But the only time that a judge has ruled on whether or not a crypto token is a security is in the XRP case, and it ruled that it was not (at least when it was sold on exchanges). This is not comparable to a ponzi scheme where the legality is not in question at all.
And let's not ignore the fact that these exchanges have done this right out in the open for around 10 years now. Coinbase even had their IPO approved by the SEC. So it's very clear that the SEC treated this as legal for a decade before suddenly changing their position. This seems incredibly dishonest to me.
The SEC has been consistently saying that most crytoassets were securities. The only acknowledged exception, for which it had contradictory statements, is if a protocol is "sufficiently decentralized" such as Bitcoin and Ethereum.[1]
On the IPO, the registration is independant from such pursuits as the SEC raised during their approval. [2]
That said, there would have been better course of action to protect consumers, such as establishing an appropriate regulatory framework, but I may be too European.
> "Coinbase even had their IPO approved by the SEC."
The SEC reviews the disclosures being made by the company that's filing for public listing, not the legality of their business model.
You can go look at the Coinbase IPO filing [1]. Under the heading "Summary of risk factors", it reads:
"A particular crypto asset’s status as a 'security' in any relevant jurisdiction is subject to a high degree of uncertainty and if we are unable to properly characterize a crypto asset, we may be subject to regulatory scrutiny, investigations, fines, and other penalties, and our business, operating results, and financial condition may be adversely affected."
Nowhere does it say "the SEC has approved our operations, it's all good!" On the contrary, Coinbase is saying that the assets they offer on their exchange may be viewed as securities and it may eventually result in fines or penalties. That's disclosure.
They are only securities in the eyes of SEC. There is no legally binding court decision that cryptocurrencies would be securities, and, for example, are not commodities.
Yes, and the SEC sued them in COURT so they can make their case that they are securities and Kraken can make the case they aren’t. Isn’t this what Kraken wanted?
fallingknife|2 years ago
And let's not ignore the fact that these exchanges have done this right out in the open for around 10 years now. Coinbase even had their IPO approved by the SEC. So it's very clear that the SEC treated this as legal for a decade before suddenly changing their position. This seems incredibly dishonest to me.
xalava|2 years ago
On the IPO, the registration is independant from such pursuits as the SEC raised during their approval. [2]
That said, there would have been better course of action to protect consumers, such as establishing an appropriate regulatory framework, but I may be too European.
[1] https://www.sec.gov/news/speech/speech-hinman-061418
[2] https://www.sec.gov/Archives/edgar/data/1679788/000000000020...
pavlov|2 years ago
The SEC reviews the disclosures being made by the company that's filing for public listing, not the legality of their business model.
You can go look at the Coinbase IPO filing [1]. Under the heading "Summary of risk factors", it reads:
"A particular crypto asset’s status as a 'security' in any relevant jurisdiction is subject to a high degree of uncertainty and if we are unable to properly characterize a crypto asset, we may be subject to regulatory scrutiny, investigations, fines, and other penalties, and our business, operating results, and financial condition may be adversely affected."
Nowhere does it say "the SEC has approved our operations, it's all good!" On the contrary, Coinbase is saying that the assets they offer on their exchange may be viewed as securities and it may eventually result in fines or penalties. That's disclosure.
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[1] https://www.sec.gov/Archives/edgar/data/1679788/000162828021...
miohtama|2 years ago
pseg134|2 years ago