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Home > Briefs > Philosophically, It Doesn’t Matter Whether Cryptos Are Securities; Practically, It Does

Philosophically, It Doesn’t Matter Whether Cryptos Are Securities; Practically, It Does

08/01/2022

I promised Twitter I would write about proof-of-stake and proof-of-work for this newsletter, but my computer (which kept restarting uncontrollably for a couple of days) and my immune system (which gave into a rhinovirus that deposited wet cement into my head) had other ideas. Since a proper proof-of-stake and proof-of-work piece deserves a lot of careful, deep thought that I’m incapable of at the moment, let’s instead focus on two players that are writing the narrative for us: Coinbase (COIN) and the U.S. Securities and Exchange Commission (SEC).
On July 26, it emerged that Coinbase was being probed by the SEC for allegedly listing securities. This news came on the heels of an insider-trading case brought against a Coinbase employee and two others on July 21 by the SEC and U.S. Justice Department. Making matters (somehow) worse, Cathie Wood’s Ark Invest off-loaded 1.4 million Coinbase shares on July 27. Woof. It has been tough sledding for Coinbase since it went public last April and the latest obstacle on its most recent downhill slide is securities law. Everyone’s favorite! No, I won’t make any assertions of if ether (ETH) is a security or not, but I will make the assertion that it doesn’t matter.

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