Hello Wizardians and crypto enthusiasts.
Its been a wild ride since the ETF approval right? For whatever reason the markets taken a bit of a shift, but we are still remaining positive and looking forward to the impact of the BTC halving… Right?... Right? ...
In any case, when the market is up or down there is never a dull day to be had. Certainly, not a day goes by where Gensler and his merry band of anti-crypto trolls aren’t trying to spoil the gains and progression of our beloved industry.
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Image source www.ai-trolls.io
The SEC is arguing those tokens are securities because people buy them as a way to invest in a common “enterprise” and possibly profit from its success. (According to the Howey Test, that makes it a security). Learn more about the Howey test with investopedia.
Coinbase is arguing that buying tokens doesn’t guarantee the buyer any rights (or profits) as part of the purchase.
GeNsLeR v Coinbase
So, I'm sure you've heard about the ongoing legal battle between Coinbase, the largest cryptocurrency exchange in the U.S., and the Securities and Exchange Commission (SEC).
It's a pretty big deal, and it could have some major implications for the future of the entire industry.
So, what's actually going on? Well, the SEC is basically accusing Coinbase of operating as an unregistered broker, exchange, and clearing agency. They also say that Coinbase is selling securities, which is a big no-no without the proper licenses.
In particular, the SEC accused Coinbase of selling securities and brang 13 cryptocurrencies to attention including SOL, ADA, MATIC, and more.
Now, Coinbase doesn't agree with the SEC's assessment. They argue that they're just providing a platform for people to trade cryptocurrencies, and that the tokens themselves aren't securities.
They even compared buying tokens to buying collectibles like Beanie Babies, which aren't considered securities.
In all seriousness, the SEC really seems to be lost and confused. Here’s a tweet showing the ridiculousness of it all...
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However, the SEC are sticking to their guns. They say that the Howey Test, a legal framework that defines a security, applies to cryptocurrencies. The Howey Test basically says that if you're investing in a common enterprise with the expectation of profits primarily from the efforts of others, then you're buying a security.
What do you think? Is the outdated Howey test a reliable method to determine new technologies use cases?
So, who's right? That's the big question that the judge in this case is going to have to answer. And the answer could have a big impact on the future of cryptocurrency regulation in the U.S.
If the judge rules in Coinbase's favor, it could open up the floodgates for more crypto businesses to operate without having to register with the SEC. This could lead to a wider adoption of cryptocurrencies and more innovation in the industry.
On the other hand, if the judge rules in the SEC's favor, it could mean that more crypto businesses could face even more regulatory scrutiny and fines. This could stifle innovation and slow down the growth of the industry.
Either way, it's a pretty big deal. So, stay tuned to see how this one plays out.
Thanks for reading, and happy hunting!
PS. Before you go, did you see Wizardias 2024 focus yet? Click here for more!
Ryan Turnbull
Introducing Ryan Turnbull, a passionate Australian Chief Vibe Officer at Wizardia. Among many things, Ryan builds Wizardia’s community, creates captivating live streams, forms partnerships with other web3 projects, and produces engaging video and blog content. With his expertise, Ryan introduces crypto gaming to both masters and beginners, fostering a vibrant, exciting and supportive environment.
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