Adam Tracy Discusses Copy Trading & Managed Crypto Wallets
Taken from: https://youtu.be/0HKEfgh7TD4
So copy trading is is Big. It’s always been big in for x and it’s getting incrementally bigger and crypto. And what crappie trading is is where an experienced Trader gains access to a platform and the client allocate certain amounts of his or her account. And those trades are made automatically, right? So they just basically copy what the experienced Traders doing and you see a lot of groups trying to emulate that in the crypto space through apis and whatnot. So just focus Your Bitcoin let’s talk about the the legality of copy training. What what you could in theory have to do in this exceedingly exceedingly gray gray area. So when you’re talking about copy trading, okay, because I’m a Bitcoin let’s go from the premise that Bitcoin is a commodity right and let’s let’s work from the 4X example or copy trading sort of originates from and then and then we’ll do we’ll go to the equity side to the security side generally speaking. If you were going to do copy trading which contemplates automatic investing right? So investing where the the trades that the client makes are generated by the the software by the signal provider right by the quote-unquote experienced Trader generally speaking.
You need to be registered as a Commodities trading advisor and that is because you’re providing investment advice regarding The investment or trading of Futures products, right? So this is governed by the cftc not the SEC and so, you know in most cases to become a CTA you have to one register obviously with the cftc but also register with the an effect the National Futures Association and that would provide you with the ability and this is sort of the hook if you will the ability to have the automatic trading right in the absence of the automatic trading you may have to be something called an introducing broker but going from you know, the basis that you’re trading open API and how these work. Well it looks like you know from my perspective my opinion that you would have to be a licensed Commodities trading advisor. So in that process isn’t terribly difficult to go through but it does require registration with the cftc and again the the NFA Some exceptions to that and that’s when you’re you’re trading algorithm or your trading your signal provider. If you want to call it that is numerically based right where it’s based on a formulaic capacity or general numeric qualifiers writer the price of Bitcoin Futures reaches six thousand dollars. It’s an automatic sell something like that something that’s nuanced and driven by less by the intuition and knowledge of the signal provider and more so from particular formulas or static market conditions, right? So when you compare, you know, when the question becomes I want to manage, you know crypto wallets, right? What what do I do? Can I do it? Well, I think by the strictest interpretation, I think you need to become a commodity trading advisor if you want to manage these wallets, and that’s because Bitcoin technically is a Now last week we had the ICC come out and say that they’re not going to regulate aetherium. So the question becomes does aetherium fall back into the definition of a commodity and generally speaking the cftc has considered etherium to be a commodity since its Inception. So I think that’s the direction we’re going right at the end of the day Bitcoin has to be something theorem has to be something right. It’s a digital asset and if it’s a currency then derivative products, which would be right what you see on like a kin to like a 4X those are Commodities and those are going to be regulated.
So I think the short answer is if you know you want to do managers wallet if you want to lock in with an API and do copy trading which is effectively what a managed. Well it is then I think that that Spurs the need for CTA registration and if a registration, you know, it’s it’s probably not what a lot of I want to do but I think at the end of the day that’s where it’s going to go and it’s the only way that you can look at it and truly say that you’re insulated from from protect, you know, potential regulatory liability. If you have that registration now, the opposite end of the spectrum is sort of if you’re going to trade Ico tokens that maybe Securities because then you’re looking at are registered investment advisor registration, which I’ll talk about in a future a future of it but for you know the short and quick answer of what do I need if I want to, you know manage? Well, it’s through either through, you know, an API or some sort of copy trading format. The answer is a CTA and NFA registration with the exception being that you know, you have some sort of algorithmic or you know automatic trading system that’s predicated upon. You know computer system and arbitrarily defined by numbers. So check me out Tracy firm.com. If you have questions, this area is like rapidly evolving. You’ve got people coming out and saying that if things aren’t Securities and commodities every single day.
So what I’m telling you today could be completely worthless tomorrow. Hopefully, it’s not but yeah, hit me up 80 at Tracy firm.com Bitcoin — lawyer dot-org. I will talk to you later.
A former competitive rugby player, serial entrepreneur and, trader attorney, Adam S. Tracy offers over 17 years of progressive legal and compliance experience in the areas of corporate, commodities, cryptocurrency, litigation, payments and securities law. Adam’s experience ranges from commodities trader for oil giant BP, initial public offerings, M&A, to initial coin offerings, having represented both startups to NASDAQ-listed entities. As an early Bitcoin adapter, Adam has promoted growth of cryptocurrency and offers a unique approach to representing crypto-clients. Based in Chicago, IL, Adam graduated from the University of Notre Dame with dual degrees in Finance and Computer Applications and would later obtain his J.D. and M.B.A. from DePaul University. Adam lives outside Chicago with his six animals, which is illegal where he lives.
Bitcoin website: http://www.bitcoin-lawyer.org
Primary website: http://www.tracyfirm.com
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