Illuminate this tiny brain of mine because I am focused.

[5W-KILO]

While the SEC are attacking Binance and Coinbase exchanges about listing some tokens that are security, why aren't they telling us why they are security?



What is a security? What are they even talking about? Anyone has a clue? How can they tell which token or coin is security and which is not? How will these exchanges know what they did wrong if there is nothing that proves that a particular token is security?

[1715102354]

1715102354

[1715102354]

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[Nwada001]

What is a security? What are they even talking about? Anyone has a clue? How can they tell which token or coin is security and which is not? How will these exchanges know what they did wrong if there is nothing that proves that a particular token is security?

According to the SEC, security tokens are those digital assets that are designed and, at the same time, marketed as security.

What I understand is that security tokens are said to be those tokens that represent a particular project, company, or even individual ownership and can be traded, staked, and investors rewarded based on their staking amount. Those token/coins are considered and seen to be same as real estate and other stock investment and as such should be considered and treated thesame way the above mentioned are treated. This is based on my level of understanding.

[un_rank]

What is a security?

A security in finance is any asset or financial instrument that represents some value in an industry and gives its holder some form of ownership.
For example if you invest in a stock or share of a company you own a percentage of the company, making the share a security

How can they tell which token or coin is security and which is not?

On research the best answer I got is that they consider which crypto is sufficiently decentralized and determines that it is not a security. I can only think that decentralized projects cannot give ownership cause there is no central point of control.

How will these exchanges know what they did wrong if there is nothing that proves that a particular token is security?

No clue. They declare more crypto tokens to be securities at intervals and exchanges can easily fault their regulations unknowingly. Or maybe they send a memo as at when they make it official, we can only speculate.

- Jay -

[Alpha Marine]

Funny enough there's still a debate among these guys if cryptocurrencies should be classified as commodities or securities.
If it's commodity like petrol and the rest then it should be regulated by the CFTC. The CFTC will also regulate it if crypto is accepted as a currency because they regulate currency trading too.

If Crypto is a security like Bonds and stock then it will be regulated by the SEC.
According to the Howey test, something can be a security if
1. Money is invested
2. There is an expectation that the investor will make profit
3. The investment is in a common enterprise
4. Profit are generated through the effort of others.

What's funnier is the fact that the SEC chairman said majority of cryptocurrencies are securities but he excluded Bitcoin. I have so many questions about this.

You can read more on this here
https://www.forbes.com/advisor/investing/sec-crypto-regulation/

[uchegod-21]

How can they tell which token or coin is security and which is not?

On research the best answer I got is that they consider which crypto is sufficiently decentralized and determines that it is not a security. I can only think that decentralized projects cannot give ownership cause there is no central point of control.

If centralization and decentralization of a project is the major determinant of whether a coin/token would be referred as a security or a commodity, it therefore means that there will be an unending conflicts and misunderstanding between the project owners and the SEC.
This is because some projects are centralized while they pose to the public to be decentralization. Apart from bitcoin, there are no much of them if any that is 100% decentralization. Does this therefore means that SEC will soon take over the cryptocurrency industry all in the name of security regulations?

[SquirrelJulietGarden]

While the SEC are attacking Binance and Coinbase exchanges about listing some tokens that are security, why aren't they telling us why they are security?



What is a security? What are they even talking about? Anyone has a clue? How can they tell which token or coin is security and which is not? How will these exchanges know what they did wrong if there is nothing that proves that a particular token is security?

Gensler will come to a time to be sued by many exchanges and cryptocurrency companies.

If he failed to say his opinion as a chair of SEC. when Mr. Patrick McHenry asked him that "Is Ethereum a security or a commodity?", what will he do if he has to protect his view as a chair of SEC. when companies and exchanges don't accept what SEC. do against them?

I believe SEC. and Gensler will fail in future. The future of cryptocurrency and cryptocurrency exchanges belong to cryptocurrency users, US. citizens and many people, not only in hands of Gensler and SEC.

[Outhue]

While the SEC are attacking Binance and Coinbase exchanges about listing some tokens that are security, why aren't they telling us why they are security?



What is a security? What are they even talking about? Anyone has a clue? How can they tell which token or coin is security and which is not? How will these exchanges know what they did wrong if there is nothing that proves that a particular token is security?

Gensler will come to a time to be sued by many exchanges and cryptocurrency companies.

If he failed to say his opinion as a chair of SEC. when Mr. Patrick McHenry asked him that "Is Ethereum a security or a commodity?", what will he do if he has to protect his view as a chair of SEC. when companies and exchanges don't accept what SEC. do against them?

I believe SEC. and Gensler will fail in future. The future of cryptocurrency and cryptocurrency exchanges belong to cryptocurrency users, US. citizens and many people, not only in the hands of Gensler and SEC.

Not even in the hands of any crypto exchanges, because people are the real sailor of the crypto space, only people who invests in crypto can bring the walls down on themselves,  I believe this is what the SEC don't like.

Crypto is a threat today because it's changing the lives of many people and many new popular figures are been created by crypto, the government isn't giving such opportunities to people and still, they don't like seeing this happening.

I hope all US citizens are seeing this now, you guys know who to vote for in 2024, that she-devil who want crypto gone for good but not get to the sit of Presidency by all means, or else it's going to be really over, for US citizens though.

[un_rank]

If centralization and decentralization of a project is the major determinant of whether a coin/token would be referred as a security or a commodity, it therefore means that there will be an unending conflicts and misunderstanding between the project owners and the SEC.

Such a conflict already exists and there is a misunderstanding about what exactly classifies a project as a security, while the SEC keeps adding more tokens to the list.
There have been cases^[1][2][3] where a crypto project denied the label of a security which was put on it.

Does this therefore means that SEC will soon take over the cryptocurrency industry all in the name of security regulations?

Besides bitcoin and maybe a handful other cryptocurrencies all others can be labelled to be centralized technically, especually if they run a sort of coin offering to raise funds for the project. This does not mean a "take over" is likely.

[1] https://cryptoslate.com/filecoin-foundation-rejects-secs-classification-of-fil-as-security/
[2] https://www.coindesk.com/policy/2023/03/06/voyager-denies-sec-claims-vgx-token-is-security-as-binance-us-decision-looms/
[3] https://cryptoslate.com/algorand-down-10-despite-foundation-claims-that-it-isnt-security/

- Jay -