> Crypto folks: We want regulatory clarity.
> SEC: Check out 'Framework for “Investment Contract” Analysis of Digital Assets' [1]
> Crypto folks: NOT LIKE THAT.
The regulators have been super clear, the crypto folks just don't like what they're seeing. They saw people who didn't ask make money, and people who did ask get shut down. So they didn't ask. But the noble ostrich is only able to keep their head in the sand for so long.
[1] https://www.sec.gov/corpfin/framework-investment-contract-an...
But Coinbase doesn't host any ICOs! And they reject ICO tokens! Here is Coinbase's guidance to its users on that point:
https://help.coinbase.com/en/coinbase/getting-started/crypto...
They say as much in their press release, if anyone would read it:
"Coinbase has a rigorous process to analyze and review each digital asset before making it available on our exchange... This process includes an analysis of whether the asset could be considered to be a security, and also considers regulatory compliance and information security aspects of the asset. 90%+ of assets that we review are not ultimately listed on Coinbase because they do not meet these standards."
Coinbase doesn't list digital assets that could be considered securities! Someone needs to actually point to what they're doing wrong.
Sorting Coinbase token pairs alphabetically I only had to get as far as AAVE.
> The firm, originally named ETHLend, raised $16.2 million in an initial coin offering (ICO) in 2017, during which time it sold 1 billion units of its AAVE cryptocurrency - originally named LEND. [1]
Coinbase doesn't publish their standards or approaches, and frankly, it's very much in their interests not to declare something a security. I suspect their process is less than rigorous.
> Coinbase doesn't list digital assets that could be considered securities! Someone needs to actually point to what they're doing wrong.
I believe I linked to the document above :) maybe their lawyers would like to give 'er a skim?
https://help.coinbase.com/en/coinbase/privacy-and-security/o...
There is a disagreement of fact - Coinbase says they don't list any securities, and the SEC claims they do and are violating securities law, without providing any specifics. Assuming the SEC goes forward, a court will have to decide.
They don't call themselves a gambling site.
> They don't meet criteria #3
"an enterprise in which the fortunes of the investor are interwoven with and dependent upon the efforts and success of those offering or selling the investment or of third parties."
Every coin meets #3, because without exchanges, you can't make profit.
> Or they don't meet criteria #4
Coins are speculative in nature. Without promotion, you can't find new investors. If you don't have new investors, the price can't go up.
To purchase the coins you need to use an exchange. To sell the coins you need an exchange. Cryptocurrency isn't usable without fiat, and it's value is based on fiat.
Unless you're using very specific coins (which aren't allowed on most exchanges), your transaction history is public to the world, which is worse from a privacy perspective than fiat. If you really used coins as your primary currency, it would be pretty trivial to obtain your identity from your transaction history.
You mean it's not convertible to fiat when fiat fails? That's what I mean too: fiat fails.
It's the job of either regulators or congress to get their story straight. The regulators need to decide what the criteria is for a digital asset to be a security or a commodity. Coinbase doesn't believe it lists any securities, and the SEC either needs to tell them what coins it believes are securities
It feels like a lot of people have knee-jerk crypto=bad reactions. But read their press release - it really sounds like Coinbase is trying their best to comply with U.S. regulation, and the regulators aren't doing their jobs.
Edit: arcticbull pointed out that many digital assets do seem like securities (ICOs). Updated this comment with Coinbase's claim that they don't list any tokens that resemble securities