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Yep, Gensler has outright said that “everything else other than bitcoin is a security.”[1] There's no chance Coinbase isn't aware of this. I don't know what the

Yep, Gensler has outright said that “everything else other than bitcoin is a security.”[1] There's no chance Coinbase isn't aware of this. I don't know what they hope to accomplish by pretending otherwise. [1]: https://cryptoslate.com/sec-chair-gensler-confirms-everything-other-than-bitcoin-is-a-security-implications-and-analysis/ https://cryptoslate.com/sec-chair-gensler-confirms-everythin...

onlyrealcuzzo 4y ago
Why is Bitcoin not a security but if I fork Bitcoin it is a security?
- bardworx 4y ago
  Predominantly, from my understanding, it’s because: 1. Bitcoin was classified as “currency” by Clayton. 2. It’s the closest to being decentralized so no “organization will benefit from the work of others”. 3. Growth of Bitcoin wasn’t initially speculative but as a use of currency, which is different from whatever token you fork as its goal would be for speculative trading, failing the Howey test.
  - nonethewiser 4y ago
    Does this address forking it making it a security? It doesn’t seem like it but I’m trying not to jump to conclusions.
  - codehalo 4y ago
    Nothing you said here makes a fork of the bitcoin code with a completely different genesis block (or ANY fork at ANY block of the bitcoin chain) a security.
    - bardworx 4y ago
      Why would people buy it?
      - codehalo 4y ago
        That’s the same question people were asking 14 years ago when bitcoin made it debut, and unfortunately still today on this site.
        bardworx 4y ago
        If you’re buying it because it “could up”, it’s a security. That was the point.
  - Mistletoe 4y ago
    Clayton said the same about Ethereum. https://www.coindesk.com/markets/2019/03/12/sec-chair-clayton-affirms-agencys-stance-ether-is-no-longer-a-security/ https://www.coindesk.com/markets/2019/03/12/sec-chair-clayto...
    - robocat 4y ago
      That was when Etherium was proof-of-work. I imagine it gets complicated now that you can earn staking rewards on your ETH, even though by default you earn 0% because by default you are not staking. So one major feature of “banking” your ETH at an exchange would be so the exchange provides a way to earn the “interest” on your deposit. This creates a regulatory risk, and is one reason for owning BTC instead of ETH. Note I own a few ETH and 0 BTC, and ETH has dropped 10% compared against BTC recently (normally they seem to be highly correlated (even long-term) which implies to me that the market is somewhat driven by generic crypto sector investing). Edit: Coinbase’s argument that their staking service is not a security: https://www.coinbase.com/blog/coinbases-staking-services-are-not-securities-and-heres-why https://www.coinbase.com/blog/coinbases-staking-services-are...
  - humanizersequel 4y ago
    >[arbitrary non-BTC token]'s goal would be for speculative trading I doubt this claim with extreme prejudice.
- arcticbull 4y ago
  I was under the impression it was due to the initial distribution mechanism. It was all open mine, no presale. Basically everything else has had a presale or premine. I could be wrong, because if that were the justification forks should qualify too by virtue of inheriting the chain history.
  - pazimzadeh 4y ago
    In the Ethereum pre-sale they explicitly state it is not intended to be a security or investment offering: https://blog.ethereum.org/2014/07/22/launching-the-ether-sale https://blog.ethereum.org/2014/07/22/launching-the-ether-sal... Staking and maybe EIP-1559 could change things? It's sad since it seems like Coinbase is now directly collaborating with Ethereum developers https://eips.ethereum.org/EIPS/eip-3651 https://eips.ethereum.org/EIPS/eip-3651 > The COINBASE address shall be warm at the start of transaction execution, in accordance with the actual cost of reading that account. > The COINBASE address should also be always be loaded because it receives the block reward and the transaction fees. Looks like Coinbase currently makes up 10% of Eth staking. Would this give special privileges to Coinbase over other exchanges?
    - humanizersequel 4y ago
      >Looks like Coinbase currently makes up 10% of Eth staking. Would this give special privileges to Coinbase over other exchanges? No.
    - Quiark 4y ago
      Do you think the technical term coinbase refers to the company?
      - pazimzadeh 4y ago
        I think so, but I'm not sure.
    - ashwagary 4y ago
      >In the Ethereum pre-sale they explicitly state it is not intended to be a security or investment offering: I'm not sure if ETH was completely in the clear even with this approach. Vitalik and other founders seemed to have created expectations of profit in their ICO presentations to US investors in a few 2014 videos.
- MacsHeadroom 4y ago
  The other reply to you is wrong. The answer is because a chain whose direction is controlled by a single entity in practice is probably a security as its value depends on the performance of that entity. Bitcoin's value as an asset is not contingent on some other party with control of it, unlike say Ethereum, Binance Coin, etc. Dogecoin is arguably in the same category as Bitcoin. So forks don't have to be securities. They do have to be actually decentralized, as in one entity does not decide which fork is the true fork (like with Ethereum, Bitcoin Satoshi Vision, etc).
- ashwagary 4y ago
  >Yep, Gensler has outright said that “everything else other than bitcoin is a security. >Why is Bitcoin not a security but if I fork Bitcoin it is a security? You are right. Gensler was either misquoted or mispoke. If somebody forks Bitcoin, distributes the majority of coins for free and renounces control; then random people (not connected to the founder) start voluntarily improving and giving it value, it probably wouldnt be a security.
cdiddy2 4y ago
The CFTC disagrees with that stance https://decrypt.co/123032/cftc-chair-says-ethereum-is-a-commodity-despite-genslers-bitcoin-only-position https://decrypt.co/123032/cftc-chair-says-ethereum-is-a-comm...

onlyrealcuzzo 4y ago

Why is Bitcoin not a security but if I fork Bitcoin it is a security?

bardworx 4y ago
Predominantly, from my understanding, it’s because: 1. Bitcoin was classified as “currency” by Clayton. 2. It’s the closest to being decentralized so no “organization will benefit from the work of others”. 3. Growth of Bitcoin wasn’t initially speculative but as a use of currency, which is different from whatever token you fork as its goal would be for speculative trading, failing the Howey test.
- nonethewiser 4y ago
  Does this address forking it making it a security? It doesn’t seem like it but I’m trying not to jump to conclusions.
- codehalo 4y ago
  Nothing you said here makes a fork of the bitcoin code with a completely different genesis block (or ANY fork at ANY block of the bitcoin chain) a security.
  - bardworx 4y ago
    Why would people buy it?
    - codehalo 4y ago
      That’s the same question people were asking 14 years ago when bitcoin made it debut, and unfortunately still today on this site.
      - bardworx 4y ago
        If you’re buying it because it “could up”, it’s a security. That was the point.
- Mistletoe 4y ago
  Clayton said the same about Ethereum. https://www.coindesk.com/markets/2019/03/12/sec-chair-clayton-affirms-agencys-stance-ether-is-no-longer-a-security/ https://www.coindesk.com/markets/2019/03/12/sec-chair-clayto...
  - robocat 4y ago
    That was when Etherium was proof-of-work. I imagine it gets complicated now that you can earn staking rewards on your ETH, even though by default you earn 0% because by default you are not staking. So one major feature of “banking” your ETH at an exchange would be so the exchange provides a way to earn the “interest” on your deposit. This creates a regulatory risk, and is one reason for owning BTC instead of ETH. Note I own a few ETH and 0 BTC, and ETH has dropped 10% compared against BTC recently (normally they seem to be highly correlated (even long-term) which implies to me that the market is somewhat driven by generic crypto sector investing). Edit: Coinbase’s argument that their staking service is not a security: https://www.coinbase.com/blog/coinbases-staking-services-are-not-securities-and-heres-why https://www.coinbase.com/blog/coinbases-staking-services-are...
- humanizersequel 4y ago
  >[arbitrary non-BTC token]'s goal would be for speculative trading I doubt this claim with extreme prejudice.
arcticbull 4y ago
I was under the impression it was due to the initial distribution mechanism. It was all open mine, no presale. Basically everything else has had a presale or premine. I could be wrong, because if that were the justification forks should qualify too by virtue of inheriting the chain history.
- pazimzadeh 4y ago
  In the Ethereum pre-sale they explicitly state it is not intended to be a security or investment offering: https://blog.ethereum.org/2014/07/22/launching-the-ether-sale https://blog.ethereum.org/2014/07/22/launching-the-ether-sal... Staking and maybe EIP-1559 could change things? It's sad since it seems like Coinbase is now directly collaborating with Ethereum developers https://eips.ethereum.org/EIPS/eip-3651 https://eips.ethereum.org/EIPS/eip-3651 > The COINBASE address shall be warm at the start of transaction execution, in accordance with the actual cost of reading that account. > The COINBASE address should also be always be loaded because it receives the block reward and the transaction fees. Looks like Coinbase currently makes up 10% of Eth staking. Would this give special privileges to Coinbase over other exchanges?
  - humanizersequel 4y ago
    >Looks like Coinbase currently makes up 10% of Eth staking. Would this give special privileges to Coinbase over other exchanges? No.
  - Quiark 4y ago
    Do you think the technical term coinbase refers to the company?
    - pazimzadeh 4y ago
      I think so, but I'm not sure.
  - ashwagary 4y ago
    >In the Ethereum pre-sale they explicitly state it is not intended to be a security or investment offering: I'm not sure if ETH was completely in the clear even with this approach. Vitalik and other founders seemed to have created expectations of profit in their ICO presentations to US investors in a few 2014 videos.
MacsHeadroom 4y ago
The other reply to you is wrong. The answer is because a chain whose direction is controlled by a single entity in practice is probably a security as its value depends on the performance of that entity. Bitcoin's value as an asset is not contingent on some other party with control of it, unlike say Ethereum, Binance Coin, etc. Dogecoin is arguably in the same category as Bitcoin. So forks don't have to be securities. They do have to be actually decentralized, as in one entity does not decide which fork is the true fork (like with Ethereum, Bitcoin Satoshi Vision, etc).
ashwagary 4y ago
>Yep, Gensler has outright said that “everything else other than bitcoin is a security. >Why is Bitcoin not a security but if I fork Bitcoin it is a security? You are right. Gensler was either misquoted or mispoke. If somebody forks Bitcoin, distributes the majority of coins for free and renounces control; then random people (not connected to the founder) start voluntarily improving and giving it value, it probably wouldnt be a security.

cdiddy2 4y ago

The CFTC disagrees with that stance https://decrypt.co/123032/cftc-chair-says-ethereum-is-a-commodity-despite-genslers-bitcoin-only-position https://decrypt.co/123032/cftc-chair-says-ethereum-is-a-comm...