Executives who logged into password trading center Coinbase defended their access to the password betting service, claiming that the service could not be classified as securities and threatened to take the matter to the U.S. People's Court.

CoinbaseCEO Brian Armstrong tweeted that the company would "defend itself in court if needed". Prior to that, access to password trading center Kraken reached an agreement with the Securities and Exchange Commission (Securities And Exchange Commission) on February 10 to stop providing betting services or programs to users in the host country.

According to SEC, Kraken was unable to "document the giving and sale of his encrypted asset stock-as-a-service plan", which has been classified as a securities by the SEC. In addition to terminating the service, Kraken allows refunds of $30 million in payments, projected interest and civil penalties.

Wade Greval, chief legal officer of Coinbase, commented on the issue in an online article, declaring that "under US securities law, bets are not securities, not securities tested by Howie." Grewal added: he

"trying to impose securities laws on procedures such as online rationing will not help customers at all. instead, it will impose unnecessary radical rules to prevent US customers from getting the most basic data encryption services. and lead customers to offshore accounts without regulatory service platforms."

Kalanwo feels that the bets fail to meet the four factors of the Howie test: financial project investment, shared companies, reasonable expectations of profitability and the diligence of others. "the Howey test comes from a case of the Supreme people's Court in 1946-there is an independent discussion about whether the test is more meaningful for new types of property such as data encryption," he wrote. "

"the purpose of the securities law is to correct the imbalance of information. But there is no information mismatch at the bet level because all participants are linked to the blockchain and can test deals through user communities that have fair access to the same information. In addition, the executive wrote:

Blockchain applications can stimulate the obvious economic development of the United States, and bets are a security and critical aspect of this technology. [.] However, applying for strict regulation does little to help users and bring independent innovation abroad, which is not a solution. Put it exactly on the bet.

SEC's decision about the login password pile has been criticized. In an announcement called "Kraken Down", Operations Commissioner Hester Peirce publicly denounced her organization for shutting down Kraken's gambling service. Pierce feels that applying for enforcement is "not a reasonable or fair way to control" a new type of industry.