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Can you point to any other security where there was no contract signed and the issuer promised no profits or dividends or upside or equity whatsoever? The Coinb

Can you point to any other security where there was no contract signed and the issuer promised no profits or dividends or upside or equity whatsoever? The Coinbase vs. SEC lawsuit makes these arguments. I am describing something that sounds like a commodity.

bboygravity 3y ago
Gotta love the business model of FTX, Coinbase, Binance (and all US retail brokers): receive money from clients for the purchase of securities, deliver nothing in return unless you feel like it. When your fraud moves against you, you can just restrict buying or selling or all trading until you're solvent again. All good. No biggy. 1 guy at FTX went to jail, I hope (for the future of the US) that there are many to follow.
- monero-xmr 3y ago
  I would argue they are purchasing commodities given the reality of what these assets are. The securities argument has been very suspect and with congress punting to the courts, we are starting to see it sorted out the long, expensive way.
  - nightpool 3y ago
    commodities don't come with an "off switch" that the "original owner" can flip if they don't like the things you're purchasing with them.
    - monero-xmr 3y ago
      That’s why we should have rules defining what a digital asset commodity is. Where is the off switch for Bitcoin or Ethereum?
      - ForkMeOnTinder 3y ago
        Ethereum has "difficulty bombs" about once a year which effectively force the network to follow along with protocol changes made by the Ethereum Foundation. They could conceivably use that same mechanism to exponentially slow the network below the point of usability by waiting for the hardcoded block and then... doing nothing. Afaik bitcoin doesn't have anything like that.
- latchkey 3y ago
  So that's the rub, right? You want more regulation for these companies so that individuals don't run off with all of your hard earned money. The issue is that the SEC isn't doing that. They are simply saying that crypto is bad and we aren't going to do anything about it other than try to ban it. Don't forget that Gensler met personally with that "1 guy at FTX", multiple times.
  - Spooky23 3y ago
    The SEC isn’t some medieval inquisitor. They are limited to acting within the legal walls provided by congress. The same congress whose dysfunction and craven corruption is such that they cannot agree to borrow money to fund the budget they approved in law.
ethanbond 3y ago
Are you telling me that these instruments, designed specifically to skirt grey areas in existing legal interpretation, are skirting grey areas in legal interpretations? Fortunately laws are interpreted and reinterpreted constantly to address this obvious, perennial technique of hucksters and conmen.
- monero-xmr 3y ago
  Well the SEC lost vs. Ripple in regards to XRP being a de facto security. So I guess you are mad at the legal system saying you are wrong?
  - ethanbond 3y ago
    I’m not “mad” about anything? I’m saying, “no no no, this was designed to be ambiguous ergo can’t touch it” is a clear misunderstanding of how laws work, how they get their teeth, and why we have them.
    - monero-xmr 3y ago
      We are debating legal definitions and the court said you are wrong. We can debate philosophy but you are not speaking about reality because the court already said you are incorrect.
      - ethanbond 3y ago
        It’s not quite that simple, even in XRP’s case specifically. The court said that secondary algorithmic sales of XRP did not constitute trading investment contracts, however they also ruled that Ripple sold an unregistered security in their initial offer of XRP. What was that security? XRP! Look, we found a grey area again.
      - RandomLensman 3y ago
        In this specific case the court handed a (partial) victory to Ripple, not sure this simply translates into other situations.
throw0101b 3y ago
> Can you point to any other security where there was no contract signed and the issuer promised no profits or dividends or upside or equity whatsoever? Isn't that every security? You hope that the companies in which take an equity stake does will, but who is promising (guaranteeing?) such a thing. That's why investors ask for returns: they are risking their money and want to be rewarded. The riskier the investment, generally the more reward is asked for. And as a technicality: in the US, per the Commodity Exchange Act, cryptocurrencies (e.g., Bitcoin) are commodities (like oil, wheat, frozen concentrated orange juice, etc): * https://www.cftc.gov/sites/default/files/2019-12/oceo_bitcoinbasics0218.pdf https://www.cftc.gov/sites/default/files/2019-12/oceo_bitcoi... * https://en.wikipedia.org/wiki/Commodity_Exchange_Act https://en.wikipedia.org/wiki/Commodity_Exchange_Act Do you expect profits, dividends, etc on eggs, potatoes, onions, cheese, wheat, corn, soybeans, lean hogs, gold, silver, aluminium, iron? * https://en.wikipedia.org/wiki/Chicago_Mercantile_Exchange https://en.wikipedia.org/wiki/Chicago_Mercantile_Exchange * https://www.cmegroup.com/markets.html https://www.cmegroup.com/markets.html You buy on one price and sell on another, and there are futures and derivative markets as well. Soybeans have no dividends.
- latchkey 3y ago
  > Soybeans have no dividends. ETH generates yield for holders who stake it. It is also deflationary.

bboygravity 3y ago

Gotta love the business model of FTX, Coinbase, Binance (and all US retail brokers): receive money from clients for the purchase of securities, deliver nothing in return unless you feel like it. When your fraud moves against you, you can just restrict buying or selling or all trading until you're solvent again. All good. No biggy. 1 guy at FTX went to jail, I hope (for the future of the US) that there are many to follow.

monero-xmr 3y ago
I would argue they are purchasing commodities given the reality of what these assets are. The securities argument has been very suspect and with congress punting to the courts, we are starting to see it sorted out the long, expensive way.
- nightpool 3y ago
  commodities don't come with an "off switch" that the "original owner" can flip if they don't like the things you're purchasing with them.
  - monero-xmr 3y ago
    That’s why we should have rules defining what a digital asset commodity is. Where is the off switch for Bitcoin or Ethereum?
    - ForkMeOnTinder 3y ago
      Ethereum has "difficulty bombs" about once a year which effectively force the network to follow along with protocol changes made by the Ethereum Foundation. They could conceivably use that same mechanism to exponentially slow the network below the point of usability by waiting for the hardcoded block and then... doing nothing. Afaik bitcoin doesn't have anything like that.
latchkey 3y ago
So that's the rub, right? You want more regulation for these companies so that individuals don't run off with all of your hard earned money. The issue is that the SEC isn't doing that. They are simply saying that crypto is bad and we aren't going to do anything about it other than try to ban it. Don't forget that Gensler met personally with that "1 guy at FTX", multiple times.
- Spooky23 3y ago
  The SEC isn’t some medieval inquisitor. They are limited to acting within the legal walls provided by congress. The same congress whose dysfunction and craven corruption is such that they cannot agree to borrow money to fund the budget they approved in law.

ethanbond 3y ago

Are you telling me that these instruments, designed specifically to skirt grey areas in existing legal interpretation, are skirting grey areas in legal interpretations? Fortunately laws are interpreted and reinterpreted constantly to address this obvious, perennial technique of hucksters and conmen.

monero-xmr 3y ago
Well the SEC lost vs. Ripple in regards to XRP being a de facto security. So I guess you are mad at the legal system saying you are wrong?
- ethanbond 3y ago
  I’m not “mad” about anything? I’m saying, “no no no, this was designed to be ambiguous ergo can’t touch it” is a clear misunderstanding of how laws work, how they get their teeth, and why we have them.
  - monero-xmr 3y ago
    We are debating legal definitions and the court said you are wrong. We can debate philosophy but you are not speaking about reality because the court already said you are incorrect.
    - ethanbond 3y ago
      It’s not quite that simple, even in XRP’s case specifically. The court said that secondary algorithmic sales of XRP did not constitute trading investment contracts, however they also ruled that Ripple sold an unregistered security in their initial offer of XRP. What was that security? XRP! Look, we found a grey area again.
    - RandomLensman 3y ago
      In this specific case the court handed a (partial) victory to Ripple, not sure this simply translates into other situations.

throw0101b 3y ago

> Can you point to any other security where there was no contract signed and the issuer promised no profits or dividends or upside or equity whatsoever? Isn't that every security? You hope that the companies in which take an equity stake does will, but who is promising (guaranteeing?) such a thing. That's why investors ask for returns: they are risking their money and want to be rewarded. The riskier the investment, generally the more reward is asked for. And as a technicality: in the US, per the Commodity Exchange Act, cryptocurrencies (e.g., Bitcoin) are commodities (like oil, wheat, frozen concentrated orange juice, etc): * https://www.cftc.gov/sites/default/files/2019-12/oceo_bitcoinbasics0218.pdf https://www.cftc.gov/sites/default/files/2019-12/oceo_bitcoi... * https://en.wikipedia.org/wiki/Commodity_Exchange_Act https://en.wikipedia.org/wiki/Commodity_Exchange_Act Do you expect profits, dividends, etc on eggs, potatoes, onions, cheese, wheat, corn, soybeans, lean hogs, gold, silver, aluminium, iron? * https://en.wikipedia.org/wiki/Chicago_Mercantile_Exchange https://en.wikipedia.org/wiki/Chicago_Mercantile_Exchange * https://www.cmegroup.com/markets.html https://www.cmegroup.com/markets.html You buy on one price and sell on another, and there are futures and derivative markets as well. Soybeans have no dividends.

latchkey 3y ago
> Soybeans have no dividends. ETH generates yield for holders who stake it. It is also deflationary.