- The CFTC and SEC claim over digital assets continue as chair Rostin Behnam claims Ether is a commodity.
- This cements his wavering opinion on the commodity status of some digital assets.
Taking legal control over crypto assets has been a bone of contention between the Commodity Futures Trading Commission (CFTC) and the US Securities and Exchange Commission (SEC). Over the years, CFTC chair Rostin Behnam has said multiple times that stablecoins and some cryptos are commodities, and should fall under their jurisdiction. In his recent appearance at the March 8 Senate Agricultural hearing, Behnam was asked about the different opinions held by his Agency and the SEC after the CFTC’s settlement with stablecoin issuer Tether in 2021. In his response, Behnam reaffirmed his position that stablecoins are going to be commodities.
Notwithstanding a regulatory framework around stablecoins, they’re going to be commodities in my view. It was clear to our enforcement team and the commission that Tether, a stablecoin, was a commodity.
During the hearing, the CFTC chair was asked if his Agency has any evidence to win regulatory influence over Ether. Behnam responded that their decision to allow Ether futures products to be listed on the CFTC exchange shows how strongly they feel about the asset being a commodity.
We have litigation risk, we have agency credibility risk if we do something like that without serious legal defenses to support our argument that [the]asset is a commodity.
Wavering opinion of CFTC chair
The CFTC chair has had a wavering opinion on the commodity status of the likes of Ether, Bitcoin, and Tether. For this reason, his recent statement is believed to put all other opinions to bed. Behnam said at an invite-only event at Princeton University in November last year that Bitcoin is the only crypto that qualifies in his opinion as a commodity, leaving out the likes of Ether. Interestingly, he had said a month earlier that Ether could qualify as a commodity too.
This position is contrary to that of the SEC. In a Feb. 23 New York Magazine interview, SEC chair Gary Gensler stated that everything other than Bitcoin is a security. In February, SEC took Binance USD issuer, Paxos on for violating investor protection laws. According to them, BUSD is an unregistered security. Despite its recent actions, Circle founder and CEO Jeremy Allaire has stated that he does not think SEC is the regulator of stablecoins.
There is a reason why everywhere in the world, including the U.S. The government is specifically saying payment stablecoins are a payment system and banking regulator activity.
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Jake Chervinsky, a lawyer and policy lead at the crypto advocacy group the Blockchain Association has argued against Gensler’s statement that his opinion is not a law. According to him, SEC lacks the authority to regulate digital assets unless it proves its case in court, and it will have to do that for every single asset. Another lawyer called Lawyer Logan Bolinger has also stated that Gensler’s opinions of what is and is not security are not legally dispositive. Similarly, the policy lead at the advocacy body Bitcoin Policy Institute, Jason Brett thinks that Gensler’s comments should not be celebrated, but rather, feared.
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