[Avodah] Heter Iska and "The Howey Rule"

Yonatan Kaganoff ykaganoff at gmail.com
Mon Feb 12 08:58:36 PST 2018

For professional reasons, I have been researching "The Howey Rule" and its

In short (tl;dr) the Howey Rule was the outcome of a landmark Supreme Court
decision (https://en.wikipedia.org/wiki/SEC_v._W._J._Howey_Co.) defining a
"security" and how it differs from a "commodity".

The basic criteria for being a security (and therefore under SEC regulation

   1. It is an investment of money.
   2. There is an expectation of profits from the investment.
   3. The investment of money is in a common enterprise.
   4. Any profit comes from the efforts of a promoter or third party.

(I am personally interested in which cryptocurrencies are commodities and
which are securities.)

IMHO, there is are obvious parallels to "Heter Iska".

In a "Heter Iska", we convert the loan of a "commodity" (currency) into a
"security" (the investment). Once a loan is defined as an investment, then
the lender can receive profits from his investment, rather than interest on
a loan which is prohibited because of interest.

Is anyone on the list-serv familiar with both topics and can let me know if
I am correct in the parallels?

Yonatan Kaganoff
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.aishdas.org/pipermail/avodah-aishdas.org/attachments/20180212/59a4e6b6/attachment.html>

More information about the Avodah mailing list