CFTC: Ether (ETH) is a commodity
Ethereum

CFTC: Ether (ETH) is a commodity

By Marco Cavicchioli - 10 Oct 2019

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CFTC President Heath Tarbert said he believes Ether (ETH) is a commodity. As such, ETH would fall under the jurisdiction of the Commodity Futures Trading Commission. 

In December 2018, the CFTC launched a public invitation to receive feedback regarding the Ethereum network and the related Ether cryptocurrency, in order to gather more information about it and to improve the agency’s understanding of it. After gathering all the necessary information, and having reflected for months, they have now come to a conclusion. 

On the stage of Yahoo Finance’s All Markets Summit in New York City, Tarbert said:

“We’ve been very clear on bitcoin: bitcoin is a commodity. We haven’t said anything about ether—until now,” Tarbert said on stage at Yahoo Finance’s All Markets Summit in New York City on Thursday. “It is my view as chairman of the CFTC that ether is a commodity”.

In addition, the CFTC anticipates that ETH futures trading in the US markets may also be allowed at some point, as was the case with BTC at the end of 2017. 

Therefore, it is not the SEC, but the CFTC, that is the US government agency responsible for overseeing the bitcoin and ether markets, although Tarbert himself reveals that they are working closely with the SEC on these issues.

The basic idea is that similar digital assets should be treated in a similar way, which means ETH should be dealt with in the same way as BTC

He also added that cryptocurrency forks, such as bitcoin cash (BCH) or ethereum classic (ETC) should be treated as the original asset from which they were born, suggesting that the classification of the CFTC for each cryptocurrency depends on how it was created, unless the fork raises issues according to the Howey Test used for securities. 

Bitcoin and Ether are considered sufficiently decentralised and not controlled by any single party, which is why they cannot be considered securities.

However, the argument changes for tokens issued through ICOs, but even in that case, according to Tarbert, it is possible that, even if they are born as a security, they can become a decentralised commodity over time. 

 

Marco Cavicchioli
Marco Cavicchioli

Class 1975, Marco teaches web-technologies and is an online writer specializing in cryptocurrencies. He founded ilBitcoin.news, and his YouTube channel has more than 11 thousand subscribers.

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