Rostin Behnam, the Commodities and Futures Trading Commission (CFTC) chairman, has taken a tough stand against the Securities and Exchange Commission of the United States SEC’s stealthy assertion and control over the digital asset market. On Wednesday, he told the Senate Agriculture Committee that Ethereum, the second-largest cryptocurrency behind Bitcoin, is a commodity. The action sets the CFTC directly against the SEC which seeks to regulate all cryptocurrencies as securities except Bitcoin.
According to Behnam, It has been registered on CFTC exchanges for a long time, presenting a “direct jurisdictional hook” for the agency to monitor both ETH’s derivatives and underlying markets. CFTC Chair stated: “Notwithstanding that, they are a commodity, and we have to police that market without a clear direction from Congress that they’re some other type of asset. Based on the cases that we’ve brought around stablecoins, I think that there’s a strong legal argument that USDC and other similar stablecoins would be commodities”.
This latest development also indicates that US officials are not cooperating to regulate the cryptocurrency sector. Benham’s viewpoint appears to be diametrically opposed to that of SEC Chairman Gary Gensler, who claimed last month that “everything but Bitcoin” is subject to securities regulations. Despite naming names, the chairman has often implied that this will include Ethereum, particularly when the network switched to a proof-of-stake consensus method.
According to Behnam, not just stablecoin, but also Ethereum, the second largest cryptocurrency and a competitor to Bitcoin, is a commodity. The CFTC director also stated that investors of fiat-backed stablecoins should not expect a profit or return on investment. As a result, Behman was implying that stablecoins should not be regarded as a security but fall under a commodity. In a 2021 lawsuit, the CFTC chair directly addressed the Tether investigation. Tether then settled for a staggering $40 million.
Behnam stated in November 2022 at Princeton that the only cryptocurrency that should be considered a commodity is Bitcoin, reversing prior views given in October in which he claimed Ether might also be considered a commodity. This implied that Behnam had come to agree with the SEC chairman that Ethereum belonged under this umbrella, but his argument on Wednesday demonstrates that he remains firm in his long-held belief that there is potential for more than one crypto commodity.
