Based on recent FTX court filings, reports on Thursday show that the Commodity Futures Trading Commission (CFTC) has designated Ethereum (ETH), Bitcoin (BTC), and US Dollar Tether (USDT) as commodities. The CFTC often referred to all three as commodities in its complaint against Sam Bankman-Fried, the former CEO of FTX.
CFTC designates three cryptocurrencies as commodities
The United States District Court for the Southern District of New York now has a fraud lawsuit filed by CFTC against FTX, Alameda Research, and Sam Bankman-Fried. However, the indictment lists Tether, Ether, and Bitcoin as commodities.
The Commission considers data that can be electronically transmitted, held by one entity, and utilized in a specified way to be digital assets. The classified cryptocurrencies are all examples of digital assets that function as a store of value and medium of exchange.
The lawsuit filed by the CFTC claims that Bankman-Fried and his companies misappropriated money from their customers. He and other high-ranking FTX officials obtained questionable loans from the city of Alameda Research, totaling millions of dollars to use for excessive personal expenditures and political contributions.
CFTC chairman has a contrary view
It appears that Rostin Behnam, chairman of the Commodity Futures Trading Commission (CFTC), does not agree with the Commission’s decision to treat ETH as a commodity.
During a recent crypto event at Princeton University, he changed his stance and argued that the two major cryptocurrencies are commodities. Behnam’s recent stance has received endorsements from the SEC’s top two officials, Chairman Gary Gensler and Commissioner Robert Shiller.
Many people believe ETH is a security because of the SEC chairman’s frequent remarks that only Bitcoin is a commodity. Gensler has maintained its stance despite Ethereum’s recent switch to a proof-of-stake consensus mechanism.
Since a long time ago, Gensler has been on a mission to prove that his beliefs are correct. In October, the security agency proved in court that the LBC currency used in the LBRY network protocol was unregistered security and so won a case against the decentralized file-sharing and payment network.
A year-long trial left little doubt that the SEC’s case against Ripple would be unsuccessful. The token classification debate has sparked discussions among regulators around the world.
Several regulatory agencies, like Belgium’s Financial Services and Markets Authority, view tokens generated by computer code and not issued for profit as commodities rather than securities (FSMA).