Coinbase vs SEC

[Abiky]

The SEC threatened Coinbase with a lawsuit if it doesn't comply with securities laws. According to the US agency, PoS coins are unregistered securities. Coinbase decided to ignore the SEC warning and continue offering staking services to US customers stating that "staking is handled by decentralized protocols". It's likely there will be a lawsuit between the SEC and Coinbase soon.

If the lawsuit becomes a reality, which do you think will win? The SEC or Coinbase? The US has been tightening its regulations towards the crypto industry, so a win by Coinbase could bring some "relief" to US-based crypto exchanges.

Your input will be greatly appreciated. Thank you.

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[DaveF]

They will both probably win.

There will be some things that the SEC will try to go after them for that are going to be too far reaching, and it will get shut down by a judge or a jury will find in their favor. There are some other things that Coinbase has probably crossed the line on. They have been warned and kept at it, just because I don't think but sticking ETH is a bad thing outside of the fact that it's ETH, that still does cross the fuzzy line. If they were smart they would have formed and offshore corporation and let them deal with it. all law making it perfectly clear that it is not an American based investment and not regulated by American laws.

Don't know if they would be able to get away with that long term, but short term I have seen many places do it.

-Dave

[Abiky]

They will both probably win.

There will be some things that the SEC will try to go after them for that are going to be too far reaching, and it will get shut down by a judge or a jury will find in their favor. There are some other things that Coinbase has probably crossed the line on. They have been warned and kept at it, just because I don't think but sticking ETH is a bad thing outside of the fact that it's ETH, that still does cross the fuzzy line. If they were smart they would have formed and offshore corporation and let them deal with it. all law making it perfectly clear that it is not an American based investment and not regulated by American laws.

Don't know if they would be able to get away with that long term, but short term I have seen many places do it.

-Dave

I sure hope the SEC and crypto exchanges work together to ensure the industry grows without limitations. All of this mess makes the US a "laughing stock" compared to other crypto-friendly countries in the world. If Coinbase wins the lawsuit, then the SEC would have no other choice but to allow crypto exchanges to provide staking services to US-based customers. It might be forced to pay back Kraken's imposed fine of millions of dollars. Rest assured, that the SEC will find other ways to hunt down crypto exchanges claiming "it's protecting investors' interests".

Let's see how this will play out in the long run. Hopefully, the US would revise its crypto regulatory framework to stay at the forefront of innovation. Who knows if things will improve in the future? Just my opinion

[Smack That Ace]

They will both probably win.

There will be some things that the SEC will try to go after them for that are going to be too far reaching, and it will get shut down by a judge or a jury will find in their favor. There are some other things that Coinbase has probably crossed the line on. They have been warned and kept at it, just because I don't think but sticking ETH is a bad thing outside of the fact that it's ETH, that still does cross the fuzzy line. If they were smart they would have formed and offshore corporation and let them deal with it. all law making it perfectly clear that it is not an American based investment and not regulated by American laws.

Don't know if they would be able to get away with that long term, but short term I have seen many places do it.

-Dave

I sure hope the SEC and crypto exchanges work together to ensure the industry grows without limitations. All of this mess makes the US a "laughing stock" compared to other crypto-friendly countries in the world. If Coinbase wins the lawsuit, then the SEC would have no other choice but to allow crypto exchanges to provide staking services to US-based customers. It might be forced to pay back Kraken's imposed fine of millions of dollars. Rest assured, that the SEC will find other ways to hunt down crypto exchanges claiming "it's protecting investors' interests".

Let's see how this will play out in the long run. Hopefully, the US would revise its crypto regulatory framework to stay at the forefront of innovation. Who knows if things will improve in the future? Just my opinion

Only an agreement between the two parties is the best outcome. Because if the SEC loses, they will also find other reasons to continue attacking exchanges or even the entire crypto industry. Even if XRP wins, Coinbase or Binance win, they will all continue to be in trouble in the future, the SEC and CFTC will certainly not ignore it.

Not only the US government but other governments will also soon do the same because what they are aiming for is money. All recent allegations are civil lawsuits, and as long as the exchanges agree and strictly comply with the fine payment, everything will be over.

[Abiky]

Only an agreement between the two parties is the best outcome. Because if the SEC loses, they will also find other reasons to continue attacking exchanges or even the entire crypto industry. Even if XRP wins, Coinbase or Binance win, they will all continue to be in trouble in the future, the SEC and CFTC will certainly not ignore it.

Not only the US government but other governments will also soon do the same because what they are aiming for is money. All recent allegations are civil lawsuits, and as long as the exchanges agree and strictly comply with the fine payment, everything will be over.

It's not only about money, but it's also about control. The US government will continue to tighten regulations just to put crypto under control. They don't want it to replace the US Dollar after all. I have no problem with regulations as long as they don't limit the growth of the crypto/Blockchain industry. Too much regulations will only scare away crypto companies, startups, and even exchanges in the long run.

Let's hope the US government and the crypto industry work together for the benefit of all. Maybe there's light at the end of the tunnel? Just my opinion

[Baofeng]

Only an agreement between the two parties is the best outcome. Because if the SEC loses, they will also find other reasons to continue attacking exchanges or even the entire crypto industry. Even if XRP wins, Coinbase or Binance win, they will all continue to be in trouble in the future, the SEC and CFTC will certainly not ignore it.

Not only the US government but other governments will also soon do the same because what they are aiming for is money. All recent allegations are civil lawsuits, and as long as the exchanges agree and strictly comply with the fine payment, everything will be over.

It's not only about money, but it's also about control. The US government will continue to tighten regulations just to put crypto under control. They don't want it to replace the US Dollar after all. I have no problem with regulations as long as they don't limit the growth of the crypto/Blockchain industry. Too much regulations will only scare away crypto companies, startups, and even exchanges in the long run.

Yeah, but just the same, if you have money then you have control, and that's what the US government is trying to prevent from happening. Because this exchanges are growing big by the day, meaning fiat is flowing on exchanges, so they have to stop because they want people to put their money on banks, in which the government has control.

Let's hope the US government and the crypto industry work together for the benefit of all. Maybe there's light at the end of the tunnel? Just my opinion

I don't think there will be like some consensus or middle ground between US government and crypto. It's either they let it flow normally, or not. The problem is that they are selectively targeting exchanges now, Binance, Coinbase and even Kraken.

And so this lawsuit might set a precedence, gonna be a uphill battle for those exchanges, but if they win (chances are slim), it's going to be big for crypto industry.

[NotATether]

The SEC threatened Coinbase with a lawsuit if it doesn't comply with securities laws. According to the US agency, PoS coins are unregistered securities. Coinbase decided to ignore the SEC warning and continue offering staking services to US customers stating that "staking is handled by decentralized protocols". It's likely there will be a lawsuit between the SEC and Coinbase soon.

Oh boy, if that's the real timeline of events, then Coinbase is in big trouble. Because nobody can just walk over the SEC like that and provide unregistered financial services in the US. I mean, they routinely take down small-time traders as "money transmitters". It is highly unlikely that the US government will let Coinbase just get away with it, *especially* since it's a public company.

[Ryker1]

The SEC threatened Coinbase with a lawsuit if it doesn't comply with securities laws. According to the US agency, PoS coins are unregistered securities. Coinbase decided to ignore the SEC warning and continue offering staking services to US customers stating that "staking is handled by decentralized protocols". It's likely there will be a lawsuit between the SEC and Coinbase soon.

Oh boy, if that's the real timeline of events, then Coinbase is in big trouble. Because nobody can just walk over the SEC like that and provide unregistered financial services in the US. I mean, they routinely take down small-time traders as "money transmitters". It is highly unlikely that the US government will let Coinbase just get away with it, *especially* since it's a public company.

Exactly, as we all know that the SEC is known for taking a strict stance on such matters, and they have been known to go after small-time traders as well. So it is possible that Coinbase even if it is a public company could potentially make them even more to face difficulties and penalties.
But in my mind --it is possible that Coinbase may have had some sort of legal loophole or justification for their actions, they follow and comply with financial regulations to avoid any possible legal issues like this which I doubt they are safe as of now.

[Darker45]

It's funny how SEC is threatening Coinbase with a lawsuit with the presumption that PoS coins like Ethereum are securities when another US government agency, CFTC, is suing Binance and CZ with a claim that Ethereum, like Bitcoin, is a commodity. There seems to be a lack of understanding and coordination here. Or is there some kind of a turf war between these two agencies?

Anyway, if the case will be filed, it will take years for the legal process to have a final decision. My hunch is that the longer the case drags on, the more advantageous for Coinbase. If it is a precedent, look at how Ripple is doing quite well in its case against the SEC.

[Abiky]

It's funny how SEC is threatening Coinbase with a lawsuit with the presumption that PoS coins like Ethereum are securities when another US government agency, CFTC, is suing Binance and CZ with a claim that Ethereum, like Bitcoin, is a commodity. There seems to be a lack of understanding and coordination here. Or is there some kind of a turf war between these two agencies?

Anyway, if the case will be filed, it will take years for the legal process to have a final decision. My hunch is that the longer the case drags on, the more advantageous for Coinbase. If it is a precedent, look at how Ripple is doing quite well in its case against the SEC.

The US doesn't have a clear regulatory framework for crypto assets. It needs to "update itself" in order to stay ahead of the game. Due to the mess caused by both the SEC and CFTC, crypto exchanges are closing up shop all across the country. All we have left is Binance, Coinbase, and Kraken as the biggest exchanges in the US. If they go away, it will be a huge loss for the country in the long run (earning taxes from crypto transactions, etc).

The EU seems to be far ahead than the US in terms of crypto/Blockchain regulation, so it's likely major companies will migrate there. The SEC vs Coinbase lawsuit might be a long dilemma, so this is only the beginning. Let's hope all goes well for the sake of crypto adoption within the US. Just my thoughts

[bbc.reporter]

@Abiky. There was a case when the SEC sued someone but the judge made a decision that ruled against the SEC, citing that there was no clear regulatory structure to use as guidelines for the projects in the cryptospace. I have posted about it, however, it did not have the attention of the readers. I will find it and share it later.

In any case, news update. Coinbase sues the SEC heheheheheh.



Coinbase is suing the Securities and Exchange Commission.

The lawsuit follows on a petition for a rulemaking that the company filed with the SEC last summer, requesting the commission draft and approve a rule specific to digital assets. The lawsuit aims to force the agency to provide a yes or no to Coinbase's ask.

Since that request by Coinbase, the SEC has reopened custody and exchange rules to explicitly say that they apply to digital assets, but has not engaged in drafting a rule specific to digital assets.

Source https://www.theblock.co/post/228047/coinbase-sues-the-sec-for-answer-on-rule-specific-to-digital-assets

[Smack That Ace]

@Abiky. There was a case when the SEC sued someone but the judge made a decision that ruled against the SEC, citing that there was no clear regulatory structure to use as guidelines for the projects in the cryptospace. I have posted about it, however, it did not have the attention of the readers. I will find it and share it later.

In any case, news update. Coinbase sues the SEC heheheheheh.



Coinbase is suing the Securities and Exchange Commission.

The lawsuit follows on a petition for a rulemaking that the company filed with the SEC last summer, requesting the commission draft and approve a rule specific to digital assets. The lawsuit aims to force the agency to provide a yes or no to Coinbase's ask.

Since that request by Coinbase, the SEC has reopened custody and exchange rules to explicitly say that they apply to digital assets, but has not engaged in drafting a rule specific to digital assets.

Source https://www.theblock.co/post/228047/coinbase-sues-the-sec-for-answer-on-rule-specific-to-digital-assets

I don't know what the outcome will be, but this is a move that I think is quite wise by Coinbase as the US law so far has not clearly regulated the crypto market. The SEC is just abusing its power to attack the industry, they don't have any strong evidence against us.
I hope other companies and exchanges will do the same as Coinbase to fight the SEC. That would be an interesting situation as many US politicians are also unhappy with what the SEC is doing with cryptocurrencies.

[Abiky]

@Abiky. There was a case when the SEC sued someone but the judge made a decision that ruled against the SEC, citing that there was no clear regulatory structure to use as guidelines for the projects in the cryptospace. I have posted about it, however, it did not have the attention of the readers. I will find it and share it later.

In any case, news update. Coinbase sues the SEC heheheheheh.



Coinbase is suing the Securities and Exchange Commission.

The lawsuit follows on a petition for a rulemaking that the company filed with the SEC last summer, requesting the commission draft and approve a rule specific to digital assets. The lawsuit aims to force the agency to provide a yes or no to Coinbase's ask.

Since that request by Coinbase, the SEC has reopened custody and exchange rules to explicitly say that they apply to digital assets, but has not engaged in drafting a rule specific to digital assets.

Source https://www.theblock.co/post/228047/coinbase-sues-the-sec-for-answer-on-rule-specific-to-digital-assets

It's nice to see Coinbase step up to the game by suing the SEC. We can consider it the "Knight of Crypto/Blockchain tech" if it wins the case. This is only a battle that's just getting started. I'm glad to see there are some US politicians in favor of crypto. They're now holding SEC chairman Gary Gensler accountable for this actions.

With increasing pressure against the SEC, it's likely the crypto industry will emerge victorious in the long run. The US needs crypto now more than ever, especially when its enemies are embracing it for their own benefit. If the US rejects the revolution, it'll be left behind in the dust. Maybe someday the US will go as far as backing the US Dollar with Bitcoin? Just my thoughts

[bittraffic]

@Abiky. There was a case when the SEC sued someone but the judge made a decision that ruled against the SEC, citing that there was no clear regulatory structure to use as guidelines for the projects in the cryptospace. I have posted about it, however, it did not have the attention of the readers. I will find it and share it later.

In any case, news update. Coinbase sues the SEC heheheheheh.



Coinbase is suing the Securities and Exchange Commission.

The lawsuit follows on a petition for a rulemaking that the company filed with the SEC last summer, requesting the commission draft and approve a rule specific to digital assets. The lawsuit aims to force the agency to provide a yes or no to Coinbase's ask.

Since that request by Coinbase, the SEC has reopened custody and exchange rules to explicitly say that they apply to digital assets, but has not engaged in drafting a rule specific to digital assets.

Source https://www.theblock.co/post/228047/coinbase-sues-the-sec-for-answer-on-rule-specific-to-digital-assets

It's nice to see Coinbase step up to the game by suing the SEC. We can consider it the "Knight of Crypto/Blockchain tech" if it wins the case. This is only a battle that's just getting started. I'm glad to see there are some US politicians in favor of crypto. They're now holding SEC chairman Gary Gensler accountable for this actions.

With increasing pressure against the SEC, it's likely the crypto industry will emerge victorious in the long run. The US needs crypto now more than ever, especially when its enemies are embracing it for their own benefit. If the US rejects the revolution, it'll be left behind in the dust. Maybe someday the US will go as far as backing the US Dollar with Bitcoin? Just my thoughts

When Gensler couldn't answer in the congressional hearing about ETH being security or not, Armstrong's lawyer may have seen that they have a huge chance of winning a case against SEC.

The coinbase lawsuit will likely make the government introduce the Digital Currency Monetary Authority (DCMA) to regulate crypto just as the MICA of Europe crypto regulation authority. Gensler will be out of the picture soon.

[bbc.reporter]

@Abiky. There was a case when the SEC sued someone but the judge made a decision that ruled against the SEC, citing that there was no clear regulatory structure to use as guidelines for the projects in the cryptospace. I have posted about it, however, it did not have the attention of the readers. I will find it and share it later.

In any case, news update. Coinbase sues the SEC heheheheheh.



Coinbase is suing the Securities and Exchange Commission.

The lawsuit follows on a petition for a rulemaking that the company filed with the SEC last summer, requesting the commission draft and approve a rule specific to digital assets. The lawsuit aims to force the agency to provide a yes or no to Coinbase's ask.

Since that request by Coinbase, the SEC has reopened custody and exchange rules to explicitly say that they apply to digital assets, but has not engaged in drafting a rule specific to digital assets.

Source https://www.theblock.co/post/228047/coinbase-sues-the-sec-for-answer-on-rule-specific-to-digital-assets

I don't know what the outcome will be, but this is a move that I think is quite wise by Coinbase as the US law so far has not clearly regulated the crypto market. The SEC is just abusing its power to attack the industry, they don't have any strong evidence against us.
I hope other companies and exchanges will do the same as Coinbase to fight the SEC. That would be an interesting situation as many US politicians are also unhappy with what the SEC is doing with cryptocurrencies.

Similar to what I mentioned in @rdbase's thread, this might only be the beginning. We might witness more exchanges and services in the cryptospace join the war against Gensler. Kraken's chief legal officer has already shared that they have begun fighting behind the scenes against the regulators. Who will be next? I speculate Binance.us, however, CZ likes to use decentralization to evade regulations hehehehe.



On Decrypt’s gm podcast, Marco Santori also said that the San Francisco-based firm was “fighting the fight” behind the scenes to get connected to the same FedNow network that all other big financial institutions use to settle transactions.

Kraken has been in hot water with regulators this year. T—he U.S. Securities and Exchange Commission hit the San Francisco-based digital asset exchange with a $30 million fine for violating securities laws back in February.

The regulator alleged that Kraken failed to register the offer and sale of their crypto asset staking-as-a-service program.

Source https://decrypt.co/138097/kraken-fighting-the-fight-behind-the-scenes-with-regulators

[malcovi2]

The problem with Gensler is, he is using decades old rule to regulate modern economy. Why not just make new or update old laws/rules but instead they are driving away a new industry in the USA.

[Abiky]

The problem with Gensler is, he is using decades old rule to regulate modern economy. Why not just make new or update old laws/rules but instead they are driving away a new industry in the USA.

Agree. Congress really needs to work on that to ensure the healthy growth of the crypto/Blockchain industry within the US. There are already pro-crypto congressmen in the country, so it should only be a matter of time before this is realized. SEC Chairman Gary Gensler could eventually be removed from office if Congress decides to do so. How will this play out for the crypto industry, is yet to be seen. But I have a feeling things will turn out well without someone who's constanly "attacking" crypto all of the time.

All in all, Coinbase did well in stepping up to the game. It could win the lawsuit against the SEC due to unclear and outdated regulations. Maybe there's light at the end of the tunnel? Just my opinion

[bittraffic]

Coinbase can not expect to follow regulations, there weren't even a real regulations to follow. Even Grayscale see it coming which they also need to file a lawsuit since SEC is not approving that BTC spot for them.

No one stands up against the regulators then all these blockchain companies will just keep inline bullied forever.

[Kemarit]

Perhaps another subtle response against SEC, as Coinbase launches International Exchange

Coinbase International Exchange will enable institutional users based in eligible jurisdictions outside of the US, to trade perpetual futures. Perpetual futures accounted for nearly 75% of global crypto trading volume in 2022, creating highly-liquid markets and offering traders additional versatility in their trading strategies.

https://www.coinbase.com/blog/introducing-coinbase-international-exchange

So as US is trying to drive away Coinbase, they are making a bold move with this kind of offerings. So I guess sooner or later, maybe in the next year or so, they will be 100% out of the US jurisdiction and building somewhere else.

It could be agreed that US is really going anti crypto now with Binance, and maybe one day, they are falling behind the adoption of BTC.

[bbc.reporter]

Does anyone speculate that Coinbase will continue on fighting with their case against the SEC? This news article makes it appear that they might be planning an exit from America permanently until there is clear regulatory guidance and infrastructure. They are slowly closing down different service offerings from their business.

The reason according to Coinbase's spokesperson is low demand. I do not believe this.



Coinbase Borrow’s days are numbered.

Customers of the U.S.-based exchange who used the program – which allowed customers to borrow fiat loans up to $1 million against as much as 30% of their bitcoin holdings, with interest – received an email on Wednesday informing them that the last day to take out new loans would be May 10.

However, the closure of Coinbase Borrow seems – at least for now – to be unconnected to any enforcement action. A person familiar with the matter told CoinDesk the closure of Coinbase Borrow had nothing to do with either pending or past troubles with the SEC.

Source https://www.coindesk.com/business/2023/05/04/coinbase-to-stop-issuing-new-loans-via-coinbase-borrow/



The real warning sign for their exit is when Coinbase begins layoffs of employees again in America. They have fired 950 employees on January already. This might be 20% of their workforce.