Is that not an unregistered financial product? That's also the kind of financial product directly behind FTX, Voyager, Gemini, and Lunacoin / Celsius collapses.
So we have direct evidence of a particular produce (staking) that is both unregistered and dangerous. That many Americans lost money over.
But both of the above are different from actual Proof of Stake, as conceived by Ethereum. The SEC has made no mention of this in neither of the 2 current lawsuits. Unfortunately many of these products misused the term to whitewash or as a marketing gimmick.
Can't you get APY returns as a retail customer with pretty much any high street banks? In what ways is that less dangerous than going through a crypto exchange: by the fact the SEC is actively criminalising the activity rather than issuing licenses so that some customer protection via the justice system remains out there for this sort of market.
You mentioned FTX, that's a good example, an exchange run by a con goofy looking artist, that achieved such massive penetration even on the US market was made possible exactly because it is so cumbersome or impossible for a legit business to get a license, the crypto affiliated threats making it also difficult for normal banks to do any sort of business with crypto entities.
All that being said, sure, if they don't have a license they can be sued for their earn products.
The only clear distinctions, the one thing the name mentioned and many others still running
Gemini was sued by SEC for running unregulated securities and was forced to shut down Gemini Earn months ago. Whatever, but its just another example of the kind of products the SEC is clearly looking at.
> Luna is.. a coin
Lunacoin supported Terra, and Celsius was backing its staking product with Terra coins. Are... you unaware of the connection between Luna and Celsius?
I wrote "Lunacoin / Celsius" for a reason. This didn't even happen that long ago, so I guess I assumed people would know where I was going.
I'm trying to describe the scope of unregistered, unregulated, super-dangerous "staking" schemes that collapsed over the last year. The names I discussed are all related to staking.
I don't think the problem the SEC is invoking is "dangerous" investments. I'm not sure who would be entitled to make the difference.
You could stake eth and that would be one of the safest positions to take in the crypto space. Actually anybody can, whether the SEC sees it as OK, via centralised exchanges for those who can access them or decentralized exchanges for those who can't. But then of course eth could drop 95% in value by next year and the yield would mean nothing to compensate. It could go the other way and go the other way.
Does it make it a dangerous product? A security illegal to trade without a license which the SEC wouldn't grant a license to offer as a product to anyone? Because it's dangerous or because it's a security having drastic volatility? More volatile than Gamespot shares not so long ago? Does it make gamespot so dangerous it should be banned from trading as a security? And one last one, what is more dangerous, owning eth tokens staked for long term returns, or some treasury bonds issued by a country that is systematically on the verge of defaulting on its unbearable debt?
And who's to say? I don't think the SEC has any legitimacy left to be taken seriously, it let SBF runs business inside and outside the US soil for years, embezzling well over 10B dollars, whether he is innocent or an idiot crook the ridicule crown goes to the SEC for not having seen anything suspect until after the empire entirely collapsed.
About having flimsy memories, it's OK but it discounts serious weight throwing incorrect facts when attacking a type of trading activity as a whole. Your argument did read like because so many collapsed, the whole thing must be flagged as a failure. Anyhow, coinbase, kraken, binance, gemini, kucoin and many others have been operating for years just fine, and are successful, profitable businesses to this day despite all the obstacles regulators and the press threw at them.
Anyhow back to the main point, I'm with you earn products if unregistered are non compliant with regulations, so the SEC can have its case and continue to pretend it's doing its job.
Well, given that there are clear ways of issuing securities that have worked for hundreds of years that aren't being followed and that people generally don't get the rug pulled in normal securities, I'd say that it's less dangerous in many obvious ways.
Would you concede that?
Coinbase at least is a registred corporate playing by the rules, aside the SEC viewing their yield based or futures product non compliant, but the SEC also makes it impossible to achieve compliance, so we may might left off with no code base and totally underground offerings, instead of "some" businesses in the clear that operates within the confined of a justice system. If you feign to see the point that's fine, i just hope you are not so blinded by anti crypto arguments that you can't SEC actions using force and paid by millions of tax payers counter productive for both consumers and the opportunity for the US to remain relevant in the growing crypto economy.
This requires a citation with data points, eg how many Americans lost money, how much money did they lose, etc. Because, what if there are more Americans who've made money than those who have lost?
> SEC said Coinbase has since at least 2019 made billions of dollars by handling cryptocurrency transactions, while evading the disclosure requirements meant to protect investors
This is a pure framing - it doesn't matter how much money Coinbase made. Otherwise, it means that if you don't make _billions_, you can conveniently avoid the disclosure requirements intended to protect investors. So really, they should've written something like: "Coinbase has been facilitating cryptocurrency transactions since at least 2019, while evading the disclosure requirements intended to protect investors".
While I do understand that these are the legal requirements, the protect investors "narrative" (khm-khm, requirement) is a joke. People lose money trading stocks / options / etc every day. To me, as a consumer, there is zero difference between trading AAPL on TD Ameritrade App vs trading crypto through Coinbase App. How's TD Ameritrade protecting me from losing money?
Why does this matter? Even if Americans are scamming foreigners (0 Americans losing money), that doesn’t make this legal.
The difference between aapl and coinbase is there is regulatory audits of the books and required publications about the health of the security. There are rules about insider trading and insurance protections if a brokerage mishandles your money (see Blockfi).
Because the parent said "that many Americans lost money over". Plus the SEC is "protecting investors". So I'm asking, what if there are more people who've made money over those who lost? Does that mean life's good? Coinbase has been pretty transparent about their operations. Not only transparent, they've publicly mentioned several times how frustrated they are dealing with SEC, the organization that is slow to come up with various legal requirements for the cryptocurrency industry. In a way, Coinbase helps the SEC to raise their own bar.
We need systems in place where everyone can make trustworthy investments. If people can't feel safe (even if it's one person or many people), then our economy will slow down (see current crypto prices post-terra, ftx, and more).
My coworker lost $X0,000 over Celsius.
So yes, maybe this is a personal bias. But its based in reality. His entire account at Celsius is written off. He managed to save his money from Voyager. I got cousins who lost money in FTX. Different people, but same overall problem.
If my personal social circle is showing huge losses in these companies, I have to imagine that other people out there have similar experiences. I don't need a study to prove the facts, I just talk to my cousins / coworkers / other people who are directly affected.
EDIT: I forgot about this lovely thing: https://cases.stretto.com/public/x191/11749/PLEADINGS/117491...
See page 34, containing links to the customers who lost money in celsius. For the list of customers starting with the letter "A": https://cases.stretto.com/public/x191/11749/CORRESPONDENCE/1...
There, that's Celsius alone. Is that enough proof for ya?
> Because, what if there are more Americans who've made money than those who have lost?
Its not about making or losing money. Its about accounts disappearing because they've been lied to.
We're all adults here. We know that investments can lose money. But lying about those investments is where the law needs to step in. Liars need to be punished. And I get that people have been skirting the truth recently. But when we get to Celsius, Voyager, and FTX, the money was just straight up being stolen. Its the worst case offenders.
So now we need to think about what kind of culture caused these crimes. And its increasingly looking like "staking", and the culture surrounding it, is to blame.
This is a personal bias. I've made $86,000 trading Ethereum. My brother-in-law made $24,000 trading Bitcoin. My reality is different from your reality ¯\_(ツ)_/¯
I can't speak for Celsius, Voyager, and FTX. If there was a scam, it has to be punished. No questions asked. But Coinbase has been closely working with SEC for years.
That's not the problem.
The problem is that companies like Celsius, FTX, and Voyager are disappearing and collapsing.
Binance and Coinbase are two other companies that could just randomly disappear because of how incredibly sketchy their products are (especially "Earn" or "Staking" products).
I'm pointing out companies that collapse (taking literally Billions of American money away). And you're just coming in here saying "But I made money on something totally unrelated", as if its a good argument?
> This is a personal bias.
I'll proudly be biased in favor of reality. There's nothing wrong with taking a stance when my real world friends get affected.
> I can't speak for Celsius, Voyager, and FTX. If there was a scam, it has to be punished. No questions asked. But Coinbase has been closely working with SEC for years.
Coinbase is doing the same thing as Celsius, Voyager, and FTX with their Earn / Staking products. And now the SEC is suing them over it.
There's a pattern here. And I for one, am glad that the SEC is no longer fickle and is trying to be proactive about it. Trying to get American money out of these dangerous instruments before they collapse, rather than after (when its too late).
> Coinbase is doing the same thing as Celsius, Voyager, and FTX with their Earn / Staking products. And now the SEC is suing them over it.
Why can't SEC work with Coinbase before suing them? Again, Coinbase has been seeking help from SEC for years. Brian Armstrong, the CEO of Coinbase, talked about this so many times. They are trying to work with the regulators, but the problem is that the regulators lack expertise dealing with these new asset types.
How has Coinbase been "seeking help"? They are a company, they should be going to the SEC with all of the particulars of each of their investment items and saying to the SEC "We believe we have met your standards of fiduciary duty on these items that appear to be securities, have we?" They shouldn't be saying, "Hey, SEC, are these things we're selling securities, and thus need a higher standard of duty of care? Tee hee, we can't figure it out on our own, as we're just a little company with thousands of employees trading billions of dollars a year. Until you get back to us we'll just assume that they aren't securities and won't bother meeting the higher standard of care."
https://assets.ctfassets.net/c5bd0wqjc7v0/5PWsXaPsqQ61gA9wlF...
Coinbase brings this mandamus action to seek modest, but meaningful and time-sensitive, relief: a writ requiring the Securities and Exchange Commission (SEC or Commission) to act on Coinbase’s pending rulemaking petition to provide clarity for the crypto industry. Coinbase does not ask the Court to instruct the agency how to respond. It simply requests that the Court order the SEC to respond at all. The Commission has repeatedly demonstrated that its mind is made up to deny the petition. But the Commission’s delay in formally announcing that decision has enabled it to improperly delay judicial review at a critical moment for the industry.> “We allege that Coinbase, despite being subject to the securities laws, commingled and unlawfully offered exchange, broker-dealer, and clearinghouse functions,” said SEC Chair Gary Gensler. “In other parts of our securities markets, these functions are separate. Coinbase’s alleged failures deprive investors of critical protections, including rulebooks that prevent fraud and manipulation, proper disclosure, safeguards against conflicts of interest, and routine inspection by the SEC. Further, as we allege, Coinbase never registered its staking-as-a-service program as required by the securities laws, again depriving investors of critical disclosure and other protections.”
Seems rather straightforward to me given this press release.
Quit comingling functions. Bring your exchange to proper legal structure in the USA. Split the broker-dealer and clearinghouse functions off.
And quit operating Coinbase Earn, which is an obvious security by any other name. Either that, or properly register Coinbase Earn as a security before offering it as a product to the public. If you are to keep operating Coinbase Earn, then bring it under security regulations, which means reporting upon your assets and such under whatever filing system you want (probably bonds?)
Its... not even that hard to read the SEC complaint. Just read it, the complaint is right there for all of us to see.
The rules always were there. Just that the SEC was willing to turn a blind eye for years on this issue.
The reason why SEC couldn't ignore this anymore is FTX and SBF. It became clear that cryptocoins are full of fraudsters, and the cryptocoin community has absolutely no way to differentiate from the fraudsters and the legitimate groups.
SEC is simply not in a position to keep turning a blind eye to the cryptocoin world after $10,000,000,000+ was stolen by FTX and SBF.
But you making money doesn't allow my friend, or anyone from FTX, or Voyager to get their money back.
And you fail to see that it is HOW he lost money that I take issue with. Celsius lied about unregulated staking/interest yielding instruments to him and the natur of how it worked.
And Coinbase is making the same lie right now with Coinbase Earn. And you are sitting here defending it, and ignoring three major collapses last year while doing so.
By definition, Ponzi schemes involve some investors making a lot of money and others losing. That doesn't make them any less illegal.
If some people are harmed by unlawful behavior, that is a reason to prosecute, just the same as if you mugged Alice and bought Bob an icecream with the proceeds.
https://www.tdameritrade.com/regulation-best-interest-and-fo...