The Securities and Exchange Commission (SEC) has been subtly trying to assert its authority over the crypto market and the Commodity and Futures Trading Commission (CFTC) is not in favor.
The chair of the CFTC, Rostin Behnam, declared the second-largest crypto in the market, Ethereum, as a commodity in front of the Senate Agricultural Committee.
The chairman said that Ether has been listed on CFTC exchanges for quite a while and it made sense for the agency to regulate its underlying market as well as derivatives market.
This is a direct contradiction to the claim of Gary Gensler, the chair of the SEC, who said last month that the securities law applies to everything in the crypto market with the exception of Bitcoin.
Even though Gensler has not taken specific names, he has hinted at Ethereum, particularly after its transition to the proof-of-stake (PoS) protocol.
The CFTC’s stance
In late November, comments had suggested that Behnam and Gensler were agreed upon Ethereum’s status as a security.
But, the argument put forward on Wednesday shows this is not the case. Instead, he said that they allowed Ether futures products to be listed because they consider it a commodity.
He also added that they had legal defenses for proving their point. Stablecoins is another type of asset on which the regulatory heads disagree.
Even though SEC recently threatened to file a lawsuit against Paxos for issuing an unregistered security in the form of BUSD, Behnam believes that stablecoins should be categorized as commodities.
Behnam referred to a lawsuit in 2021 against Tether in which it had paid $40 million for lying about its dollar reserves.
The CFTC chairman said that the case had shown that the USDT stablecoin was a commodity and they had taken the steps necessary for regulating the market.
There has been no clarity about the status of cryptocurrencies, as the SEC has opted to use the enforcement approach to regulate the digital market.
Meanwhile, lawmakers are demanding greater scrutiny of the market in light of the events of the previous year, which resulted in devastating losses and downfalls.