US Supreme Court Ruled in Favor of Coinbase

[bbc.reporter]

....

The SEC and several states argue that the product constitutes a unregistered security offering. Coinbase claims staking is not a security, maintaining that it is a "core part of ensuring the cryptoeconomy functions for hundreds of millions of users around the globe."

Calling staked coins "a security" might be considered an extreme compliment. Most POS tokens/coins are really just glorified Ponzi schemes, if we are really honest, is this correct or not?

The ponzi scheme works differently. There, old users make a profit at the expense of attracted money from new users. If ecosystem tokens are used and have value, then this is no longer a ponzi scheme. And staking is also different, you can create your own node and maintain the network to get a reward for it.

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SEC asked Coinbase to halt trading in everything except bitcoin, CEO says
Request would have meant ‘the end of the crypto industry in the US’, according to Brian Armstrong
https://www.ft.com/content/1f873dd5-df8f-4cfc-bb21-ef83ed11fb4d

In the cryptospace, calling some type of coin or token a ponzi scheme would open an argument that other coins and tokens of a different type might also be ponzi schemes. This is reality.

Also to take the argument further, from a ponzi's definition, assets of any type traded in markets also of any type can also be considered ponzi schemes, including bitcoin, stocks and futures. For older investors to make money, new money should enter the market.

[zasad@]

....

The SEC and several states argue that the product constitutes a unregistered security offering. Coinbase claims staking is not a security, maintaining that it is a "core part of ensuring the cryptoeconomy functions for hundreds of millions of users around the globe."

Calling staked coins "a security" might be considered an extreme compliment. Most POS tokens/coins are really just glorified Ponzi schemes, if we are really honest, is this correct or not?

The ponzi scheme works differently. There, old users make a profit at the expense of attracted money from new users. If ecosystem tokens are used and have value, then this is no longer a ponzi scheme. And staking is also different, you can create your own node and maintain the network to get a reward for it.

___
SEC asked Coinbase to halt trading in everything except bitcoin, CEO says
Request would have meant ‘the end of the crypto industry in the US’, according to Brian Armstrong
https://www.ft.com/content/1f873dd5-df8f-4cfc-bb21-ef83ed11fb4d

In the cryptospace, calling some type of coin or token a ponzi scheme would open an argument that other coins and tokens of a different type might also be ponzi schemes. This is reality.

Also to take the argument further, from a ponzi's definition, assets of any type traded in markets also of any type can also be considered ponzi schemes, including bitcoin, stocks and futures. For older investors to make money, new money should enter the market.

https://www.sec.gov/spotlight/enf-actions-ponzi.shtml
"SEC Enforcement Actions Against Ponzi Schemes
What Is A Ponzi Scheme?
A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. With little or no legitimate earnings, Ponzi schemes require a constant flow of money from new investors to continue. Ponzi schemes inevitably collapse, most often when it becomes difficult to recruit new investors or when a large number of investors ask for their funds to be returned."
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Just because every project wants to hype doesn't mean it's a new Ponzi scheme. I prefer to use the SEC clarification, where everything is clear and examples of such schemes are given.

[bbc.reporter]

@zasad@. However, there might be a problem with that definition because uncle Gary can declare any project that has issued a token a fraud and a ponzi scheme. Ethereum, Uniswap, Sushiswap, Curve, Convex and many projects in DeFi issued a token but they never scammed the buyers. Is it right for Gary Gensler to crackdown on them because for the old holders of those coins to profit, new buyers must come in?

I reckon that you are one of the people in this forum who knows that a project that has issued a token should not be automatically declared a ponzi scheme.

[zasad@]

@zasad@. However, there might be a problem with that definition because uncle Gary can declare any project that has issued a token a fraud and a ponzi scheme. Ethereum, Uniswap, Sushiswap, Curve, Convex and many projects in DeFi issued a token but they never scammed the buyers. Is it right for Gary Gensler to crackdown on them because for the old holders of those coins to profit, new buyers must come in?

I reckon that you are one of the people in this forum who knows that a project that has issued a token should not be automatically declared a ponzi scheme.

I don’t understand why you compare cryptocurrency projects with a Ponzi scheme. Projects like StepN are like a Ponzi scheme, but there are a lot of legal issues.
The SEC is fighting the illegal sale of shares, and the main question now is which token is a share and which token is not a share. There is a court practice that says that the company will pay fines and penalties from the amount received at the ICO. For projects like Ethereum, this is a ridiculous amount, but it is not certain that the SEC will sue Ethereum.

[yhiaali3]

I also feel lazy to read lengthy ToS. I skip them unless in a project I know is important to me or I'll remain in for a very long term.

Unfortunately, most of the investors in any project or service do not read the ToS when registering because they are lazy or in a hurry, or this has become routine and they are used to it, when in reality the ToS is very important.

But anyway, whether you read the ToS or not, what will it do if the project turns into spam? Especially if you're in a country that doesn't legalize crypto, they'll get away with it pretty easily, if you can get them sued in the first place.

[bbc.reporter]

@zasad@. However, there might be a problem with that definition because uncle Gary can declare any project that has issued a token a fraud and a ponzi scheme. Ethereum, Uniswap, Sushiswap, Curve, Convex and many projects in DeFi issued a token but they never scammed the buyers. Is it right for Gary Gensler to crackdown on them because for the old holders of those coins to profit, new buyers must come in?

I reckon that you are one of the people in this forum who knows that a project that has issued a token should not be automatically declared a ponzi scheme.

I don’t understand why you compare cryptocurrency projects with a Ponzi scheme. Projects like StepN are like a Ponzi scheme, but there are a lot of legal issues.
The SEC is fighting the illegal sale of shares, and the main question now is which token is a share and which token is not a share. There is a court practice that says that the company will pay fines and penalties from the amount received at the ICO. For projects like Ethereum, this is a ridiculous amount, but it is not certain that the SEC will sue Ethereum.

I am not comparing or implying that DeFi projects are ponzi schemes. I am saying that because of the SEC's broad definition of what a ponzi scheme is, uncle Gary can use this definition to declare many projects in the cryptospace as ponzi schemes and crackdown on them.

The SEC's fight against the cryptospace by using the howey test has become questionable after Ripple won their case. Uncle Gary's next fight will be about ponzi schemes and as already mentioned, their definition is broad and they will apply this as much on the cryptospace as possible.

[zasad@]

@zasad@. However, there might be a problem with that definition because uncle Gary can declare any project that has issued a token a fraud and a ponzi scheme. Ethereum, Uniswap, Sushiswap, Curve, Convex and many projects in DeFi issued a token but they never scammed the buyers. Is it right for Gary Gensler to crackdown on them because for the old holders of those coins to profit, new buyers must come in?

I reckon that you are one of the people in this forum who knows that a project that has issued a token should not be automatically declared a ponzi scheme.

I don’t understand why you compare cryptocurrency projects with a Ponzi scheme. Projects like StepN are like a Ponzi scheme, but there are a lot of legal issues.
The SEC is fighting the illegal sale of shares, and the main question now is which token is a share and which token is not a share. There is a court practice that says that the company will pay fines and penalties from the amount received at the ICO. For projects like Ethereum, this is a ridiculous amount, but it is not certain that the SEC will sue Ethereum.

I am not comparing or implying that DeFi projects are ponzi schemes. I am saying that because of the SEC's broad definition of what a ponzi scheme is, uncle Gary can use this definition to declare many projects in the cryptospace as ponzi schemes and crackdown on them.

The SEC's fight against the cryptospace by using the howey test has become questionable after Ripple won their case. Uncle Gary's next fight will be about ponzi schemes and as already mentioned, their definition is broad and they will apply this as much on the cryptospace as possible.

I appreciate your opinion, but in my opinion you are overcomplicating the situation. The SEC has a lot of work to do in the coming years, because a lot of projects have collected investments on ICOs and, with a sane amount of a fine, they are all ready to pay money without courts. But Gary Gensler doesn't stand much of a chance of staying in office after next year's US presidential election.