Coinbase does not list securities. End of story(blog.coinbase.com)
blog.coinbase.com
Coinbase does not list securities. End of story
https://blog.coinbase.com/coinbase-does-not-list-securities-end-of-story-e58dc873be79
51 comments
What blows my mind is how laissez faire regulators have been when it comes to these scams. Countless billions of dollars and thousands, if not millions, of man hours went into this scam economy. It's just such a waste of time and resources, and it flies in the face of the idea of market efficiencies.
China got this right by banning cryptocurrencies. It seems like the US is happy to wallow in its own crypto scam waste while other countries are more efficient with how they allocate resources in their economies.
China got this right by banning cryptocurrencies. It seems like the US is happy to wallow in its own crypto scam waste while other countries are more efficient with how they allocate resources in their economies.
> It seems like the US is happy to wallow in its own crypto scam waste while other countries are more efficient with how they allocate resources in their economies.
You probably aren't from the US, but we don't have a top down rule of how resources are allocated like other countries. It is a free market, so if someone wants to waste their resources building electric cars or a search engine - they are more than welcome to do so.
You probably aren't from the US, but we don't have a top down rule of how resources are allocated like other countries. It is a free market, so if someone wants to waste their resources building electric cars or a search engine - they are more than welcome to do so.
What happens if someone wants to manufacture and sell LSD?
Then they get to skip the step of asking the government to allocate resources for building an LSD factory.
You are confusing economic policy with enforcement of laws. If the majority of people thought LSD what a good idea, they would elect people who would change that law.
You are confusing economic policy with enforcement of laws. If the majority of people thought LSD what a good idea, they would elect people who would change that law.
It's weird that you think that I'm advocating for "asking the government to allocate resources for building" anything. Bans and regulations have nothing to do with that, as the multitude of bans and regulations in the US have illustrated.
You heard him, it's a free country. /sarcasm
Man, the crickets in here are deafening.
Just because you can insider trade doesn't make something a security in my view. You can do insider trading around gold or palladium or any other commodity for instance. You can do insider trading with property and land. You can even do insider trading with currencies.
They're not securities because you can insider trade them -- they're securities because they fairly clearly meet the Federal definition;
> The term “security” means any note, stock, treasury stock, security future, security-based swap, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a “security”, or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing.
https://www.law.cornell.edu/uscode/text/15/77b
> The term “security” means any note, stock, treasury stock, security future, security-based swap, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a “security”, or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing.
https://www.law.cornell.edu/uscode/text/15/77b
I have to say that it's not clear to me from your comment. If it is an open-and-shut case, why is it the subject of such controversy?
[deleted]
Because of vested interests with power to keep the controversy alive at a high level.
I don’t really see how it meets that definition. It’s not a note or a contract, it’s just numbers and a global state, it represents nothing.
Your comment has not contributed anything. Which of those many categories do you think crypto falls within?
For example, foreign currency is not a security, and an intuitive stance would be that crypto is far closer to foreign currency than it is to stocks. Other sources have a more useful definition in my opinion [1]:
> Firstly, a security is simply a financial instrument that represents a specific ownership position in either a corporation, a creditor related to a governmental body, a publicly traded corporation, or rights to ownership as represented by an option. The security must represent some type of financial value. Securities are generally categorised as either debts or equities, with a debt security indicating money that has been borrowed and must be repaid.
Under this definition, it is hard to see how the average "boring" cryptocurrency is a security.
[1] https://www.onefinancialmarkets.com/securities-vs-forex
For example, foreign currency is not a security, and an intuitive stance would be that crypto is far closer to foreign currency than it is to stocks. Other sources have a more useful definition in my opinion [1]:
> Firstly, a security is simply a financial instrument that represents a specific ownership position in either a corporation, a creditor related to a governmental body, a publicly traded corporation, or rights to ownership as represented by an option. The security must represent some type of financial value. Securities are generally categorised as either debts or equities, with a debt security indicating money that has been borrowed and must be repaid.
Under this definition, it is hard to see how the average "boring" cryptocurrency is a security.
[1] https://www.onefinancialmarkets.com/securities-vs-forex
> The security must represent some type of financial value
This is probably going to be the point of contention. There's no shortage of people wanting to argue Bitcoin really does have financial value, cures cancer, etc...
This is probably going to be the point of contention. There's no shortage of people wanting to argue Bitcoin really does have financial value, cures cancer, etc...
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Is "must be an agreement for future performance" a fair first test of whether something is a securities contract?
1) If there is no contractual agreement for future performance, it cannot be a securities contract (a "security").
That we can test before applying 2) the Howey Test, and then 3) assessing whether it's a Payment, Utility, Asset, or Hybrid coin/token
From https://en.wikipedia.org/wiki/SEC_v._W._J._Howey_Co. :
> "In other words, an investment contract for purposes of the Securities Act means a contract, transaction or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party, it being immaterial whether the shares in the enterprise are evidenced by formal certificates or by nominal interests in the physical assets employed in the enterprise."[1]
> "The test is whether the scheme involves an investment of money in a common enterprise with profits to come solely from the efforts of others. If that test be satisfied, it is immaterial whether the enterprise is speculative or non-speculative or whether there is a sale of property with or without intrinsic value."[1]
Collectible coins, trading cards, beanie babies, real estate, and rare earth commodities, for example, are not securities per US securities law. Do these things fail a hypothetical and hopefully helpful "must be an agreement for future performance" litmus test for whether a thing is a security per US case law precedent?
What must be fed into the FTC CAT is a different set of policies.
From "Guidelines for enquiries regarding the regulatory framework for ICOs [pdf]" (2018) https://news.ycombinator.com/item?id=16406967 https://westurner.github.io/hnlog/#comment-16407277 :
> This is a helpful table indicating whether a Payment, Utility, Asset, or Hybrid coin/token: is a security, qualifies under Swiss AML payment law.
> The "Minimum information requirements for ICO enquiries" appendix seems like a good set of questions for evaluating ICOs. Are there other good questions to ask when considering whether to invest in a Payment, Utility, Asset, or Hybrid ICO?
> Are US regulations different from these clear and helpful regulatory guidelines for ICOs in Switzerland?
1) If there is no contractual agreement for future performance, it cannot be a securities contract (a "security").
That we can test before applying 2) the Howey Test, and then 3) assessing whether it's a Payment, Utility, Asset, or Hybrid coin/token
From https://en.wikipedia.org/wiki/SEC_v._W._J._Howey_Co. :
> "In other words, an investment contract for purposes of the Securities Act means a contract, transaction or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party, it being immaterial whether the shares in the enterprise are evidenced by formal certificates or by nominal interests in the physical assets employed in the enterprise."[1]
> "The test is whether the scheme involves an investment of money in a common enterprise with profits to come solely from the efforts of others. If that test be satisfied, it is immaterial whether the enterprise is speculative or non-speculative or whether there is a sale of property with or without intrinsic value."[1]
Collectible coins, trading cards, beanie babies, real estate, and rare earth commodities, for example, are not securities per US securities law. Do these things fail a hypothetical and hopefully helpful "must be an agreement for future performance" litmus test for whether a thing is a security per US case law precedent?
What must be fed into the FTC CAT is a different set of policies.
From "Guidelines for enquiries regarding the regulatory framework for ICOs [pdf]" (2018) https://news.ycombinator.com/item?id=16406967 https://westurner.github.io/hnlog/#comment-16407277 :
> This is a helpful table indicating whether a Payment, Utility, Asset, or Hybrid coin/token: is a security, qualifies under Swiss AML payment law.
> The "Minimum information requirements for ICO enquiries" appendix seems like a good set of questions for evaluating ICOs. Are there other good questions to ask when considering whether to invest in a Payment, Utility, Asset, or Hybrid ICO?
> Are US regulations different from these clear and helpful regulatory guidelines for ICOs in Switzerland?
As well, do investors have any responsibility for evaluating written agreements for future performance before investing?
Does a person have the responsibility of evaluating contracts before entering into them; for example, with the belief that it's a securities agreement for future performance? What burden of responsibility has a securities investor?
Does that business sell any registered securities at all? Why did you think they were selling you a security? Were you presented with a shareholders agreement? A securities agreement? Any sort written contract? Why did you think you were entering into a securities contract if there was no contract?
Does a person have the responsibility of evaluating contracts before entering into them; for example, with the belief that it's a securities agreement for future performance? What burden of responsibility has a securities investor?
Does that business sell any registered securities at all? Why did you think they were selling you a security? Were you presented with a shareholders agreement? A securities agreement? Any sort written contract? Why did you think you were entering into a securities contract if there was no contract?
If someone makes hopeful, pumping, forward-looking statements, does that obligate them to perform?
When does the Statute of Frauds apply to phantom contractual agreements for future performance?
Statute of Frauds: https://www.investopedia.com/terms/s/statute-of-frauds.asp :
> The statute of frauds (SOF) is a legal concept that requires certain types of contracts to be executed in writing. The statute covers contracts for the sale of land, agreements involving goods worth over $500, and contracts lasting one year or more.
> The statute of frauds was adopted in the U.S. primarily as a common law concept—that is, as unwritten law. However, it has since been formalized by statutes in certain jurisdictions, such as in most states. In a breach of contract case where the statute of frauds applies, the defendant may raise it as a defense.* Indeed, they often must do so affirmatively for the defense to be valid. In such a case, the burden of proof is on the plaintiff. The plaintiff must establish that a valid contract was indeed in existence.
Statute of Frauds: https://en.wikipedia.org/wiki/Statute_of_frauds
Q: When should you check for a contractual agreement for future performance, for future returns? A: At least before you give more than $500.
When does the Statute of Frauds apply to phantom contractual agreements for future performance?
Statute of Frauds: https://www.investopedia.com/terms/s/statute-of-frauds.asp :
> The statute of frauds (SOF) is a legal concept that requires certain types of contracts to be executed in writing. The statute covers contracts for the sale of land, agreements involving goods worth over $500, and contracts lasting one year or more.
> The statute of frauds was adopted in the U.S. primarily as a common law concept—that is, as unwritten law. However, it has since been formalized by statutes in certain jurisdictions, such as in most states. In a breach of contract case where the statute of frauds applies, the defendant may raise it as a defense.* Indeed, they often must do so affirmatively for the defense to be valid. In such a case, the burden of proof is on the plaintiff. The plaintiff must establish that a valid contract was indeed in existence.
Statute of Frauds: https://en.wikipedia.org/wiki/Statute_of_frauds
Q: When should you check for a contractual agreement for future performance, for future returns? A: At least before you give more than $500.
In the US, cryptoasset exchanges have gained specific legal approval from each and every state where those assets are listed for sale.
What process does your state have for approving assets for listing by cryptoasset exchanges? When or why does a state reject a cryptoasset exchange's application to list a cryptoasset?
What process does your state have for approving assets for listing by cryptoasset exchanges? When or why does a state reject a cryptoasset exchange's application to list a cryptoasset?
Is it the case that we have 50 state-level procedures for getting a cryptoasset approved for list by an exchange?
Is it the case that SEC does not provide a "formally reject an unregistered security which is thus not SEC jurisdiction" service?
If some 50 states failed to red flag a cryptoasset, I find it unreasonable to fault cryptoasset exchanges for choosing to list, or retail investors for failing to review a contract for future performance and investing.
Is it the case that SEC does not provide a "formally reject an unregistered security which is thus not SEC jurisdiction" service?
If some 50 states failed to red flag a cryptoasset, I find it unreasonable to fault cryptoasset exchanges for choosing to list, or retail investors for failing to review a contract for future performance and investing.
>Just because you can insider trade doesn't make something a security in my view.
I'm not an expert on security law. All I know is that there needs to be far better regulation around crypto whether it's labeling them as securities or creating brand new regulation. It's just way too easy to scam people in crypto.
I'm not an expert on security law. All I know is that there needs to be far better regulation around crypto whether it's labeling them as securities or creating brand new regulation. It's just way too easy to scam people in crypto.
In crypto, they just call insider trading "sharing alpha".
Its rampant in discords and telegram chats.
Its rampant in discords and telegram chats.
What a wonderfully content-free discussion on hacker news regarding crypto currency. Again. They're all the same. Crypto scammers. It's so tiresome.
At least acknowledge the difference between ICO funds, NFTs, native tokens, inflationary or deflationary assets, liquidity pools, slush funds with voting and governance attached.
Even getting some nuance on the different ways in which one thinks different crypto assets are a scam would be nice. But here I see no engagement or interest in the particular assets in question or the details of the story. Why?
At least acknowledge the difference between ICO funds, NFTs, native tokens, inflationary or deflationary assets, liquidity pools, slush funds with voting and governance attached.
Even getting some nuance on the different ways in which one thinks different crypto assets are a scam would be nice. But here I see no engagement or interest in the particular assets in question or the details of the story. Why?
The thing is that all of those are avenues for fraud and scams. And very little else. Even the apparently honest actors in the space seem to get wound up investing in fraud and scams somewhere down the line.
> It's so tiresome.
Yes, isn't it? Can we regulate this space under the same rules as other finance yet? Or do we need Joe Public to be ripped off for a few more billion first?
> It's so tiresome.
Yes, isn't it? Can we regulate this space under the same rules as other finance yet? Or do we need Joe Public to be ripped off for a few more billion first?
Let's note up front that Coinbase also did not engage with the particular assets in question, instead making a blanket statement that absolutely no securities are on Coinbase (but also that nobody knows how to define a digital security in the first place?). A cynical person like myself would see this as evidence that Coinbase knows there's no story to tell about how the world is better off for having these coins listed. But going to the tweet that started this all (https://twitter.com/cobie/status/1513874972552355846) and spot checking the first three coins:
* Indexed says that you'll "gain exposure to passively-managed crypto index portfolios represented by a single token" and references their $2.25m assets under management.
* Kromatika says that they'll be selling some reserved KROM tokens on an ongoing basis in order to fund their project.
* DappRadar says that, by buying their RADAR token, you will help scale their "Dapp store".
The second and third are perhaps arguable, although I struggle to believe that anyone would buy their tokens except as an investment in the future of their platforms. The first is the most obvious security imaginable. This kind of thing is why I don't usually engage with the details of specific coins; at least when we're talking about exchange-listed coins, they all end up being like this.
* Indexed says that you'll "gain exposure to passively-managed crypto index portfolios represented by a single token" and references their $2.25m assets under management.
* Kromatika says that they'll be selling some reserved KROM tokens on an ongoing basis in order to fund their project.
* DappRadar says that, by buying their RADAR token, you will help scale their "Dapp store".
The second and third are perhaps arguable, although I struggle to believe that anyone would buy their tokens except as an investment in the future of their platforms. The first is the most obvious security imaginable. This kind of thing is why I don't usually engage with the details of specific coins; at least when we're talking about exchange-listed coins, they all end up being like this.
> At least acknowledge the difference between ICO funds, NFTs, native tokens, inflationary or deflationary assets, liquidity pools, slush funds with voting and governance attached.
They don't want to distinguish between any of that and instead want to blanket all of them and say that they are all the same. Not all NFTs are JPEGs and there is an obvious difference between a 'coin' vs a 'token' where those blockchains which allow tokens, you will see them have ICO launches since 2016.
> Even getting some nuance on the different ways in which one thinks different crypto assets are a scam would be nice. But here I see no engagement or interest in the particular assets in question or the details of the story. Why?
I think the right approach is to wait for the Ripple vs SEC case which will not only determine whether if XRP (Ripple's blockchain coin) is a security or not, but the wider implications on other coins and tokens. But as for ICOs in general, the SEC has already cracked down on unregistered ICOs in 2018, making them illegal in the US.
Overall I don't think you will get a rational response on this site about anything mentioning crypto. Instead, the typical response you will get on HN is always to the extreme: 'All of crypto is scam', 'Ban it all, ban everything crypto, all of it', 'web3 should die in a fire'.
It is indeed the same absolutist nonsense that doesn't add any new arguments other than spreading regurgitated garbage that is recycled from other anti-crypto supporters and repeated here.
They don't want to distinguish between any of that and instead want to blanket all of them and say that they are all the same. Not all NFTs are JPEGs and there is an obvious difference between a 'coin' vs a 'token' where those blockchains which allow tokens, you will see them have ICO launches since 2016.
> Even getting some nuance on the different ways in which one thinks different crypto assets are a scam would be nice. But here I see no engagement or interest in the particular assets in question or the details of the story. Why?
I think the right approach is to wait for the Ripple vs SEC case which will not only determine whether if XRP (Ripple's blockchain coin) is a security or not, but the wider implications on other coins and tokens. But as for ICOs in general, the SEC has already cracked down on unregistered ICOs in 2018, making them illegal in the US.
Overall I don't think you will get a rational response on this site about anything mentioning crypto. Instead, the typical response you will get on HN is always to the extreme: 'All of crypto is scam', 'Ban it all, ban everything crypto, all of it', 'web3 should die in a fire'.
It is indeed the same absolutist nonsense that doesn't add any new arguments other than spreading regurgitated garbage that is recycled from other anti-crypto supporters and repeated here.
> Earlier today, following a Department of Justice (DOJ) investigation into a former Coinbase employee’s misuse of confidential Coinbase information related to listing decisions (...)
If my exchange was accused of having an employee doing something so damaging as insider trade against my customers, I would deny it if it were false, or apologize and promise corrections/reparations if it were true.
Instead, Coinbase does not deny that their employee damaged their customers, but instead spend their effort in denying the legal technicality that could make them liable.
I've made up my mind, Coinbase leadership are scumbags.
If my exchange was accused of having an employee doing something so damaging as insider trade against my customers, I would deny it if it were false, or apologize and promise corrections/reparations if it were true.
Instead, Coinbase does not deny that their employee damaged their customers, but instead spend their effort in denying the legal technicality that could make them liable.
I've made up my mind, Coinbase leadership are scumbags.
I don't view it that way.
I think the fact that Coinbase does not deny that their employee acted wrongly is a good thing.
Their stance is that cryptocurrencies aren't securities to avoid ("unfair") SEC regulatory capture.
I think the fact that Coinbase does not deny that their employee acted wrongly is a good thing.
Their stance is that cryptocurrencies aren't securities to avoid ("unfair") SEC regulatory capture.
Good thing, what the hell does that mean? Good for what purpose?
Obviously they don't deny it because it's true, that's not my point. My point is that even being true, their first concern could be their customers, but it's not because they're scumbags.
Obviously they don't deny it because it's true, that's not my point. My point is that even being true, their first concern could be their customers, but it's not because they're scumbags.
Whether these things are securities will be the central issue of the insider trading case [1]. It will be interesting! Coinbase fired this guy for breaking Coinbase's internal insider trading rules, but now will they have to come in and help defend him in court against federal insider trading charges just to prove that they don't list securities?
[1] in case you missed it https://www.justice.gov/usao-sdny/pr/three-charged-first-eve...
[1] in case you missed it https://www.justice.gov/usao-sdny/pr/three-charged-first-eve...
> Whether these things are securities will be the central issue of the insider trading case
And the result of that rests on the Ripple vs SEC case for determining if XRP or any other crypto is a security of not.
And the result of that rests on the Ripple vs SEC case for determining if XRP or any other crypto is a security of not.
Avoiding the legal definition being fought over here for a second, putting "End of story." and "Period." in your blog post as chief legal officer is fairly unprofessional and a bit astounding when you're going up against a government agency if not entire government that could wipe you off the map.
I suppose hubris and cryptocurrencies go together, but it still struck me.
I suppose hubris and cryptocurrencies go together, but it still struck me.
Huh, would you mind sharing the latest CFO professional handbooks? I definitely wouldn’t wanna overstep the all knowing government agencies by placing emphasizes in the blogpost headlines!
Most Cryptocurrencies do NOT fulfil the definition of a security because there is no underlying "thing". This is why shares (with a company underlying them) are and bonds (with debt and debtors under them) are securities (that and the fact they can be traded) but currencies are NOT. Obviously there are exceptions to that like tokenised stocks. This is also why I would not consider most crypto an investment: there is no source for a reasonable expectation of a return.
In the UK, we just designate certain markets as "regulated" (stocks for instance) and others as not (eg FX). That would avoid this whole nonsense where the SEC etc have to argue that some things ARE securities and others are NOT (if bitcoin is a security then stamps definitely are, do the SEC want to regulate stamps? Or Baseball cards or cars, the examples are pretty endless...).
Watching all of this makes me think regulators either being disingenuous or dumb. I doubt it's the latter. So is this someone just grabbing power for its own sake ("I can get more salary and a better office if we get to regulate crypto)? Or maybe trying to get media coverage to up their personal brand for a political career? Either way, if congress wants the SEC to do this, they should pass such a law, and if they haven't then the SEC should be careful what it sticks it's nose into not least because regulating all of Crypto would be exceedingly difficult and error prone.
In the UK, we just designate certain markets as "regulated" (stocks for instance) and others as not (eg FX). That would avoid this whole nonsense where the SEC etc have to argue that some things ARE securities and others are NOT (if bitcoin is a security then stamps definitely are, do the SEC want to regulate stamps? Or Baseball cards or cars, the examples are pretty endless...).
Watching all of this makes me think regulators either being disingenuous or dumb. I doubt it's the latter. So is this someone just grabbing power for its own sake ("I can get more salary and a better office if we get to regulate crypto)? Or maybe trying to get media coverage to up their personal brand for a political career? Either way, if congress wants the SEC to do this, they should pass such a law, and if they haven't then the SEC should be careful what it sticks it's nose into not least because regulating all of Crypto would be exceedingly difficult and error prone.
Are Forex ETFs considered regulated or unregulated, in your view?
They should be considered regulated, because there is some value underlying them (the forex), plus they're traded and offered to unsophisticated investors etc.
A BTC ETF could maybe be the same.
Similarly shares in a farm would be regulated, but farms (or cattle :) ) would not be. Otherwise the SEC ends up regulating all known trade and/or value production...
A BTC ETF could maybe be the same.
Similarly shares in a farm would be regulated, but farms (or cattle :) ) would not be. Otherwise the SEC ends up regulating all known trade and/or value production...
> ISHAN WAHI, a former product manager at Coinbase Global, Inc. (“Coinbase”), NIKHIL WAHI, and SAMEER RAMANI
Say what you want, but I consider these three people fraudsters, even if the law doesn't exactly cover this "angle".
I expected Coinbase to react like this, of course. And I hope the whole scam thing in crypto will eventually be properly regulated.
I'm all for innovation in Fintech; I am not in favor of scamming millions of people just because the laws are not up to speed with it.
Say what you want, but I consider these three people fraudsters, even if the law doesn't exactly cover this "angle".
I expected Coinbase to react like this, of course. And I hope the whole scam thing in crypto will eventually be properly regulated.
I'm all for innovation in Fintech; I am not in favor of scamming millions of people just because the laws are not up to speed with it.
Glad I pulled all my money out of Coinbase. Sounds like they could care less about protecting customers.
What other exchange would you recommend that won’t go bust?
What sounds like that?
See the story about insider trading. "Former Coinbase Employee Allegedly Tipped His Brother and Friend Regarding Crypto Assets That Were Going to be Listed on Coinbase Exchanges". Coinbase lawyer is arguing that it's not a security, which if true could mean it's not insider trading. If that's the case, customers are losing protection.
Losing protection from what?
Terrible communication by coinbase but I think coinbase are actually correct and pro-customer when they say there is a lack of good legislation around digital assets. While it remains unclear whether or not these coins are covered by existing securities legislation it also remains unclear what costumers and exchanges can do with these coins. If the SEC decides all these coins are securities it will criminalise the insider trading for sure, but it will also potentially criminalise coinbase's exchange as (They aren't licensed to deal in securities AFAIK). In my own view that might be a good thing but whether this is good for customers is debatable - I'm not sure where they could go instead.
Related ongoing thread:
Former Coinbase PM charged in cryptocurrency insider trading tipping scheme - https://news.ycombinator.com/item?id=32180428 - July 2022 (370 comments)
Former Coinbase PM charged in cryptocurrency insider trading tipping scheme - https://news.ycombinator.com/item?id=32180428 - July 2022 (370 comments)
So, does this gives free pass to people working in crypto exchanges to leverage any information accessible to them for profit, even if it is at the expense of customers?
Hot take here but I think crypto should be as unregulated as possible. We already have plenty of highly regulated assets. People that want those qualities already have many things to choose from.
Having different options is what makes life fun. If you want safe, regulated, buy your bonds, etf and so on. If you want extremely risky investments where you have no one to blame but yourself, there's crypto.
The focus should be on informing people how risky these assets are and that there is a very good chance they will go to 0. If you are fully informed of the risks then you're free to gamble your money.
Having different options is what makes life fun. If you want safe, regulated, buy your bonds, etf and so on. If you want extremely risky investments where you have no one to blame but yourself, there's crypto.
The focus should be on informing people how risky these assets are and that there is a very good chance they will go to 0. If you are fully informed of the risks then you're free to gamble your money.
By definition, if someone is insider trading, it’s impossible to be fully informed of the risks.
All crypto should be treated as securities. The rampant insider trading, lack of transparency in project finances and decision making is insane.
I've consulted for a few crypto projects. In most of them, the founders completely misused ICO funds for personal gains and traded their own tokens with inside info.
If your project token is available to be purchased and sold in the US, they should be subject to the same rules other securities follow.
Scamming people shouldn't be this easy.