A recent development highlights the ongoing interagency drama between the US Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC): the ranking of major cryptocurrencies has become a focal point of contention.
The CFTC has once again affirmed its position that ethereum (eth) and several other cryptocurrencies should be classified as commodities, intensifying the battle for regulatory oversight in the growing digital asset industry.
Regulatory breakup with the SEC over the classification of bitcoin, ethereum and Litecoin
The latest episode of this regulatory dispute unfolded when the CFTC filed a complaint against the KuCoin crypto exchange, coinciding with the discovery of a accusation by the United States Department of Justice (DOJ) against KuCoin and its founders, Chun Gan and Ke Tang.
The CFTC complaint alleged that KuCoin engaged in illegal off-exchange commodity futures transactions and leveraged, margined, or financed retail commodity transactions.
Additionally, the exchange was accused of operating without necessary records, failing to monitor its activities diligently, and failing to implement an effective customer identification program.
However, the most eye-catching appearance The reason for the complaint lies in the CFTC's claim that KuCoin facilitated the trading of digital assets such as bitcoin (btc), ethereum (eth) and Litecoin (LTC), recognizing them as commodities.
This is in stark contrast to the SEC's current stance, advocated by Chairman Gary Gensler, which suggests that only bitcoin holds commodity classification, leaving other cryptocurrencies outside this designation, including ethereum.
This ongoing turf war over cryptocurrency classification has a history, as demonstrated by the CFTC's previous report. lawsuit against Binance last year, where ethereum and Litecoin were also considered commodities.
Legal Experts Suggest Turf War Over Cryptocurrency Jurisdiction
The discrepancies between the two regulatory bodies have sparked debate within the industry, with legal experts such as Jake Chervinsky, chief legal officer at venture capital firm Variant, interpreting the CFTC's position as a challenge to the SEC's authority.
Chervinsky suggests That the CFTC's message to the SEC is that numerous digital assets should be considered commodities, indicating that the cryptocurrency space is within the jurisdiction of both agencies, even if the CFTC's approach is less explicit. Chervinsky's statement further says:
Typically, the SEC and CFTC pretend they are not in a turf war over cryptocurrencies. Today the CFTC is openly attacking the SEC's alleged eth investigation. This may seem minor, but it's actually a pretty wild interagency drama by DC standards… I read it as the CFTC telling the SEC ~ a ton of other digital assets are also commodities and you're not the only one that can judge them; This space belongs to us as much as it belongs to you, even if we're not that loud about it.
As the clash between the CFTC and SEC intensifies, the industry expects new developments and official rulings that will shape the regulatory landscape for CRYPTOCURRENCIES and their respective classifications.
At the time of writing, the price of eth stands at $3,543, experiencing a slight drop of 0.6% in the last 24 hours. This follows a notable 5% rally over the past seven days.
Featured image from Shutterstock, chart from TradingView.com
