The Securities and Exchange Commission (SEC) has recently charged Coinbase with failing to register its Bitcoin exchange with the agency. This is a joke. Bitcoin is not a security, and Coinbase is not a broker-dealer. The SEC is simply trying to exert its authority over a new and disruptive technology.
The SEC’s case against Coinbase is based on the argument that Bitcoin is a security. However, this argument is flawed. A security is an investment contract, which is defined as an investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others. Bitcoin does not meet this definition. It is not an investment contract, and it does not require the efforts of others to generate profits.
The SEC is simply trying to regulate Bitcoin because it is a new and disruptive technology. The agency is afraid of what Bitcoin could do to the financial system. However, Bitcoin is not a threat to the financial system. It is an opportunity. Bitcoin could revolutionize the way we think about money and finance.
The SEC’s case against Coinbase is a joke when it comes to Bitcoin. However, it might not be a joke when it comes to the crazy altoin brokers that have listed security offerings. That said even in those cases Coinbase did everything they could to comply.
Bitcoin will succeed, despite the SEC’s efforts to stop it. In fact these efforts will only add regulatory clarity as to Bitcoin’s inability to be stopped.
Just like China failed to effectively ban Bitcoin, the USA is setting itself up for an epic fail.
Here are some reasons why Bitcoin will succeed:
- Bitcoin is decentralized and peer-to-peer, which makes it very secure and resistant to censorship.
- Bitcoin is scarce, with a limited supply of 21 million coins. This makes it a good store of value.
- Bitcoin is easy to use and can be used to make payments anywhere in the world.
- Bitcoin is more efficient than traditional payment systems, such as credit cards and wire transfers.
- Bitcoin is gaining acceptance from businesses and governments around the world. (Microstrategy, Tesla, Fidelity, El Salvador, Central African Republic)
The SEC’s case against Coinbase is a joke, but Bitcoin is no joke. Bitcoin is a real technology with real potential to change the world. The SEC’s efforts to stop Bitcoin will only make it stronger.
What about FTX?
To make matters more embarrassing for the SEC, we only need review the history they have had with fraudulent exchange FTX.
The SEC reportedly met with executives from FTX on multiple occasions and NEVER proceeded with any investigation! Chairman Gary Gensler even has MIT ties to Caroline Ellison, CFO at fraud central FTX
A top executive at FTX WAS THE SECOND LARGEST donor to the Joe Biden presidential campaign of 2020.
Things are starting to not add up here for the SEC and those connected to these latest enforcement actions. Stay tuned!
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