September 25, 2023

Ethereum Remains a Commodity Despite POS – CFTC Commissioner

The CFTC Commissioner, Christy Romero, confirmed that the US Commodity Futures and Trading Commission continues to categorize Ethereum as a commodity despite its transition to the proof-of-stake protocol. The Chairman of the CFTC, Rostin Behnam, said on Wednesday that the Commission has requested the US Congress to give it regulatory authority over Bitcoin and Ethereum.

The CFTC’s Long-Standing Position

Chamber of Digital Commerce founder, Perianne Boring, asked the CFTC Commissioner, Christy Romero if the transition of Ethereum from proof-of-work to the proof-of-stake protocol has an implication on the policies around it. It was then Romero affirmed the CFTC’s position on Ethereum still being a commodity.

Romero said when Ethereum is carefully considered, along with other products, it is been questioned as to what a commodity is. She said the Commission has long decided that Ethereum is a commodity. What a commodity is happens to be very broad, she said, while reiterating the Commission’s position.

The CFTC Chairman, Rostin Behnam, on Wednesday, said that the regulators have been requesting that the United States Congress make it the overseeing authority over the cash market. That would make the CFTC the regulator over Ethereum, Bitcoin, as well as over other cryptocurrencies as commodities.

Ripple Gains Ground in Court

The Chairman of the Security and Exchange Commission, Gary Gensler, agrees that both Ethereum and Bitcoin are commodities and he further agrees that the CFTC should have regulatory oversight of them. But not long afterward, Gensler drew back on his words and said Ethereum is a security because of its proof-of-stake protocol. He said that every cryptocurrency based on the POS protocol is a security based on the Howey Test.

For Behnam, he believes that cryptocurrencies are a new set of asset classes and the decision over them has to be made through legislation. The SEC and the CFTC are trying to work out a reasonable way of establishing certainties in the digital market, as well as how to protect investors.

While a decision is yet to be made by the SEC and CFTC on the nature of Ethereum and some other digital assets, Ripple has secured a win over the SEC in their long-drawn legal battle. The court has asked the SEC to turn over the Hinman documents. Due to that, XRP recorded a new price jump of more than 11% within the last 24 hours. It now sells at $0.28. 

But Ethereum has been trading within a tight range since the Merge was completed two weeks ago. ETH currently sells at $1,333, gaining 1% in 24 hours.

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