Commodities and Futures Trade Commission chairman has spoken out against the SEC’s gradual expansion of its authority into the digital asset market.
Ethereum, the second biggest cryptocurrency behind Bitcoin, was declared a commodity on Wednesday by Rostin Behnam, who spoke before the Senate Agricultural Committee.
To restate what Behnam said, “It’s been listed on CFTC exchanges for quite some time, and for that reason,” the CFTC now has a “direct jurisdictional hook” to monitor both the futures market and the underlying market for ETH.
Gary Gensler, head of the Securities and Exchange Commission, claimed last month that “anything other than Bitcoin” is security; thus, his view seems to counter that. Without directly identifying Ethereum, the chairman has often alluded to it as an example of a network that would suffer this fate, particularly now that it has adopted a proof-of-stake consensus method.
Hester Peirce, a commissioner at the Securities and Exchange Commission, has expressed concerns about the limits of the so-called Howey test, which is used to decide whether or not a digital asset can be categorized as a security. A seminal 1946 Supreme Court decision established the criterion,
Security meets the definition of a Howey Test asset if it is offered to the public with the expectation of benefit from the efforts of others. In January 2022, Gensler confirmed this point in his own words. This concept, though, may be significantly expanded under the Securities Act.
While Behnam seemed to agree with the SEC chairman in late November that Ethereum was included in this category, his argument on Wednesday demonstrates that he is sticking to his original view that more than one crypto commodity is acceptable.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.