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Robinhood Crypto Gets Wells Notice from US SEC

reuters.com

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Re: Robinhood Crypto Gets Wells Notice from US SEC

#41

Post by siftrics »

gamblor956 wrote: post #27
siftrics wrote: post #21

Earlier quoted context omitted.

Derivatives are governed by the CFTC not the SEC. It does matter, because they aren't doing anything wrong if these crypto assets are considered commodities and not securities. Also, just because a government agency is suing you, that doesn't mean it has any legal or moral imperative. I don't see your point.

A trading instrument can be both a commodity and a security and thus subject to regulation by the CFTC and the SEC. Most issuers try very hard to keep their instrument in one bucket to avoid the kind of issues that cryptocurrencies are dealing with.

I should have said "the derivatives in question" instead of simply "derivatives".

My point stands: OP claimed that most trading volume happens in securities and it simply does not. I highly doubt securities amount to more than the $20 quadrillion settled in the CFTC's realm last week.

I'm not claiming the jurisdictions of the CFTC and SEC are mutually exclusive. My point stands.

Re: Robinhood Crypto Gets Wells Notice from US SEC

#42

Post by oarsinsync »

pie420 wrote: post #28
siftrics wrote: post #13

Earlier quoted context omitted.

Why not? It is highly litigated and still abundantly unclear whether certain cryptocurrencies are securities or commodities. That's the whole point of these legal battles. If it was clear, they would not be ongoing.

based on the definition of what a security and what a commodity, it should be abundantly clear to anyone over the age of 5 what crypto falls under: Commodities are consumable goods that get transformed through usage in industrial or commercial processes. Gold and silver can be transformed into jewelry. Securities, on the other hand, grant holders the right to periodic benefits like dividends, coupons, principal repay…

> Commodities are consumable goods that get transformed through usage in industrial or commercial processes. Gold and silver can be transformed into jewelry. Securities, on the other hand, grant holders the right to periodic benefits like dividends, coupons, principal repayments and potential profit shares.

> How are you consuming crypto? What commercial or industrial process are being used?

What rights does holding bitcoin confer to the holder? I get no dividends, coupons, principle repayments or potential profit shares.

We’ve nicely entered why this argument still rages on. It doesn’t fit cleanly into either definition.

Re: Robinhood Crypto Gets Wells Notice from US SEC

#43

Post by robbyiq999 »

I dont think cryptos are securities; especially given that they are decentralized, which is the whole point. Which would make these points of the howie test moot.

> 2) In a common enterprise. + 4) Due to the managerial efforts of others.

The expectation of profit is tricky, something like ethereum could argue that ethereum itself is used for network precipitation, gwei or gas. Also, wouldn't they have to out and say "PAY US FOR THESE AND WE WILL REWARD YOU WITH DOLLAR PROFITS"

Also, isn't crypto just beanie baby tulip bulbs. Aren't those commodities?

Re: Robinhood Crypto Gets Wells Notice from US SEC

#44

Post by JumpCrisscross »

bidandanswer wrote: post #39
JumpCrisscross wrote: post #30

Earlier quoted context omitted.

> None of their huge cases claiming various cryptocurrencies are securities have succeeded A federal judge found the SEC has jurisdiction over crypto and is sending Coinbase’s case to a jury trial [1]. [1] https://www.cnbc.com/2024/03/27/sec-scores-big-win-in-lawsui...

That's in the specific context of staking and promising returns, not crypto in general.

> in the specific context of staking and promising returns, not crypto in general

Every ruling in the lower courts on these issues will be narrow. The SEC has been on a winning streak recently. The only major kerfuffle was the judge not ruling that XRP is a security, though Torres still ruled in the SEC's favour broadly, and the ruling has been widely criticised (not by industry people, but senior lawyers) for being likely to be overturned on appeal.

Re: Robinhood Crypto Gets Wells Notice from US SEC

#45

Post by robbyiq999 »

nimbius wrote: post #5

glad to see the same regulatory agency that snored through the gamestop fiasco has suddenly taken notice of the crypto wing of the same predatory fintech that should have faced a congressional hearing years ago.

Don't forget Gensler meeting with Sam Bankman-Fried; which actually blew up in everyones face and wasn't crypto's fault but an exchange run amok.

Re: Robinhood Crypto Gets Wells Notice from US SEC

#46

Post by [deleted] »

siftrics wrote: post #40
JumpCrisscross wrote: post #29

Earlier quoted context omitted.

SEC regulates securities-based derivatives. I used to professionally make markets in those. SEC and CFTC are both claiming jurisdiction over Bitcoin.

Correct. And this case hinges on the yet undecided question as to whether or not Bitcoin and numerous other cryptocurrencies are actually securities.

[deleted]

Re: Robinhood Crypto Gets Wells Notice from US SEC

#47

Post by robbyiq999 »

JumpCrisscross wrote: post #32
smeej wrote: post #26

Earlier quoted context omitted.

That's a nice ad hominem attack you've made there, but it isn't actually unreasonable to argue that Bitcoin and certain other currencies like it are not securities. Heck, even the SEC has said as much. It's even more reasonable to argue that things like NFTs are more like digital baseball cards than securities.

> it isn't actually unreasonable to argue that Bitcoin and certain other currencies like it are not securities It’s not. But it’s clear the industry needs supervision, and it isn’t really worth the time drafting federal legislation. The SEC keeping the most egregious behaviour checked, e.g. policing positioning with retail investors, is the best worst option for now.

Centralized exchanges need supervision, they have the history of doing the most harm. Look at Mt Gox and FTX

Re: Robinhood Crypto Gets Wells Notice from US SEC

#48

Post by megadal »

jprete wrote: post #9
siftrics wrote: post #7

Earlier quoted context omitted.

The vast majority of arbitrage of fungible assets happens in commodities, not securities. The SEC regulates securities. The CFTC regulates commodities.

Ok, but these are clearly not commodities.

From Wikipedia:

> In economics, a commodity is an economic good, usually a resource, that specifically has full or substantial fungibility: that is, the market treats instances of the good as equivalent or nearly so with no regard to who produced them.

I am pretty sure you can get BTC from any exchange and sell it on any other exchange. Whereas, with stocks, you generally cannot as a retail investor.

That is, I suppose, what makes crypto a commodity at its core.

Re: Robinhood Crypto Gets Wells Notice from US SEC

#49

Post by megadal »

SkyPuncher wrote: post #31
jprete wrote: post #9

Earlier quoted context omitted.

Ok, but these are clearly not commodities.

10 years ago, I’d probably agree with you. Today, you can spin up your own shit coin with basically a few clicks.

The fact that you can create a crypto more easily today has nothing to do with whether or not crypto is a commodity (though I suspect that point is not really why you made this comment).

It's the fact that there's an overwhelming number of exchanges that willingly accept crypto from other exchanges coupled with the fact that anyone can mine/produce crypto. The moment that there were two places to get BTC that accept BTC from each other in exchange for money, it was a commodity.

Re: Robinhood Crypto Gets Wells Notice from US SEC

#50

Post by j0hnyl »

ToucanLoucan wrote: post #34
smeej wrote: post #26

Earlier quoted context omitted.

That's a nice ad hominem attack you've made there, but it isn't actually unreasonable to argue that Bitcoin and certain other currencies like it are not securities. Heck, even the SEC has said as much. It's even more reasonable to argue that things like NFTs are more like digital baseball cards than securities.

I don't think that's an ad-hominem attack at all. The entire point of crypocurrency from jump was to escape the "reckless inflation/deflation of fiat currency", fiat currency meaning state-sponsored currency. The goal was to create an object that would hold value outside the traditional financial sector, similar to things like gold. I think the only real problem is that the crypto community took the several decades o…

Uncle Sam getting his cut is not what's being contested though when it comes to the securities conversation.
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