Categories: U.S. Regulation

Bitcoin and Ethereum are Digital Commodities, Says CFTC Chair

Crypto Twitter was quick to celebrate Wednesday following congressional testimony from Rostin Behman, in which the chairman of the Commodity Futures Trading Commission (CFTC) said a recent federal court ruling reaffirmed Bitcoin and Ethereum’s status as commodities.

While the Securities and Exchange Commission’s (SEC) Chairman, Gary Gensler, has said that Bitcoin isn’t under his agency’s regulatory purview, a cloud of uncertainty still lingers around crypto’s second largest coin—despite the abrupt approval of spot Ethereum ETFs in May.

“In its decision, the court reaffirmed that both Bitcoin and Ether are commodities under the Commodity Exchange Act (CEA),” Behman said, referring to a fraud case pursued by the CFTC in the U.S. District Court for the Northern District of Illinois against an unregistered entity.

Decided by Judge Mary M. Rowland, the case’s defendant argued that the CFTC’s statutory authority, when it comes to regulating commodities, “does not extend to any cryptocurrencies.” However, the judge ruled that Bitcoin and Ethereum are well within the CFTC’s regulatory scope based on the case’s similarity with other decided cases and language within the CEA.

But Rowland’s decision, and Behman’s citation, doesn’t mean Ethereum’s status is set.

Even though other courts can take the decision into consideration, which was reached in trial court, Rowland’s ruling isn’t binding within the Northern District of Illinois—let alone the rest of the country—Anthony Tu-Sekine, a partner at Seward & Kissel, told Decrypt.

“Anything that happens on the trial court level is not really binding on the other courts in that jurisdiction,” he said. “This is good news, not bad news, but it’s probably not that big.”

CFTC officials first described Ethereum as a commodity in 2019, when then-chairman Heath Tarbert spoke at Yahoo Finance’s All Market Summit. While the SEC has never claimed that Ethereum is a security, a since-droppedinvestigation into “Ethereum 2.0” raised questions.
Terron Gold

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