It seems absurd because the judge must use existing law, i.e. the Howey test as the basis for her opinion. And just to keep things in perspective, the Howey test was created in 1946, about 7 years before the first color television was brought to market, and the original case itself had to do with leasing back land after a sale for the purpose of citrus production. So here we are a century later in the internet age trying to curve fit decentralized digital assets into a framework that was derived before most of us were even born. The SEC wants everyone to believe that the Howey test makes everything so clear and simple, but clearly the judge is saying that if you're going to use the Howey test as the basis for evaluating whether something is a security or not, there's plenty of wiggle room for interpretation, and that really slams on the SEC's brake pedal moving forward because they can't just go around suing all these exchanges and tokens randomly like they are the biggest criminals on the planet.
Not sure why crypto would be categorized as commodities as commodities generally have some kind of intrinsic value. But then securities theoretically have value as well; so I would agree that Crypto shouldn't be called a security. Probably the best way to appease the SEC is to call Crypto a method of gambling.
at the end of the day people convert the real money currency ( as it still exist) in to something.. that then gets traded...on an exchange. If it is a share an IPO happens , has to go through scrutiny SO my simple questions is no matter what you call it why should any Crypto Asset( if at all it is an asset) creation should not go through same scrutiny? as an IPO and why should the exchange not be regulated? Decentralized or not it is hard earned money getting converted/ pulled together sometimes / held in custody by a third party ... is it not? The only reason It seems all the Crypto currency enthusiastic are opposing any jurisdictional oversight is because simple they don't want ANY scrutiny at all... so anybody in a backyard can create a NEW COIN and raise millions ...and one day disappear if not caught
No one except the extreme fringe is arguing that crypto should not be regulated at all. The question is how, or, more critically, by whom? If crypto tokens are securities, the they can be regulated by the SEC. If they are not securities, then... what are they? And which federal agency, if any, has the authority to regulate them?
ok so why some proponents are arguing that they are not a security? how diff is IPO than an ICO? and even if they are not a security and they are commodity then it's trading exchange should be regulated just like oil/ Gold or Silver or coffee
The court case that we are talking about in this thread centered on whether XRP is a security, and the case was brought by the SEC. The judge did not express an opinion as to whether it is commodity. The CFTC was not involved in the case. And the judge ruled that XRP was indeed a security when it was offered by the issuer to institutions, but that it was not a security when it was bought and sold on the secondary market. And I think that's ridiculous, and it's likely to be overturned on appeal. And if it isn't overturned, then Congress will pass new legislation that explicitly defines crypto as as a security or as a commodity. Earlier in this thread, someone pointed out that the Howey case, which is used to determine whether something is a security, was decided in 1946. The courts and regulatory agencies are being forced to use legal principles that are simply not equipped to address digital assets. Kind of like arguing that the Second Amendment means that any US citizen can have their own personal collection of nuclear weapons... I mean, c'mon... nuclear weapons are arms, aren't they?
iF Howey case DEFINATION applied to IPO in 1950 /80 and 2000 and today in 2023 then why should it not apply to any Public ASSET! be crypto or whatever! it is as simple as that - Creation for a publicaly traded assets and its trading is what an IPO is be it 1950 0r 2023 ! Regarding being decentralized: now a days shares are listed not just on various exchanges within one country but in some form in other countries also ( like ADR) so ina way they are decentralised Decentralized/ Anonymity blah blah.. all excuses to escape the scrutiny .. Coming back to currency creation out of thin air When EURO was created it was a sort of "New currency" only because it had EU member backing it has "store of value" Exchange security is another ball game that crypto cult members don't want to address...all the dodgy ones are in really questionable jurisdictions... 10K for a financial services license LOL
Ok, I'll give you one huge example why it doesn't work with any public asset: Bitcoin is a public digital asset that is not considered a security by any standard definition out there. For one, it's truly decentralized, meaning that you can't say that it was issued by any particular person. There's also no investment contract involved, meaning that there's no indication from anyone that you'll generate a return on your bitcoin purchase. Furthermore, bitcoin is not a company, and therefore there is no board of directors or employees with titles like CEO or CFO, which means you can't point to anyone in particular and say you are relying on them to make good decisions to protect your investment. So no matter how you look at it, Bitcoin is not a security. And so in order to move forward into the digital age, a new set of standards needs to be implemented so we can identify which category that each digital asset belongs in for the sake of applying the proper rules and regulations. Some might be securities, some might be commodities, and some may fall into a completely different category altogether.
Ok Baron.... I get your point ...bitcoin is not a company, yes , so shall we call it a currency like EURO ? but then what do you call when an ICO happens and a new "Coin" is made from thin air! should such a conversion of real money not be scrutinized? and the other issue of Exchange security!