Why Do America's Republicans Like Crypto? SEC Plan To Drop Coinbase Suit Marks Big Shift

"Regulators have agreed to drop a lawsuit against Coinbase that sought to regulate the company as a stock exchange, marking the end of years of hard-line enforcement against the crypto market.

Coinbase said Friday that enforcers at the Securities and Exchange Commission would recommend dismissal of the two-year-old lawsuit, a crucial plank of the agency's strategy to bring crypto under investor-protection rules. Coinbase had fought the suit, which was filed during the Biden administration, arguing the law didn't support equating crypto assets with securities.

"It's a great day for Coinbase and for crypto," said Paul Grewal, Coinbase's chief legal officer. "We were committed to defending it [the lawsuit] to the gates of hell, for as long as it took and for as much money as it took."

Dismissing the Coinbase lawsuit still requires a commission vote. The company expects the vote to happen next week, Grewal said.

The SEC's retreat was expected after the election of President Trump, a Republican who embraced crypto [1] and promised to end the industry's friction with the commission. Still, the retreat represents a rare instance of regulators reversing their position on a significant issue for investors.

Coinbase had appealed in January a federal district court's ruling that declined to throw out the SEC's case. That appeal will now be moot. An SEC spokesman declined to comment.

The SEC is making peace with crypto firms after Coinbase and others poured millions of dollars into helping elect lawmakers friendlier to the industry. Trump is a major backer of crypto and last month sold his own digital token that has a market value of about $3.4 billion.

Some regulation advocates said it is a mistake for the SEC to surrender to an unregulated industry that has been vulnerable to fraud and contagion. The crypto market was rocked in 2022 by a series of bankruptcies, the implosion of a major stablecoin, criminal-fraud charges against the founder of a major crypto exchange, and falling prices.

The agency is also backing away from positions it took during the first Trump administration, when its chairman, Jay Clayton, launched an enforcement campaign against dozens of crypto assets that he said were illegally marketed to investors without the SEC's oversight.

"It's going to embolden law breakers everywhere," said Dennis Kelleher, the president of Better Markets, a pro-regulation group that backed a tough approach to crypto. "The SEC is supposed to be the cop on the beat and here it's unilaterally disarming."

The crypto market has been on a tear since Trump won the presidential election. Bitcoin soared past $100,000 in December after Trump nominated crypto ally Paul Atkins to lead the SEC. Other smaller and riskier tokens also surged, while "memecoins," a type of cryptocurrency created based on internet memes, proliferated. Coinbase has been quick to list those tokens, which typically serve no economic purpose other than speculation.

Coinbase CEO Brian Armstrong himself has warned that some meme coins have "clearly gone too far." "In every crypto cycle, there is a 'get rich quick' crowd that comes and goes, and learns this lesson the hard way," he said Wednesday in a post on the social-media platform X. "Don't break the law! And don't try to get rich quick."

The SEC has already moved to break up the special enforcement unit that was devoted to investigating crypto companies. Former SEC Chair Gary Gensler, who stepped down in January, nearly doubled the unit's size as he pursued legal action against exchanges such as Coinbase, Binance and Kraken to force them to adopt similar investor protections to those imposed on Wall Street.

Acting SEC Chairman Mark Uyeda said Thursday that the unit would have a broader remit and "deploy enforcement resources judiciously," including investigating fraud involving crypto assets. The Coinbase lawsuit didn't involve any fraud claims.

Uyeda said last month that a new SEC task force is considering how to move away from Gensler's approach toward the crypto market.

The SEC appears poised for a much smaller role policing the industry. House and Senate lawmakers are working on legislation that would likely lead to most cryptocurrencies being treated as commodities. That would probably give oversight of more crypto assets to the Commodity Futures Trading Commission, a much smaller agency than the SEC.

The securities agency is still litigating with Binance and Kraken. This month regulators asked a federal court hearing the Binance case in Washington, D.C., to put it on hold, citing the opportunity to resolve the case through the work of the agency's task force.

Dismissal of the SEC's case would create a more favorable environment for Coinbase's growth, allowing the company to list more tokens and offer more products, analysts said. The company delivered a blowout fourth-quarter earnings report as major cryptocurrencies rallied after the U.S. election.

Coinbase is also diversifying into areas beyond trading and earning more revenue from products such as staking, which allows investors to earn interest on their tokens. The SEC lawsuit had alleged that Coinbase's staking program was an illegal sale of securities, which the company has denied.” [2]

1. “And why do Republicans like crypto? The reason, David Reibstein, a marketing professor at Penn’s Wharton School, said, has a lot to do with decentralization.

Cryptocurrency is digital money. It isn’t issued by governments or banks, so there’s no central authority. It exists on decentralized networks and uses a technology called blockchain, which tracks transactions and assets.

“And it’s hard to separate decentralization from political affiliation,” Reibstein said. Republicans tend to favor decentralized government.”

2.  SEC Plan To Drop Coinbase Suit Marks Big Shift. Michaels, Dave; Vicky Ge Huang.  Wall Street Journal, Eastern edition; New York, N.Y.. 22 Feb 2025: A1.

 

Didysis banginis plaukia pas mus: Buffettas kaupia daug grynųjų ir kelia antakius Volstryte

 „Warrenas Buffettas garsėja tuo, kad renkasi akcijas. Šiomis dienomis jis vis dažniau renkasi grynuosius pinigus.

 

 „Dow Jones Market Data“ duomenimis, grynųjų pinigų ir iždo vekselių kalnas garsiojoje investuotojo įmonėje Berkshire Hathaway trečiąjį ketvirtį viršijo 300 mlrd. dolerių.

 

 Laikyti daug grynųjų yra įprasta Berkshire praktika, tačiau pastarojo meto kaupimosi mastai kai kuriems Omahos (Neb.) konglomerato stebėtojams sukėlė antakius.

 

 Jie ruošiasi išanalizuoti Buffetto metinį laišką akcininkams šeštadienį, kad sužinotų, kaip Berkshire valdybos pirmininkas ir generalinis direktorius galvoja apie akcijų rinką ir bet kokias galimybes investuoti pinigus. „Berkshire“ metinėje ataskaitoje, kurioje yra ir laiškas, bus parodyta, kiek grynųjų įmonė turėjo 2024 m. pabaigoje.

 

 „Klausimas yra, ką jie ketina daryti su visais šiais pinigais? sakė Stevenas Checkas, „Check Capital Management“ vyriausiasis investicijų pareigūnas, kuris Berkshire metiniuose susitikimuose dalyvavo nuo 1996 m. „Tai yra ekstremalu, kiek aš prisimenu“.

 

 „Berkshire“ uždirba grynųjų pinigų iš savo stabilios veiklos, nuo draudimo iki geležinkelių, nuo komunalinių paslaugų iki saldainių, taip pat iš savo investicijų. Pastaruoju metu bendrovė pardavė daug akcijų. „Berkshire“ buvo grynasis nuosavybės vertybinių popierių pardavėjas per pastaruosius aštuonis ataskaitinius ketvirčius, o gruodžio mėn. paskelbus jos JAV akcijų pozicijas, galima teigti, kad pardavimas pratęstas iki devintojo laikotarpio.

 

 Buffetto reputacija reiškia, kad jo įmonės sandoriai yra stebimi, kaip reto kurio investuotojo. Kai „Berkshire“ parduoda, tai gali sukelti nerimą, kad akcijų perspektyvos yra prastos. „Edward Jones“ finansų patarėjai išreiškė susirūpinimą Jamesui Shanahanui, vyresniajam bendrovės akcijų tyrimų analitikui, kuris apima Berkshire.

 

 „Girdžiu tai iš mūsų patarėjų: kodėl turėtume pirkti akcijas, jei Warrenas Buffettas neperka akcijų?” Shanahan pasakė.

 

 Atidūs Berkshire stebėtojai apie grynųjų pinigų augimą galvoja taip: Buffetto supratimu, bendrovės medžioklės lauke, kuriame gausu stambių, aukštos kokybės verslo šakų, kainos pakilo per aukštai, kad akcijų rinkėjas galėtų jaustis įsitikinęs, kad investicija atneš Berkshire ir jos akcininkams naudingos grąžos.

 

 Buffettas ir jo pavaduotojai ieško nuolaidų, o akcijomis dabar rinkoje prekiaujama su rekordais. S&P 500 trečiadienį per vieną dieną pasiekė naujausią visų laikų rekordą ir 2025 m. pakilo 2,2%, po dvejų metų metinio augimo virš 20%. Remiantis „FactSet“ duomenimis, plataus JAV akcijų indekso prekyba per ateinančius 12 mėnesių buvo 22,3 karto didesnė už prognozuojamą pelną, ty daugiau, nei 10 metų vidurkis – 18,6.

 

 Paskutiniame Berkshire metiniame susirinkime, gegužę, Buffettas atsižvelgė į bendrovės grynųjų pinigų bokštą: „Norėtume juos išleisti, bet neišleisime, nebent manytume, kad darome tai, kas turi labai mažai rizikos ir gali mums uždirbti daug pinigų“.

 

 „Mes atakuojame tik tose aikštelėse, kurios mums patinka“, – vėliau sesijos metu pridūrė jis. "Nėra taip, kad aš pradėjau bado streiką ar kažką panašaus. Tiesiog viskas nėra patrauklu."

 

 Jei Buffettas rastų kompaniją, kuri atrodo patraukli, jis gali turėti pinigų, kad galėtų ją visą nusipirkti. Remdamasi savo trečiojo ketvirčio ataskaita, „Berkshire“ galėtų lengvai sumokėti visų, išskyrus didžiausias JAV bendroves, rinkos kainą, turėdama pakankamai grynųjų pinigų, kad nusipirktų tokį, kiekvienuose namuose žinomą, pavadinimą, kaip „Deere“, „United Parcel Service“ ar „CVS Health“.

 

 Buffetto stebėtojai linkę sakyti, kad akcijų pardavimo triukšmas nereiškia raginimo visai rinkai. Atvirkščiai, jie teigė, kad kiekvienu konkrečiu atveju buvo nuspręsta, kad atskirų įmonių perspektyvos nenusipelno tos kainos, už kurią kiti prekybininkai nori pirkti akcijas iš Berkshire rankų.

 

 Viena iš priežasčių, nulėmusių pinigų padidėjimą, yra platus „Berkshire“ pardavimas „Apple“ akcijų, kurių vertė pastaraisiais metais buvo daug geresnė, nei tada, kai Buffetto įmonė kūrė iš jų savo pozicijas 2016–2018 m.

 

 Remiantis „FactSet“, „Berkshire“ keturis ketvirčius iš eilės sumažino savo „iPhone“ gamintojo akcijų paketą, pradedant nuo 2023 m. pabaigos, sumažindama savo „Apple“ nuosavybės dalį nuo beveik 6% iki 2%. Ketvirtąjį ketvirtį „Berkshire“ sulaikė tolesnius „Apple“ pardavimus, o plataus vartojimo elektronikos bendrovė 2024 m. pabaigoje išliko didžiausia „Berkshire“  akcijų pakete, kuriame „Apple“ akcijų  rinkos vertė siekė 75 mlrd. dolerių.

 

 Kai kurie stebėtojai mano, kad pastangos palengvinti padėtį, kuri išaugo iki didelės Berkshire akcijų portfelio dalies, yra dalis 94 metų vyriausiojo direktoriaus pastangų sklandžiai pereiti, kai jo paskirtas įpėdinis Gregas Abelis galiausiai perima vadžias.

 

 „Kai kas gali pasakyti, kad tai yra namų ruoša, kad jis viską valo ir ruošiasi perduoti įmonę“, – sakė Shanahanas. „Jis norėtų suteikti Gregui Abeliui gerą atspirties tašką ir neturėti jokio palikimo problemų“.

 

 Taip pat prisidėjo prie grynųjų pinigų augimo: akcijų supirkimas sustojo, o trečiąjį ketvirtį Berkshire pirmą kartą per kelerius metus neatpirko akcijų.

 

 Bendrovė teigė, kad gali atpirkti akcijas, kai Buffettas „mano, kad atpirkimo kaina yra mažesnė už vidinę Berkshire vertę, konservatyviai nustatytą“, jei jos grynųjų pinigų ir iždo vekselių kiekis nesumažės žemiau 30 mlrd. dolerių.

 

 „Berkshire“ akcijos pakilo nuo metų pradžios, o tiek A, tiek B klasės akcijos šią savaitę užsidarė rekordiškai. Praėjusiais metais bendrovės rinkos vertė pirmą kartą viršijo 1 trilijoną dolerių.

 

 Ir pati pinigų krūva uždirba pinigus. Per pirmuosius devynis 2024 m. mėnesius „Berkshire“ pranešė apie 8 mlrd. dolerių palūkanų ir kitų investicijų pajamų iš savo draudimo veiklos, taip pat 3,8 mlrd. dolerių dividendais.

 

 Berkshire grynųjų akcijų pardavimo serija sutapo su bendros rinkos pakilimu. Nuo 2022 m. trečiojo ketvirčio pabaigos S&P 500 pakilo 68%.

 

 Tačiau ilgamečiai akcininkai neatrodo pernelyg nerimaujantys dėl praleistų galimybių. Jie sakė, kad pasitiki Buffettu, kad nuspręs, kaip panaudoti Berkshire'o atsargas.

 

 Jie taip pat nereikalauja, kad bendrovė išleistų jiems grynųjų pinigų dividendais.

 

 „Mums priklauso Berkshire, kad kapitalas būtų reinvestuojamas“, – sakė Darrenas Pollockas, Cheviot Value Management portfelio vadovas. "Mums tai priklauso, nes tikimės, kad atplauks pas mus didelis banginis ir jie galės jį sugauti. Akivaizdu, kad tai užtrunka ilgai." [1]

 

Kodėl verta parduoti „Apple“ akcijas, atrodo, aišku. Su „Apple“  JAV valdžia pati sušiko vienos geriausių JAV kompanijų perspektyvas, bandydama nuskandinti kinų Huawei, privertė Huawei pasitempti ir tapti, naikinančia pasaulinę „Apple“  rinką, konkurente. Dabar JAV valdžia kartoja tą patį su JAV dirbtinio intelekto kompanijomis. Jei supratai, kad kasi sau kapą, tai nors nustok kasti.

1. Buffett Is Hoarding Lots of Cash, Raising Eyebrows on Wall Street. Langley, Karen.  Wall Street Journal, Eastern edition; New York, N.Y.. 22 Feb 2025: A1.

Big Whale Is Coming Along: Buffett Is Hoarding Lots of Cash, Raising Eyebrows on Wall Street

 

"Warren Buffett is known for picking stocks. These days, he is increasingly picking cash.

The mountain of cash and Treasury bills at the famed investor's company, Berkshire Hathaway, rose above $300 billion in the third quarter -- easily a record and its highest as a percentage of company assets in data going back to 1998, according to Dow Jones Market Data.

Holding lots of cash is standard practice for Berkshire, but the scale of the recent buildup has raised eyebrows among some observers of the Omaha, Neb., conglomerate.

They are preparing to parse Buffett's annual letter to shareholders on Saturday for clues about how the Berkshire chairman and chief executive is thinking about the stock market and any opportunities he might see for investing the cash. Berkshire's annual report, which includes the letter, will show how much cash the company held at the end of 2024.

"The issue is, what are they going to do with all this cash?" said Steven Check, chief investment officer of Check Capital Management, who has attended Berkshire's annual meetings since 1996. "This is as extreme as I can recall."

Berkshire generates cash from its stable of operating businesses, which range from insurance to rail, from utilities to candy, as well as from its investments. Recently, the company's investing moves have involved selling a lot of stock. Berkshire was a net seller of equity securities in the past eight reported quarters, and a regulatory disclosure of its U.S. stock positions in December suggests the selling extended to a ninth period.

Buffett's storied reputation means his company's trades are watched like those of few investors. When Berkshire sells, it can spark worries that the outlook for stocks is poor. Financial advisers at Edward Jones have voiced their concerns to James Shanahan, a senior equity research analyst at the firm who covers Berkshire.

"I hear that from our advisers: Why should we be buying stocks if Warren Buffett's not buying stocks?" Shanahan said.

Close observers of Berkshire think about the rise in cash this way: Within the company's hunting ground of large, high-quality businesses in industries Buffett understands, prices have risen too high for the stock picker to feel confident an investment would lead to worthwhile returns for Berkshire and its shareholders.

Buffett and his deputies are searching for bargains while stocks trade at records. The S&P 500 notched its latest all-time high Wednesday and has advanced 2.2% in 2025 after two years of annual gains above 20%. The broad U.S. stock index recently traded at 22.3 times its projected earnings over the next 12 months, above a 10-year average of 18.6, according to FactSet.

At Berkshire's most recent annual meeting, in May, Buffett weighed in on the company's tower of cash: "We'd love to spend it, but we won't spend it unless we think we're doing something that has very little risk and can make us a lot of money."

"We only swing at pitches we like," he added later in the session. "It isn't like I've got a hunger strike or something like that going on. It's just that things aren't attractive."

If Buffett did find a company that looked appetizing, he might well have the cash to buy it in full. Based on its third-quarter report, Berkshire could easily pay the market price of all but the biggest U.S. companies, with ample cash to buy a household name such as Deere, United Parcel Service or CVS Health.

Buffett watchers tend to say the drumbeat of stock sales doesn't amount to a call on the overall market. Rather, they said, it has resulted from case-by-case determinations that individual companies' prospects don't merit the price at which other traders are willing to take the shares off Berkshire's hands.

One reason behind the cash buildup is Berkshire's extensive sales of Apple stock, which has traded in recent years at much richer valuations than when Buffett's company was establishing its position from 2016 through 2018.

Berkshire slashed its stake in the iPhone maker for four consecutive quarters starting in late 2023, reducing its ownership of Apple from nearly 6% to 2%, according to FactSet. Berkshire held off on further Apple sales in the fourth quarter, and the consumer-electronics company remained its largest stockholding at the end of 2024 with a market value of $75 billion.

The move to lighten a position that had grown to an outsize share of Berkshire's stock portfolio is seen by some observers as part of the 94-year-old chief executive's efforts to smooth the transition when his designated successor, Greg Abel, eventually takes the reins.

"Some might say that this is housekeeping, that he's cleaning everything up and getting ready to hand over the company," Shanahan said. "He would want to give Greg Abel a good starting point and not have any legacy problems."

Also contributing to the climb in cash: Stock buybacks have ground to a halt, with Berkshire repurchasing no stock in the third quarter for the first time in several years.

The company said it can buy back stock whenever Buffett "believes that the repurchase price is below Berkshire's intrinsic value, conservatively determined," as long as its holdings of cash and Treasury bills wouldn't fall below $30 billion.

Berkshire's stock has rallied to start the year, with both Class A and Class B shares closing at records this week. The company's market value passed $1 trillion for the first time last year.

And the cash pile itself is making money. Berkshire reported $8 billion in interest and other investment income in its insurance operations in the first nine months of 2024, along with $3.8 billion in income from dividends.

Berkshire's streak of net stock sales has coincided with a climb in the overall market. Since the end of the third quarter of 2022, the S&P 500 has risen 68%.

But longtime shareholders don't seem too anxious about missed opportunities. They said they trust Buffett to decide how to use Berkshire's hoard.

Nor are they clamoring for the company to release cash through a dividend.

"We own Berkshire to see the capital be reinvested," said Darren Pollock, portfolio manager at Cheviot Value Management. "We own it for the hope that the big whale will come along and they'll be able to snare it. That just is taking a long time, obviously."" [1]

Why it's worth selling Apple shares seems clear. With Apple, the US government itself screwed up the prospects of one of the best US companies, trying to sink the Chinese Huawei, forcing Huawei to step up and become a competitor that destroys the global Apple market. Now the US government is repeating the same thing with US artificial intelligence companies. If you realize that you are digging your own grave, then at least stop digging.

1. Buffett Is Hoarding Lots of Cash, Raising Eyebrows on Wall Street. Langley, Karen.  Wall Street Journal, Eastern edition; New York, N.Y.. 22 Feb 2025: A1.