Dan Berkowitz, a former commissioner of the CFTC and former general counsel at the SEC, hinted that it is possible to categorize Ethereum as both a commodity and a security.
As cryptocurrencies grow more popular, there is a rising need for clarity about their legal status, as many people see them differently based on the regulatory provisions within their jurisdiction. In what seems like an addition to the ongoing talks about the regulatory status of Ethereum, Dan Berkovitz, a former commissioner of the Commodities Future Trading Commission (CFTC), said in an interview on the May 23 edition of the unchained podcast that Ethereum could be a security and, at the same time, a commodity.
According to him, Ethereum can fall under the Securities and Exchange Commission (SEC) and the CFTC regulatory provisions. While the former is making efforts to classify Ethereum clearly but tilts towards regarding it as a security, the latter regard it as a commodity.
Explaining CFTC and SEC Overlapping Definitions
Speaking further, he examined the definitions the two regulatory bodies provided for securities and commodities and identified some shared characteristics. According to the CFTC’s provision, a commodity is not strictly limited to tangible goods but includes any asset that is involved in a futures contract. The Securities and Exchange Commission’s definition of security also includes contracts subject to a futures contract, making it overlap with the CFTC’s definition.
Since CFTC’s definition allows them to see ETH as a commodity and the SEC sees it as a security, it is ok to regard the crypto as both a commodity and a security that the two bodies should regulate.
Collin Lloyd, a Sullivan & Cromwell partner, who was also on the podcast, did not agree with the SEC’s position that all cryptocurrencies except Bitcoin should be regarded as a security. He stated that he had not seen any legal precedent backing the idea that a sequence of numbers on a blockchain should automatically be considered a security.
The regulatory status of cryptocurrencies remains a major concern within the crypto industry. Each step and discussion taken to establish their proper regulatory status bring us closer to finding a lasting solution. The May 23 episode of the Unchained podcast aimed to contribute to solving this issue.
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