Crypto, the pet peeve of regulators – Bitcoin and Ethereum spin U.S. lawmakers on the loose, and it’s not much saying. The representatives of the CFTC (Commodity Futures Trading Commission) and of the SEC (Securities and Exchange Commission) do not get along… caught off guard by this crypto UFO hovering in water so murky regulators had never dared to navigate it before. Story of a badly embarked confrontation!
Bitcoin and Ethereum: the crypto-pebbles in the regulator’s polished shoe
In the United States, two regulatory bodies stand out.
To starboard, the CFTC is responsible for regulating the amenities, that is to say the goods or raw materials, like wood, oil or electrical energy. This concerns, more broadly, generic products or products with little added value from one supplier to another. For example, TotalEnergies does not sell flake electricity compared to EDF.
On the port side, the SEC, so often mentioned in crypto. His role ? Regulate the Financial assets (Where securities in English): stocks, bonds, ETFs (Exchange Traded-Funds) and trackers.
Now that the light is shed on the two main players in the debate, here comes the million dollar question. In your opinion, Bitcoin and Ethereum are commodities or financial assets? This is THE problem that’s been bothering you for months. Rostin Behnamthe chairman of the CFTC, and Gary Genslerthe boss of the SEC.
As much, they both agree to consider Bitcoin (BTC) as a raw material in the same way as gold. Both Ether (ETH) and even XRPcompany token Ripplecurrently in lawsuit against the SEC on these same issues, are the subject of all the debates.
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CFTC vs. SEC: Who will be sent to the ropes?
“I suggested Ethereum was a commodity, but Chairman Gensler thinks otherwise. »
Rostin Behnam during a conference organized by the law firm Lowenstein Sandler
The theme ? “Regulating Financial Innovation: The Future of Crypto and Blockchain”. We will understand. The regulation of cryptocurrencies is clearly topical.
Ethereum, the subject of the regulatory dispute
Bitcoin is more of a commodity. On this subject, the debate seems to be on the right track. For Ethereumon the other hand, the battle is far from won, especially since the recent switch to Proof of Stake (PoS) seems to be reshuffling the cards.
people firmly maintains that Ethereum is a financial asset. For Behnam, on the other hand, it is a raw material. Nevertheless, if Ethereum becomes a commodity, it could open Pandora’s box… so that one day, by force of circumstance, all cryptos will be classified as such. However, behind each, are private companies, specific projects, seeking to profit from their product, which is the exact definition of a financial security. Dilemma !
The SEC’s ultimatum takes the form of the Howey test soon applied to Ethereum. This is to check whether ETH meets the criteria making it a financial asset.
Whether Bitcoin and Ethereum become financial assets or commodities in the near future, the debate remains open. Indeed, it would be an illusion to think that the CFTC will be more complacent than the SEC. Similarly, Behnam recalls that the CFTC and the SEC are used to working together. It is therefore difficult to determine in what sauce our cryptos will be eaten. L’mistake wouldn’t it be to try to fit cryptos, these strange things that didn’t exist 15 years ago, into the dusty old framework of the regulation ? Wouldn’t there be a need for this emerging multicolored crypto-tableau with such a particular geometry ofa whole new frame ?
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