A security is a security is a security.Īnd the SEC has been very clear - it’s saying that most crypto tokens are securities. Never mind the DAO Report from 2017, let alone the past century of judicial precedent that securities laws apply to what you do, not what you call the assets you are trading. “Contrary to the prior actions and statements of the Commission and its officials, the SEC Chair now claims that it is ‘clear’ the securities laws already apply to digital assets and platforms.” The petition pounds on the table and cites an extensive range of blog posts as legal authorities.

Coinbase promptly filed a petition for a writ of mandamus to try to force the SEC to respond to their July 2022 letter.

In March, the SEC sent Coinbase a Wells notice saying that they were going to file an enforcement action. The SEC didn’t respond - because this claim is just stupid - and in the time since have stated repeatedly that they think the Howey test of what is a security in the US is just fine. Coinbase handwaved that putting unregistered securities on a blockchain was “a paradigm shift from existing market practices, rendering many of the Commission rules that govern the offer, sale, trading, custody, and clearing of traditional assets both incomplete and unsuitable for securities in this market.”

In July 2022, Coinbase petitioned the SEC to make a clear framework for crypto asset trading. In the meantime, the SEC’s lack of jackbooted statist enforcement over the last decade has allowed Coinbase to grow larger and larger - which means that Coinbase has bigger guns to challenge the regulator with. In the wake of FTX’s collapse, the SEC has the political backing it needs to get much more serious about making crypto exchanges comply with rules that have always been there. This presents some difficulties to regulators, who are used to financial firms that listen to them.Ĭoinbase keeps demanding “regulatory clarity.” What this means is that they want special permission to do things that are presently just illegal.įTX blew up spectacularly in November, and its CEO and top execs were indicted for fraud. “All financial complexity is a footnote to ‘don’t hand all your money to some random guy promising high returns.’” - Matt Levine on Celsius Network Coinbase takes on the SECĬrypto bitterly resents any possible regulation. Sign up on Amy’s blog to see every new post she makes as it goes up, and click here and enter your email address for every new post on David’s blog as it goes up.David has signed author copies of his books for sale.Our patrons can also get a couple of “Bitcoin: It Can’t Be That Stupid” stickers just by messaging one of us and asking.ONE WEIRD TRICK they don’t want you to know: Send us money! Here’s Amy’s Patreon, and here’s David’s.

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