What are securities & commodities?

To get started, let’s first define securities and commodities. Securities are financial instruments that represent a claim on the issuer, such as stocks, bonds and derivatives and are regulated by the Securities and Exchange Commission (SEC).

Should cryptocurrencies be classified as commodities or securities?

The classification of cryptocurrencies and digital assets as either commodities or securities is critical because it impacts how they are regulated. Generally, securities are more highly regulated than commodities. Commodities are taxed more favorably than securities.

What is the difference between SEC & commodity trading commission?

The U.S. Securities and Exchange Commission (SEC) regulates securities under the Securities Act of 1933. The Commodity Futures Trading Commission regulates commodity markets under the Commodity Exchange Act of 1936. Securities and commodities are governed by different statutes, regulated by different agencies, and operate in different markets.

Are commodities regulated?

In this case, you’ve technically bought a security that gives you commodity exposure. In the U.S., commodities are regulated by the Commodities Futures Trading Commission (CFTC) and securities are regulated by the Securities and Exchange Commission (SEC).