The Commodity Futures Trading Commission (CFTC) has called both Ethereum (ETH) and Litecoin (LTC) commodities in its recent KuCoin lawsuit filings. Indeed, the CFTC filed its civil enforcement action amid the recent criminal charges levied against the exchange and two of its founders.
The complaint alleges that KuCoin had “illegally dealt off-exchange” commodity transactions without first registering with the CFTC. Moreover, within the complaint, the commission identifies Bitcoin, Ethereum, and Litecoin as commodities that investors were able to trade.
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CFTC Says Ethereum and Litecoin Are Commodities
The digital asset market saw KuCoin emerge as the subject of criminal charges from the US government Tuesday. Moreover, the CFTC has now released a lawsuit against the cryptocurrency exchange, highlighting a plethora of illegal activity regarding commodity transactions.
Subseuqnlety, the CFTC called both Ethereum and Litecoin commodities within that KuCoin. Specifically, the commission listed the two cryptocurrencies alongside Bitcoin as the included commodities that KuCoin illegally allowed investors to trade.
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“These actions brought KuCoin squarely within the CFTC’s authority and required KuCoin to register within the CFTC and comply with all applicable regulations,” the lawsuit stated. Additionally, the commission noted that it is seeking “civil momentary penalties, permanent trading and registration bans, and permanent injunction against further violations of the CEA and CFTC regulations, as charged.”
The Department of Justice issued criminal charges against both the KuCoin exchange and its founders. Specifically, they noted that the exchange violated the Bank Secrecy Act, and did not implement necessary customer identification procedures.
An interesting development from the lawsuit is the Ethereum distinction. Reports from earlier this month have noted the US Securities and Exchange Commission (SEC) is seeking a legal campaign to ensure ETH’s security status. This lawsuit encourages the commodity distinction that the SEC is seemingly seeking to overturn.