RT @Alex_LLOYLaw: The precedent piles up, and in predictable ways. I've always thought that, overall, the #crypto markets are best handled in their nascency by anti-fraud enforcement under #CFTC Rule 180.1; this decision gives it teeth! https://t.co/k7i0lDNCK6
Good, the CFTC has been a lot friendlier to the crypto space than the SEC.
markr52 - 3 years account age. 300 - 1000 comment karma.2 weeks ago
How so? I understand the commissioner has spent a fair amount of time going to various crypto conferences and paying lip service to the idea of not stifling innovation etc... But are there any actual good deeds to speak of rather than words?
This is regarding the case against MyBigCoin (MBC):
The CFTC’s amended complaint alleges that since at least January 2014, the defendants operated a fraudulent virtual currency scheme in which they solicited customers to purchase a fully-functioning virtual currency, MBC, by repeatedly making false and misleading claims about its value, usage, trade status, and financial backing. As alleged in the amended complaint, Defendants lied that MBC could be bought, sold, donated, used to make purchases, and was actively trading. To give the illusion that MBC was a safe bet, Defendants also lied that MBC was backed by millions of dollars in gold, and would be used to stabilize the economies of twenty-two countries, as alleged in the amended complaint. The amended complaint also alleges that Defendants misappropriated customer funds by conning people into giving them more than $6 million for what Defendants represented was a fully-functioning virtual currency. Defendants allegedly used these misappropriated funds to purchase a home, antiques, fine art, jewelry, luxury goods, furniture, interior decorating and other home improvement services, travel, and entertainment.
One case among many that will be logged, noted, annotated and eventually the heap will be either settled by the SC or definitions will be set forth and then kicked back to the lower courts from whence they came. Wait for the other foot to drp...which could take quite a while - there's a lot of money to be made before reins are put on this choo-choo.
Xrp has the characteristics of a commodity, because of it's usefulness. But either way am curious to see if it's deemed a currency as well. It's not a security for sure. But I don't know if it can be both a commodity and a currency but it would make the most logical sense to be
Classification of the cryptocurrencies as commodities buy the commodity futures and trading commission and as a security by the Securities and Exchange Commission is making a clear indication that the financial regulators are trying to pull the cryptocurrencies into the regulation in order to make huge amounts of profits by taxing the cryptocurrency world.
Just because it was designed for a specific utility doesn't mean it can't be repurposed as a currency. Is it ideally suited to be one? Some would argue no due to it's deflationary nature, but it's not to say that expectations can't be defied.
Repurposing because it doesn't fit the jurisdiction of the SEC or that of the CFTC is ridiculous. The whole problem is it fits in neither jurisdiction until they start rewriting shit according to how things are today and not in the 1940s.
Can be distinguished in four categories: energy (oil, gas, electricity), metals (gold, copper, iron), livestock and meat (beef, pork bellies, live cattle) and agricultural products (rice, palm oil, corn, coffee, cocoa, cotton, sugar, orange juice). (Perhaps they'll create a new category)
This applies to Crypto as a currency:
A change in the price of commodities such as electricity or rice will be directly felt through a change purchasing power.
The only part they get right as it applies to XRP is:
Commodities are standing still, their price determined by global forces of supply, demand and the occasional natural disaster.
Agreed. A commodity is something that can be touched.
I strongly feel as though either A) an addendum should be made to the legal definition of commodities, or B) An addendum should be made to the definition of a currency to include "digital currencies." Adoption will be unreal in the next few years, and the term "commodity" will no longer suffice.
That would be wise of them, but momentum towards a Senate Bill would still give us a hell of a push towards whale-grade adoption. Anything to push towards official legislation is good, this uncertainty period is holding us back
From a quick look it seems to be basically an as expected result. Basically the court ruled that tokens can be commodities and commodity tokens are subject to CFTC oversight. This is as expected.
It has always been expected that tokens will fall into one of three categories based on which federal group has jurisdiction; securities to SEC, commodities to CFTC, and other instruments to FINRA. The general consensus is that dealing with FINRA on this will be a complete nightmare, as their first approach will absolutely be that by the very nature tokens are felonies.
This seems to be defining one end by the court, just establishing that CFTC has jurisdiction for commodities, taking them away from FINRA. It doesn't look like it defines the line between security and commodity, so no determined line between CFTC and SEC. The CFTC/SEC line is likely the bigger one because there are many tokens that look to be both commodities and securities.
Very positive news! The big question now is whether just because a court has found that (some?) cryptos are a commodity, does that mean they can't also be classified as a security. Does everything have to be one or other, and not both?