Of course Coinbase will say they're not securities.
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.
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.
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.
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?
> 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.
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?
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.
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.
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.
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.
[+] [-] senttoschool|3 years ago|reply
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.
[+] [-] heavyset_go|3 years ago|reply
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.
[+] [-] missedthecue|3 years ago|reply
[+] [-] spaceman_2020|3 years ago|reply
Its rampant in discords and telegram chats.
[+] [-] silasdavis|3 years ago|reply
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?
[+] [-] t6jvcereio|3 years ago|reply
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.
[+] [-] mastermojo|3 years ago|reply
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.
[+] [-] modeless|3 years ago|reply
[1] in case you missed it https://www.justice.gov/usao-sdny/pr/three-charged-first-eve...
[+] [-] rvz|3 years ago|reply
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.
[+] [-] boardwaalk|3 years ago|reply
I suppose hubris and cryptocurrencies go together, but it still struck me.
[+] [-] klohto|3 years ago|reply
[+] [-] LatteLazy|3 years ago|reply
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.
[+] [-] MafellUser|3 years ago|reply
[+] [-] simonebrunozzi|3 years ago|reply
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.
[+] [-] DougMellon|3 years ago|reply
[+] [-] joyfylbanana|3 years ago|reply
[+] [-] Justin_K|3 years ago|reply
[+] [-] sytelus|3 years ago|reply
[+] [-] crumpled|3 years ago|reply
[+] [-] fancyfredbot|3 years ago|reply
[+] [-] dang|3 years ago|reply
Former Coinbase PM charged in cryptocurrency insider trading tipping scheme - https://news.ycombinator.com/item?id=32180428 - July 2022 (370 comments)
[+] [-] sytelus|3 years ago|reply
[+] [-] cypress66|3 years ago|reply
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.
[+] [-] closewith|3 years ago|reply