[joefigura]

And Coinbase's position is that none of the crypto assets it lists meet that test. For the coins Coinbase lists:

  - Criteria #2 is debatable
  - They don't meet criteria #3
  - Or they don't meet criteria #4

Lots of coins look like commodities. They represent a digital asset, not ownership in a common enterprise or a loan.

Coinbase believes that all of the tokens they list are securities. The SEC will need to tell Coinbase specifically what it believes they are doing wrong. At the very least, if they eventually file suit they will need to make a specific accusation.

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.

And last - For digital assets that do look like securities, the SEC provides no way to register them, and thus vaguely implies that Americans can't own digital securities. That's not their decision to make - they either have to do their job and regulate crypto securities, or get congress to ban them.

[fxd123]

> And Coinbase's position is that none of the crypto assets it lists meet that test

Because the aspect that the SEC is going after is not any crypto asset it lists- it's Coinbase Earn. Staking-as-a-service products are securities according to the SEC [1]

> The SEC will need to tell Coinbase specifically what it believes they are doing wrong

That's not the purpose of a Wells notice

> For digital assets that do look like securities, the SEC provides no way to register them

This is just completely false. There are digital securities currently registered with the SEC. You can register digital securities with Form 10. Most notably, I'm sure you've heard about those ICO's that were previously punished by the SEC for being an unregistered security... they were just fined and forced to register- they now exist as registered securities. [2]

[1] https://www.pymnts.com/cryptocurrency/2022/secs-gensler-says...

[2] https://www.sec.gov/news/public-statement/digital-asset-secu...

[aardvarkr]

That’s interesting to hear your perspective.

Do you really believe that any given token does not qualify as a common enterprise? Crypto tokens seem to pretty clearly meet that definition.

Additionally, if I were to buy any given token and then it gains or loses value without any effort on my part, that would pretty clearly satisfy #3. Not sure what #4 is that you’re referencing

[friend_and_foe]

That doesnt satisfy #3. People buy gold expecting profit through no work of their own as well. Gold is a commodity. The key there is the efforts of others, someone has to do something for you to be profitable. Just speculating on something doesn't qualify.

Some tokens qualify as common enterprise and some don't. And lots and lots of tokens are sold on the expectation of profit, almost all of them.

[aardvarkr]

Gold fails #2. It’s not a common enterprise. There’s no investment contract to owning a piece of gold. Crypto tokens, on the other hand, are literally defined by contracts written in code.

[friend_and_foe]

A contract in the legal sense requires a counterparty, as well as legality and a benefit to both parties. This is not the same as a "smart contract" which is just a program.