Thread by @nugenmediahub

Guys arguing BTC can be classified as a security under Howey test.

1/8: Let's explore why #Bitcoin and similar #cryptocurrencies aren't classified as securities under the Howey Test. This test assesses whether an arrangement involves an investment contract. #Crypto #HoweyTest

2/8: The Howey Test has 4 key points: an investment of money, expectation of profits, a common enterprise, and efforts of a promoter or third party. Let's break these down for Bitcoin. #CryptoRegulation #Bitcoin

3/8: Investment of Money: Yes, Bitcoin miners invest money in hardware and electricity, but they're not buying an investment contract from a third party. They contribute resources to validate transactions & secure the network. #CryptoMining

4/8: Expectation of Profits: Miners do expect profit, but not from a promoter or third party's efforts. Profits come directly from their efforts and the fixed rules of the protocol. #CryptoProfit #BitcoinMining

5/8: Common Enterprise: Miners' profits aren't tied to a common enterprise. Each miner operates independently; their profits aren't directly dependent on the success of a specific project or entity. #Decentralization #Crypto

6/8: Efforts of a Promoter or Third Party: In Bitcoin, the coin's value isn't dependent on a promoter or third party's efforts. It's determined by supply and demand in the market and pre-set protocol rules. #BitcoinValue #DecentralizedFinance

7/8: So, Bitcoin doesn't satisfy the Howey Test, as profits aren't primarily from others' efforts. Miners actively participate and their profits result from their direct efforts, not from a passive investment. #CryptoRegulation #SEC

8/8: Each cryptocurrency is unique, and different regulatory bodies may interpret these issues differently. While Bitcoin isn't considered a security by the SEC, other cryptocurrencies with different structures could be. #CryptoLaw