- CFTC Chairman Rostin Behnam said that both Bitcoin and Ethereum were ruled as commodities in the state of Illinois by a district court last week.
- The ruling reaffirmed that Bitcoin and Ether are commodities under the Commodities Exchange Act, which is overseen by the CFTC rather than the SEC.
- Behnam stated that between 70% and 80% of cryptocurrencies are non-securities, potentially lessening the crypto industry’s difficulties with the SEC.
A recent court ruling affirmed the commodity status of Bitcoin and Ethereum, which could have major implications for cryptocurrency regulation going forward.
CFTC Chair Confirms BTC and ETH as Commodities
At a Senate Committee hearing, CFTC Chairman Rostin Behnam said both Bitcoin and Ethereum were ruled as commodities in Illinois. He noted that a district court made the ruling last week, offering an important judgment for the agency.
According to Behnam, the decision reaffirmed that Bitcoin and Ether are commodities under the Commodities Exchange Act. Whether cryptocurrencies are securities or commodities has been an ongoing issue between the crypto industry and the SEC.
Commodity vs. Security Classification
In the U.S., there is an important distinction between a security and a commodity. A commodity is a basic good used in commerce that is interchangeable with similar goods. Assets like gold, oil, and agricultural products are examples.
A security indicates ownership stake in a publicly traded company. The agency that governs each asset is also significant. The CFTC oversees commodities, while the SEC regulates securities. The lack of clarity on crypto’s status has led the SEC to increase enforcement.
However, Behman stated that 70-80% of cryptocurrencies are non-securities. Regarding Bitcoin and Ethereum specifically, he said the recent ruling affirmed their commodity classification. If more courts make similar judgments, it could profoundly shift the crypto market.
The presence of BTC and ETH ETFs also sets a precedent, classifying them as commodities for ETF purposes. This could ease industry tensions with SEC Chair Gary Gensler, who has criticized crypto markets.
Conclusion
The recent court judgment that designated Bitcoin and Ethereum as commodities could influence future rulings and regulatory approaches. If more courts affirm their status as commodities rather than securities, it would delineate clearer oversight roles for the CFTC and SEC. This clarity could benefit the growth and direction of the cryptocurrency industry.
