ETH is a Commodity, Confirms CFTC Chairman Heath Tarbert
After the U.S. SEC’s decision not to classify Bitcoin and Ether as securities, the CFTC has acknowledged Ether’s status as a commodity.
Despite the expected Bitwise Bitcoin ETF rejection, good news has come from the U.S. Commodity Futures Trading Commission (CFTC), whose chairman acknowledged Ether (ETH) as a commodity, falling under the CFTC purview.
Heath Tarbert, the CFTC chairman, made these comments while speaking at a Yahoo Finance summit in New York,
“It is my view as chairman of the CFTC that ether is a commodity”.
This recognition comes a year after the U.S. Securities and Exchange Commission decided not to classify Bitcoin and Ether as securities. The difference, as explained by the SEC, was in the way a token was sold and behaved - and while most digital tokens are issued as securities, Bitcoin and Ether, by way of their decentralized nature, cannot be classified as such.
Taking it further, the CFTC chairman opined that similar digital assets should be classified similarly, which means forked cryptocurrencies, such as Bitcoin Cash (BCH) and Ethereum Classic (ETC) should also be considered commodities, like Bitcoin and Ether.
Commenting on initial coin offerings, which took the market by storm in 2017 and the early part of 2018 before collapsing in the face of regulatory pressure, Tarbert shared that it was possible for a coin to start as a security and turn into a commodity later, provided it achieves sufficient decentralization.
“You can have a situation where something in an initial coin offering is a security initially, but over time, it gets more decentralized, and there's a tangible value there, so you can have things that change back and forth,” he said.
Meanwhile, we saw the U.S. SEC reject the Bitcoin ETF proposed by Bitwise and NYSE Arca ahead of the October 13 deadline. The regulatory body cited lack of transparency in Bitcoin markets as the main reason, especially given how fake trading volumes and activity is rampant in the crypto space.