CFTC Chairman Reiterates: BTC and ETH Are Commodities

The power struggle between the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) over regulation of the crypto market has been confusing investors about what rules they should follow.

This week, CFTC Chairman Rostin Behnam reiterated that Bitcoin (BTC) and Ethereum (ETH) are commodities, not securities.

Ether is a commodity

“I suggested that [ether] be considered a commodity, but SEC Chairman Gensler disagreed,” Behnam said Monday at a Manhattan event attended by Rutgers University, the Wall Street Blockchain Alliance and law firm Lowenstein Sandler.

Although SEC Chairman Gary Gensler has referred to Bitcoin as a commodity, he has a different view on other crypto assets like Ethereum and XRP.

Last month, Gensler suggested that ether could be classified as a security after the Ethereum blockchain moved from proof-of-work (PoW) to proof-of-stake (PoS).

While the SEC has yet to test whether ether would pass the Howey test, Gensler said staking could be formally considered an investment. If ETH passes the Howey test, it would have to register as a security with the SEC.

But Behnam disagrees.

Behnam also used the opportunity to dispel the common belief that the CFTC would be a more favorable regulator, given that the SEC has been cracking down on entities involved in cryptocurrency-related businesses.

CFTC and SEC continue to work together

The CFTC chairman further explained that, contrary to popular belief, the Digital Commodity Consumer Protection Act bill would not give the CFTC full authority to classify cryptocurrencies. The draft of the bill was introduced by Senators Debbie Stabenow and John Boozman of the Senate Agriculture Committee.

Based on the bill, Behnam is confident that the CFTC and SEC will continue to work together.

“This is a very important question. How do we work with the SEC when a product is in a gray area?”

Behnam then responded: The two agencies must work together to come up with solutions to legal and policy issues to clarify the classification of cryptocurrencies. The Digital Commodity Consumer Protection Act will help establish a regulatory framework and provide regulatory resources for the CFTC.