The Commodity Futures Trading Commission (CFTC) has once again named Ethereum as a commodity in one Court filing on the 13th of December. This has led to speculation that Bitcoin (BTC) is the only cryptocurrency that should be considered a commodity.
In the CFTC’s lawsuit against cryptocurrency exchange FTX, its sister company Alameda Research and Sam Bankman-Fried “SBF,” the regulator noted, “certain digital assets are ‘commodities’, including Bitcoin (BTC) and Ether (ETH), Tether (USDT)) and others, as defined in Section 1a(9) of the Code, 7 USC § 1a(9).”
However, there appears to be some disagreement within the CFTC as to whether ether should be classified as a commodity.
CFTC and SEC Battle Over Crypto Control?
Last month, in the aftermath of the FTX collapse, CFTC director Rustin Behnam claimed at a Princeton University event that bitcoin is the only crypto asset. This statement contradicts his previous comments which claimed that ether can also be a commodity.
SEC Chairman Gary Gensler has also expressed conflicting views on Ether in recent months.
Gensler had previously said that Ether was a security after its initial coin offering (ICO), but it has since become a more decentralized commodity.
In September, Ether switched from a Proof of Work (PoW) consensus mechanism to a Proof of Stake (PoW) mechanism during the merger. Once this development occurred, Gensler’s outlook began to change. He argued that cryptocurrencies and brokers that allow their holders to partake in their cryptocurrency can be classified as securities under the Howey test.
In the United States, there is a growing struggle between regulators. The classification of crypto assets in the US is crucial because commodity futures are regulated by the CFTC while the Securities and Exchange Commission regulates securities.
After the collapse of FTX, lawmakers from all over the world cracked down on the cryptocurrency industry. Crypto-suspect Senator Elizabeth Warren is reportedly working on a bill that would give the Securities and Exchange Commission (SEC) most regulatory power over the cryptocurrency industry.
As more clarity emerges about the state of cryptocurrencies, it will eventually become clear whether the CFTC or the SEC will oversee Ether.