Not a security, nor a commodity: legal currency -Part 2

Si Gyeongmin

Sep 23, 2021

(2) Not a commodity

The definition of the commodity comes from the Commodity Exchange Act of 1936 (CEA), which defines “commodity” through a series of tangible goods (such as wheat, cotton, rice, livestock, etc.) and “other commodities and items” as well as "services, rights, and interests". In 2015, when the Commodity Futures Trading Commission described the "definition of commodities", it announced that "Bitcoin and other virtual currencies are included in the definition and are appropriately defined as commodities."

In March 2018, a judge for the Eastern District of New York agreed to this. The reason for this decision is quite simple. A source cited in his decision to support the U.S. Commodity Futures Trading Commission highlights further loopholes in the argument that cryptocurrencies are securities or commodities. As Goldman Sachs Global Commodity Research Director and economist said:

1. Commodity is any item that can "satisfy" our physiological needs. One of these material needs is the storage of value. Throughout history, humans have always used different commodities to store value, even cocoa beans, but gold is more durable;

2. In contrast, security refers to any "guarantee" tool against something else;