Perhaps Al can tell me differently but the response by Coinbase misses the point. The company issues shares. The accounting has to be correct. This is about Crypto in the fact that the company is accounting for cryptos.
On Thursday Coinbase also released a letter it sent to the SEC responding to the Wells notice. SEC staff, Coinbase said in the letter, “contends that Coinbase has operated illegally since at least 2018” but the staff’s legal theories are “flawed and untested.”
It also states that a SEC enforcement action “would present major programmatic risks to the commission” and “would fail on the merits because Coinbase does not list, clear or effect trading in securities.”
“It also states that a SEC enforcement action “would present major programmatic risks to the commission” and “would fail on the merits because Coinbase does not list, clear or effect trading in securities.””
For a nation of law and order, one would first expect lawmakers to clarify whether or not crypto currencies are indeed to be treated as securities, rather than allowing agencies to come up with their own theories, i.e. “securities” (SEC), “commodities” (CFTC), “currencies” (the Treasury).
It’s not that simple in most cases. While an item can be a commodity, or a currency, or perhaps neither, derivatives based on that item might be securities. For example, oil is a commodity, but options on oil futures might be a security. Similarly, bitcoin might be a commodity, a currency, a collectible, or whatever, but a contract to pay interest on bitcoin deposited somewhere might be a security. It seems that the issue at hand for Coinbase is not the bitcoin itself, but rather some of the derivative products they offer based on bitcoin.