Ethereum Designated As Commodity By CFTC, Triggering Regulatory Conflict With SEC

Recent developments highlight the ongoing interagency drama between the U.S. Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). The classification of major cryptocurrencies has been the focus of controversy.

The CFTC has once again confirmed its position that Ethereum (ETH) and several other cryptocurrencies should be classified as commodities, and the battle is heating up. Regulatory oversight In the expanding digital asset industry.

Regulatory rift with SEC over classification of Bitcoin, Ethereum and Litecoin

The latest episode in this regulatory battle is that the CFTC complaint For cryptocurrency exchange KuCoin, indictment Lawsuit by the US Department of Justice (DOJ) against KuCoin and its founders Chun Gan and Ke Tang.

The CFTC’s complaint alleges that KuCoin engaged in illegal off-exchange commodity futures trading and provided leverage, margin, or funding for retail commodity trading.

Additionally, the exchange was accused of operating without the required registration, failing to diligently supervise its activities, and failing to implement an effective customer identification program.

However, most impressive aspects The complaint centers around the CFTC’s allegation that KuCoin facilitates transactions in digital assets such as Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC) by recognizing them as commodities.

Excerpts from the CFTC complaint highlight Ethereum as a commodity.Source: Jake Chervinski of X

This is in sharp contrast to the SEC’s current stance, supported by Chairman Gary Gensler. suggest Only Bitcoin retains the product classification; other cryptocurrencies, including Ethereum, are exempt from this designation.

This ongoing turf war over the classification of cryptocurrencies has a history. This is also evidenced by the CFTC’s previous statements. lawsuit Ethereum and Litecoin were also considered commodities for Binance last year.

Legal experts hint at turf war over virtual currency jurisdiction

The conflict between the two regulators has sparked debate within the industry, with legal experts such as Jake Cherbinski, chief legal officer at venture capital firm Valiant, interpreting the CFTC’s position as a challenge to the SEC’s authority. There is.

Chervinsky suggest The CFTC’s message to the SEC is that many digital assets should be considered commodities, indicating that the crypto space is within the jurisdiction of both agencies, even if the CFTC’s approach is less assertive. ing. Chervinsky’s statement further reads:

Normally, the SEC and CFTC pretend that they are not engaged in a turf war over cryptocurrencies. Today, the CFTC is publicly attacking the SEC’s investigation of ETH. This may seem trivial, but it’s actually a pretty wild interagency drama by DC standards…I’d like to point this out to the CFTC telling the SEC that “a large amount of other digital assets are also commercially available.” And you’re not the only one who can judge them.” Even if we don’t say so much, this space is just as much ours as it is yours.

As the conflict between the CFTC and the SEC intensifies, the industry awaits further developments and a formal ruling that will shape the regulatory environment. cryptocurrency and their respective classifications.

Ethereum
The 1-D chart shows the lateral price movement of ETH. sauce: ETHUSD on TradingView.com

At the time of writing, the price of ETH was $3,543, down just 0.6% in the past 24 hours. This follows his notable 5% rebound over the past seven days.

Featured image from Shutterstock, chart from TradingView.com

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