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- CFTC is considering listing BTC, ETH and USDT as commodities.
- Gary Gensler had been advocating for BTC to be treated as a commodity.
- If these three are classified as commodities, they shall be regulated by the CFTC.
Bitcoin, Ethereum and Tether were created to build a decentralized financial system. This might not be possible if the SEC regulates it. However, that will remain the case even if the CFTC regulates it…
Yes, the CFTC is considering listing these unique digital assets as commodities.
CFTC has filed a complaint regarding fraud in the US District Court for the Southern District of New York against Sam Bankman-Fried, Alameda Research and FTX. The accusation notes that digital assets such as Bitcoin (BTC), Tether (USDT) and Ethereum (ETH) are commodities.
According to CFTC, a digital asset can be stored and transmitted electronically and has defined usage and ownership rights. Virtual currencies fall within the category of digital assets, such as BTC, ETH, and USDT, which function as digital representations of a value that operate as a medium of exchange, store of value, and unit of account.
“Certain digital assets are ‘commodities’ including BTC, ETH, USDT and others….”
In the complaint, the CFTC, charged that SBF and the companies he founded misused users’ funds. SBF, along with other FTX executives, took millions of dollars in poorly-documented loans from Alameda, which were then used for purchasing luxury properties and real estate, and making political donations.
SBF was arrested on December 12, 2020, by Bahamian authorities and will be under remand till February 8, 2023. That’s when the extradition hearing is supposed to take place. The US Attorney’s Office for Southern District New York had issued an indictment charging SBF with one count of conspiracy to commit money laundering, one count of conspiracy to embezzle US and campaign finance laws, and six counts of deceit. Meaning a total of eight counts, so far.
What if BTC, ETH, and USDT were treated as Commodities?
US Securities and Exchange Commission chair Gary Gensler has strongly supported treating Bitcoin as a Commodity rather than a cryptocurrency.
“Bitcoin – may be that’s a commodity token, that has a big market value, but that goes over there” said the SEC chair before the House Appropriation Committee on May 18th, 2020.
Former SEC director William Hinman previously said that Ethereum should be treated as a Commodity but backtracked from his statement, saying SEC is unsure regarding ETH’s status. Ripple CEO Brad Garlinghouse summed up the situation, blasting the SEC’s frivolous approach towards regulation. He said that if such ambiguous signals continue, “How is the market supposed to have clarity?”
The SEC Chair, when asked about his views on commodities, said,
“A commodity would be a product like “corn or wheat or gold or oil” which dosent have one party sitting there behind it and the public’s not anticipating based on the effort of that one party.”
If BTC, ETH and USDT were to be treated as commodities, then they would come under the purview of the CFTC. This will not mean good news for cryptos status as decentralized assets. Though it might make crypto sound more safe, the fundamental objective behind the creation of these assets would still be debated.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
