The CFTC chair insisted that ether is a commodity, not a security as the SEC chair claimed. The CFTC chair stressed that the derivatives watchdog would not have allowed ether futures products to be listed on CFTC-regulated exchanges “if we did not feel strongly that it was a commodity asset.”
Ether is a commodity, the CFTC chief claims
Commodity Futures Trading Commission (CFTC) Chairman Rustin Behnam addressed the panel Claim Securities and Exchange Commission (SEC) Chairman Gary Gensler stated that all tokens other than bitcoin are securities in a hearing before the Senate Committee on Agriculture, Nutrition and Forestry on Wednesday.
During the hearing, Senator Kirsten Gillibrand (D-NY) asked Behnam: “In light of President Gensler’s recent suggestion that all digital assets except Bitcoin are securities, what does that mean for a number of specific contract markets? [DCMs] Currently offering futures or swaps on ether? DCMs are exchanges that operate under the regulatory oversight of the CFTC.
“Obviously, that would raise questions about the legitimacy of those countries, their specific contract markets, and the listing of these digital assets that are purportedly securities,” the CFTC chair replied, reiterating:
I made the argument that ether is a commodity.
Noting that ether-based products have been “listed on CFTC exchanges for some time,” Behnam said, “Because of this, it creates a very direct jurisdictional link for us to monitor the derivatives market as well as the underlying market as well.”
As he elaborated, “The process for which an exchange or DCM lists a contract is very straightforward under our law. They can get approval from the commission.” [CFTC] Or they can self-certify a product. This self-certification process is one that transfers responsibility to both the CFTC and the market participant.”
The CFTC chairman set out to explain why he strongly believes that ether is a commodity. “I would say that serious and deep legal analysis goes into the thought process before the product is self-certified, so there is no doubt in my mind and having known this and been on Commission when the ether futures contracts were listed that both the exchange and Commission thought deeply and thoughtfully about ‘what Is the product?” Is it included in a commodity system or a security system?
We wouldn’t have allowed a product, in this case an ether futures product, to be listed on the CFTC if we didn’t feel very strongly that it was a commodity asset.
Behnam concluded, “Because of the risk of litigation, we run the agency’s credibility risk if we do something like this without a serious legal defense or defenses to support our argument that the asset is a commodity.”
Do you think Ethereum will be classified as a security or commodity in the US? Let us know in the comments section below.
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