4 ms·

Depends on what you consider a "Security". Are "Securities" meant to be used as currencies?

lumost 4y ago
Are virtual currencies actually being used as currencies? I've been long BTC for ~10 years, I've only made a few small novelty purchases through BTC. Based on any ads I've seen for crypto from coinbase, along with the tools they've built into their app - the primary use case for crypto appears to be as a security.
- PretzelPirate 3y ago
  I pay for POAPs on Ethereum using Eth. There's no expectation of profit by owning one since anyone who actively participates in the event can get one, but they're fun collectibles. Because of POAPs, I use Eth as a currency all the time.
- ascendantlogic 4y ago
  Bitcoin was originally meant to be used as a currency. Ethereum was meant to be the oil that powered the smart contract network. I guess the question is, what matters more: the intent by the creators or what the end users choose to do with it?
  - lumost 4y ago
    I have yet to see any coin be used in a manner that doesn’t devolve to a security. While there were many projects to do other things with crypto - they all still sell tokens on exchanges. I’d find the claim that crypto isn’t meant as a security more convincing if the crypto traded at 0 dollars.
- nyolfen 4y ago
  i run a small retail shop that sells digital goods for btc. i bought a book with btc two months ago. more convincingly, it's widely used for remittances and as a store of value in countries with debased currencies -- this is a powerful tool for ordinary citizens in countries like venezuela, argentina etc to discipline central banks who would otherwise steal their savings.
  - mrguyorama 4y ago
    In japan, there exist a bunch of businesses that buy your pachinko prizes and give you cash. It's a standard thing that happens pretty much anywhere with pachinko machines. Yet it would be absurd to call those toys "A currency". A currency requires more usage than occasional barter.
    - deleted 4y ago
      [deleted]
    - nyolfen 4y ago
      what threshold would you find convincing? it performs all conventionally defined functions of money, it is legally recognized as money in some jurisdictions, it is useful as a store of value and medium of exchange. japanese yen might as well be 'toy' to me since i can't pay taxes with it. at this point i feel like i'm arguing about the utility of automobiles with an equestrian in 1920.
this_user 4y ago
Just because you claim something is a currency, doesn't make it one, especially if it doesn't even exhibit the properties of a currency. But the question of what is a "security" has been clearly answered in 1946: > For purposes of the Securities Act, an investment contract (undefined by the 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. A lot of these coins are attached to some such scheme by a 3rd party, therefore they should be considered securities. This may even apply to most NFTs. Source: https://supreme.justia.com/cases/federal/us/328/293/ https://supreme.justia.com/cases/federal/us/328/293/
- sebzim4500 4y ago
  A lot of people buy houses thinking they will increase in value. Good to know they've all been doing securities fraud.
  - prottog 4y ago
    If there was a startup called Homebase that was in the business of serving as an exchange where people could trade houses, the SEC might be interested ;-)
    - sebzim4500 4y ago
      Last time this was discussed here people were suggesting that BTC was not a security but BCH was, despite being basically the same thing, and certainly both being exchanged on Coinbase.
  - arcticbull 4y ago
    You can google this stuff you know? Real estate does not fall under the securities umbrella. This is well established legal precedent, covered under Howey, the Securities Act, the Securities Exchange Act subsequent rulings. Real estate fails the Howey test because there is no common enterprise. https://www.compliancebuilding.com/2010/11/04/what-is-a-security-is-real-estate-a-security/ https://www.compliancebuilding.com/2010/11/04/what-is-a-secu...

Are virtual currencies actually being used as currencies? I've been long BTC for ~10 years, I've only made a few small novelty purchases through BTC. Based on any ads I've seen for crypto from coinbase, along with the tools they've built into their app - the primary use case for crypto appears to be as a security.

PretzelPirate 3y ago
I pay for POAPs on Ethereum using Eth. There's no expectation of profit by owning one since anyone who actively participates in the event can get one, but they're fun collectibles. Because of POAPs, I use Eth as a currency all the time.
ascendantlogic 4y ago
Bitcoin was originally meant to be used as a currency. Ethereum was meant to be the oil that powered the smart contract network. I guess the question is, what matters more: the intent by the creators or what the end users choose to do with it?
- lumost 4y ago
  I have yet to see any coin be used in a manner that doesn’t devolve to a security. While there were many projects to do other things with crypto - they all still sell tokens on exchanges. I’d find the claim that crypto isn’t meant as a security more convincing if the crypto traded at 0 dollars.
nyolfen 4y ago
i run a small retail shop that sells digital goods for btc. i bought a book with btc two months ago. more convincingly, it's widely used for remittances and as a store of value in countries with debased currencies -- this is a powerful tool for ordinary citizens in countries like venezuela, argentina etc to discipline central banks who would otherwise steal their savings.
- mrguyorama 4y ago
  In japan, there exist a bunch of businesses that buy your pachinko prizes and give you cash. It's a standard thing that happens pretty much anywhere with pachinko machines. Yet it would be absurd to call those toys "A currency". A currency requires more usage than occasional barter.
  - deleted 4y ago
    [deleted]
  - nyolfen 4y ago
    what threshold would you find convincing? it performs all conventionally defined functions of money, it is legally recognized as money in some jurisdictions, it is useful as a store of value and medium of exchange. japanese yen might as well be 'toy' to me since i can't pay taxes with it. at this point i feel like i'm arguing about the utility of automobiles with an equestrian in 1920.

this_user 4y ago

Just because you claim something is a currency, doesn't make it one, especially if it doesn't even exhibit the properties of a currency. But the question of what is a "security" has been clearly answered in 1946: > For purposes of the Securities Act, an investment contract (undefined by the 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. A lot of these coins are attached to some such scheme by a 3rd party, therefore they should be considered securities. This may even apply to most NFTs. Source: https://supreme.justia.com/cases/federal/us/328/293/ https://supreme.justia.com/cases/federal/us/328/293/

sebzim4500 4y ago
A lot of people buy houses thinking they will increase in value. Good to know they've all been doing securities fraud.
- prottog 4y ago
  If there was a startup called Homebase that was in the business of serving as an exchange where people could trade houses, the SEC might be interested ;-)
  - sebzim4500 4y ago
    Last time this was discussed here people were suggesting that BTC was not a security but BCH was, despite being basically the same thing, and certainly both being exchanged on Coinbase.
- arcticbull 4y ago
  You can google this stuff you know? Real estate does not fall under the securities umbrella. This is well established legal precedent, covered under Howey, the Securities Act, the Securities Exchange Act subsequent rulings. Real estate fails the Howey test because there is no common enterprise. https://www.compliancebuilding.com/2010/11/04/what-is-a-security-is-real-estate-a-security/ https://www.compliancebuilding.com/2010/11/04/what-is-a-secu...