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Commodities Investing

Newest information about Commodities Investing.

What is a security?

A “security” generally refers to a financial instrument or an interest in a financial asset issued by another – typically a company. This can take the form of an equity (e.g., a residual or profit sharing) interest in a company or an interest in the debt of a company. Securities can take other forms too, …

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What are commodities? And who regulates them?

A commodity is a basic commercial good that is interchangeable with other similar goods. In the United States, it is a statutorily defined term under the Commodity Exchange Act that includes, among other things, physical commodities, such as agricultural products or natural resources, as opposed to financial instruments like currencies. Commodity futures contracts are agreements …

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What is an Initial Coin Offering?

In recent years and in many parts of the world, companies, individuals, and technical developers have used initial coin offerings, also called “ICOs,” “token sales,” and “digital asset sales,” as a way to raise capital to fund the development of blockchain-based technologies, networks, and services. This method of capital raising is novel in that it …

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What is a blockchain? How does it work?

A blockchain is a distributed ledger technology (DLT) or list of entries – similar to a stock ledger – that is maintained by various participants in a network of computers and allows data to be stored globally on thousands of servers.  Blockchains use cryptography to process and verify transactions on the DLT, which makes it …

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What is a digital asset, coin, or token?

A digital asset, coin, or token (aka – virtual currency) is a digital representation of value that functions as a medium of exchange (commodity) and can be traded digitally often using distributed ledger (blockchain) technology.  Digital assets may represent other rights as well, including securities.  If a security, the digital asset must be offered and …

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What is a digital asset trading platform?

A digital asset trading platform (aka – “virtual currency exchanges” or just “exchanges”) is an entity (or person) that exchanges virtual currency for fiat currency, funds, or other forms of virtual currency.  Digital asset trading platforms typically charge fees for their services.  Aftermarket trading of digital assets may also occur on so called, “exchanges.”  These …

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Who can issue digital assets, coins, or tokens?

Digital assets may be issued by any number of different entities or persons as a way to raise capital or sell products or services. Often, digital assets flow through to asset purchasers from a virtual organization. These organizations are embodied in computer code and executed on a blockchain or using distributed ledger technology.  The code …

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Considering contributing to an initial coin offering?

Here are some things you should consider if you are contemplating contributing to an initial coin (or digital asset) offering: Is the ICO or digital asset offering really just a securities offering in disguise? If so, the offer and sale of the digital asset must be registered with the SEC, or offered pursuant to an …

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