Bitcoin and Ether are commodities

The power struggle between the United States Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) over regulatory oversight of the crypto market continues to confuse investors about which rules to follow.

In line with the turf war between the two market watchdogs, CFTC Chairman Rostin Behnam has reiterated that Bitcoin (BTC) and Ethereum (ETH) are commodities, not securities.

Behnam says Ether is commodity despite PoS transition

“I have proposed [Ether] is a commodity, and chairman Gensler thinks otherwise,” Behnam so during a Manhattan event with Rutgers Law, the Wall Street Blockchain Alliance and Lowenstein Sandler on Monday.

Although SEC Chairman Gary Gensler is willing to call Bitcoin a commodity, he does not have the same sentiment about other assets such as Ether and XRP.

Last month, after the merger, in which Ethereum went from Proof-of-Work (PoW) to Proof-of-Stake (PoS), Gensler implied that the asset can be classified as a security.

While the SEC was checking to see if Ethereum would pass the Howey test, Gensler indicated that stakes can officially be considered an investment. If ETH passes the test, it must be registered with the SEC as a security. But Behnam does not agree.

The CFTC chairman also dispelled the common belief that the CFTC would be a more favorable regulator, given the SEC’s intense attack on crypto entities. “Our enforcement record speaks for itself,” he said.

The CFTC and the SEC must work together

The CFTC chairman further explained that, contrary to common sentiment, the proposed Digital Commodities Consumer Protection Act would not give the agency full authority to classify cryptocurrencies.

The bill was introduced by Senators Debbie Stabenow and John Boozman of the Senate Agriculture Committee.

Based on that, Behnam insisted that the CFTC and SEC would continue to work together.

“It’s a pretty cynical view to suggest that two agencies can’t figure it out and work together,” he said, referring to their track record of cooperation, such as with the development of security futures.

“This is the million-dollar question. How do we communicate with the SEC when a product is in the gray area?” he asked.

Behnam then noted that both agencies had to do it work together to come up with a solution to legal and policy issues that would bring clarity to the categorization of crypto assets. He argued that the legislation would help create a regulatory framework and provide resources to the CFTC.