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Comment by fogof | Hacker News Reader

> They have only told us that they are assessing our Lend product through the prism of decades-old Supreme Court cases called Howey and Reves ... These two cases are from 1946 and 1990.

Trying to make out like Howey is some obscure precedent from decades ago which the SEC is nitpicking over. The Howey test is the test applied to determine if something is an investment contract.

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It's also like saying - I can't believe they're not letting us operate an Atlantic Slave Trade - because of some supreme court cases from decades ago.

Why should the decades matter?

Supreme court cases matter...

Or the US constitution, centuries old.

That's a very poor analogy. It's inflammatory and disrespectful to put a trivial disagreement over investment classification on the same footing as the slave trade, and it's not factual either. Slave trade was not abolished by the Supreme Court, but by an act of Congress [0] and later by presidential decree [1].

[0] https://www.history.com/this-day-in-history/congress-abolish...

[1] Emancipation Proclamation

Nit: the Emancipation Proclamation only freed slaves in states rebelling against the union. Slavery was perfectly legal in Kentucky until December 18, 1865.

That is just a nit, as you say. The point is that the Supreme Court had nothing to do with ending the slave trade.

During and after civil war the Supreme Court was problematic and the Republicans solved the problem in part by packing it.

Reductio ad absurdum is a valid argument.

That's not reduction ad absurdum. [0]

[0] https://en.wikipedia.org/wiki/Reductio_ad_absurdum

That's exactly reductio ad absurdum.

Quoting your own link: > [a] form of argument that attempts to establish a claim by showing that the opposite scenario would lead to absurdity or contradiction.

The claim parent is attempting to establish is "how old a law is doesn't matter". The extreme example is ignoring an old law that abolishes the slave trade, and claims it is unimportant because it is decades old, which (parent is claiming) is absurd. Therefore, the original claim is absurd.

Nobody cares because we understood the point.

The Howey Test is absurdly broad. Two kids pooling their pocket money to buy the extra large bag of candy with a plan sell the extra gummy worms meets all four parts of the Howey Test and is unlicensed securities creation.

Reminds me of the Bloomberg article "Everything Everywhere is Securities Fraud" https://www.bloomberg.com/opinion/articles/2019-06-26/everyt...

I don't see how that passes "effort of others". They're clearly working in the sales and distribution business at that point. Now, if they then went around the school and said to everyone, give us $1 and we'll pay you back by splitting half of the profits from our sale, then yes, that sounds very much like a security.

Eating half the bag of candy is a loss though. You'd have to sell the other half for twice the price just to break even and if you promised the other kid that he gets back more than he spent then it is pretty damn close to a security.

Your example very clearly doesn’t meet the Howey test though?

I am going to guess the article is PR to Coinbase going ahead with plans and getting sued, in the hopes they set a new precedent. I am cautiously hopeful for cryptocurrency in general, but this genuinely seems like it would be an easy lay up for the SEC.

There are plenty of exemptions for Coinbase to lean on

The SEC doesn't get to know which one, so if they auto-disagree let them waste their budget finding out in court

This will be a decent dip to buy Coinbase stock from paper hand bootlickers

And Reves is the Court doubling down on Howey and saying, yes, our decision from 1946 totally still works 50 years later, here's us restating it for you if you're still confused.

The Supreme Court of 1910 declared “motion pictures” to not be covered by the first amendment

Reversing itself in the 1950s, long after religious and exclusionary states made censorship boards across the republic

It is absolutely possible to create room for introspection for old rulings

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