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Bitcoin United States

Bitcoin is the Only Coin the SEC Chair Will Call a Commodity (axios.com) 65

Posted by msmash from the how-about-that dept.
The chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, said on CNBC's Squawk Box that the only token he would lump in with commodities was bitcoin. From a report: Gensler pointedly declined to name any cryptocurrency other than the original one, notable because the market has been operating under the assumption that there is a sort of wink-and-nod understanding that ether is also not a security. "Many of these financial assets, crypto assets, have the key attributes of a security... some like bitcoin, and that's the only one, Jim, I'm going to say, because I'm not going to talk about any of these tokens, my predecessors and others have said they're a commodity," Gensler said. He made the comment as he discussed the importance of collaborating with the Commodity Futures Trading Commission (CFTC).
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Bitcoin is the Only Coin the SEC Chair Will Call a Commodity More

Bitcoin is the Only Coin the SEC Chair Will Call a Commodity

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  • These are not commodities (Score:4, Insightful)

    by rsilvergun ( 571051 ) on Wednesday June 29, 2022 @11:02AM (#62659552)
    Commodities have a use beyond trading and speculating on their value. Bitcoin has no such thing. It only has value because people think it has value. The food in my fridge has value because I can eat it and continue to live. Electricity has value because it provides light and heat and air conditioning. Oil has value because I can use it to make gas and drive.

    Bitcoin isn't even a currency so you can't even start arguing that currencies are a commodity.

    My guess is this guy is helping for a fat paycheck from one of the crypto companies. He's signaling that cryptocurrencies are going to be regulated by the much weaker commodities rules. This is bad news for all of us because without that oversight we're going to see 2008 style bundled securities with cryptocurrency built on top of Bitcoin. Market crashed results from that is going to be brutal. Half of us are going to lose our jobs and the other half are going to be working double unpaid overtime

    • He's signalling that they're going to be regulated as securities which will be the end of crypto as a thing.

      • I can't say I'm sad to see that happen. Maybe then finally we'll have stories worth reading again on /.

      • I would think that the financial industry would push for them to be minimally regulated but not totally regulated. For the most part, the regulations would cover basics like contract enforcement. The financial industry has always dealt in and has liked unregulated markets. For example the housing crisis of 2008 was in large part to CDOs which had bets on mortgages totalling more than the actual value of all mortgages many times over. There was/is not a lot of regulation on CDOs other than the bare minimum t

        • Anything involving real audits and reporting would mean the end of crypto as a thing. Same for exchanges. 95% of all of it is pure fraud and make-believe.

    • Re:These are not commodities (Score:4, Insightful)

      by muh_freeze_peach ( 9622152 ) on Wednesday June 29, 2022 @11:06AM (#62659564)
      "It only has value because people think it does" All money works this way.

      • "It only has value because people think it does" All money works this way.

        Money has value because people who have debt need to obtain money to pay back that debt. It even says as much right on US currency.

        When banks start writing loans in Bitcoin and people are willing to actually take them up on it, then it's money. Until then, it's a fucking gambling token.

        • When banks start writing loans in Bitcoin and people are willing to actually take them up on it, then it's money. Until then, it's a fucking gambling token.

          Bitcoin is legal tender in Central African Republic and El Salvador. They both accept payment directly in BTC by fiat, same as USD is by fiat. El Salvador even has a fixed exchange rate agreement with the dollar.

          If you think BTC is inefficient, may I introduce you to the international bank transfer?

          • Re: (Score:2)

            by gweihir ( 88907 )

            Good luck with that. If you try to use that path, you will find that there is some hard road-block somewhere along the way.

            • Good luck with that. If you try to use that path, you will find that there is some hard road-block somewhere along the way.

              Yep, after getting burned one too many times, I’m finally off international bank transfers for life.

              • Re: (Score:2)

                by gweihir ( 88907 )

                Good luck with that. If you try to use that path, you will find that there is some hard road-block somewhere along the way.

                Yep, after getting burned one too many times, I’m finally off international bank transfers for life.

                They are OK if you have high-reputation or strongly regulated banks on both sides. Otherwise, not so much.

                • They are OK if you have high-reputation or strongly regulated banks on both sides. Otherwise, not so much.

                  If by OK you mean taking a large flat fee on both sides and a % off the top pre payment due to a crappy exchange rate, then waiting up to days for the transaction to clea^h^h^h become the most profitable for the banks at the expense of the customer then yes. It’s quite a bit more expensive and far far slower than using BTC as a middleman for larger amounts. Either is better than pseudo exchanges where money is churned and never leaves the country like Wise. A small transaction and they might put i

      • And fiat money is not a commodity.

        There is such a thing as commodity money, but the world abandoned it long ago.

      • Bitcoin will be money when the US Gov't accepts tax payments in BTC. Until then its (at best) a speculative commodity with no inherent value.

      • Comment removed based on user account deletion

      • Re: (Score:1)

        by gweihir ( 88907 )

        "It only has value because people think it does" All money works this way.

        Nope. Stop pushing that stupid lie.

      • The US dollar has intrinsic value because the US government mandates that certain transactions need to be performed using US dollars. Namely: paying taxes.

    • Market crashed results from that is going to be brutal. Half of us are going to lose our jobs and the other half are going to be working double unpaid overtime

      You forgot the 1%. They'll be the ones buying everything up for pennies on the dollar during the crash. That's why they actually want the economy to take a dump, and are actively encouraging this crap.

      • Not just the 1%. Plenty of us saw this coming years ago and are prepared.

        • Re: (Score:2)

          by HiThere ( 15173 )

          If you had the resources to prepare for a crash, you may not be in the 1%, but you're definitely in the 30%. And unless you're planning to live on a self-sufficient small farm (what's your water supply?), probably wealthier.

    • I interpret his use of "commodity" closer to financial market definitions of "commodity trading". Commodities used to be physical things like agricultural products, mining resources, etc. Today's markets have derivatives in insurance and mortgages (housing crisis 2008) as part of commodity trading. It is not a large leap from those to cryptocurrency as a commodity.

      • This is the chair of the Securities Exchange Commission discussing what a security (regulated by the SEC) vs what is a commodity (regulated by the CFTC). Only because that's the entire point of discussion, I don't think it's to pedantic to point out:

        The things you mentioned are NOT commodities. They are securities.

        Commodities are useful goods themselves, promises (contracts) to deliver coffee, gold, or wheat. Typically they are ingredients used in consumer products - wheat is a commodity used to make bread.

        • Again for the purposes of markets, cryptocurrency being traded on the "commodity market" is most likely what he is talking about. Just like securities are traded on the commodities market. He is not saying that crypto meets the classical or general usage of the term "commodity".

    • Re: (Score:2)

      by HiThere ( 15173 )

      Of course they've got use beyond speculation. How else are you supposed to pay to get your server decrypted after an attack.

  • How dumb. (Score:5, Insightful)

    by Brain-Fu ( 1274756 ) on Wednesday June 29, 2022 @11:05AM (#62659560) Homepage Journal

    More confusion and harm surrounding cryptocurrencies.

    They are clearly not commodities. They are examples one might use as a contrast to help explain what a commodity is not.

    I fear the road ahead remains stormy, as people struggle to understand cryptocurrencies and why they are bad.

    • Cryptocurrencies already cause more harm by their existence than anything that could be done to them.

    • I think a lot of it has got to do with how one present ones viewpoint. The people who are against cryptocurrencies and bitcoin often lashes out in sarcasm and down right cynicism, many times in a very arrogant and dismissive tone, while the people who promote cryptocurrencies and blockchain tech are genuinely perceived as encouraging and interested in educating the people they interact with - which generates genuine good will. I'm not saying the pro people don't lash out in sarcasm, they do. But I think th

      • I don't think so. I mean, I do agree that people may reject a message if they don't like how it is presented, but I don't think that is the main reason that cryptocurrencies are getting as much traction as they are. I think the main reasons are:

        1. Fear of missing out
        2. Fear of being seen as a luddite.
        3. Misunderstanding and confusion
        4. Crime (including bribery).
        5. Gambling addiction.

      • Re: (Score:2)

        by HiThere ( 15173 )

        Naah.
        The folks push cryptocurriences are pushing "This is a really good thing!".
        The folks warning against them are saying "This is a new danger to avoid!".
        People want to hear the first message, and don't want to hear the second message. So many will hear what they want to hear.

    • And instead give it to the regulatory body that oversees commodities because that regulatory body has significantly less resources and is significantly more relaxed with enforcement.

      There's only two ways to read this. Either he's been bribed or is hoping to be bribed via regulatory capture or he is trying to allow cryptocurrencies to continue to exist because he knows that if the SEC regulates them it'll chase away all the money laundering and Ponzi schemes and that'll collapse that market. Not a one of

  • Difference? (Score:3)

    by enriquevagu ( 1026480 ) on Wednesday June 29, 2022 @11:16AM (#62659592)

    Is there any relevant difference to make Bitcoin a commodity, but not the others? Like Gary Gensler (or any other friend) having many bitcoins, for example?

    • Re: (Score:2)

      by DarkOx ( 621550 )

      Sure seems like it has to be something like that. I'd really love someone to show there work in terms of argument as to why

      BitCoin is a commodity but Ether is a security..

      They sure seem mechanically similar in every way I can think of; without getting into which category they actually belong in.

    • Yes, the relevant difference being who bribes whom.

    • Scarcity plus requires resources to create (mine). It's probably closer to a commodity than anything else. You can't blame them for trying to fit it into a category that's already heavily-regulated instead of reinventing the wheel for dumb-ass crypto bros. This will be mostly over soon enough anyway.

    • Re: (Score:2)

      by pjt33 ( 739471 )

      I'm not going to talk about any of these tokens, my predecessors and others have said they're a commodity

      (My emphasis). Unless he's innovating the use of singular they to substitute for the pronoun it, the interpretation from the commentary and the headline of the article are complete nonsense.

    • Commodities are regulated by a different body than the SEC and that government body is significantly more Lax an enforcement and has significantly fewer resources. It's an attempt to bypass proper regulation of cryptocurrencies so they can continue to operate as an unregulated security. A pair of extremely corrupt senators are also pushing a bill that would codify this in law. It's bad news for everyone except the handful of people get out of it before the whole market collapses. They'll offload the bad sec

  • Howey test (Score:5, Informative)

    by Xenna ( 37238 ) on Wednesday June 29, 2022 @11:31AM (#62659656)

    Actually, Gensler has lectured on this subject as an MIT teacher many times long before he was the SEC chair.

    The Supreme Court approved method to distinguish commodities from securities is the Howey test.

    If you want to go beyond the typical superficial slashdot level of crypto discussion you could read this.

    https://www.sec.gov/news/publi... [sec.gov]

    All altcoins are securities and should be regulated as such. Bitcoin is not. Pay attention.

    • I read the article you linked, but fail to find anything in it that distinguishes Bitcoin from other crypto coins.

      • Re: (Score:3)

        by Xenna ( 37238 )

        "An investment contract exists if there is an "investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others."

        It's easy to forget, but when Bitcoin was created there was no expectation of profits at all. Most people (including me) thought it was madness to expect a bunch of numbers to become worth something.

        After Bitcoin turned out to be profitable it became impossible to start an altcoin without a reasonable expectation of profits. Isn't that l

  • There are over 18,000 cryptocurrencies in circulation as of March 2022, and BTC is the only one that qualifies as a commodity? Either they all are commodities, or none are. In contrast if I add up all the publicly traded companies on NYSE and NASDAQ, I get 6,296 companies. So there are roughly three times as many cryptocurrencies as publicly traded companies. Regardless of whether crypto is a digital Ponzi or not (I'm certain it is), this is a bubble that needs to burst. There are just way too many cryptocu

    • You cannot control Bitcoin.
      There is no CEO, no owner, quantities cannot be increased, it has a hard limit, etc..

      All other coins can be controlled, shutoff, created or destroyed, modified, made scarce or abundant, etc...

  • Commodity... hmm. (Score:4)

    by Drethon ( 1445051 ) on Wednesday June 29, 2022 @12:06PM (#62659744)

    https://www.merriam-webster.co... [merriam-webster.com]

    Lets see.

    "a product of agriculture or mining" - I don't think bitcoin mining is the type of "mining" they had in mind.

    "an article of commerce especially when delivered for shipment" - Are Ethernet wires considered shipping containers these days?

    "a mass-produced unspecialized product" - Definitely not mass produced.

    "something useful or valued" - Former, I'd say no as you can't do anything with bitcoin, other than turn it into physical things you can use. Later, you would have to ask people who actually buy and sell bitcoin. Though the merriam webster examples seem to be thinking of value more like the value of an attribute or quality, rather than trade value so, meh.

    "a good or service whose wide availability typically leads to smaller profit margins and diminishes the importance of factors (such as brand name) other than price" - IMHO cryptocurrency could possibly be what would be considered a commodity, while bitcoin is a brand name. I feel like this completely fails that test.

    "one that is subject to ready exchange or exploitation within a market" - OK sure, within the constraints of how bitcoin is traded anyway.

    Personally I just can't see any cryptocurrency as a commodity as I've preferred the basic definition "a raw material or primary agricultural product that can be bought and sold, such as copper or coffee.", or something that can be consumed or used, or a component of something that can be consumed or used. Bitcoin is rather hard to be consumed, mostly just seems to consume energy, and the only value is that assigned by those trading it.

    • Re: (Score:3)

      by HiThere ( 15173 )

      You are running into the problem that words in laws don't mean what they mean in English. Generations of lawyers have fought to establish this as one of the soundest legal principles. Patent law doesn't even allow non-specialist lawyers to have an opinion as to what patent law means.

      • You are running into the problem that words in laws don't mean what they mean in English. Generations of lawyers have fought to establish this as one of the soundest legal principles. Patent law doesn't even allow non-specialist lawyers to have an opinion as to what patent law means.

        Yeah, would be nice if there was a law dictionary that I could look up for their definition of the words, but I think they prefer to avoid documenting the definitions wherever possible.

    • So if I gave you keys to 10BC you would just throw them out because they are valueless? Thanks for being ridiculous!

      • So if I gave you keys to 10BC you would just throw them out because they are valueless? Thanks for being ridiculous!

        Nope, I'd sell them as fast as I could for a form of currency that I'm less worried about the possibility of going to 0 value over a short period of time. Same reason why I only bought one Tesla stock at $28 to keep an eye on the company and don't regret not buying more. Sure there is plenty of money to be made on speculating on something people think is drastically over/under priced, thanks.

        • So you admit they have value...

          • So you admit they have value...

            Please point to where I said in my OP that it has no value? I said bitcoin only has value as assigned by those trading it. For any other value, please tell me what you can do with a bitcoin if no one is willing to exchange it for a good, service, or other currency?

  • ⦠has on his personal investment portfolio and therefore calls it a commodity.

    There, fixed the title for ya.

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