US CFTC Chair believes most crypto should be classified as commodities
Behnam and Gensler share goals but differ on crypto oversight.
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Rostin Behnam, the US Commodity Futures Trading Commission (CFTC) chairman, recently stated that many cryptocurrencies are considered commodities under current laws. He expressed concern over the need for clear regulatory guidelines, which has become a significant obstacle for businesses operating in the crypto industry in the US.
“It’s about figuring out how existing, decades-old laws fit into this new technology that seems to be changing and ultimately requires a new way of thinking around policy and legislation. Under existing law, many of the tokens are considered commodities,” he explained.
Behnam has previously stated that digital assets, including Ethereum and stablecoins, are commodities. The CFTC upheld this classification in a lawsuit against FTX founder Sam Bankman-Fried in December 2021, where the commission asserted that Bitcoin, Ether, and Tether are commodities.
In contrast, Gary Gensler, the chair of the Securities and Exchange Commission (SEC), has consistently argued that all crypto, except Bitcoin, are securities and should be regulated by the SEC.
Behnam cited the CFTC’s previous designation of Ether, Tether, and other significant cryptocurrencies as commodities. Gensler contends that the public invests in crypto with the expectation of profits, meaning they meet the definition of securities.
The differing views of these two regulatory bodies have led to what Behnam describes as a “turf war” over who gets to regulate the crypto industry.
Despite the ongoing regulatory dispute, Behnam maintains a positive working relationship with the SEC, emphasizing that both agencies share the same interest in protecting the US markets, the country’s financial ecosystem, and consumers.
This regulatory uncertainty and continuous enforcement actions have seemingly discouraged some crypto companies from continuing business in the US. The industry and investors eagerly await a resolution providing much-needed clarity and stability in the regulatory space.