By
Chimamanda U. Martha
April 25th, 2024
During his recent testimony to lawmakers CFTC Chairman Rostin Behnam said that he believes Ether to be a commodity since it’s listed on CFTC and its derivatives marketplace.
A day after the US Commodities and Futures Trading Commission (CFTC) filed a lawsuit against Binance, Chairman Rostin Behnam reiterated his stand on Ethereum as a commodity.
Earlier this month, the CFTC chairman clearly stated that Ethereum (ETH) classifies as a commodity adding that “It’s been listed on CFTC exchanges for quite some time, and for that reason,” it comes under their jurisdiction.
This stand by the CFTC puts it directly against the US SEC. Gary Gensler, the Chairman of the US SEC, recently said that all the Proof-of-Stake (PoS) cryptocurrencies shall be subject to US securities laws.
However, in their 14-page lawsuit document against Binance, CFTC specifically mentions that several cryptocurrencies such as Bitcoin, Ether, Litecoin, and other stablecoins, are commodities that Binance was trading illegally.
During a budget hearing on Tuesday, March 28, a lawmaker on the House Appropriations Committee asked CFTC Chairman Rostin Behnam whether he believes that Ether should be on the list of commodities. Responding to this, the CFTC chair said:
“I believe they are a commodity. And because they are listed on CFTC exchanges, we do have a regulatory relationship – obviously with the derivatives market and that product, but the underlying market as well.”
He added that since Bitcoin and Ether are both commodities, it is the primary reason why they have slapped a case on Binance. Interestingly, he also suggested that other crypto trading platforms could eventually face scrutiny.
CFTC Chairman on Crypto
Over the last few years, some crypto insiders viewed the CFTC as a friendlier agency for the sector. However, CFTC and its chairman Rostin Behnam have recently undertaken several measures and enforcement actions against crypto companies.
The recent one is targeting the largest crypto platform by trading volume, Binance, which could have even wider implications in the long term. On Tuesday, lawmakers asked Behnam whether he still hopes that there’s space for crypto innovation in the US. “It should be absolutely a concern. Europe has put in place a pretty comprehensive regime that’s going to be implemented over the next couple of years,” he said, adding that the US needs to “move the ball forward.”
With Behnam in action recently, it will be interesting to see what regulatory measures does the CFTC introduce on the crypto industry further ahead.