The SEC has told us it wants to sue us over Lend. We don’t know why(blog.coinbase.com)
blog.coinbase.com
The SEC has told us it wants to sue us over Lend. We don’t know why
https://blog.coinbase.com/the-sec-has-told-us-it-wants-to-sue-us-over-lend-we-have-no-idea-why-a3a1b6507009
415 comments
It looks like the entire blog got deleted?
https://blog.coinbase.com/
https://blog.coinbase.com/
Seems to be gone from the internet. Can't find it in archive.today or archive.org either.
reddit comment thread: https://www.reddit.com/r/CryptoCurrency/comments/pk2rjl/coin...
Which points to a tweet thread from Brian Armstrong of Coinbase that is still there for now....
https://twitter.com/brian_armstrong/status/14354409980546539...
unrolled (and probably will still be there even if tweets deleted?) https://threadreaderapp.com/thread/1435440998054653959.html
reddit comment thread: https://www.reddit.com/r/CryptoCurrency/comments/pk2rjl/coin...
Which points to a tweet thread from Brian Armstrong of Coinbase that is still there for now....
https://twitter.com/brian_armstrong/status/14354409980546539...
unrolled (and probably will still be there even if tweets deleted?) https://threadreaderapp.com/thread/1435440998054653959.html
damn
Hmmm, the link just redirects to medium's home page for some reason.
Interesting that they had to delete it. I have it on my cache!
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I see it here: https://medium.com/@coinbaseblog
I actually initially wanted to be on Coinbase’s side here, but after a quick google of “Howey test” and reading even just the introduction on Wikipedia, I cannot imagine how they don’t see the SEC’s reasoning about Lend wrt Howey. If you want to argue that Howey does not apply or fight the decision/lawsuit, then fine. But feigning ignorance of something a (non-legal expert) programmer can connect the dots of instantly just makes me feel like they’re playing a PR game. Seeing as they are already offering APY on staked Ethereum, I don’t see “concern” reflected in their actions. Seems like they are trying to get out to the public before the SEC does to farm some good will.
I would like to think that even the most crypto-skeptical here, those who wish the entire ecosystem would collapse in flames, would agree that the SEC and other regulatory bodies need to operate with transparent rules, making it clear when and why a company is violating the law. Operating short of that is not, by conventional definition, operating under the rule of law.
It seems pretty clear that the SEC is not currently meeting those standards, and that needs to be fixed. Whether or not the target is one we are currently sympathetic towards.
It seems pretty clear that the SEC is not currently meeting those standards, and that needs to be fixed. Whether or not the target is one we are currently sympathetic towards.
“We have no idea why the SEC intends to sue us! It is a complete mystery.”
(Later in the post…)
“All we’ve done is create a thing that people can trade which we are moving towards selling to investors against specific SEC advice to the contrary, but it is definitely not a security and as a result it is completely fine even though we have not complied with SEC regulations in any way with respect to it.”
A mystery indeed…
(Later in the post…)
“All we’ve done is create a thing that people can trade which we are moving towards selling to investors against specific SEC advice to the contrary, but it is definitely not a security and as a result it is completely fine even though we have not complied with SEC regulations in any way with respect to it.”
A mystery indeed…
As dangerous as it sounds for the industry, this article tells us they’ve discussed with the SEC without telling us what was said on their side. It’s difficult to share their confusion if we don’t know what they have fed the regulator.
Common sense makes it sound like Lend is clearly not about securities, but the SEC has generally been looking for settlements or discussion instead of straight litigation. Why the change of motus operandi? Is it because Coinbase is big and it would make an example, or maybe somewhere in Lend there’s a business model that makes the product act like a security? Who knows at this point?
More information from Coinbase would help us empathize.
Common sense makes it sound like Lend is clearly not about securities, but the SEC has generally been looking for settlements or discussion instead of straight litigation. Why the change of motus operandi? Is it because Coinbase is big and it would make an example, or maybe somewhere in Lend there’s a business model that makes the product act like a security? Who knows at this point?
More information from Coinbase would help us empathize.
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> They have only told us that they are assessing our Lend product through the prism of decades-old Supreme Court cases called Howey and Reves ... These two cases are from 1946 and 1990.
Trying to make out like Howey is some obscure precedent from decades ago which the SEC is nitpicking over. The Howey test is the test applied to determine if something is an investment contract.
Trying to make out like Howey is some obscure precedent from decades ago which the SEC is nitpicking over. The Howey test is the test applied to determine if something is an investment contract.
From the Coinbase page about Lend:
>Lend your crypto to earn 4% APY
>Your principal is guaranteed
This definitely seems fishy. I don't see how this is possible unless if their position isn't levered. However, if they aren't levered, then why can't they just lend USDC themselves?
>Lend your crypto to earn 4% APY
>Your principal is guaranteed
This definitely seems fishy. I don't see how this is possible unless if their position isn't levered. However, if they aren't levered, then why can't they just lend USDC themselves?
After reading the description of Coinbase Lend in this article I have no idea what it is.
coinbase should figure out why so many people are having problems with its withdrawal functionality before trying new products
Coinbase is even shifter then PayPal. It took several months and numerous support tickets before they clarified that they take a percentage of all ACH withdrawals regardless if it is cash you deposited or proceeds of a crypto sale. If you take money out you pay them a percentage. They try really to hide that in their pricing matrix. Every time I asked about it I would either get a form letter pointing me to the pricing matrix, or a form letter explaining my bank may charge a fee for ACH. If I asked in a way that was clear that I had read the matrix already and verified my bank charged no ACH fees - they would stop responding. I think some manager was closing stale tickets and they gave me the exact answer.
I mean why not go after Coinbase? The argument that everyone else is doing it why not go after them doesn't hold much water. Sometimes it makes sense to go after the biggest fish first.
Also, is Coinbase saying Lend isn't an investment contract? It sure sounds like one to me. Lend my crypto to Coinbase and I get a 4% return? I like the idea but it sure sounds like an investment contract to me.
Also, is Coinbase saying Lend isn't an investment contract? It sure sounds like one to me. Lend my crypto to Coinbase and I get a 4% return? I like the idea but it sure sounds like an investment contract to me.
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>we’re seeking to allow eligible customers to earn interest on select assets on Coinbase, starting with 4% APY on USD Coin (USDC)
My uneducated view of the Howie test is an investment qualifies as a security if you invest, do nothing, and expect a return. That’s my dumbed down definition that makes sense to me, a non lawyer. I do think Coinbase has painted a target on their back, the govt sees crypto as a threat to stability, and this lawsuit is an attempt to create stability.
My uneducated view of the Howie test is an investment qualifies as a security if you invest, do nothing, and expect a return. That’s my dumbed down definition that makes sense to me, a non lawyer. I do think Coinbase has painted a target on their back, the govt sees crypto as a threat to stability, and this lawsuit is an attempt to create stability.
In general, it seems like the SEC now has a mandate to reel in many players in the shadow banking industry and crypto happens to be in the cross-fire.
https://www.nytimes.com/2021/09/05/us/politics/cryptocurrenc...
https://www.nytimes.com/2021/09/05/us/politics/cryptocurrenc...
see this comment from "animats" : https://news.ycombinator.com/item?id=28453169
Mark Cuban's response is interesting:
Brian, this is "Regulation via Litigation". They aren't capable of working through this themselves and are afraid of making mistakes in doing so. They they leave it to the lawyers. Just the people you don't want impacting the new technologies. You have to go on the offensive
https://twitter.com/mcuban/status/1435454959441620995
Brian, this is "Regulation via Litigation". They aren't capable of working through this themselves and are afraid of making mistakes in doing so. They they leave it to the lawyers. Just the people you don't want impacting the new technologies. You have to go on the offensive
https://twitter.com/mcuban/status/1435454959441620995
Original link redirects to medium.com for me.
https://medium.com/@coinbaseblog?p=a3a1b6507009 works however.
https://medium.com/@coinbaseblog?p=a3a1b6507009 works however.
Probably a finance related issue.
It looks like the medium piece was taken down.
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I have to say I'm getting tired of all these 'new economy' (is it still new?) companies, trying to get around established regulations which usually have been put into place for a good reason and using PR to create a narrative/pressure to say that regulations/regulators are hindering innovation and are not acting in good faith. Instead it seems to usually be the case that they are trying to do exactly what the regulation is trying to prevent. Just because because they come out of a "move fast and break things" culture, doesn't mean rules don't apply to them. Fortunately more and more people are seeing through these shenanigans.
At least that's the impression I got from phrases such as "engage productively", "proactively engaging", "eager to hear", and others that seem to say that Coinbase has good intentions and is trying their best, while at the same time seeming to portray the SEC as uncooperative and antagonistic, through phrases such as "SEC still won’t explain", "wouldn’t say why or how they’d reached that conclusion", and others.
The one that hits me the most and makes me think this is more about trying to align with the public will and not the current law is the following: "They have only told us that they are assessing our Lend product through the prism of decades-old Supreme Court cases called Howey and Reves."
AFAIK, a decades-old Supreme Court case is still considered valid law, and such an appeal I would imagine would fall pretty flat in a court of law, but seems to work well in a public sphere.
I'm open to being off on this, I guess I just feel a bit unsure how to proceed in this internet age, when I get the impression that people are skirting the courts of law more and more.