Coinbase's opinion on the matter is pretty irrelevant to determining what is and isn't a security. The fact that they tried to get the SEC to tell them what they were doing was or wasn't allowed (never mind the fact the SEC likely had an ongoing investigation that prevented them from commenting in the first place) is wholly irrelevant to the fact they were actively breaking the law.
If the SEC won’t identify the alleged security then I think it’s different than what you’d characterize.
The SEC should have a more collaborative spirit and share so that Coinbase can follow regulations or make their case. If the SEC is actually withholding this information they are acting in bad faith and operating more like a mob shaking someone down.
So, you’re saying that Coinbase knowingly offered unregistered security. And acknowledged that’s not legal. The fact the SEC refuses these securities to be registered doesn’t negate the illegal offering of unregistered securities.
That is one side of a conversation where the other party as a rule never comments. Coinbase is simply not a reliable source for characterizing the SEC’s position on this.
The facts are the SEC thinks Coinbase ran afoul of the laws and regulations around securities. Coinbase has been trying to get the SEC to either explicitly or implicitly allow Coinbase's operations, and the SEC declined to do so.
They probably went through several legal teams before they found one that could be willing to try some wild strategy, or they were willing to take the Uber approach and break the law and cash the checks, hoping to outrun law enforcement and lobby for the laws to change.
Yeah, I can see they're trading in unregistered securities, and they're going to have the book thrown at them for it. Anyone that's not a crypto fanboy can see they were trading in unregistered securities.
I'm not saying Coinbase has to agree with that decision, but it's a little silly they're posturing to the public like they're unaware. It's not exactly a secret.
If they disagree then going to court is probably their only move.
> Coinbase issuing public statements to SEC “tell us what is a security” were basically a ploy or the lawyers involved were extremely inexperienced.
I take it as a stunt intended shift the layman's perception of Coinbase's legal responsibilities onto the SEC. They're counting on cryptobros using this "SEC won't tell us what's legal" talking point to affect favorable political / legislative change.
But newsflash: government regulators aren't obliged to act as your legal council.
The last I recall is that the SEC considered all crypto to be a security. And Coinbase is absolutely aware of it. In fact, in the previous sentences to my quote, in their court filing, they are aware, but disagree:
> We disagree that the majority of digital assets are securities.
And you seem to miss my point.
Not once in Coinbase's lawsuit did they actually say "We'd love to comply, we just don't know how to".
In fact what they did say was that they knew how to comply, "but the cost and effort makes it not profitable for us".
But because of their PR everyone is latching on to this spin of "we'd love to follow regulation, but we don't know how and no-one will tell us!"
It is clear from their own blog post that they have communicated with the SEC in considerable detail, and the SEC has told them in no uncertain terms not to proceed. It sounds to me like the SEC welcomed the discussion, it’s just that Coinbase doesn’t like the answer they got.
Coinbase wants to know the legal rationale as to why it's a security, but SEC is stonewalling them and goading them to get into a legal fight. The opposite of "talk to us, come in" that the SEC claims the crypto industry refuses to do.
I replied to your other comment, but posting here that this article is wrong and twists his words. He said Bitcoin is not a security, everything else is undecided. Big difference. Coinbase it taking them to court to make them decide.
It made me understand that this is all about protecting the customers investment, and, if nobody is protecting it, then it would have to be the SEC who does it, but they can only do this if it is a security. If it isn't a security which has to be protected by the SEC -- like Coinbase is claiming -- then who is protecting it? This appears to be what the SEC wants to have answered. Coinbase instead wants the SEC to tell them what to do about it, but that they don't want to set it up as a security. Yet Coinbase would be happy with just proceeding without any protections in place.
Coinbase has an interest in not having their information abused, and when an employee granted access to that information abuses it it's fraud. It has nothing to do with crypto or insider trading regulations.
It doesn't seem like Coinbase has received such answers, they just know that some sort of enforcement action is coming. As per the article, "[Armstrong says] the company has not got any more information on the specific issues the SEC has".
"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.
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