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Bitcoin is the only coin the SEC Chair will call a commodity

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Re: Bitcoin is the only coin the SEC Chair will call a commodity

#61

Post by tyrfing »

TimPC wrote: post #10

This is huge. Essentially if they find anyone sold crypto to unaccredited investors they would be engaging in illegal sales of a security. This may lead to lawsuits where crypto sellers find they are on the hook for the losses of people they illegally sold to. It may also lead to jail time for a substantial portion of the crypto community.

No, this is just a SEC vs CFTC turf war. Neither is willing to concede the "territory" to the other; the only notable part here is that the SEC still doesn't think ETH is settled. It's a minor TV interview, not something "huge".

https://www.klgates.com/CFTC-and-SEC-Perspectives-on-Cryptoc...

Re: Bitcoin is the only coin the SEC Chair will call a commodity

#62

Post by DennisP »

AtlasBarfed wrote: post #49
uncomputation wrote: post #16

Bitcoin has less foundation- or team-based leadership that have plagued other crypto projects. This leadership (eg Ethereum foundation) gives crypto projects the air of legitimacy, but also the impression, as Hinman put it, that some managerial work and direction is expected, tipping the scale towards security. If the network becomes decentralized to the point where no one party has sway over its direction (even a go…

If Ethereum can be changed from Proof of Work to Proof of Stake on a "whim", how is it not centralized in some capacity?

That's quite a whim. It's been the plan since 2014.

Re: Bitcoin is the only coin the SEC Chair will call a commodity

#63

Post by konschubert »

tboyd47 wrote: post #55
hnthrow1010 wrote: post #35

Earlier quoted context omitted.

The idea that Bitcoin has no leaders is a big lie that these regulators should be able to see through. You can take look at any of the well-known whales to see obvious evidence against that claim. They make the claim because it allows them to maintain plausible deniability while manipulating the market as much as they possibly can. I wouldn't trust anyone in finance who says they're not doing managerial work and dire…

If there are "leaders" in Bitcoin, it would not be the whales. It is not Proof of Stake where money buys you a voting right.

In Pow, Money buys you mining capacity which is voting rights.

Re: Bitcoin is the only coin the SEC Chair will call a commodity

#64

Post by Shank »

vmoore wrote: post #44

Finance newbie here, but what is a 'security'? I looked it up, but can't grok it despite people's best attempt to describe it. All the articles can't sum it up in an ELI5 way. What's the TL;DR way of describing a security, and how does BTC fare in this? Is BTC a security?

> Is BTC a security?

Probably not in the traditional sense. The difference Bitcoin has to most cryptocurrencies is that it was specifically designed with no "premined" blocks and no preordained rewards. In contrast, a lot of projects sold tokens through an "ICO" with a promise of a future project developed against it. ICOs are basically securities, because you're buying the token without actually any guarantee that the project delivers on what it needs to deliver on for the value to change.

In contrast, again, Bitcoin was just offered as a cryptocurrency, from the start. The first block encoded a current event to distinguish the fact that there aren't any rewards already allocated to creators. It was also launched with the complete product available from the start (sans network upgrades).

Note: I'm not saying that Bitcoin is good or anything. I'm just distinguishing between it and most other tokens. Bitcoin has governance systems in place and other systems that make it "more security like" but clearly the SEC chair doesn't seem to believe it crosses that line.

Re: Bitcoin is the only coin the SEC Chair will call a commodity

#65

Post by DennisP »

Animats wrote: post #48
TimPC wrote: post #10

This is huge. Essentially if they find anyone sold crypto to unaccredited investors they would be engaging in illegal sales of a security. This may lead to lawsuits where crypto sellers find they are on the hook for the losses of people they illegally sold to. It may also lead to jail time for a substantial portion of the crypto community.

Essentially if they find anyone sold crypto to unaccredited investors they would be engaging in illegal sales of a security. Well, yes. That's the Howey test. It's pretty simple. A lot of crypto issuers liked to think it didn't apply to them, but the SEC has been saying consistently that it does. There's argument over whether crypto brokers, exchanges, or miners are subject to regulation. But anybody who created and…

So far at least, this is not the worst bear market ever in crypto. ETH right now is down about 80%, but in 2018 it dropped 94%.

Re: Bitcoin is the only coin the SEC Chair will call a commodity

#66

Post by [deleted] »

hnthrow1010 wrote: post #35
uncomputation wrote: post #16

Bitcoin has less foundation- or team-based leadership that have plagued other crypto projects. This leadership (eg Ethereum foundation) gives crypto projects the air of legitimacy, but also the impression, as Hinman put it, that some managerial work and direction is expected, tipping the scale towards security. If the network becomes decentralized to the point where no one party has sway over its direction (even a go…

The idea that Bitcoin has no leaders is a big lie that these regulators should be able to see through. You can take look at any of the well-known whales to see obvious evidence against that claim. They make the claim because it allows them to maintain plausible deniability while manipulating the market as much as they possibly can. I wouldn't trust anyone in finance who says they're not doing managerial work and dire…

[deleted]

Re: Bitcoin is the only coin the SEC Chair will call a commodity

#67

Post by DennisP »

mirntyfirty wrote: post #34
IAmGraydon wrote: post #24

Earlier quoted context omitted.

>It may also lead to jail time for a substantial portion of the crypto community. I'm cracking up over here. Are you actually being serious?

I’d claim that tax misrepresentation would likely lead to some jail time, particularly for those that don’t have the funds for legal representation. As far as I can tell, the prevailing point of Bitcoin is to make capital gains.

If crypto is a commodity, people still owe the same capital gains tax.

The IRS has been giving tax guidance on crypto for years; any US person in crypto with half a brain has been following it.

Re: Bitcoin is the only coin the SEC Chair will call a commodity

#68

Post by JumpCrisscross »

gjsman-1000 wrote: post #12
ASlave2Gravity wrote: post #7

Earlier quoted context omitted.

Would you mind sharing more of your thoughts on what might play out if the SEC loses? And then also, if you don't mind, what would happen if the SEC wins?

If the SEC loses, unless Congress were to pass a law to grant more authority, the SEC would have almost no ability to regulate cryptocurrency as they would have no ability to define cryptocurrency as a form of "security" (which is the purview they are granted legal authority over, even in their name, the Securities and Exchange Commission ). If the SEC wins, they can define some cryptocurrencies as "securities" which…

> unless Congress were to pass a law to grant more authority, the SEC would have almost no ability to regulate cryptocurrency as they would have no ability to define cryptocurrency as a form of "security"

This is a fringe theory no administrative lawyer backs. Neither, based on crypto’s lobbying of the Congress, do those with influence in crypto.

Ripple’s case is narrow. This legal theory sounds like it’s being pitched by someone making a “times are about to change” pitch.

Re: Bitcoin is the only coin the SEC Chair will call a commodity

#70

Post by mixedCase »

AtlasBarfed wrote: post #49
uncomputation wrote: post #16

Bitcoin has less foundation- or team-based leadership that have plagued other crypto projects. This leadership (eg Ethereum foundation) gives crypto projects the air of legitimacy, but also the impression, as Hinman put it, that some managerial work and direction is expected, tipping the scale towards security. If the network becomes decentralized to the point where no one party has sway over its direction (even a go…

If Ethereum can be changed from Proof of Work to Proof of Stake on a "whim", how is it not centralized in some capacity?

On a "whim" in so far as miners agree on the change.
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