5 ms·

Just because you can insider trade doesn't make something a security in my view. You can do insider trading around gold or palladium or any other commodity for

Just because you can insider trade doesn't make something a security in my view. You can do insider trading around gold or palladium or any other commodity for instance. You can do insider trading with property and land. You can even do insider trading with currencies.

mikeyouse 4y ago
They're not securities because you can insider trade them -- they're securities because they fairly clearly meet the Federal definition; > The term “security” means any note, stock, treasury stock, security future, security-based swap, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a “security”, or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing. https://www.law.cornell.edu/uscode/text/15/77b https://www.law.cornell.edu/uscode/text/15/77b
- bpodgursky 4y ago
  Your comment has not contributed anything. Which of those many categories do you think crypto falls within? For example, foreign currency is not a security, and an intuitive stance would be that crypto is far closer to foreign currency than it is to stocks. Other sources have a more useful definition in my opinion [1]: > Firstly, a security is simply a financial instrument that represents a specific ownership position in either a corporation, a creditor related to a governmental body, a publicly traded corporation, or rights to ownership as represented by an option. The security must represent some type of financial value. Securities are generally categorised as either debts or equities, with a debt security indicating money that has been borrowed and must be repaid. Under this definition, it is hard to see how the average "boring" cryptocurrency is a security. [1] https://www.onefinancialmarkets.com/securities-vs-forex https://www.onefinancialmarkets.com/securities-vs-forex
  - dataflow 4y ago
    > The security must represent some type of financial value This is probably going to be the point of contention. There's no shortage of people wanting to argue Bitcoin really does have financial value, cures cancer, etc...
  - westurner 4y ago
    Is "must be an agreement for future performance" a fair first test of whether something is a securities contract? 1) If there is no contractual agreement for future performance, it cannot be a securities contract (a "security"). That we can test before applying 2) the Howey Test, and then 3) assessing whether it's a Payment, Utility, Asset, or Hybrid coin/token From https://en.wikipedia.org/wiki/SEC_v._W._J._Howey_Co https://en.wikipedia.org/wiki/SEC_v._W._J._Howey_Co. : > "In other words, an investment contract for purposes of the Securities Act means a contract, transaction or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party, it being immaterial whether the shares in the enterprise are evidenced by formal certificates or by nominal interests in the physical assets employed in the enterprise."[1] > "The test is whether the scheme involves an investment of money in a common enterprise with profits to come solely from the efforts of others. If that test be satisfied, it is immaterial whether the enterprise is speculative or non-speculative or whether there is a sale of property with or without intrinsic value."[1] Collectible coins, trading cards, beanie babies, real estate, and rare earth commodities, for example, are not securities per US securities law. Do these things fail a hypothetical and hopefully helpful "must be an agreement for future performance" litmus test for whether a thing is a security per US case law precedent? What must be fed into the FTC CAT is a different set of policies. From "Guidelines for enquiries regarding the regulatory framework for ICOs [pdf]" (2018) https://news.ycombinator.com/item?id=16406967 https://news.ycombinator.com/item?id=16406967 https://westurner.github.io/hnlog/#comment-16407277 https://westurner.github.io/hnlog/#comment-16407277 : > This is a helpful table indicating whether a Payment, Utility, Asset, or Hybrid coin/token: is a security, qualifies under Swiss AML payment law. > The "Minimum information requirements for ICO enquiries" appendix seems like a good set of questions for evaluating ICOs. Are there other good questions to ask when considering whether to invest in a Payment, Utility, Asset, or Hybrid ICO? > Are US regulations different from these clear and helpful regulatory guidelines for ICOs in Switzerland?
- closewith 4y ago
  I have to say that it's not clear to me from your comment. If it is an open-and-shut case, why is it the subject of such controversy?
  - deleted 4y ago
    [deleted]
  - heavyset_go 4y ago
    Because of vested interests with power to keep the controversy alive at a high level.
- tarsinge 4y ago
  I don’t really see how it meets that definition. It’s not a note or a contract, it’s just numbers and a global state, it represents nothing.
senttoschool 4y ago
>Just because you can insider trade doesn't make something a security in my view. I'm not an expert on security law. All I know is that there needs to be far better regulation around crypto whether it's labeling them as securities or creating brand new regulation. It's just way too easy to scam people in crypto.

mikeyouse 4y ago

They're not securities because you can insider trade them -- they're securities because they fairly clearly meet the Federal definition; > The term “security” means any note, stock, treasury stock, security future, security-based swap, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a “security”, or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing. https://www.law.cornell.edu/uscode/text/15/77b https://www.law.cornell.edu/uscode/text/15/77b

bpodgursky 4y ago
Your comment has not contributed anything. Which of those many categories do you think crypto falls within? For example, foreign currency is not a security, and an intuitive stance would be that crypto is far closer to foreign currency than it is to stocks. Other sources have a more useful definition in my opinion [1]: > Firstly, a security is simply a financial instrument that represents a specific ownership position in either a corporation, a creditor related to a governmental body, a publicly traded corporation, or rights to ownership as represented by an option. The security must represent some type of financial value. Securities are generally categorised as either debts or equities, with a debt security indicating money that has been borrowed and must be repaid. Under this definition, it is hard to see how the average "boring" cryptocurrency is a security. [1] https://www.onefinancialmarkets.com/securities-vs-forex https://www.onefinancialmarkets.com/securities-vs-forex
- dataflow 4y ago
  > The security must represent some type of financial value This is probably going to be the point of contention. There's no shortage of people wanting to argue Bitcoin really does have financial value, cures cancer, etc...
- westurner 4y ago
  Is "must be an agreement for future performance" a fair first test of whether something is a securities contract? 1) If there is no contractual agreement for future performance, it cannot be a securities contract (a "security"). That we can test before applying 2) the Howey Test, and then 3) assessing whether it's a Payment, Utility, Asset, or Hybrid coin/token From https://en.wikipedia.org/wiki/SEC_v._W._J._Howey_Co https://en.wikipedia.org/wiki/SEC_v._W._J._Howey_Co. : > "In other words, an investment contract for purposes of the Securities Act means a contract, transaction or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party, it being immaterial whether the shares in the enterprise are evidenced by formal certificates or by nominal interests in the physical assets employed in the enterprise."[1] > "The test is whether the scheme involves an investment of money in a common enterprise with profits to come solely from the efforts of others. If that test be satisfied, it is immaterial whether the enterprise is speculative or non-speculative or whether there is a sale of property with or without intrinsic value."[1] Collectible coins, trading cards, beanie babies, real estate, and rare earth commodities, for example, are not securities per US securities law. Do these things fail a hypothetical and hopefully helpful "must be an agreement for future performance" litmus test for whether a thing is a security per US case law precedent? What must be fed into the FTC CAT is a different set of policies. From "Guidelines for enquiries regarding the regulatory framework for ICOs [pdf]" (2018) https://news.ycombinator.com/item?id=16406967 https://news.ycombinator.com/item?id=16406967 https://westurner.github.io/hnlog/#comment-16407277 https://westurner.github.io/hnlog/#comment-16407277 : > This is a helpful table indicating whether a Payment, Utility, Asset, or Hybrid coin/token: is a security, qualifies under Swiss AML payment law. > The "Minimum information requirements for ICO enquiries" appendix seems like a good set of questions for evaluating ICOs. Are there other good questions to ask when considering whether to invest in a Payment, Utility, Asset, or Hybrid ICO? > Are US regulations different from these clear and helpful regulatory guidelines for ICOs in Switzerland?
closewith 4y ago
I have to say that it's not clear to me from your comment. If it is an open-and-shut case, why is it the subject of such controversy?
- deleted 4y ago
  [deleted]
- heavyset_go 4y ago
  Because of vested interests with power to keep the controversy alive at a high level.
tarsinge 4y ago
I don’t really see how it meets that definition. It’s not a note or a contract, it’s just numbers and a global state, it represents nothing.

senttoschool 4y ago

>Just because you can insider trade doesn't make something a security in my view. I'm not an expert on security law. All I know is that there needs to be far better regulation around crypto whether it's labeling them as securities or creating brand new regulation. It's just way too easy to scam people in crypto.