In a surprising turn, CFTC Chairman Rostin Behnam has announced that Bitcoin (BTC), Ethereum (ETH), and about 70% to 80% of cryptocurrencies are not classified as securities. This conclusion comes from a recent ruling by the CFTC.
In recent months, the cryptocurrency markets have seen numerous legal battles, including the Ripple case, which sparked speculation about XRP’s status and whether it is considered a security. These legal issues with the Securities and Exchange Commission (SEC) have posed significant challenges for investors.
CFTC Chairman Discusses Bitcoin and Ethereum Classification Before Senate
CFTC Chairman Rostin Behnam recently appeared before the Senate Agriculture Committee to address the classification of digital assets in the crypto market. He stated that, based on market cap, 70-80% of digital assets are non-securities, meaning they fall outside direct federal oversight.
Amid ongoing legal debates about the security status of various crypto commodities, Behnam revealed that a recent ruling by an Illinois court classified Bitcoin (BTC) and Ethereum (ETH) as commodities under the Commodity Exchange Act (CEA). This classification shifts the perspective on BTC, ETH, and other digital assets that might otherwise be considered securities.
Behnam shared details of the court’s decision, explaining that a district court in Illinois had recently ruled in favor of the CFTC in a case involving fraud by an unregistered entity promising returns in digital assets like Bitcoin and Ethereum. The court’s decision affirmed that BTC and ETH are indeed commodities under the CEA.
CFTC vs. SEC: Contrasting Views on Cryptocurrency Classification
The CFTC’s stance on digital assets, such as Bitcoin, contrasts sharply with the SEC’s long-standing position. SEC Chairman Gary Gensler argues that many cryptocurrencies should be classified as securities based on the Howey test. According to Gensler, if tokens are sold with the expectation of profit by buyers, this suggests they meet the criteria for being considered securities.
In contrast, CFTC Chairman Rostin Behnam maintains that his agency has the authority to regulate digital commodities like Bitcoin and Ethereum. Behnam has urged Congress to act swiftly on crypto regulation, warning that failure to do so risks investor protection and could place the U.S. at a competitive disadvantage in the global market.
CFTC’s BTC and ETH Ruling Excites Crypto Community
The CFTC Chairman’s clarification that Bitcoin (BTC) and Ethereum (ETH) are commodities rather than securities has garnered significant attention and enthusiasm from key figures in the crypto world. HEXscout, the portfolio manager for Hex and PulseChain, expressed excitement on X, noting, “This is a significant milestone for our ecosystem. The court’s confirmation that Ethereum, which PulseChain is a fork of, is NOT a security is a major success.”
The classification of BTC and ETH as non-securities has several implications. It reduces regulatory burdens since commodities are subject to less regulation compared to securities, allowing for greater flexibility in market activities. Additionally, treating digital assets as commodities can foster market development through increased innovation and liquidity.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
Join Cryptos Headlines Community
Follow Cryptos Headlines on Google News
