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Coinbase Faces SEC Probe on Crypto Listings (bloomberg.com) 37

Posted by msmash from the how-about-that dept.
Coinbase is facing a US probe into whether it improperly let Americans trade digital assets that should have been registered as securities, Bloomberg reported Tuesday, citing people familiar with the matter. From the report: The US Securities and Exchange Commission's scrutiny of Coinbase has increased since the platform expanded the number of tokens in which it offers trading, said two of the people, who asked not to be named because the inquiry hasn't been disclosed publicly. The probe by the SEC's enforcement unit predates the agency's investigation into an alleged insider trading scheme that led the regulator last week to sue a former Coinbase manager and two other people. "We are confident that our rigorous diligence process -- a process the SEC has already reviewed -- keeps securities off our platform, and we look forward to engaging with the SEC on the matter," Chief Legal Officer Paul Grewal said on Twitter.
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Coinbase Faces SEC Probe on Crypto Listings More

Coinbase Faces SEC Probe on Crypto Listings

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  • They failed their dodge throw, despite often and loudly proclaiming they can't/should not/don't want to be regulated.

    Maybe the one responsible for the delusion failed to shout hard enough at the start of the day. Who knows.

    I must say I'm utterly surprised by this (that was sarcasm).

  • Federal agencies of the past:

    Business: "Hey SEC, do I need to register as a securities exchange given this business model?"
    SEC: "Is your business on the list? No? Then you don't, until Congress says you have to."

    Federal agencies of the present:
    Business: "Hey SEC, do I need to register as a securities exchange given this business model?"
    SEC: Shrugs shoulders. "We don't know. Maybe. We have to check, we'll get back to you."
    Business: "So, should we register?"
    SEC: "Hang on, we'll get back to you."
    Two years late

    • Re:Old And New (Score:5, Informative)

      by Train0987 ( 1059246 ) on Tuesday July 26, 2022 @10:59AM (#62735166)

      The Howey Test has been a thing for over 70 years. The SEC is not a consultant that's supposed to hold your hand, they're a regulatory and enforcement body.

    • Re:Old And New (Score:5, Informative)

      by mattaw2001 ( 9712110 ) on Tuesday July 26, 2022 @11:07AM (#62735204)
      I would disagree quite a lot here about your timeline and characterization of the SEC. While the crypto companies have spent a lot of money to make the SEC actions appear "new" and "capricious" the main lawmaking around the SEC was 1939-1940 after the great crash which saw so many ordinary folks lose their savings to effectively unregulated securities which in many cases were scams.

      Companies and industries have been trying to weasel around the SEC regulation almost as soon as it was created, and we have thousands of cases and enforcement actions around every kind of scheme you can think of.

      There does seem to be a 1:1 correspondence with how many recent crypto schemes and coins (anything with yield, or most ICOs) have worked with the existing body of case law - adding in the word "crypto" doesn't change anything much at all, especially when there have been so many different varieties of fraud in almost 100 years.

      TLDR is that every crypto scheme offering a yield or ICO which is offered with the idea that early buy in will give returns is 100% in the SEC's regulatory power, and every one of them should have expected this to come up. That the crypto schemers are spending money and time to persuade everyone that "this has never happened before", "its new government overreach", and "this is completely unexpected" is annoying.

    • That sounds like a very exchange blinkered view of what really happened.

      More accurate
      Business : We don't fall under the SEC regulations.
      SEC : Any issuing of securities falls under the SEC
      Business : cool we are saying we don't deal with securities so all good.
      SEC hang on a minute, you don't get to decide what a security is. Here is the definition.
      Business : ignores it till the SEC comes hunting
      Business : WTF Government overreach. We decided we didn't want to be regulated by the SEC, they have no rig

    • Federal agencies of the past:

      Business: "Hey SEC, do I need to register as a securities exchange given this business model?"
      SEC: "Is your business on the list? No? Then you don't, until Congress says you have to."

      Federal agencies of the present:
      Business: "Hey SEC, do I need to register as a securities exchange given this business model?"
      SEC: Shrugs shoulders. "We don't know. Maybe. We have to check, we'll get back to you."
      Business: "So, should we register?"
      SEC: "Hang on, we'll get back to you."
      Two years later
      SEC: "You've been operating as a securities exchange for two years in violation of these regulations..."

      The best part is, nowadays, you'll get dragged in front of a judge that works for the SEC, it will be an "administrative" hearing meaning you have no constitutional protections regarding evidence or legal council, and, even if you are completely innocent and settle with favorable terms, there will be a gag order in place and you aren't allowed to tell anyone about it. All your investors will see in the public record is that charges were brought against you and you settled.

      The SEC is a very important regulatory agency, but their regulations have become Kafkaesque as of late.

      That's not an accurate description. SEC chair Gary Gensler March 4 “It's a question of whether they're registered or they're operating outside of the law and I'll leave it at that,” https://finance.yahoo.com/news... [yahoo.com]

  • With the collapse of Celsius, people are realizing that "stablecoin" isn't that stable. One guy had to tell his pregnant wife he lost $100,000 in Celsius [futurism.com]. Took out a loan for the mone and everything.

    The hilarity is only just beginning.

    • Re: (Score:2)

      by gweihir ( 88907 )

      Well, that is tough on the wife. She married and is pregnant from a moron. For the guy, I have zero compassion. He tried to get rich quick and it failed.

  • Falling victim of a scam can be depressing, you were given empty promises. They usually stop replying after achieving their aim with hurts even more, i have been there too as i was too ambitious and wanted financial security which made me invest a huge chunk of my life savings. I never thought i would be getting back a dime back and already lost hope until i contacted a team which was just a leap of faith as i wasn't going to go down without a fight. Hacktified with the help of their support team was able a

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