YouSaid · the spoken record

Casey Wagner

lines on the record: 36
first: 2023-06-06
most recent: 2023-06-06
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Yeah, I mean, I think that we could definitely see that. We've already seen individual states bring up charges and complaints against finance just within the U.S. So, you know, seeing similar actions, you know, in the EU or the UK is very plausible. There's a lot of similar discussion going on around the world about token classification specifically and the legality of these types of operations.”
2023-06-06 · Forward Guidance · Coinbase Sued By SEC | Casey Wagner · IDENTIFIED FROM THE TRANSCRIPT
“Against all Binance. So Binance US was listed. Their trading arm was also listed. CZ Binance's head has come forward and said that they are having discussions around a settlement. So curious what that might look like. But again, anytime you make a deal with the SEC, it's very likely that you would see some sort of limitation in offering the products going forward. For example, Kraken, they settled and they no longer offer that product.”
2023-06-06 · Forward Guidance · Coinbase Sued By SEC | Casey Wagner · IDENTIFIED FROM THE TRANSCRIPT
“Got it. Well, Casey, great getting you on. I just want to return to the Binance thing because, you know, the US, Coinbase is the big story, but Binance, I mean, it's just a mammoth in crypto trading. I mean, it is, what, 85, 90% of trading is on Binance. So is this action against Binance? Is it just against Binance US or against all of Binance?”
2023-06-06 · Forward Guidance · Coinbase Sued By SEC | Casey Wagner · IDENTIFIED FROM THE TRANSCRIPT
“Helps it be classified as a security. It creates this expectation of profit that there's value in something that has a limited supply. So we're really seeing a lot of that. Argument for sure from the SEC.”
2023-06-06 · Forward Guidance · Coinbase Sued By SEC | Casey Wagner · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, yeah, definitely. So, yeah, we can focus on Solana. In the Coinbase lawsuit and also in the Binance lawsuit, we saw a pretty short summary of the SEC's argument on why Solana and other tokens should be considered securities. The Solana argument specifically really focused on this expectation of profit. They've said that Solana has invested in marketing the sole token and therefore that gives potential investors a reasonable expectation of profit. They mentioned Solana's podcast and their YouTube channel. They've also mentioned what they called deflationary mechanisms. So having a cap on tokens that could be issued is a deflationary mechanism in the SEC's view and therefore”
2023-06-06 · Forward Guidance · Coinbase Sued By SEC | Casey Wagner · IDENTIFIED FROM THE TRANSCRIPT
“Very interesting. Yeah, so that Howie test, which you referenced it just now and earlier, is sort of four rough criteria. Number one, an investment of money. Two, in a common enterprise with the expectation of profit to be derived from the efforts of others. So that is the security. Could you just walk through the case of how the SEC would make that, say that about Solana or Cardano or some other crypto asset? Anyone, you know, pick, pick one, how do they say that it's to be derived from the efforts of others? I mean, that's really what it hinges on, right? That last one. Yeah.”
2023-06-06 · Forward Guidance · Coinbase Sued By SEC | Casey Wagner · IDENTIFIED FROM THE TRANSCRIPT
“The system is willing to go, we could potentially see the SEC target these issuers individually. We could see a lawsuit against Solana, just like we saw a lawsuit against Ripple and XRP. My personal opinion is that if the SEC had a strong enough case, we would have seen that.”
2023-06-06 · Forward Guidance · Coinbase Sued By SEC | Casey Wagner · IDENTIFIED FROM THE TRANSCRIPT
“Issue nailed down seems to be a priority. On the other hand, we're not seeing Substantial policy from Congress and guidance from Congress to give the SEC or the CFTC, you know, further instruction on how to approach this asset class. The SEC is basing everything off of the Howey test. They're basing it off of securities laws that are very dated. And that's a big criticism from the crypto industry as well is that they're not looking at this asset class as something new that potentially might need a different set of guidelines and processes in terms of classification. Again, when we're seeing the SEC label certain tokens in these lawsuits that are really unrelated. So when we see the SEC label Solana as a security in a binance and a Coinbase lawsuit, it's alarming to the industry to kind of see how far this regulation by enforcement.”
2023-06-06 · Forward Guidance · Coinbase Sued By SEC | Casey Wagner · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, definitely. I mean, Don't have a ton of visibility into the SEC's agenda, but we can only go off of what commissioners have said and what chair Gensler has said. Gensler's been pretty clear. He's said multiple times very publicly that most crypto assets, he discludes Bitcoin and sometimes Ethereum. Ethereum's status is a little bit up in the air with the SEC. But generally speaking, he says that everything besides Bitcoin should be labeled a security. We know from certain commissioners, Commissioner Perse, she's kind of known in the crypto world as being much more friendly to the asset class than Gensler has been. She said that Gensler's agenda is extremely ambitious. He's moving really quickly. There's a lot of enforcement actions that we've seen already. There's probably a lot that we can expect down the line this year and really getting this token classification.”
2023-06-06 · Forward Guidance · Coinbase Sued By SEC | Casey Wagner · IDENTIFIED FROM THE TRANSCRIPT
“Right. And Do you think that the SEC Gary Gensler have a specific strategy to try and label these crypto assets, most crypto assets as securities? In other words, it's less about it's not just about Coinbase itself. It's also about establishing the precedent that these things are securities.”
2023-06-06 · Forward Guidance · Coinbase Sued By SEC | Casey Wagner · IDENTIFIED FROM THE TRANSCRIPT
“Exactly. Yeah, you know, when you're holding certain assets in this current interest rate environment, you're going to make a lot of money. And we've seen that with Coinbase. So yeah, I mean, it's been an ongoing struggle with them for, I would say, over a year to try to get away from this transaction fee revenue, which obviously also suffers in a bear market when less people are trading and interested in getting involved in the space.”
2023-06-06 · Forward Guidance · Coinbase Sued By SEC | Casey Wagner · IDENTIFIED FROM THE TRANSCRIPT
“Yes. And I having looked at it a little bit, you having looked at Coinbase earnings reports a lot, a lot, those diversifications, they are different business models, but they are fundamentally correlated to crypto. Like when the price of Bitcoin goes down, obviously trading revenue goes down, but so does earn as well. And you and I have noted that their.”
2023-06-06 · Forward Guidance · Coinbase Sued By SEC | Casey Wagner · IDENTIFIED FROM THE TRANSCRIPT
“Last couple years. It's really ramped up this year and last year. So, you know, I think that Coinbase has fight in them. I see them wanting to take this to court. And attempt for a real win. A settlement often means some sort of, you know, admission that they were in the wrong. A settlement usually means that they agree to stop offering these products that the SEC says are securities. So their wallet product, their Coinbase Prime brokerage arm, Coinbase lend earn, all of those products would presumably have to be shut down in the event of a settlement. And we've really seen in the last few quarters and Coinbase's financial statements, they're trying to diversify away from just trading revenue. So wallet, lend, earn, Coinbase Prime, these are all. All really essential to their long term revenue goals.”
2023-06-06 · Forward Guidance · Coinbase Sued By SEC | Casey Wagner · IDENTIFIED FROM THE TRANSCRIPT
“I mean, Coinbase has been very vocal about their dissatisfaction with the current regulatory environment in the US. There was actually a hearing today in the House Agriculture Committee where Coinbase's chief legal officer was speaking, certainly a busy day for him. Brian Armstrong at Coinbase has really been very vocal about his disappointment in the SEC's willingness, he says, to converse with them and to have open dialogue. This sentiment has been echoed by other crypto exchanges and companies that have been targeted by the SEC. They say that there just isn't a tolerance at the SEC right now to productively engage in any sort of conversation that would result in regulation in a tangible way instead of this regulation by enforcement pattern that we've been seeing for the”
2023-06-06 · Forward Guidance · Coinbase Sued By SEC | Casey Wagner · IDENTIFIED FROM THE TRANSCRIPT
“I would imagine, yeah, that's the case. I mean, Voyager, they're bankrupt. Anyone who had assets on that platform are creditors, uninsured creditors. Yeah.”
2023-06-06 · Forward Guidance · Coinbase Sued By SEC | Casey Wagner · IDENTIFIED FROM THE TRANSCRIPT
“Wow, yeah. So FTIC minimum insurance up to 250,000. And then there's actually, I think, SIPIC insurance securities investor protection corporation that S stands for the word securities, interesting. And that, you know, if you have it on E-Trader or investor, you have securities that those can be insured, even though it's not a bank. But Coinbase sounds like they have neither CIPIC nor FDIC. So if I'm not comparing Coinbase to FTX, a totally different bag of bag worms, but if Coinbase goes down because of its shutdown by the SEC, would people who own Bitcoin on Coinbase, would they be an unsecured creditor to Coinbase in the same way that people were to FEX?”
2023-06-06 · Forward Guidance · Coinbase Sued By SEC | Casey Wagner · IDENTIFIED FROM THE TRANSCRIPT
“What would actually happen to consumer funds in Coinbase's case with their USDC token, stablecoin, they publicly say that their reserves are completely matched one for one presumably those assets would be okay. But again, in the event of a bankruptcy. It's really up in the air what would happen to consumer assets.”
2023-06-06 · Forward Guidance · Coinbase Sued By SEC | Casey Wagner · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, there's been a lot of it's finding Coinbase, there was a rumor for a little while that Coinbase was the safest exchange because they had some sort of FDIC insurance. This is not true. So any crypto that you have in Coinbase and Coinbase admits this is not federally insured in any way. There have been a few exchanges that have come forward and tried to make similar claims that while they're not FDIC insured, maybe their partner bank where they keep user deposits is. So there's been a lot of cases of crypto exchanges trying to reassure customers and tell them that there is some sort of federal insurance protecting their assets and their deposits in the event of a run or bankruptcy. We haven't actually seen that play out in practice. So I'm curious what”
2023-06-06 · Forward Guidance · Coinbase Sued By SEC | Casey Wagner · IDENTIFIED FROM THE TRANSCRIPT
“Why it's a sound practice. They have not come forward and said anything specific about being willing or unwilling to settle. Again, it's very early. These charges were announced today. And again, in terms of the stock, I mean, like I said, the Wells notice has been out for months. So people have definitely been expecting some sort of legal action. The Wells Notice mentioned specifically Coinbase's wallet and earn product. So, you know, seeing those targeted today is really not terribly surprising. It just depends on do investors think that Coinbase has a shot at winning this if they fight it, which like we saw with Ripple, it could take years.”
2023-06-06 · Forward Guidance · Coinbase Sued By SEC | Casey Wagner · IDENTIFIED FROM THE TRANSCRIPT
“The SEC said that that was a security. Kraken settled with the SEC. They paid a fine. They stopped offering that service and they've continued to operate as an exchange, more or less the same. Settlements are definitely faster. They're cheaper. Ripple has been in the weeds with the SEC for its XRP token for over two years. The CEO of Ripple recently said that they've spent $200 million fighting that. So not only is it expensive, it's extremely time consuming. Coinbase hasn't Coinbase has come forward since the lawsuit was announced and denied these allegations. They've said that they have worked with the SEC for years. The CEO, Brian Armstrong, pointed out that Coinbase is publicly traded and they went through a very extensive process with the SEC, like I said, covering their business model, going over”
2023-06-06 · Forward Guidance · Coinbase Sued By SEC | Casey Wagner · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I mean, it's really up in the air right now. Like you mentioned, there were a lot of debt buyers today. I mean, Coinbase's stock has not historically performed great. I think it's down like 80% since its direct listing. Although year to date, I think it's up 70-something percent. It's had a really strong start to 2023 after a very negative couple of years since going public in terms of what could happen to Coinbase We might see a settlement. The SEC has settled with several crypto exchanges and issuers over the years for relatively similar issues. Kraken exchange was recently sued because the SEC said that earn product, which facilitates leverage trading and earning rewards on staked crypto.”
2023-06-06 · Forward Guidance · Coinbase Sued By SEC | Casey Wagner · IDENTIFIED FROM THE TRANSCRIPT
“It and how bad will this be for Coinbase? I noticed that the stock opened down a lot today, but actually rose throughout the day intraday, even though it's still down, something like 11% roughly. I mean, how much is it a fine that they're going to have to pay? Is it just they could be shut down? I mean, how severe will this be for Coinbase?”
2023-06-06 · Forward Guidance · Coinbase Sued By SEC | Casey Wagner · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, Coinbase specifically, so the SEC does come forward and say we haven't accepted Coinbase. They don't get publicly at least super in the weeds about why the overarching message from Gensler has always been consumer protection. And so denying any of these applications to become broker dealers or denying any of the applications from token issuers to have their security, their crypto security registered, they've all been denied because they don't meet the SEC standard for something that's safe and promotes. Responsible investing.”
2023-06-06 · Forward Guidance · Coinbase Sued By SEC | Casey Wagner · IDENTIFIED FROM THE TRANSCRIPT
“So, a lot of the criticism from the crypto industry is that they're attempting to fit into the existing regulations. They're attempting to go in and register and meet these requirements that, like I said, have been established for decades and decades. But the SEC is either not letting them or also potentially not giving them enough reason why they're denied. And they're not saying, well, if you did X, Y, and Z, we could approve you. They're just not getting a lot of feedback. The dialogue is not really there.”
2023-06-06 · Forward Guidance · Coinbase Sued By SEC | Casey Wagner · IDENTIFIED FROM THE TRANSCRIPT
“What they believe to be all of the relevant information. They've tried to kind of work with the SEC and how they could get this registration. And they've never received any sort of feedback on why they're never approved. Robinhood actually has said something very similar. So Robin Hood does have a broker dealer registration where you can go and buy normal stocks. On the other side of that, Robin Hood has their crypto platform, which operates as a crypto exchange. They don't offer very many crypto assets, a lot less than Coinbase or Binancer, Kraken or any other major crypto exchange, but they do have this separate entity. Robinhood has said that they have tried to get Robinhood crypto registered as a broker dealer. They said that they were in conversation with the SEC and their staff for 16 months, and then they were denied.”
2023-06-06 · Forward Guidance · Coinbase Sued By SEC | Casey Wagner · IDENTIFIED FROM THE TRANSCRIPT
“Definitely. So Gensler is kind of famous for saying come in and register. Gensler for years has said that the US has very clear laws and regulations. The process for registering as a broker exchange as or excuse me a broker dealer, the process for registering as a security issuer is very clear. It has not changed for many, many, many decades. The issue that the”
2023-06-06 · Forward Guidance · Coinbase Sued By SEC | Casey Wagner · IDENTIFIED FROM THE TRANSCRIPT
“Got it. And so when you interview a lot of people in crypto as well as media people in crypto, I think from reading your work and hearing what they say, a lot of people say that what they want is clarity. The SEC needs to give us regulatory clarity. So you hear that word clarity probably 10 times a day. And the refrain, I think, from SEC chair Gensler, who you mentioned, is that we have clarity. These companies are not playing by the rules. Could you just flesh out the arguments on both sides of the issue, please?”
2023-06-06 · Forward Guidance · Coinbase Sued By SEC | Casey Wagner · IDENTIFIED FROM THE TRANSCRIPT
“Should be classified, then we wouldn't have these cases of regulation by enforcement where the SEC is stepping in, suing two exchanges, and then unilaterally looping in all of these other token issuers and projects.”
2023-06-06 · Forward Guidance · Coinbase Sued By SEC | Casey Wagner · IDENTIFIED FROM THE TRANSCRIPT
“Getting at. They think that most crypto assets operate under investment contracts where the investor has reasonable expectation for profit. And that should be a security. The issue with kind of tackling that token classification piece in these lawsuits against specific exchanges is the SEC is not suing Solana for offering and for issuing what they would say is an unregistered security they're targeting Coinbase and Binance for facilitating the trading of it so it gets a little murky there and a lot of the discussion the past couple days as this has come out has been you know if the SEC had clear guidelines and if Congress created a better framework labeling what securities should be and how to”
2023-06-06 · Forward Guidance · Coinbase Sued By SEC | Casey Wagner · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so I mean, the SEC's argument really forever, but especially since Gensler came into power, has been most crypto assets are securities. If you're issuing a security that is traded in the United States that's available to U.S. citizens, you have to register with the SEC. You have to go to them, explain why your investment vehicle is safe for consumers, why it should be allowed to be traded publicly in markets. We see this all the time when companies go public, Coinbase went public via direct listing. They had to go through a very extensive process with the SEC explaining their business model, you know, why they are operating safely and soundly and why U.S. citizens should have access to investing in their company. So that's really the gist that the SEC is.”
2023-06-06 · Forward Guidance · Coinbase Sued By SEC | Casey Wagner · IDENTIFIED FROM THE TRANSCRIPT
“Like in the Binance lawsuit, the SEC did name additional tokens that are securities that are traded on the Coinbase platform. Again, these include Solana, Cardano. There's like 12 total.”
2023-06-06 · Forward Guidance · Coinbase Sued By SEC | Casey Wagner · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so Coinbase was actually served a Wells notice months ago. Coinbase came forward and said that the SEC had reached out to them with a Wells notice, which is basically the SEC informing an entity that enforcement actions will be coming. So Coinbase should not have been surprised. The general crypto community, anyone who's been following Coinbase and their various legal situations with the SEC should not have been terribly surprised. The SEC's case against Coinbase basically is that they're operating as an unregistered broker. They have facilitated the trading of unregistered securities and also the services that Coinbase is offering, mostly their wallet and staking services are classified as securities and therefore are unregistered securities. So we have accusations that Coinbase is issuing unregistered securities and also that they're facilitating the trading of unregistered securities.”
2023-06-06 · Forward Guidance · Coinbase Sued By SEC | Casey Wagner · IDENTIFIED FROM THE TRANSCRIPT
“So, if Binance is commingling user funds as it is being accused by the SEC, that is a big deal and seriously shady. And then there's the security delegations, which is broader and not necessarily as Dastardly, as Kummingly Funk, I mean, that's illegal and very immoral, and it's just a sign of any financial criminal, really. Whereas security thing is a little perhaps more less black and white, more gray. What did Coinbase, what was Coinbase accused of today by the SEC? Why was it sued? And were you surprised that it was sued”
2023-06-06 · Forward Guidance · Coinbase Sued By SEC | Casey Wagner · IDENTIFIED FROM THE TRANSCRIPT
“How the actual argument and what their defense looks like as it comes out. Generally speaking, that was the big hitter against Binance. Binance was also targeted for operating an unregistered securities broker and exchange and for facilitating the trading of various assets that the SEC claims are securities. These include Binance's own BNB token, Binance's Stablecoin, BUSD, which a lot of exchanges have already delisted anyway. But the SEC also mentioned a few unrelated crypto assets like Solana, Polygon's Matic token was also listed. So they're really targeting a lot of assets and basically claiming that not only do they have jurisdiction over these, but Binance is violating U.S. security laws by engaging with them.”
2023-06-06 · Forward Guidance · Coinbase Sued By SEC | Casey Wagner · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, let's start with Binance. The Binance charges are more severe, definitely. There are allegations of co-mingling assets with a trading arm, which if anyone listening is familiar with FTX is very similar to the charges that FTX is facing. So like you mentioned, Binance is an offshore exchange. They're not based in the US. They do have a US arm Binance US. Both of those entities were named in the lawsuit in addition to their trading operations. Binance has since denied that it has done any commingling of client assets, that it has used any sort of client deposits to make trades with third-party entities. But again, that's what the SEC saying. And we tend to know that these charges don't generally come forward unless there's pretty decent evidence. So we'll have to wait and see, you know.”
2023-06-06 · Forward Guidance · Coinbase Sued By SEC | Casey Wagner · IDENTIFIED FROM THE TRANSCRIPT
“Oh my god, I totally forgot. Okay, so finance got sued on Monday and then Coinbase got sued on Wednesday. Binance and offshore non-US exchange, you know, a lot of rumors being Coinbase seen within the crypto world as a somewhat legitimate thing. It has a stock that's publicly traded and the CEO, Ryan Armstrong, he does like to wear a tie. So what did Binance get sued for? And then what did Coinbase get sued for?”
2023-06-06 · Forward Guidance · Coinbase Sued By SEC | Casey Wagner · IDENTIFIED FROM THE TRANSCRIPT