Stablecoins and Ether will become “commodities,” CFTC chairman reaffirms

Stablecoins and Ether (ETH) are commodities that should fall under the purview of the United States Commodity Futures Trading Commission, its chairman has again asserted at a recent Senate hearing.

During the March 8 Agriculture Senate hearing, CFTC Chairman Rostin Behnam was asked by Senator Kirsten Gillibrand about the differing positions of the regulator and the Securities and Exchange Commission following the CFTC’s 2021 settlement with stablecoin issuer Tether. Behnam replied:

“Despite a regulatory framework around stablecoins, in my opinion they will be commodities.”

“It was clear to our enforcement team and the commission that Tether, a stablecoin, was a commodity,” he added.

In the past, the CFTC has alleged that certain digital assets such as Ether, Bitcoin (BTC) and Tether (USDT) were commodities – as in the lawsuit against FTX founder Sam Bankman-Fried in mid-December.

When asked what evidence the CFTC would bring forward to gain regulatory influence over Ether at the Senate hearing, Behnam said it “would not have allowed” Ether futures products to list on CFTC exchanges if it “didn’t strongly support the felt it was a commodity.”, adding:

“We risk litigation, we risk agency credibility if we do something like that without serious legal defense to support our argument that [the] asset is a commodity.”

The comment apparently reinforced Behnam’s sometimes hesitant view of Ether’s classification. Speaking at an invitation-only event at Princeton University last November, he said Bitcoin was the only cryptocurrency that could be considered a commodity, leaving out Ether. Just a month before, he suggested that Ether could also be considered a commodity.

Related: CFTC continues to explore digital asset policy considerations at MRAC meeting

Behnam’s most recent comments counter a stance taken by SEC Chairman Gary Gensler, who claimed in a Feb. 23 interview in New York Magazine that “everything but Bitcoin” is a security, a claim that has been rejected by multiple crypto firms. lawyers.

The differing viewpoints of the market regulators could set the stage for conflict as they all vie for legal control of the crypto industry.

In mid-February, the SEC shifted its authority against stablecoin issuer Paxos, saying it could sue the company for violating investor protection laws, claiming its Binance USD (BUSD) stablecoin is an unregistered security.

Around the same time, the regulator similarly targeted Terraform Labs, calling its algorithmic stablecoin TerraUSD Classic (USTC) a security, a move Delphi Labs general counsel Gabriel Shapiro said could be a “roadmap” for how the SEC predicts future lawsuits against other stablecoin issuers.

The SEC’s crypto measures have met resistance from the industry. Circle founder and CEO Jeremy Allaire said he doesn’t believe “the SEC is the regulator for stablecoins,” saying they should be overseen by a banking regulator.






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