- In its lawsuit against Sam Bankman-Fried, the CFTC claimed ether was a commodity
- SEC disagrees, insisting everything other than Bitcoin is a security
Stablecoins and ether are commodities and should be regulated by the US Commodity Futures Trading Commission (CFTC) as such, chairman Rostin Behnam stated at a US Senate hearing on March 8, CoinTelegraph reported.
The regulators face off
Senator Kirsten Gillibrand asked Behnam about the differences in opinion between the SEC and the CFTC after the latter’s settlement with stablecoin issuer Tether two years ago. Behnam said stablecoins and ether would be commodities “notwithstanding a regulatory framework around stablecoins.”
In its lawsuit against Sam Bankman-Fried, the CFTC claimed ether and other digital assets were commodities. Behnam argued that if the CFTC hadn’t felt ether was a commodity, it would not have allowed the listing of its futures products on CFTC exchanges.
The regulators’ differing views have the potential to set the stage for a conflict as each one fights for more and more authority over the crypto market and industry.
Not a firm stance
At a conference at Princeton in November 2022, the chair of the CFTC said no cryptocurrency except Bitcoin could be seen as a commodity. A month earlier, he had indicated ether could also be viewed as one.
SEC chair Gary Gensler disagrees with Behnam’s most recent comments. In a recent interview with New York Magazine, Gensler insisted “everything other than Bitcoin” was a security. Several crypto experts rebuffed this claim, including crypto lawyers.
In the middle of February 2023, SEC threatened to sue stablecoin issuer Paxos for committing purported violations of investor protection regulations. More specifically, SEC claimed its stablecoin was an unregistered security.
Industry fights back
The industry is not indifferent to regulators’ attempts to crack down on crypto. Jeremy Allaire, the CEO and founder of Circle, has stated a bank regulator should oversee stablecoins, insisting SEC is not the regulator for this asset class.
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