Tangent: As Coinbase Has All But Lost On Mandamus -- In The Third Cir., It Now Files What Amounts To A Request For Reconsideration...

This item appears here, since for about eight years, Mr. Bankman-Fried had argued that his silly (and it turns out, malignant) theory of "effective altruism" -- a pure Ayn Randian's libertarian fever dream. . . placed him well-above regular laws -- and enforcemant agencies. Since he was going to give it all away (he claimed, sipping Door-Dash delivered bubble teas, from his $110 million Bahamian hide-away!), he was ENTITLED to break the law in order to amass his billions. Problem is, he never gave much away -- he just stole it all, from others who trusted him -- and trusted that the law would protect their savings.

So yes -- this is a bit of tangent here (since so far, the SEC has not found evidence of theft of customer funds, at Coinbase), but we said we'd close it out, since we covered it here before -- and now we do so.

First the background: Mandamus is an extraordinary remedy. It is used to command officials to do things statutes and rules require of them.

Emphasis on the word "require".

Mr. Armstrong, as CEO of Coinbase, demanded that the SEC act, and act immediately -- on his request for special rules to govern so called crypto-exchanges at the SEC. No rule or law he might point to. . . requires Mr. Gensler to make new rules for any industry vertical. Since 1934, Congress has left that to the sound discretion of the SEC Commissioners and the able staff lawyers.

So, Coinbase sought to compel something that cannot be compelled, at law. They lost.

Now, Mr. Armstrong, through his (Scalia's son) lawyer, demands that that Third Circuit act. It will, at best, result in a polite letter to the SEC, saying. . . "if you feel new rules are not needed -- since the existing comprehensive set of broker/exchange rules have worked well, since at least the 1950s. . . just say so, Mr. Gensler." Hilarious, that.

I might add that what Coinbase CEO Armstrong wants, is for most rules that exist. . . to NOT apply to it, since "crypto is special in all the world." Poppycock. That sort of libertarian nonsense: "we've dreamed up a new way to separate rube investors from their wealth (they have!), so now give us a Hall Pass on all laws" -- just as the loon Hester Peirce has suggested... is why the SEC is dead right to say "we've repeatedly told you all the usual rules apply to you, Mr. Armstrong -- and you've intentionally ignored them".

So now Coinbase is being (separately) sued by the SEC, for making, selling and trading loan products it had no authority or clearance to issue. Armstrong sought mandamus as an end run, around well-settled black letter law. It's over, bub.

In any event, here is that nine page response, from Mr. Armstrong, as a pdf filing in the Third Circuit.

I'll not bother to quote it, as it misstates almost all the law it purports to quote.

Onward, grinning -- but (as a tangent -- to that tangent!) Riot Platforms should prepare for the City Council down in Corsicana, Texas to start applying the law, to it -- after Ms. Sawicky's fine efforts.

Cheers. Onward.

नमस्ते