Ethereum, Bitcoin, and Tether Are Classified as Commodities by the CFTC

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Last Updated on December 22, 2022 by Bitfinsider

Commodity Futures Trading Commission (CFTC) has filed a fraud lawsuit in the United States District Court for the Southern District of New York against FTX, Alameda Research, and Sam Bankman-Fried. The indictment, however, classifies Tether, Ether, and Bitcoin as commodities.

Digital assets are defined by the Commission as data that can be electronically transmitted, held by a single entity, and utilized in a particular manner. The categorized cryptocurrencies are all digital assets that serve as a store of value and medium of exchange.

The CFTC alleges in its lawsuit that Bankman-Fried and his companies misappropriated customer funds. He and other high-ranking FTX officials obtained dubious loans from the city of Alameda Research totaling millions of dollars for use in extravagant personal expenditures and political contributions.

It appears that CFTC chairman Rostin Behnam disagrees with the Commission’s decision to classify ETH as a commodity.

During a recent crypto-related event at Princeton University, he shifted his position and argued that the two largest cryptocurrencies are commodities. Chairman Gary Gensler and Commissioner Robert Shiller, the SEC’s top two officials, have endorsed Behnam’s recent stance.

Due to the SEC chairman’s frequent comments that only Bitcoin is a commodity, many people believe ETH to be a security. Gensler has maintained its position despite Ethereum’s recent switch to a consensus mechanism based on proof-of-stake.

Gensler has been on a mission to prove that his beliefs are correct for a very long time. In October, the security agency demonstrated in court that the LBC currency utilized by the LBRY network protocol was an unregistered security, thereby prevailing in a lawsuit against the decentralized file-sharing and payment network.

A one-year trial left little room for doubt that the SEC’s case against Ripple would fail. The classification of tokens has sparked discussions amongst regulators worldwide.

Several regulatory agencies, such as the Financial Services and Markets Authority (FSMA) of Belgium, consider tokens generated by computer code and not issued for profit to be commodities rather than securities.

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