• The CFTC and SEC have conflicting views on the status of crypto assets, with the CFTC Chair stating it is a commodity and the former Commissioner saying it can be both.
• Former CFTC Commissioner Dan Berkowitz spoke on the Unchained podcast, claiming that Ethereum is a “special case” in which it can be both a commodity and a security.
• CFTC Chair Rostin Behnam also discussed his views on crypto assets in a Bloomberg podcast, stating that it could be viewed as either a security or a commodity depending on its use.
Conflicting Regulatory Views
The Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) have different opinions about how to classify crypto assets such as Ethereum. CFTC Chair Rostin Behnam said that these digital assets can be seen as either commodities or securities depending on their intended use. Meanwhile, former CFTC Commissioner Dan Berkowitz has argued that some digital assets such as Ethereum can actually fall into both categories.
Dan Berkowitz recently spoke about this issue during an Unchained podcast. He stated that there are certain cases where something can simultaneously be classified as both a commodity and security, citing Ethereum as an example of this phenomenon. According to him, if Ethereum were to become available for futures trading then it could fit into both categories since futures contracts are considered securities under the CEA (Commodity Exchange Act).
CFTC Chair Rostin Behnam was asked about his opinion regarding crypto asset classification during a Bloomberg podcast published May 23rd. While he did not give an explicit answer to the question of whether or not they should be classified as commodities or securities, he did state that this decision would depend on their intended use by investors.
The mixed messages from regulators make compliance efforts more challenging for companies dealing with digital assets such as cryptocurrencies. With different entities expressing conflicting opinions about how they should be categorized, it becomes increasingly difficult for companies to ensure they are following all applicable laws and regulations when operating in this space.
Crypto asset classification remains unclear despite recent comments by both current and former members of the Commodities Futures Trading Commission. While the SEC maintains its stance that all crypto assets are securities with investment contracts, Dan Berkowitz believes there is potential for some digital assets such as Ethereum to fit into both categories depending on how they are used by investors and traders alike.