A Judge JUST Destroyed the SEC on Crypto.

you won't believe what the judge says in

this crypto discussion with the SEC

regarding the SEC coinbase lawsuit and

what it potentially means for where all

of this is going this is intense buckle

up for this entire video because you're

going to see some tense intense slams

against the SC so we've got to talk a

crypto earlier uh this week I posted

well I guess that would be last week I

posted a video discussing uh my thoughts

on how potentially we could end up

seeing a regulated crypto environment

within the next year which those of you

in Twitter space has reminded me could

end up aligning with the uh Bitcoin

housing and could end up being a really

great setup for actually bringing crypto

to a bullish environment rather than the

crap everybody's been riding through

over the last about 18 months it's been

painful which is fantastic that hey

there's light at the end of the tunnel

now not only this but we've seen some

sec acceptance of Bitcoin ETF

applications suggesting that they're

actually now processing these ETF

applications which is also very bullish

there is obviously the potential that

all this bullishness on regulation is

potentially over hyping some valuations

which once then we actually get clear

regulation maybe and ironically that

means you see a sell down as speculators

get out but others counter off for that

and say hey well if speculators get out

that's okay it'll be offset by

institutions and Pension funds who can

now much more readily invest into crypto

so this is all fantastic news well we've

got a little bit of an update here on

the SEC versus coinbase we've got a

pre-motion conference between the judge

and the plaintiffs and defendants and

some of the commentary from the judge is

quite frankly

fascinating and I'm going to go through

some pieces of that commentary now so

first what I think is really incredible

uh is this discussion about uh whether

the SEC at all has jurisdiction uh over

uh uh you know coinbase in terms of

their crypto offerings but not just that

specifically how they determine what's a

security and whatnot and we've all heard

this before the Howie test see look at

this here the simple answer your honor

about whether or not something is a

security or not is the Howie analysis

and what I think is interesting here

about the Howie analysis is that they

reference uh this idea that look we

potentially look at what outside

industry forces use there's a particular

Council that they refer to here it is

look at this

I'm going to read you this segment here

individuals or companies to determine

whether a crypto asset is a security

need to do an analysis of crypto assets

that they have allowed to trade on their

platform or those that they have issued

we see that the industry does this they

have created I believe they call it the

CRC or crypto rating Council where there

is an where there are a number of Market

participants that have gotten together

these are like your public it used to be

block fi and other companies coinbase uh

where a number of Market participants

have gotten together and they create

what they call a scorecard and then they

use a Howie analysis as part of that

scorecard to determine how risky their

crypto assets are in terms of uh you

know sort of a scale of zero to five on

what the odds are that something's going

to be considered a security and so

you've got this sort of build up of this

discussion here where the SEC is saying

look the industries already themselves

trying to figure out hey is something a

security or not which is fantastic

because you're seeing the industry is

showing it wants to follow the law I

think this is a great setup for crypto

on a regulatory basis a great and

fantastic setup and follows what I was

initially not very optimistic about but

have become more optimistic about the

I've read through the ruling for uh the

Ripple case again after I last talked

about it last week it it reads better

the more often you read it it doesn't

feel like the strongest ruling but it's

definitely great news uh for uh for the

crypto community and I think the Judge

has a point not to call it a security I

think the Judge is right on if anything

would be much more of a commodity than a

security and what's beautiful about that

is gets the SEC away from some of these

offerings more you get the SEC away uh

generally the less pressure you seem to

have uh especially since the cftc seems

to be a little bit uh less aggressive

than the SEC but take a look look at

this this I thought was really

incredible

in this you start having an argument

about the S1 the S1 is your initial

regulatory filing to say look we want to

take a company public like coinbase and

here the SEC argues that the S1 is about

disclosures and just because we let the

coinbase the company coinbase go public

doesn't mean we approved of their entire

business they say here the S1 is about

disclosures but I don't have everything

in front of me we can fully brief all of

the legal and factual implications that

go in regarding an S one filing but

there is no way an approval of an S1 is

a blessing of the company's entire

business

and remember that any kind of really

filing with the SEC is generally a way

of the SEC saying look we just want to

make sure everybody's following the same

format providing the right information

to investors to evaluate those

businesses so initially I thought okay I

mean that's the argument I would expect

the SEC to make here but what I thought

is really interesting here

is that listen to this

so we get the court so the judge saying

this

but I would have thought that the

commission was doing diligence into what

coinbase was doing and somehow I thought

it would say you know you really

shouldn't do this if there was a problem

with something coinbase was doing I

think this is a phenomenal hit by the

judge against the SEC here it's saying

look if you thought the entire business

model was illegal why would you end up

approving them to go public at all

but not only that they say they make a

comparison which I think is great I want

to find it here really quick but they

make a comparison to rightfully so to

the marijuana business uh and I don't

know that I can find it right now no it

doesn't look like the search function

works

uh but anyway that's fine so the

comparison to the marijuana business is

great because they say look

y'all the SEC have frequently the judge

is saying this you all have frequently

denied the listings of certain

businesses like marijuana businesses

because you've thought that the

businesses were potentially illegal

so why would you not do the same for

coinbase why would you approve them if

you're potentially alleging what they're

doing is not within the realm of the law

that was a pretty powerful point in this

uh which I could conveniently find ah I

got it yes listen to this

this is such a great line it's clear

that the commission has repeatedly

refused to review authorized

registration statements for companies

because of concerns about the legality

of the underlying business it has done

that repeatedly with cannabis companies

it did it repeatedly with betting

companies like online betting companies

and here the Securities registration is

the core competency of the agency

this is by the way a huge line it is a

huge line because the SEC or or the

judge is basically saying look

you all don't do cannabis for a living

well to the extent that that's your job

maybe you do cannabis but anyway that's

not your job uh and you don't do betting

is your job you do Securities for a job

so here you are saying that well we

don't know if we want to register your

business because it's an online betting

company or it's a cannabis business

yet you don't give that same kind of

opinion

for business that is going to

potentially sell Securities to retail

investors

listen to this slam right here this is a

smoker of a slam you ready for this

so the idea that the commission could

authorize the offer and sale of

coinbase's Securities to millions of

retail investors and then turn around

and flip flop and say oh sorry you're

running a completely illegal business

and it's not merely that an S1

registration provides the very platform

on being told violence or blah blah blah

anyway keeps going here so anyway

they could have finished the sentence

here a little bit better got cut off a

little bit here but they're trying to

make the argument that look how could

you flip-flop on people and say oh it's

okay to invest in coinbase oh but it's

not okay they're operating in a legal

business especially since that's your

core competency

fantastic line massive slam right here

from the judge big

big win for crypto right here not just

that though ready for this it gets fun

where is it here it is

all right there we go

so what do we have here

uh so

the court says

it was within the power of the SEC to

say look you guys need to register as a

Securities Exchange but you didn't do

that that was within your power but you

didn't do that in fact the judge says

quote I don't think anything stopped the

commission from doing it

and here we go

it's not crazy quote for a coinbase to

think that what they were doing was okay

because it was exactly what you let them

do when they issued their S1

that's the point I'm making you may say

that they and I are reading too much

into the S issuance of the S1 end quote

but basically

you can't flip-flop on people the way

you're doing it here because that's the

way it comes across to the investing

public

this is a big piece this was a fantastic

transcript now this is just a pre-motion

conference it doesn't mean anything in

terms of setting a precedent it doesn't

really do anything but it did set the

stage here for the sec's fight

and again even though it's a promotion

conference I have to say if if you're if

you're the attorneys for the SEC you

just got your work cut out for you the

judge basically set this set the stage

for you the judge wants the SEC to show

why

do you authorize a business essentially

in your mind selling securities to list

publicly on the New York Stock exchanger

NASDAQ wherever they're listed for

people to invest in

on one hand but then now on the other

hand sue them and suggest ah well you

know you you sell unregistered

Securities on your platform and

therefore we're coming after you

it's a little problematic so you've got

a lot of work to do here for the SEC

attorneys uh and and I I think this I

mean that's the point of these

pre-motion conferences is to really set

them up so I I don't want to make an

argument here that hey the SEC didn't

seem prepared or or whatever even though

it did feel like that a little bit in

this it's very likely that uh this this

is just it's so early stage that the SEC

is going to put together a much stronger

and compelling argument especially since

now the groundwork has been set but I

have to say from an outsider looking in

you can't really blame the judge for

what the judge is saying here and the

entire crypto industry is looking at

going I mean come on SCC

y'all kind of flip-flopping here and you

know people don't really like

flip-floppers

anyway uh look this is fantastic we're

gonna keep following this uh story make

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