None of the cryptos are actually a security, let's see how the judge dealing with the 'SEC vs Coinbase' case made it clear today for everyone!

Judge Katherine Polk Failla in the case of 'SEC vs Coinbase' made it pretty clear today that none of the cryptos that are sold on exchanges are a security as per the current definitions.

There are 4 conditions on the Howey Test which define a security:

➡ An investment of money

➡ In a common enterprise

➡ With the expectation of profit

➡ To be derived from the efforts of others

Now, let's take a scenario where a crypto coin covers all of these points. So it must be a security then?

Wrong! The Howey Test was created and taken from the Sec vs Howey case from 1946. These 4 components shouldn't be taken out of context. For a security to be a security there must be a signed 'investment contract' which must adhere to all regulations and also gives the buyer many other rights, which none of the crypto buyers actually have. This is the entire point of the Howey case. The 4 components are an addition to help clarify further what is a security but only and only after an 'investment contract' is signed.

None of the exchanges offer such an 'investment contract'. This contract also guarantees that you have the right of cancellation in case of scam. Imagine buying 10,000$ worth of Luna, and Luna rug pulls the next day, Coinbase will literally have to refund you all of the lost money. This will never happen of course, because cryptos are not a security.

When presented with these facts, the SEC couldn't say anything, couldn't respond back adequality and didn't have any counter arguments which speaks a ton.

edit/

Having said all that, an important point is that crypto exchanges in USA are not obliged by the current law to provide such 'investment contracts' for any cryptocurrency. For anyone interested in reading a summarized transcript of the case, please check here => case transcript summary