In a court filing on December 13, the Commodity Futures Trading Commission (CFTC) called the ETH coin a commodity. It has led to speculation that Bitcoin (BTC) is the only cryptocurrency that should be classified as a commodity.
The CFTC stated in its lawsuit against cryptocurrency exchange FTX, its sister company Alameda Research, and Sam Bankman-Fried “SBF” that “certain digital assets, including Bitcoin (BTC), Ether (ETH), Tether (USDT), and others, are ‘commodities,’ as defined under Section 1a(9) of the Act, 7 U.S.C. 1a(9).”
However, the CFTC appears to be divided on “whether Ether should be classified as a commodity.”
CFTC and SEC at odds over control of cryptocurrency?
At a Princeton University event last month, CFTC Director Rostin Behnam asserted that Bitcoin is the only cryptocurrency asset in the wake of FTX’s demise. This assertion runs counter to his earlier assertions that Ether might also be a commodity.
Gary Gensler, the chairman of the Securities and Exchange Commission (SEC), has recently expressed opposing opinions about ether.
Gensler had previously claimed that after Ether’s initial coin offering (ICO), it was a security, but that it has since evolved into a commodity and become more decentralized.
During the Merge in September, Ether switched from a proof-of-work (PoW) consensus mechanism to a proof-of-stake (PoW) consensus mechanism. This change in circumstance caused Gensler’s perspective to shift. According to his opinion, the Howey test may classify cryptocurrencies and intermediaries that enable holders to stake their cryptocurrencies as securities.
There is an increase in regulatory body conflict in the United States. Because the SEC regulates securities while the CFTC regulates commodities futures, the classification of crypto assets in the US is crucial.
After FTX’s demise, the cryptocurrency industry has come under intense scrutiny from lawmakers all over the world. Senator Elizabeth Warren, a vocal opponent of cryptocurrencies, is reportedly working on a bill that would give the SEC the majority of the regulatory authority over the sector.
Whether the CFTC or the SEC will oversee Ether regulation will become clearer over time as more information about the status of crypto coins becomes available.