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He said BTC was the only cryptocurrency he was comfortable saying was a commodity, while many were securities it didn't address explicitly what all others were

He said BTC was the only cryptocurrency he was comfortable saying was a commodity, while many were securities it didn't address explicitly what all others were “That’s the only one I’m going to say because I’m not going to talk about any one of these tokens” https://twitter.com/SBF_FTX/status/1541565079992369155?s=20&t=CvDEh4HgUtfKZIgX9fM6PA https://twitter.com/SBF_FTX/status/1541565079992369155?s=20&...

null0pointer 4y ago
Thanks, headline is a bit misleading,
omginternets 4y ago
What’s the difference between a security and a commodity? And what does this distinction change for the SEC?
- phabricator 4y ago
  The Howey Test
- sshine 4y ago
  > What’s the difference between a security and a commodity? Securities: Stocks and Bonds Commodities: Metals, Grains, and Oil A commodity's defining feature is its interchangeability. One unit is essentially the same as another unit. To an orange juice company oranges are oranges, to an apple juice company apples are apples, and to an oil refinery one barrel of oil is a lot like any other barrel of oil. Commodities must meet certain minimum quality standards and markets do distinguish between different types of the same commodity. But for the most part it's about quantity. https://www.findlaw.com/consumer/securities-law/securities-vs-commodities.html https://www.findlaw.com/consumer/securities-law/securities-v... A commodity is a basic good used in commerce that is interchangeable with other goods of the same type. Commodities are most often used as inputs in the production of other goods or services. The quality of a given commodity may differ slightly, but it is essentially uniform across producers. https://www.investopedia.com/terms/c/commodity.asp https://www.investopedia.com/terms/c/commodity.asp > And what does this distinction change for the SEC? Good question. This thread is full of suggestions. I couldn’t find a truly compelling one except that Bitcoin could fit the description of a commodity.
  - tcbawo 4y ago
    One major difference is jurisdiction: SEC vs CFTC
- bedros 4y ago
  Difference is scarcity
- im3w1l 4y ago
  A commodity is (traditionally) a standardized physical good. A security is a tradable contract. It could for example give you the right to a certain sum of money per year, or partial ownership of a company, or the right to buy something at a certain price. Some stable coins fit the security definition pretty well since they come with a right to redeem for dollars. Other cryptos don't really fit either.
- daydream 4y ago
  Securities and commodities are regulated differently and subject to different laws.
- sgent 4y ago
  A commodity doesn't promise a return for holding it, a security does. If I buy a gold bar, in a year I have a gold bar, same with a bushel of wheat, or 1million yen. Securities use resources to try and generate a return -- companies try to sell a product, bonds generate interest, etc.
  - Galanwe 4y ago
    This is actually the only answer that is pertinent in this context, it should be up voted. Securities generate returns, commodities do not. The regulation proposals for tokens include a number of different categories: utilities (governance), securities (returns), commodities (holding), etc. The categorization of tokens influence the amount of regulation they have to undergo: Exchanges, KYC, AML, etc. For instance if a token is categorized as a security, then it is an investment product. You will need a SEC licence to sell it, perform KYC & AML on clients, have audits, etc.

null0pointer 4y ago

Thanks, headline is a bit misleading,

omginternets 4y ago

What’s the difference between a security and a commodity? And what does this distinction change for the SEC?

phabricator 4y ago
The Howey Test
sshine 4y ago
> What’s the difference between a security and a commodity? Securities: Stocks and Bonds Commodities: Metals, Grains, and Oil A commodity's defining feature is its interchangeability. One unit is essentially the same as another unit. To an orange juice company oranges are oranges, to an apple juice company apples are apples, and to an oil refinery one barrel of oil is a lot like any other barrel of oil. Commodities must meet certain minimum quality standards and markets do distinguish between different types of the same commodity. But for the most part it's about quantity. https://www.findlaw.com/consumer/securities-law/securities-vs-commodities.html https://www.findlaw.com/consumer/securities-law/securities-v... A commodity is a basic good used in commerce that is interchangeable with other goods of the same type. Commodities are most often used as inputs in the production of other goods or services. The quality of a given commodity may differ slightly, but it is essentially uniform across producers. https://www.investopedia.com/terms/c/commodity.asp https://www.investopedia.com/terms/c/commodity.asp > And what does this distinction change for the SEC? Good question. This thread is full of suggestions. I couldn’t find a truly compelling one except that Bitcoin could fit the description of a commodity.
- tcbawo 4y ago
  One major difference is jurisdiction: SEC vs CFTC
bedros 4y ago
Difference is scarcity
im3w1l 4y ago
A commodity is (traditionally) a standardized physical good. A security is a tradable contract. It could for example give you the right to a certain sum of money per year, or partial ownership of a company, or the right to buy something at a certain price. Some stable coins fit the security definition pretty well since they come with a right to redeem for dollars. Other cryptos don't really fit either.
daydream 4y ago
Securities and commodities are regulated differently and subject to different laws.
sgent 4y ago
A commodity doesn't promise a return for holding it, a security does. If I buy a gold bar, in a year I have a gold bar, same with a bushel of wheat, or 1million yen. Securities use resources to try and generate a return -- companies try to sell a product, bonds generate interest, etc.
- Galanwe 4y ago
  This is actually the only answer that is pertinent in this context, it should be up voted. Securities generate returns, commodities do not. The regulation proposals for tokens include a number of different categories: utilities (governance), securities (returns), commodities (holding), etc. The categorization of tokens influence the amount of regulation they have to undergo: Exchanges, KYC, AML, etc. For instance if a token is categorized as a security, then it is an investment product. You will need a SEC licence to sell it, perform KYC & AML on clients, have audits, etc.