If it is up to the US Commodity Futures Trading Commission (CFTC), ethereum qualifies as a digital commodity under US law. This would mean that the CFTC believes that ether is not a effect and that is probably a positive development for the industry. It was feared that ether, especially after the switch to Proof-of-Stake, would qualify as an effect.
Bitcoin, Litecoin and Ethereum
The CFTC is suing Binance and names bitcoin (BTC), ether (ETH) and litecoin (LTC) in the same row in the suit. According to the CFTC, all three cryptocurrencies qualify as digital commodities.
This means that they are not under the supervision of the Securities and Exchange Commission (SEC) and exchange platforms do not need a special license to make these tokens tradable.
After Ethereum switched to Proof-of-Stake, there was some debate, as SEC Chairman Gary Gensler felt that staking coins qualify as a security. So they don’t agree with that at the CFTC.
In itself this is positive for ethereum, except that there is not really clarity in this way. The SEC seems to believe that ether qualifies as a security, while the CFTC takes a completely opposite view. Which regulator is going for it now? That remains the question.
SEC is busy with crypto
Incidentally, the SEC has been quite busy with the crypto industry in recent times. For example, how about banning Kraken’s staking program and banning Paxos from issuing any new Binance USD (BUSD) stablecoins. Also, of course, we got the news about the Wells notice to Coinbase last week.
It seems that the SEC is trying all sorts of things to clamp down on the industry in the United States. So far it has also been quite successful in this, because Kraken had to obediently close its strike program after the ban from the SEC and Paxos also listens to the regulator.