I have been generally following the legal case the SEC brought against COINBASE and have written about it in the past.
Yesterday, in a Manhattan courthouse a judge heard arguments from both Coinbase and the SEC regarding whether or not cryptocurrencies are securities, and whether or not Coinbase was in violation of SEC rules.
Here is an article outlining this issue in more detail: https://www.yahoo.com/tech/coinbase-sec-set-face-off-110417271.html
According to the article above both sides presented arguments to make their case. I found two points of interest, which I have written about in the past. One was regarding the major questions doctrine, and the other was what defines a security. The article's author suggested the judge "appeared dismissive" regarding Coinbase's argument that the SEC had violated the major questions doctrine. I had written this article on the major questions doctrine in the past: https://www.publish0x.com/twodogscaged/is-the-major-questions-doctrine-what-cryptocurrency-needs-xnnokdz As you can read if you checked it out, I believe the SEC does in fact violate the major questions doctrine. Now, I consider if I am "drinking the Kool aid" myself and oversimplifying the case. I don't believe I am, cryptocurrency is new, and there is nothing in the SEC that states it can regulate cryptocurrency. I think that is overly simplistic, but makes the point that the SEC cannot make it up as they go. In my humble opinion, I believe they need a mandate from Congress to regulate cryptocurrency. I may be wrong, and the judge may have in fact been dismissive of Coinbase's point, we will see when the judge makes their ruling. On the second point, the article's author interpreted the judge as being "concerned" about the SEC asking her to "broaden the definition of what constitutes a security"
I write this as I believe this case is really important. I mean, if the court throws out the SEC's case, it is a huge win for Cryptocurrency. If it determines that cryptocurrencies are securities, it is a blow for cryptocurrencies and all exchanges. The latter will not mean an end to cryptocurrencies, it will likely mean a blow to cryptocurrencies and a further depressing of value in the short term.
I believe the judge in the case will do something like the judge did in the SEC vs Ripple case, they will rule down the middle and punt the question in the hopes that Congress will get it's act together and legislate cryptocurrencies.
Whatever happens, I think in the long run most cryptocurrencies are commodities. I mean, I did not sign a contract when I bought various different coins and tokens. Doesn't that make the decision easy?
