Stablecoins and ether (ETH) are commodities that should fall under the jurisdiction of the U.S. Commodity Futures Trading Commission, its chairman again asserted during a recent Senate hearing.
During the March 8 Senate Farm Hearing, CFTC Chairman Rostin Behnam was asked by Senator Kirsten Gillibrand about the divergent views of the regulator and the Securities and Exchange Commission following the CFTC settlement. in 2021 with the stablecoin transmitter Tether. Behnam replied
“Despite a regulatory framework around stablecoins, they are going to be commodities in my view.”
“It was clear to our law enforcement team and the commission that Tether, a stablecoin, was a commodity,” he added.
In the past, the CFTC has asserted that certain digital assets such as Ether, Bitcoin (BTC), and Tether (USDT) are commodities — such as in its lawsuit against FTX founder Sam Bankman-Fried in mid-December.
This is a pretty blunt (almost passionate?) rebuke of the “everything but BTC is a security” and “stablecoins are securities” positions. It would be great if the CFTC released the legal analysis on these issues, according to Chairman Behnam. https://t.co/RIeTgUxTFd pic.twitter.com/LGtuEPs4X3
— Lawtoshi (@lawtoshi) March 8, 2023
Asked what evidence the CFTC would present to gain regulatory influence over Ether during the Senate hearing, Behnam said he “would not have allowed” Ether futures products to be listed on CFTC exchanges. if he “wasn’t convinced it was a core asset.” ,” add:
“We have litigation risk, we have agency credibility risk if we do something like this without serious legal defenses to support our argument that (the) asset is a commodity.”
The comment apparently cemented Behnam’s sometimes hesitant opinion on Ether’s classification. At an invitation-only event at Princeton University in November last year, he said Bitcoin was the only cryptocurrency that could be considered a commodity, excluding Ether. Only a month before, he had suggested that Ether could also be considered a commodity.
Related: CFTC continues to explore digital asset policy considerations at MRAC meeting
Behnam’s most recent comments clash with the view of SEC Chairman Gary Gensler, who asserted in a Feb. 23 interview with New York Magazine that “anything but Bitcoin” is a security claim. which was rejected by several crypto lawyers.
The differing views of market regulators could set the stage for conflict as each vies for regulatory control of the crypto industry.
In mid-February, the SEC increased its authority against stablecoin issuer Paxos, saying it could sue the company for violating investor protection laws, alleging that its Binance USD (BUSD) stablecoin ) is an unregistered title.
Around the same time, the regulator also targeted Terraform Labs and labeled its algorithmic stablecoin TerraUSD Classic (USTC) secure, a move that Delphi Labs General Counsel Gabriel Shapiro said could be a “sheet of paper.” road” on how the SEC might structure future lawsuits against other stablecoin issuers.
SEC crypto crackdowns have been pushed back by the industry. Circle Founder and CEO Jeremy Allaire said he doesn’t believe “the SEC is the regulator of stablecoins,” saying they should be overseen by a banking regulator.