How CFTC Illinois Case Strengthens Calls For Crypto as Commodities
The United States has faced unclear digital asset regulations as agencies like the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) pitch for jurisdictions on the subjects. This has been a contentious issue for many industry executives saying that the lack of rule clarity stems deeply from the agency to oversee the sector.
Others have expressed that several sectors of the market should be regulated by multiple authorities under a single framework. However, a recent Illinois judgment has given more backing to the CFTC’s position that Bitcoin and Ethereum are commodities with crypto users extending the logic to other assets.
CFTC Chair Says Crypto Assets Are Commodities
Rostin Behman the CFTC chairman in his Congressional testimony doubled down on the commodity tag on Bitcoin and Ethereum citing a judgment in the Northern District of Illinois.
“Just last week, a District Court in the Northern District of Illinois entered summary judgment in favor of the CFTC in a case involving fraud by an unregistered entity that promised steady returns in digital asset commodities such as Bitcoin and Ether. In its decision, the court reaffirmed that both Bitcoin and Ether are commodities under the Commodity Exchange Act.”
This revelation in Congress sparked debates around digital asset spaces on the effect of the SEC lawsuits on the market. According to the CFTC chair, 70-80% of crypto tokens are non-securities. Reacting, Coinbase CLO Paul Grewal talked about criticized expectations of notice by assets that violate Federal securities laws.
It’s Not Yet Over
While a court in Illinois ruled that both assets are commodities under the Commodities Exchange Act, it is not a binding decision across the country leaving spaces for the status quo to remain unchanged. Lawyers explained that the decision isn’t a precedent opposed to how crypto users have tipped the news. However, commentators say it can shape future regulations and increase the role of the CFTC in the crypto market.
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