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Comment by polygamous_bat | Hacker News Reader

SEC already has rules, hire lawyers to interpret them and decide what risk is worth taking and what's not. This is just another case of libertarian crocodile tears because government won't guarantee them against any and all sorts of business risks while letting them keep the fat profits.

Like, if you are Coinbase, your primary product is a sort of regulatory arbitrage -- there is legal risk associated with it, and so one of your primary expenses would be an army of lawyers to decide where on the risk-reward curve you would want to be. The army of lawyers is too expensive? Buddy, no one is forcing you to be in this business. Just because you made profits in the earlier years with little to no regulation doesn't mean that government is bound to let you keep making that profit forever. Deal with it like a grown businessperson rather than whining.

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It sounds like Coinbase did hire lawyers, and it sounds like SEC is getting heavily questioned in court--by the judge!--about hiw the SEC can enforce without disclosing why or what.

https://twitter.com/BillHughesDC/status/1636069735006699523

I would guess that Coinbase, as a long-standing US-based exchange that is now publicly owned and therefore subject to various (stringent? not sure if I should laugh at that or not) business regulations, would be attempting to achieve / maintain legitimacy in the least under-handed way possible given the prevailing winds are already heavily cryptocurrency-skeptical.

Clarity is what's being asked for. If the SEC deems some/all cryptocurrencies a security, then allow Coinbase (or whichever other exchanges) to file the paperwork required to exchange securities and we can all be on our way.

But, it seems that the SEC doesn't actually have any process for that to happen. The paperwork either doesn't exist or the process has a gap whereby cryptocurrency security exchange requests hit a cliff with no bridge.

As per Jesse Powell:

“The ‘This is wrong but I won’t tell you how to do it right. Want to find out if X works? Try it and see what happens.’ approach does not help the industry nor consumers. We aren’t anti-regulation but we need a clear path to operate.”[0]

"Oh man, all I had to do was fill out a form on a website and tell people that staking rewards come from staking? Wish I'd seen this video before paying a $30m fine and agreeing to permanently shut down the service in the US. How dumb do I look. Gosh."[1]

Both sides are likely being somewhat disingenuous, but the SEC, given it's role, should never, ever, fucking be disingenuous. And given it's a government department with its... severely chequered... history, then I wouldn't be betting on it having it's i's dotted and t's crossed.

Kraken and Coinbase were established in 2011 and 2012 respectively, so they've been run well enough as businesses to weather three or four cryptocurrency winters that have taken the lives of many others. In an industry with a dearth of trustworthiness[3], these two stand out from that crowd.

[0]: https://www.coinreporter.io/2023/02/kraken-co-founder-jesse-...

[1]: https://twitter.com/jespow/status/1624177588074848256

[3]: Because traditional US and global finance is a such beacon of goodness and trust

In the article they said they have spent millions on lawyers only to be met with silence.

No dog in this fight, but making an investment of millions in some aspect of your business is also not a guarantee that you will see any traction, much less success, with that effort.

They are an 18B company whose business is providing an exchange for legally dubious tokens. Millions is literally chump change compared to that, because once again, their "product" is primarily legal arbitrage.

The SEC literally approved their public listing two years ago. It's disingenuous to describe them as "an exchange for legally dubious tokens"

It's disingenuous to claim that once a company is approved for public listing all of their future operations are outside the jurisdiction of the SEC. What kind of world would that be?

Your comment really reveals what is behind the embrace of this criminal abuse of securities law to punish crypto-based commerce: anti-libertarian dogmatism.

You haven't responded to any of the arguments made by crypto advocates in good faith. You've completely ignored the evidence and rationale provided in the complaints, because ultimately the legality of the SEC's actions is irrelevant to you. What's relevant is constraining, punishing and banishing anything associated with libertarianism.

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