Thanks for that link, gives great context for the US situation around the regulatory situation around commercially offered crypto lending program. There's a good summary on page 17.
From reading, the requirements you quote are specifically to be excluded under Section 3(a)3. There is also the possibility to be excluded under Section 4(a)2. Looks to me that out of those, the following points rule that out as well:
- the issuer cannot use general solicitation or advertising to market the securities
- the issuer may sell its securities to an unlimited number of accredited investors and up to 35 other purchases
- each resale of CP, including each resale by a purchaser in the secondary market, must be made in a private placement transaction
Now, my question is: How does this apply (or not apply) to interest on accounts with banks or credit unions? I think it's also quite clear that those don't apply here; is there some separate legislation (that I assume have other requirements, like holding some form of banking license) that regulate these?
Kraken has a Wyoming banking license since last year, making them federally recognized as a bank. I'd be curious to know if this means that they have a way to offer lending services that Coinbase aren't allowed to.
> They have to know this; they're a public company and have now filed SEC filings for two whole quarters.
This makes me think there may be something we're missing here. In any other case I have the impression of CB to be doing their best to play by (their interpretation of) the book. They employ some of the most competent advice in the states on compliance matters. It'd be inconsistent of them to just flagrantly ignore something like this without having any ground at all to stand on. I wouldn't blink if Poloniex/Circle or Binance US did any kind of shenanigans and excusing themselves with "regulatory uncertainty" but it's not congruent with what we've seen from Coinbase so far.
EDIT: Alternative take: CB are so worried about an exodus of liquidity if they can't match lending terms of other exchanges that they knowingly violate securities regulations to stay competitive. Under this model BA's tweets are theater. This would indicate a significant shift in values but not impossible.
From reading, the requirements you quote are specifically to be excluded under Section 3(a)3. There is also the possibility to be excluded under Section 4(a)2. Looks to me that out of those, the following points rule that out as well:
- the issuer cannot use general solicitation or advertising to market the securities
- the issuer may sell its securities to an unlimited number of accredited investors and up to 35 other purchases
- each resale of CP, including each resale by a purchaser in the secondary market, must be made in a private placement transaction
Now, my question is: How does this apply (or not apply) to interest on accounts with banks or credit unions? I think it's also quite clear that those don't apply here; is there some separate legislation (that I assume have other requirements, like holding some form of banking license) that regulate these?
Kraken has a Wyoming banking license since last year, making them federally recognized as a bank. I'd be curious to know if this means that they have a way to offer lending services that Coinbase aren't allowed to.
> They have to know this; they're a public company and have now filed SEC filings for two whole quarters.
This makes me think there may be something we're missing here. In any other case I have the impression of CB to be doing their best to play by (their interpretation of) the book. They employ some of the most competent advice in the states on compliance matters. It'd be inconsistent of them to just flagrantly ignore something like this without having any ground at all to stand on. I wouldn't blink if Poloniex/Circle or Binance US did any kind of shenanigans and excusing themselves with "regulatory uncertainty" but it's not congruent with what we've seen from Coinbase so far.
EDIT: Alternative take: CB are so worried about an exodus of liquidity if they can't match lending terms of other exchanges that they knowingly violate securities regulations to stay competitive. Under this model BA's tweets are theater. This would indicate a significant shift in values but not impossible.