The Chairman of the Commodity Futures Trading Commission (CFTC), Rostin Behnam, has changed his stance on Ethereum being a commodity.
“Only BTC Is Commodity”
During an exclusive crypto event, CFTC Chair Rostin Behnam reportedly stated that only one crypto in the market could be counted as a commodity, which is Bitcoin. However, this statement represents a complete reversal in stance regarding altcoins like Ethereum. The CFTC had previously stated that both Bitcoin and Ethereum were commodities and not securities, making them fall under the CFTC’s jurisdiction. However, the recent claim that only Bitcoin is a commodity leaves Ethereum out of the regulatory body’s jurisdiction.
FTX Crash Changed Approach
Behnam made his recent comments while speaking about the regulatory landscape and the changes to be adopted in light of the FTX bankruptcy case at the invite-only crypto event hosted by Princeton University this past Wednesday. The event earlier had booked the former CEO of the bankrupt FTX exchange, Sam Bankman-Fried. However, he was replaced, and the time slot was instead filled with a panel titled “The Demise of FTX and Other Crypto Entities: Lessons Learned,” where Behnam spoke.
CFTC Previously Held Different Views
Behnam claims that the CFTC was working with SBF to develop the Digital Commodities Consumer Protection Act (DCCPA) before the FTX crash happened. The bill sought to expand CFTC authority to regulate markets for “digital commodities” and explicitly classify both Bitcoin and Ether as commodities. Back in September, Behnam had even testified to the Senate about the act, saying,
“Many digital assets constitute commodities. As recognized by the DCCPA, the CFTC’s expertise and experience make it the right regulator for the digital asset commodity market.”
This earlier viewpoint was in direct contrast with that of SEC chief Gary Gensler, who generally hinted that most cryptocurrencies are securities.
CFTC Leaves ETH Hanging
However, Behnam’s recent change of mind will fit in more with Gensler’s approach toward these assets. If Ethereum and other cryptos are classified as securities instead of commodities, they will fall under the jurisdiction of the SEC, which has much harsher regulatory methods than the CFTC.
Behnam also called for tighter regulations, especially in the wake of the billions of dollars of losses stemming from the FTX collapse. Since CFTC is limited in its enforcement actions across the assets under its jurisdiction, he believes that it will not be the appropriate watchdog to be appointed in the case of most cryptocurrencies. Behnam believes nothing could be worse than regulators doing nothing, stating that “inaction is paralysis.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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