CFTC declares ethereum (ETH) as a commodity

In a court filing on December 13, the Commodity Futures Trading Commission (CFTC) declared Ether to once again be a commodity, in contradiction to remarks made by the agency’s head Rostin Behnam on November 30 that Bitcoin was the only cryptocurrency that should be regarded as a commodity. The community hopes that the CFTC’s allegation will end claims that staked coins meet the Howey Test’s definition of securities.  

The regulator repeatedly referred to Ether, Bitcoin, and Tether (USDT) in its action against Sam Bankman-Fried, FTX, and sister business Alameda Research as “commodities” under US law.

According to Section 1a(9) of the Act, 7 U.S.C. 1a(9), “some digital assets constitute “commodities,” including bitcoin (BTC), ethereum (ETH), tether (USDT), and other stablecoins.

But in the past week, there has been some discussion inside the CFTC itself over whether Ether should be considered a commodity. On Nov. 30, during a crypto symposium at Princeton University, CFTC chairman Rostin Benham allegedly argued that only Bitcoin should be considered a commodity, reversing earlier statements that Ether may potentially qualify.

What changed Gensler’s stand on Ether?

Gary Gensler, the head of the Securities and Exchange Commission, has also been unsure about his position on ether recently. In a conversation with Jim Cramer on CNBC’s Mad Money show on June 27, Gensler said that he would only remark that Bitcoin was a commodity.

In the past, Gensler has claimed that while Ether was once a security, it has subsequently grown more decentralized and transformed into a commodity. After ethereum switched to proof-of-stake (PoS), his position changed again in September when he asserted that staked tokens might qualify as securities under the Howey test.

Categorizing crypto assets in the US is particularly crucial since the Securities and Exchange Commission (SEC) oversees securities like bonds and stocks. At the same time, the Commodity Futures Trading Commission (CFTC) supervises commodities futures (SEC).

Related: Belgium de-characterizes crypto assets as securities

at a financial services conference on December 6, Bitcoin skeptic Intercontinental Exchange Inc. CEO Jeffrey Sprecher expressed confidence that crypto assets will be treated like securities, leading to greater consumer protection. Senator Elizabeth Warren is reportedly working on a bill to give the SEC the majority of the regulatory authority over the cryptocurrency industry.

However, Belgium has adopted a different perspective on the matter, stating in a study published on November 22 that Bitcoin, ethereum, and other cryptocurrency assets created exclusively through computer code do not qualify as securities. This is contrary to Gensler’s statement, which stated that some stablecoins could be declared as assets.