On Wednesday, Rostin Behnam, Chairman of the US Commodities Futures Trading Commission (CFTC), confirmed that a court in Illinois has officially recognized the status of Bitcoin and Ethereum as digital commodities under the Commodity Exchange Act.
This decision could revolutionize the crypto world or plunge it into regulatory chaos. This classification directly contradicts the statements of SEC Chairman Gary Gensler, who has so far only wanted to recognize Bitcoin as a commodity and classify the rest of the tokens as securities.
Gensler’s stance led to a massive crackdown on leading crypto companies like Binance, Coinbase (NASDAQ:COIN), Ripple, and Uniswap Labs last year. The SEC claimed that many of the tokens offered for trading were securities according to the Howey Test and thus needed stricter regulation.
The CFTC, supported by the recent court ruling, sees Bitcoin and Ethereum as commodities and claims oversight of these digital assets. This power struggle between the authorities could lead to even more confusion and uncertainty in the crypto market.
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Senator Roger Marshall called for transferring full responsibility for digital assets to the CFTC. Behnam, who had previously expressed his pro-crypto stance, agreed. This could simplify the industry’s regulation, but the power struggle between the SEC and CFTC is likely to continue causing uncertainty. The need for clear regulatory frameworks was emphasized by Behnam at the Milken Institute Conference. Without clear guidelines, retail investors and the market as a whole could suffer.
The classification of Bitcoin and Ethereum as commodities could be a double-edged sword for the crypto community. On the one hand, it creates clarity and could pave the way for greater acceptance. On the other hand, the power struggle between the SEC and CFTC leads to massive uncertainty, which harms the market in the long run. Is this a victory for cryptocurrencies or just another nail in the coffin? The future will tell.
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Source: Cryptocurrency - investing.com
