Clear as Mud: CFTC Chair Says Cryptos Are Commodities, Former Commissioner Says They Can be Both
Former CFTC Commissioner Dan Berkowitz has spoken out about the status of crypto assets, and things are still no clearer.
The US Commodity Futures Trading Commission (CFTC) is an independent federal agency that was established back in 1974 by the Commodity Futures Trading Commission Act. It regulates the commodity futures, as well as the options market. The goal is to protect investors against market manipulation, fraud, and abusive trade practices, while also promoting competitive and efficient trading.
There has been a serious debate regarding the nature of cryptocurrencies and whether or not they can be classified as commodities or securities, or even currencies, in general. Bitcoin, for example, was deemed a commodity by the CFTC back in 2015. Hence, those who operate with it would have to abide by the regulations set forth toward commodities.
In December 2019, the Chairman of the CFTC also said that Ether (ETH) is a commodity and, as such, falls within the jurisdiction of the CFTC.
Regarding other cryptocurrencies, it depends on their structure, intended use, and designation. As such, some of them may be considered securities and to fall within the department of the Securities and Exchange Commission (SEC), which posts a whole different set of rules.
Former CFTC Commissioner Dan Berkowitz has spoken out about the status of crypto assets, and things are still no clearer.
The CFTC describes the Bitcoin fraud case as largest to date the agency.
The individual was charged with one count of wire fraud.
The world’s largest crypto exchange Binance has seen its market dominance dwindle following the CFTC lawsuit last month.
Binance experienced a 60% withdrawal surge this week following the CFTC’s market manipulation allegations.Â
According to Santiment's data, just 10.31% of Ethereum's supply is held on exchanges.
There was an increase in net withdrawals from Binance on the news of the CFTC’s charges, shortly before and after
Here are the CFTC’s accusations against Binance that CZ is choosing to ignore.Â
The committee will hold its first meeting on March 22nd.
Eisenberg is also in legal battles with several US federal and regulatory agencies.