The community is hopeful that the assertion by the CFTC will put to bed claims that staked coins are securities according to the Howey Test.
The Commodity Futures Trading Commission (CFTC) has again labeled er (ereum-price”>) as a commodity in a Dec. 13 court filing — in contrast to statements from chief Rostin Behnam on Nov. 30 suggesting that Bitcoin was the sole cryptocurrency that should be viewed as a commodity.
According to the CFTC, as per their filing today, is a commodity. This really should put any security designation to rest. pic.twitter.com/PkHWredNK4
— Hal Press (@NorthRockLP) December 13, 2022
In its lawsuit against Sam Bankman-Fried, FTX, and sister company Alameda Research, the regulator on multiple occasions referred to er, Bitcoin () and Ter (USDT) “among others” as “commodities” under United States law.
“Certain digital assets are “commodities,” including bitcoin (), er (), ter (USDT) and others, as defined under Section 1a(9) of the Act, 7 U.S.C. § 1a(9).”
However, there appears to be some disagreement within the CFTC itself regarding wher er should be viewed as a commodity or not, at least in recent weeks.
During a crypto event at Princeton University on Nov. 30, CFTC chief Rostin Benham reportedly suggested that Bitcoin is the only crypto asset that should be viewed as a commodity — walking back previous comments which asserted that er may also be a commodity.
The chairman of the Securities and Exchange Commission, Gary Gensler has also had an undetermined stance on er in recent months.
In an interview with Jim Cramer during the hosts’ Mad Money show on Jun. 27, Gensler confirmed that Bitcoin was a commodity adding: “That’s the only one I’m going to say.”
Gensler has previously suggested er was a security after its initial coin offering but had become more decentralized and turned into a commodity since then.
In September, his stance appeared to have shifted again after er’s transition to proof-of-stake (PoS), when he argued that staked tokens may constitute securities under the Howey test.
The designation of crypto assets in the U.S. is particularly important, as the CFTC regulates commodities futures while securities like bonds and stocks are regulated by the Securities and Exchange Commission (SEC).
Crypto skeptic Senator Elizab Warren is reportedly working on a bill that would give the SEC most of the regulatory authority over the crypto industry, and Intercontinental Exchange Inc CEO Jeffrey Sprecher is also confident that crypto assets will be handled like securities — suggesting at a financial services conference on Dec. 6 that this would result in greater consumer protections.
Belgium has taken a different stance on the designation however, with its Financial Services and Markets Authority asserting in a Nov. 22 report that Bitcoin, er and other crypto assets –and-other-decentralized-coins-are-not-securities”>issued solely by computer code do not constitute securities.