Legal Scorecard: Coinbase Up Good; Terraform Down Bad

The Breakdown

Blockworks

Investing, Business

4.8 • 786 Ratings

🗓️ 8 April 2024

⏱️ 12 minutes

🔗️ Recording | iTunes | RSS

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Summary

NLW looks at a set of recent court cases with very different results for the defendants. Today's Show Brought To You By Ledger - 5% to Bitcoin Developers When You Buy https://shop.ledger.com/pages/bitcoin-hardware-wallet Enjoying this content? SUBSCRIBE to the Podcast: https://pod.link/1438693620 Watch on YouTube: https://www.youtube.com/nathanielwhittemorecrypto Subscribe to the newsletter: https://breakdown.beehiiv.com/ Join the discussion: https://discord.gg/VrKRrfKCz8 Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownNLW

Transcript

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0:00.0	Welcome back to The Breakdown with me, NLW.
0:08.0	It's a daily podcast on Macro, Bitcoin, and the Big Picture Power Shifts remaking our world.
0:18.0	What's going on, guys? It is Monday, April 8th. And today we are talking about some interesting
0:23.0	recent legal battles. Before we get into that, if you are enjoying the breakdown, please go
0:26.9	subscribe to it, give it a rating, give it a review, or if you want to dive deeper into the
0:30.4	conversation, come join us on the Breakers Discord. You can find a link in the show notes or get
0:34.0	a bit.ly slash breakdown pod. All right, friends, like I said, a couple interesting legal cases today, and the first that
0:40.0	we're looking at is that Coinbase has won a significant victory in the Court of Appeals,
0:43.9	with a judge ruling that secondary token sales on their platform are not subject to securities
0:48.0	law.
0:48.7	This news was picked up on crypto-Twitter in a very misleading way, so it's worth spending
0:52.2	some time breaking down exactly what this does and doesn't mean. First and most importantly, this isn't Coinbase's ongoing lawsuit
0:57.7	against the SEC. That is a completely separate class action lawsuit brought by customers in
1:01.5	2023. The decision could be used as precedent in the SEC case, but it would likely carry fairly
1:06.6	minimal weight. Secondly, the judge didn't exactly decide that tokens can never be subject to
1:10.6	securities law. The ruling was focused only on the facts and circumstances of the case. The findings minimal weight. Secondly, the judge didn't exactly decide that tokens can never be subject to securities
1:10.9	law. The ruling was focused only on the facts and circumstances of the case. The finding was only
1:15.2	that the plaintiffs had failed to prove that there were transaction-specific investment contracts
1:18.6	in their pleadings. The major upside for Coinbase is that the judge agreed with their argument
1:22.6	as to why secondary token sales are not securities transactions. Coinbase had argued that there is
1:27.3	no investment
1:27.8	contract embodied in most crypto tokens. They claim this is especially true in the resale market,
	...

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