GiGaBiTe]

That's not the failure of currency though. That's the failure of government.

Failure of the currency and failure of the government are one and the same. The government issues the currency and is directly responsible for it.

and for proper functioning a currency absolutely must be subject to central bank and monetary policy control.

Which has never happened in the history of the human race. Fiat government minted currency has all of the same problems as digital currency does and all of the same risks.

Coinbase sucks pretty hard as far as Bitcoin exchanges go. They were trying to charge me $20 in fees to send $30 of Bitcoin last time I used them.

That's not Coinbase's fault, that's how the Bitcoin network works. For every transaction on the network, it has to be validated by other nodes on the network to ensure it's not a fraudulent transaction. BTC was never designed to scale to the level of usage that it has now, and as a result, transaction fees are ridiculous. If the network is congested with a high number of transactions, the price to do said transactions starts to rise. Transactions also have a priority in the queue, the more you pay, the quicker your transaction will be processed.

You'll pay a transaction fee regardless of who you do a transaction with. Of course Coinbase charges you more than it would cost to directly do a transaction on the Bitcoin network, but that's no different than going to a Western Union to transfer money, or going to the bank for a cashiers check, you pay either way.

I remember the last Bitcoin transaction I did years ago, I think it was like $50 to send $400 to NewEgg for computer parts, if I wanted priority on my transaction and not have it take hours. And that wasn't on Coinbase. Since BTC is so volatile, vendors usually put time limits of something like 30 minutes before you have to resubmit the transaction.

 

[LukeTbk]

Failure of the currency and failure of the government are one and the same. The government issues the currency and is directly responsible for it.

They tend to have buffer (in the past pegged it to gold, more recently having the central bank being a bit independant and having a private banking with a fractional loan system that generate it with on going demand), there was a windows in between when they were more directly responsible but inflation was terrible and was abandoned mostly everywhere. They can control the destruction of it by taxing people to remove it from circulation. Lot of money creation goes via private demand for money via banking loan.

Money is not minted in purely a governement action, they can try to influence their central bank by who they put in charge, their own spending and taxing but there is money creation in the private bank system going on:
https://lop.parl.ca/sites/PublicWebsite/default/en_CA/ResearchPublications/201551E#:~:text=3 Money Creation in the Private Banking System,-Private commercial banks&text=Whenever a bank makes a,see Appendix, Table 2).
, it is important to note that the majority of money in the Canadian economy is created within the private banking system every time banks extend new loans like mortgages, consumer loans and business loans.

It regulates itself a bit automatically a bit in a market way, loan that a repaid create some money and generally if the loaner was able to repay its loan value was created (a new house exist now or business, someone built for 16 months good and service via a job to pay the car loans etc...), if the loan is not repaid enough there is now less money but probably less value (house was not worth that much, business endeavour failed, etc...)

Fiat government minted currency has all of the same problems as digital currency does and all of the same risks.

I not sure if the deflation risk (fiat govermment minted currency gained a lot of value) is the same.

If you meant as fiat goverment digital currency like India as I imagine, if you mean same problems and risks than uncentral crypto type money no it is a bit different.

goverment minted currency for example can allow private transaction and does not have the problem of very gaz heavy cost to them like some crypto as, uncentralized system then than only allow 100% publics transaction with a public historic from the beginning of time and one big difference government as gun to force people to use their money, which make the risk of the money loosing all its value quite different.