Are Cryptos Really Digital Commodities?
Here’s what SBF’s leaked crypto draft has in store for DeFi
Firstly, just read the depth of nepotism involved. Finance has always been a game of paid friends - and so is crypto.
SBF [Sam Bankman-Fried] is currently the top crypto-industry donor to politicians and has succeeded in positioning himself as a main industry reference point to the legislative process. So far this year, he’s spent more than $40 million on donations but is still some way short of the $1 billion he originally promised.
The leaked draft bill, called the Digital Commodities Consumer Protection Act, is still available. The text currently going through the Senate committees is here. A short summary is here.
Thing is, the Commodity Exchange Act and the Commodity Futures Trading Commission deal with commodity futures. The CFTC has no jurisdiction over physical commodities, merely their futures contracts.
So, by trying to define "digital commodity futures" and then define backwards what a "digital commodity" is, or might be, they are trying to over-reach their authoroty - never mind the blatant over-reach of trying to tegulate the whole world.
But, I would argue that a coin is "physical", in that it exists as ledger entries on computers, and hence the CFTC has no authority over digital coins at all - merely their futures contracts.
To see how weird futures can get, note that there are futures contracts for frost, snowfall and hurricanes - or were, as they have been delisted due to a lack of interest. How would one take delivery? Anyway, the point here is that the mere creation of a futures contract in no way helps define the original "commodity".
I would say that depends on where you live and where the Cryptos where held, because there are som jurisdictions where Cryptos are a comodity and there are some where Cryptos are money.
And hell, these guy´s love to stipulate contracts and new laws and also like to tell everybody that just they have the knowledge to do so other peeps aren´t wise enough in their mindset.
If they were as wise as they think they are then their monetary system wouldn´t fail constantly, and hey one should tell them that ignoring this fact isn´t making it better or solve the issue but its getting worse ;)
I had a funny idea while investigating some of the weird futures - snowfall index cannot be redeemed. So a coin perpetual futures contract is an index that is merely a measure of the trading price.