CFTC reiterates ether is commodity in complaint against Kucoin

Quick Take

  • The CFTC on Tuesday publicly declared that ether and several other cryptocurrencies are commodities in a legal complaint against KuCoin’s operators, signaling the agency’s latest attempt to lay claim to the second largest cryptocurrency by market capitalization. 

The U.S. Commodity Futures Trading Commission (CFTC) has once more asserted that ether and several other cryptocurrencies are commodities as regulators engage in a tug-of-war to secure oversight of the sprawling digital assets industry. 

The derivatives regulator on Tuesday said in a legal complaint against the operators of crypto exchange Kucoin that bitcoin, ether and litecoin are commodities, a press release shows. The CFTC’s assertion marks the latest of several public attempts by the regulator to establish the Ethereum blockchain’s native token as a good that falls under its purview.  

“KuCoin solicited and accepted orders, accepted property to margin, and operated a facility for the trading of futures, swaps, and leveraged, margined, or financed retail transactions involving digital assets that are commodities including bitcoin (BTC), ether (ETH), and litecoin (LTC),” the CFTC’s lawyers said Tuesday in the complaint.

In recent years, the CFTC and Securities and Exchange Commission (SEC) have locked horns over which agency should regulate the growing digital assets industry.  

CFTC Chairman Rostin Behnam last year told lawmakers that ether is a commodity during a congressional hearing, shortly after his agency sued Binance for circumventing several U.S. regulations and laws.  

SEC Chairman Gary Gensler also seemed to make a claim to ether around the same time, however. Last March, Gensler argued that tokens using staking protocols (such as ether) could be considered securities under U.S. law. Ethereum changed from a proof-of-work consensus mechanism in September 2022. Litecoin uses a proof-of-work consensus mechanism similar to bitcoin.

The SEC, however, has not yet explicitly declared ether a security.

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