At a Senate Committee hearing today, CFTC Chairman Rostin Behnam said both Bitcoin and Ethereum were ruled as commodities in the state of Illinois. Indeed, Behnam noted that last week saw a district court rule in favor of the agency in a fraud case, offering a judgment with important ramifications.
Behnam noted that the decision, “reaffirmed that both Bitcoin and Ether are commodities under the Commodities Exchange Act.” The question of the cryptocurrency’s status as a security or a commodity has been a consistent issue between the industry and the US Securities and Exchange Commission (SEC).
Also Read: Donald Trump to Spark a Bitcoin Rally in the Second Half of the Year if Elected
CFTC Chair Reaffirms BTC and ETH Commodity Classification
In the United States, there is an important difference between a security and a commodity. The latter is a basic good that is used in commerce and interchangeable with similar goods. Assets like gold, oil, or agriculture would be various commodities.
Alternatively, a security is an asset that indicates ownership stake in a publicly traded company. Moreover, who governs the assets is an even more important distinction. Commodities are patrolled by the CFTC, while securities are overlooked by the SEC. The lack of clarity on crypto has led the latter to embrace increased enforcement over the market.
Also Read: CFTC Calls Ethereum & Litecoin Commodities in KuCoin Lawsuit
However, according to Behman, anywhere between 70% and 80% of all cryptocurrencies are non-securities. For Bitcoin and Ethereum specifically, the CFTC Chair notes that a recent court ruling affirmed their commodity status. If this sets off a trend of similar rulings, there could be an overwhelming shift in the crypto market.
The presence of crypto-based ETFs for both BTC and ETH is a good sign. That set’s a precedent for both, with it classifying the assets as a commodity ETF. Moreover, it could lessen the industry’s continued difficulty with Gary Gensler and the SEC. The SEC Chair has been outspoken in his unsavory opinion of the market as a whole.