SEC Denies Coinbase Petition for New Crypto Rules (reuters.com) 11
The U.S. Securities and Exchange Commission on Friday denied a petition by the country's largest crypto exchange, Coinbase Global, seeking new rules from the agency for the digital asset sector. From a report: The five-member body, in a 3-2 vote, said it would not propose new rules because it fundamentally disagreed that current regulations are "unworkable" for the crypto sphere, as Coinbase has argued. The letter marked the latest in a broader tug-of-war between the crypto sector and the top U.S. markets regulator, which has repeatedly said most crypto tokens are securities and subject to its jurisdiction.
The agency has sued several crypto companies, including Coinbase, for listing and trading crypto tokens which it says should be registered as securities. "Existing laws and regulations apply to the crypto securities markets," SEC Chair Gary Gensler said in a separate statement supporting the decision. In 2022, the company pressed the SEC to create a bespoke set of rules for the crypto sector, arguing that existing U.S. securities laws are inadequate. In April, Coinbase appealed to a judge to force the SEC to respond to the petition.
The agency has sued several crypto companies, including Coinbase, for listing and trading crypto tokens which it says should be registered as securities. "Existing laws and regulations apply to the crypto securities markets," SEC Chair Gary Gensler said in a separate statement supporting the decision. In 2022, the company pressed the SEC to create a bespoke set of rules for the crypto sector, arguing that existing U.S. securities laws are inadequate. In April, Coinbase appealed to a judge to force the SEC to respond to the petition.
You now I gotta agree with Coinbase here (Score:3)
In case anyone's wondering why Bitcoin didn't collapse, the SEC has been dangling the carrot of allowing derivatives backed by crypto for some time and it's looking likely they will at some point. These are the exact same kind of financial instruments that caused the 2008 market collapse only instead of houses backing everything it'll be pretend money. Because that's a good idea....
Assuming they get away with it these jokers will walk away with hundreds of billions of your dollars while you're left scrambling in the economic meltdown they caused. Sleep tight.
Re: (Score:1)
gift cards are used every day to launder money and it hasn't lead to economic collapse. why would cryptocurrency be different?
Your equivocating (Score:2)
The collapse will come from cryptocurrencies being bundled into securities that can be sold on stock exchanges and that are being offered as a low risk investment because there's so many different coins wrapped up in the security and how could all of them go busted once? Of course bec
Regulators and Congress (Score:3)
I'm so glad these elected Congress folks and their regulator brethren know so much about these topics so as to make informed decisions about what does, and does not work.
We didn't have these crypto market problems before the regulators were involved. The problems have only gotten worse since they have.
Re:Regulators and Congress (Score:5, Insightful)
We didn't have these crypto market problems before the regulators were involved
Because there wasn't anyone to pop the bubble. Folks started asking about protections and then getting legally require to show protections and then BOOM the pyramid scheme that they always were, was exposed.
FTX wasn't made into a Ponzi scheme because the SEC came in. FTX was found out to be a Ponzi scheme because regulators asked questions. It's like the people who are like "Well back in my day there wasn't any autism! Clearly it's the jet fuel chemtrails!" No we didn't have autism back them because our medical definition of things wasn't as evolved as it is today. It was there, just no one was pointing it out. Same thing here. A lot of these exchanges are just someone asking the correct questions away from being exposed as a fraud. And unless you have legal backing, those exchanges can just ignore those questions being asked.
The problems have only gotten worse since they have
It's called cleaning house. The only people with problems with the SEC asking questions about crypto are the people who stand to profit from crypto. Nobody else is being harmed from crypto being asked to be better regulated. All the ones having problems are the same ones yelling "trust me bro". That should give anyone a good indication as to what's actually happening.
Re: (Score:2)
I'm so glad these elected Congress folks and their regulator brethren know so much about these topics so as to make informed decisions about what does, and does not work.
That was the justification for creating these federal agencies (SEC, FCC, FTC, etc.) in the first place. Having government subject-matter experts to make decisions about regulations requiring more expertise than congress members had.
Re: (Score:1)
The SECs full statement on the matter. (Score:5, Interesting)
This [sec.gov] is the SEC's full statement on the matter for rejection. As they usually don't file denials of this sort onto the Federal Register.
And what it comes down to is this. Coinbase is indicating (from their petition).
Transactions in these securities (henceforth “digital asset securities”) are executed and settled in real time, permanently recorded on blockchains, and visible with equal access to all market participants. This is 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.
And the thing is rebuffed as (From the SEC)
The Commission has long explained that, as with any type of instrument, if a particular crypto asset is offered and sold as a security, its offer or sale requires disclosure through the registration process developed by Congress to protect investors
And that's the key aspect. Crypto meets many of the bookkeeping aspects that Congress mandates. But Crypto does not meet many of the properly vetting protections that Congress also mandates. Yes, you are transparent, but Uncle Bob's "Mega-Butt Coin" can also be transparent. That does not mean that the Mega-Butt Coin is a viable investment that's been properly vetted. The requirement to vet and have underlying rules for investment protection are there ESPECIALLY for crypto. Because with crypto literally anyone can establish Aunt Martha's Deluxe-Shit Coin and begin trading it with the "trust me bro" for assurances on protection.
And while Coinbase is likes to pander:
Rather than initiate new rulemaking, Chair Gensler has repeatedly stated through speeches and testimony that the vast majority of digital tokens are securities, and has asked issuers and exchanges that offer, sell, and trade them to come in and register.
The chair is asking that because of the reason given. You need to be known and just:
For example, the EU recently reached agreement on Markets in Crypto Assets (MiCA) regulation first proposed in 2020,
stating that "Buyer beware" but in a more strict legal sense is not good for the country's banking system that every other country's banking system has to go through in most International markets. It's one thing if Dubai is playing loose with their protections. It's a whole another thing if the paper market that oil commodities have to exchange through is playing loose with their protections. Those are two VASTLY different things.
In short. Coinbase absolutely is looking to rest their case on "well if you didn't do due diligence, then a crypto asset that goes bust is your fault." No. You cannot just shrug and avoid responsibility, no one will take the market seriously and it will all turn into a Ponzi scheme that's a race to see who is left with the hot potato last.
Coinbase is WAY WAY WAY WAY off base here with their "trust me bro" and trying to indicate that formalizing a security is "Ok Boomer" bullshit that they shouldn't have to go through. That's not how US markets work and holy shit we've all collectively dodged a bullet by them outright denying Coinbase any kind of measure on changing the rules. I still think crypto is a scam, but you know what, if there is a crypto exchange that wants to formalize their position and be subject to regular disclosure requirements. Shoot, I don't mind. I still wouldn't use it, but I'll be happy to say "Okay well they're at least trying to be legitimate." But the notion, "OH BUT WE CAN'T!! We're too real time and fluid for that! Modern markets are made to be this decentralized thing that just couldn't possibly be reasonably regulated as such." That's just someone asking the SEC to give their Ponzi scheme a wink and a nod.