CFTC Calls BTC, ETH, and USDT Commodities in FTX Court Filing

CFTC Calls BTC, ETH, and USDT Commodities in FTX Court Filing

  • The Commodity Futures Trading Commission referred to Bitcoin, Ethereum, and Tether as commodities in its lawsuit against former FTX CEO Sam Bankman-Fried.
  • The CFTC said these and “other” digital assets are commodities under U.S. law.
  • The CFTC’s stance seems to contradict its chairman Rostin Benham, who has recently said that only Bitcoin is a commodity.

The Commodity Futures Trading Commission (CFTC) has declared Bitcoin (BTC), Ethereum (ETH), and Tether (USDT) as commodities, recent FTX court files show.

In its lawsuit against disgraced former FTX CEO Sam Bankman-Fried, CFTC numerous times referred to all three as “commodities” as “defined” by United States law. The lawsuit said “other” digital assets are also commodities but didn’t specify which.

“Certain digital assets are “commodities,” including bitcoin (BTC), ether (ETH), tether (USDT) and others, as defined under Section 1a(9) of the Act, 7 U.S.C. § 1a(9).”

CFTC Chairman Rostin Behnam Thinks Differently

The CFTC classifying ETH as a commodity seems to be in direct contrast with what its chairman, Rostin Behnam, thinks.

In a recent crypto event at Princeton University, Behnam suggested that only Bitcoin is a commodity, seemingly pivoting from its earlier view that both top cryptocurrencies are commodities.

Behnam’s recent comments side him with the Securities and Exchange Commission (SEC) chairman Gary Gensler. The SEC chief has repeatedly said that he believes only Bitcoin is a commodity, implying that ETH is a security. Gensler doubled down on this view after Ethereum implemented a proof-of-stake consensus mechanism a couple of months ago.

Gensler has recently been on a mission to prove his point. The SEC won its case against LBRY, a decentralized file-sharing and payment network, in October, proving that the protocol’s LBC token was a security that was issued without first registering it with the agency. It also seems like the SEC will win the year-long case against Ripple (XRP).

Token classification continues to be the subject of heated debates among regulators around the world. Some regulators, like Belgium’s Financial Services and Markets Authority (FSMA), argue that tokens created by computer code and not issued in anticipation of profit are commodities rather than securities.

On the Flipside

  • It’s still unclear whether the CFTC thinks ETH is a commodity. Both the CFTC and Benham have gone back and forth on the topic.

Why You Should Care

What’s a security and what’s not has been a year-long debate in Washington. Bringing regulatory clarity to the digital asset industry would greatly benefit current and future crypto investors.

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