Topic: US Supreme Court Ruled in Favor of Coinbase (Read 329 times)

Quote from: zasad@ on August 02, 2023, 07:46:32 AM

....

The SEC and several states argue that the product constitutes a unregistered security offering. Coinbase claims staking is not a security, maintaining that it is a "core part of ensuring the cryptoeconomy functions for hundreds of millions of users around the globe."

Calling staked coins "a security" might be considered an extreme compliment. Most POS tokens/coins are really just glorified Ponzi schemes, if we are really honest, is this correct or not?

The ponzi scheme works differently. There, old users make a profit at the expense of attracted money from new users. If ecosystem tokens are used and have value, then this is no longer a ponzi scheme. And staking is also different, you can create your own node and maintain the network to get a reward for it.

___
SEC asked Coinbase to halt trading in everything except bitcoin, CEO says
Request would have meant ‘the end of the crypto industry in the US’, according to Brian Armstrong
https://www.ft.com/content/1f873dd5-df8f-4cfc-bb21-ef83ed11fb4d

In the cryptospace, calling some type of coin or token a ponzi scheme would open an argument that other coins and tokens of a different type might also be ponzi schemes. This is reality.

Also to take the argument further, from a ponzi's definition, assets of any type traded in markets also of any type can also be considered ponzi schemes, including bitcoin, stocks and futures. For older investors to make money, new money should enter the market.

https://www.sec.gov/spotlight/enf-actions-ponzi.shtml
"SEC Enforcement Actions Against Ponzi Schemes
What Is A Ponzi Scheme?
A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. With little or no legitimate earnings, Ponzi schemes require a constant flow of money from new investors to continue. Ponzi schemes inevitably collapse, most often when it becomes difficult to recruit new investors or when a large number of investors ask for their funds to be returned."
__
Just because every project wants to hype doesn't mean it's a new Ponzi scheme. I prefer to use the SEC clarification, where everything is clear and examples of such schemes are given.

bbc.reporter

legendary

Activity: 3010

Merit: 1460

Quote from: Bender Over on July 20, 2023, 02:23:51 AM

Quote from: Fiatless on June 27, 2023, 08:19:26 AM

....

The SEC and several states argue that the product constitutes a unregistered security offering. Coinbase claims staking is not a security, maintaining that it is a "core part of ensuring the cryptoeconomy functions for hundreds of millions of users around the globe."

Calling staked coins "a security" might be considered an extreme compliment. Most POS tokens/coins are really just glorified Ponzi schemes, if we are really honest, is this correct or not?

The ponzi scheme works differently. There, old users make a profit at the expense of attracted money from new users. If ecosystem tokens are used and have value, then this is no longer a ponzi scheme. And staking is also different, you can create your own node and maintain the network to get a reward for it.

___
SEC asked Coinbase to halt trading in everything except bitcoin, CEO says
Request would have meant ‘the end of the crypto industry in the US’, according to Brian Armstrong
https://www.ft.com/content/1f873dd5-df8f-4cfc-bb21-ef83ed11fb4d

In the cryptospace, calling some type of coin or token a ponzi scheme would open an argument that other coins and tokens of a different type might also be ponzi schemes. This is reality.

Also to take the argument further, from a ponzi's definition, assets of any type traded in markets also of any type can also be considered ponzi schemes, including bitcoin, stocks and futures. For older investors to make money, new money should enter the market.

Zoomic

sr. member

Activity: 616

Merit: 271

Quote from: zasad@ on August 02, 2023, 07:46:32 AM

This case shows the importance of the terms of service of any organisation.

The terms of service is very important, but sadly only very few people read it, they only read it when they have a problem to be resolved by the company, and by then it may be late to go back on what you agreed without reading. One good example is how some naive people think that if they lose funds they kept in centralized exchanges, that the exchange is always going to give them a refund, to imagine that people think this way shows that they do not read terms of service before use.

These terms of service are too bulky and many people don't like reading long information. But these terms are important and should determine the choice to either use or shun such a service. Some crypto firms sometimes change these terms of service without fully informing clients. So it has become necessary to read these terms of service periodically to be abreast with these fraudulent changes. I have seen people that believe that thier funds in centralized exchanges are insured by deposit insurance firms, so they can get a refund, this is indeed laughable.

I have read somewhere in the gambling section where people alleged that some gambling companies change their ToS without consenting their customers. This is a big fraudulent act and should be punishable. But then, they wouldn't agree that they changed the ToS, they will allege that you mutilated yours. The solution to this could be that the project owners should provide a downloadable format of the ToS such that both parties will have a copy of it.

I also feel lazy to read lengthy ToS. I skip them unless in a project I know is important to me or I'll remain in for a very long term.

coolcoinz

legendary

Activity: 2814

Merit: 1192

The ponzi scheme works differently. There, old users make a profit at the expense of attracted money from new users. If ecosystem tokens are used and have value, then this is no longer a ponzi scheme. And staking is also different, you can create your own node and maintain the network to get a reward for it.

How can something that started as a ponzi scheme stop being one? The way I see it, if a coin was made to scam people, it will remain tainted until the end of its days. There's no bringing back Tera Luna, there's not going to be a new bitcoin exchange run by SBF and we won't see Bitconnect with real value.

Since value came up, you say that if tokens have value they stop being a ponzi scheme. That's interesting.
Don't scam coins have value? People are buying them not knowing what the real value is, but they pay to get them, so these coins must have value before they implode, it's just that this value is faked.
All coins listed on exchanges have value, but it's often value derived from trading and false promises.

zasad@

legendary

Activity: 1932

Merit: 4602

Buy on Amazon with Crypto

Quote from: Bender Over on July 20, 2023, 02:23:51 AM

....

The SEC and several states argue that the product constitutes a unregistered security offering. Coinbase claims staking is not a security, maintaining that it is a "core part of ensuring the cryptoeconomy functions for hundreds of millions of users around the globe."

Calling staked coins "a security" might be considered an extreme compliment. Most POS tokens/coins are really just glorified Ponzi schemes, if we are really honest, is this correct or not?

The ponzi scheme works differently. There, old users make a profit at the expense of attracted money from new users. If ecosystem tokens are used and have value, then this is no longer a ponzi scheme. And staking is also different, you can create your own node and maintain the network to get a reward for it.

___
SEC asked Coinbase to halt trading in everything except bitcoin, CEO says
Request would have meant ‘the end of the crypto industry in the US’, according to Brian Armstrong
https://www.ft.com/content/1f873dd5-df8f-4cfc-bb21-ef83ed11fb4d

Bender Over

newbie

Activity: 12

Merit: 0

Quote from: Beparanf on June 26, 2023, 10:36:39 AM

....

The SEC and several states argue that the product constitutes a unregistered security offering. Coinbase claims staking is not a security, maintaining that it is a "core part of ensuring the cryptoeconomy functions for hundreds of millions of users around the globe."

Calling staked coins "a security" might be considered an extreme compliment. Most POS tokens/coins are really just glorified Ponzi schemes, if we are really honest, is this correct or not?

zasad@

legendary

Activity: 1932

Merit: 4602

Buy on Amazon with Crypto

https://www.theblock.co/post/239734/coinbase-users-in-four-states-will-no-longer-be-able-to-stake-additional-asset
Coinbase said retail clients in four states will no longer to be able to add new assets to its staking product while numerous legal proceedings carry on.

Ten states — including Alabama, California, and New Jersey — filed actions against the exchange to halt its staking program within their jurisdictions on the heels of the Securities and Exchange Commission's lawsuit against the firm in June.

The SEC and several states argue that the product constitutes a unregistered security offering. Coinbase claims staking is not a security, maintaining that it is a "core part of ensuring the cryptoeconomy functions for hundreds of millions of users around the globe."

BenCodie

legendary

Activity: 1666

Merit: 1037

Quote from: Darker45 on June 26, 2023, 02:55:23 AM

Quote from: Darker45 on June 26, 2023, 02:55:23 AM

The title and content is severely misleading given the more important issues going on against coinbase at the moment. So, they prevailed against a user. Who cares? When do customers not beat their consumers in court?

The SEC vs. Coinbase. That's the real thing to keep eyes on. My bet is that coinbase will be gone by next year.

I don't know why it is severely misleading when it was all there is to it. Coinbase indeed secured a favorable ruling from the US supreme court. But it wasn't against a user like you said. You're the one misleading. The case was against the district courts of California.

The SEC vs. Coinbase; that's another thing. Apparently, I wasn't talking about it.

I don't know how convinced you are that Coinbase will be gone by next year, but if you want to put your money where your mouth is, I'm willing to bet against that. Not only will Coinbase stay by next year, it will stay in the year 2025 and even beyond that.

I think he is considering the severity of each case involved. One is a case against users regarding their account while they agree on terms while the current case they are facing is much bigger since it’s against SEC and SEC has a legal basis for their case.

I get the insight of your thread that coinbase has a sweet spot on supreme court since their case decision went positive from negative decision on lower court. But their current case involved is really big and we know how lunatic Gensler is.

Thanks, you interpreted my post pretty much how I intended

I will say reading back on it, it was worded a little poorly so I don't blame Darker45 for his reply.

Quote from: Fiatless on June 27, 2023, 08:19:26 AM

The title and content is severely misleading given the more important issues going on against coinbase at the moment. So, they prevailed against a user. Who cares? When do customers not beat their consumers in court?

The SEC vs. Coinbase. That's the real thing to keep eyes on. My bet is that coinbase will be gone by next year.

I don't know why it is severely misleading when it was all there is to it. Coinbase indeed secured a favorable ruling from the US supreme court. But it wasn't against a user like you said. You're the one misleading. The case was against the district courts of California.

The SEC vs. Coinbase; that's another thing. Apparently, I wasn't talking about it.

I don't know how convinced you are that Coinbase will be gone by next year, but if you want to put your money where your mouth is, I'm willing to bet against that. Not only will Coinbase stay by next year, it will stay in the year 2025 and even beyond that.

Severely misleading was probably too much.

A better way to put it - this is a pea in the pond compared to the SEC case.

How convinced am I? Not convicted. Just my theory, considering EDX markets will probably blow coinbase out of the water, or even acquire coinbase.

If I were to actually bet, it'd be that coinbase either ceases operations or is acquired by EDX/whichever exchange is monopolised by the US Govt./Wall street/(Insert ruling class here) by 2028.

Next year might be an extreme but I certainly wouldn't say that it's impossible as a black swan event - Coinbase ceases operations, liquidates assets, merges (at least some employment) into EDX over some deal.

Zoomic

sr. member

Activity: 616

Merit: 271

This case shows the importance of the terms of service of any organisation.

The terms of service is very important, but sadly only very few people read it, they only read it when they have a problem to be resolved by the company, and by then it may be late to go back on what you agreed without reading. One good example is how some naive people think that if they lose funds they kept in centralized exchanges, that the exchange is always going to give them a refund, to imagine that people think this way shows that they do not read terms of service before use.

These terms of service are too bulky and many people don't like reading long information. But these terms are important and should determine the choice to either use or shun such a service. Some crypto firms sometimes change these terms of service without fully informing clients. So it has become necessary to read these terms of service periodically to be abreast with these fraudulent changes. I have seen people that believe that thier funds in centralized exchanges are insured by deposit insurance firms, so they can get a refund, this is indeed laughable.

Some companies put some important points of their ToS very far in the middle of the lengthy write up such that before you will get there you are already tired.
Another concern is what is the guarantee that the company will not rewrite the ToS without the customer's consent.

Fiatless

hero member

Activity: 574

Merit: 554

Leading Crypto Sports Betting & Casino Platform

This case shows the importance of the terms of service of any organisation.

The terms of service is very important, but sadly only very few people read it, they only read it when they have a problem to be resolved by the company, and by then it may be late to go back on what you agreed without reading. One good example is how some naive people think that if they lose funds they kept in centralized exchanges, that the exchange is always going to give them a refund, to imagine that people think this way shows that they do not read terms of service before use.

These terms of service are too bulky and many people don't like reading long information. But these terms are important and should determine the choice to either use or shun such a service. Some crypto firms sometimes change these terms of service without fully informing clients. So it has become necessary to read these terms of service periodically to be abreast with these fraudulent changes. I have seen people that believe that thier funds in centralized exchanges are insured by deposit insurance firms, so they can get a refund, this is indeed laughable.

joniboini

legendary

Activity: 2170

Merit: 1789

Quote from: Beparanf on June 26, 2023, 10:36:39 AM

One good example is how some naive people think that if they lose funds they kept in centralized exchanges, that the exchange is always going to give them a refund, to imagine that people think this way shows that they do not read terms of service before use.

It is kinda unfortunate but most people don't read ToS to begin with. Companies have no incentive to make their articles easier to read either since most people don't really argue the ToS before they sign it. Even if some cases blow up and lead to their 'disgusting ToS' being exposed, I bet their profit outweighs the cost at least in the short term.

But their current case involved is really big and we know how lunatic Gensler is.

I've been seeing so much news in the last few months related to his SEC position. If he can stay in his position even after so many people suggest removing him, it would be surprising.

Z-tight

hero member

Activity: 994

Merit: 1089

Quote from: Darker45 on June 26, 2023, 02:55:23 AM

This case shows the importance of the terms of service of any organisation.

The terms of service is very important, but sadly only very few people read it, they only read it when they have a problem to be resolved by the company, and by then it may be late to go back on what you agreed without reading. One good example is how some naive people think that if they lose funds they kept in centralized exchanges, that the exchange is always going to give them a refund, to imagine that people think this way shows that they do not read terms of service before use.

Beparanf

hero member

Activity: 2954

Merit: 796

Quote from: Z-tight on June 25, 2023, 03:06:53 AM

The title and content is severely misleading given the more important issues going on against coinbase at the moment. So, they prevailed against a user. Who cares? When do customers not beat their consumers in court?

The SEC vs. Coinbase. That's the real thing to keep eyes on. My bet is that coinbase will be gone by next year.

I don't know why it is severely misleading when it was all there is to it. Coinbase indeed secured a favorable ruling from the US supreme court. But it wasn't against a user like you said. You're the one misleading. The case was against the district courts of California.

The SEC vs. Coinbase; that's another thing. Apparently, I wasn't talking about it.

I don't know how convinced you are that Coinbase will be gone by next year, but if you want to put your money where your mouth is, I'm willing to bet against that. Not only will Coinbase stay by next year, it will stay in the year 2025 and even beyond that.

I think he is considering the severity of each case involved. One is a case against users regarding their account while they agree on terms while the current case they are facing is much bigger since it’s against SEC and SEC has a legal basis for their case.

I get the insight of your thread that coinbase has a sweet spot on supreme court since their case decision went positive from negative decision on lower court. But their current case involved is really big and we know how lunatic Gensler is.

Fiatless

hero member

Activity: 574

Merit: 554

Leading Crypto Sports Betting & Casino Platform

Quote from: Darker45 on June 24, 2023, 09:37:37 PM

Coinbase winning a legal battle in no less than the supreme court and against the lower courts in California will have significant implications.

Coinbase didn't win the case as such, because the supreme court didn't give any 'final' verdict on the matter, they have only ruled for the case to follow the correct proceedings, and that's for it to begin through arbitration, because that's the terms that every coinbase user agrees to before using their service.

It was a victory for Coinbase because the court granted their prayer. Their plea was that the court should halt the proceeding of California district court civil cases because they bypassed the standard legal process a client should follow to seek redress. The standard was that the customer will seek the position of arbitration before he would seek redress in a law court. Coinbase informed the client to go to the standard arbitration as stated in the terms of service but they moved faster than their shadow.

Some of these clients and government officials see infringement as an avenue to ripe off crypto businesses. California district court hands are tied for now because they will have to wait for the outcome of the arbitration before they go ahead with the legal action. The matter might be settled by arbitration or the case will continue in California district court. This case shows the importance of the terms of service of any organisation.

Darker45

legendary

Activity: 2576

Merit: 1860