Stock or commodity: ETH in joint custody – Stock (security) even weeks, raw materials (commodities) odd weeks. Here is an idea that could well delight the American regulators that are the DRY (Security Exchange Commission) and the CFTC (Commodity Futures Trading Commission). These latter bickering for ages to bring into their lap the second crypto on the market: theETH.
Ethereum: butter and butter money for the regulator?
Which of the two is right? For months, even years, the battle has been raging between the boss of the SEC, Gary Genslerand the head of the CFTC, Rostin Behnam. Both seek to fit a circle into a square, to house the crypto UFO that has just landed on planet Earth in cramped and dusty boxes built for decades. And of course, regulators have push with all their might, it does not want to fit. So here is a bright idea to bring the ETH square into the round of legislation: cut it in half. With a bit of luck, it will eventually pass.
During an interview conducted by Laura Shin for the media Unchained, two guests expressed themselves on this subject: Dan Berkovitzformer commissioner at the CFTC, and Colin Lloyd, a partner at Sullivan & Cromwell. This law firm helps in particular the exchange Coinbase In his fight against the abusive regulation of the SEC.
These last weeks, Gary Gensler was summoned by the courts to explain his anti-crypto relentlessness. He has also called to order on the need to establish a clear regulations with regard to cryptocurrencies, and this, in order not to penalize any longer companies which try to develop in the USA and which, it must be said, no longer know where to turn. Asked about the Ethereum case, Gary Gensler could only stammer, refusing to take a position on the issue. The course has however struck it: an asset cannot be both a security and an commodities…or maybe it does, after all.
Indeed, for Dan Berkovitzand contrary to common thought, it is quite possible that Ethereum, and more broadly digital assets, could fall foul of the two jurisdictions.
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Stock and commodities: crypto innovation under threat in the USA?
In the end, this is all a matter of legal definition. Clearly, in the law, nothing prevents an asset from being forced to comply with both regulations.
“The law is clear. An asset can indeed be both an action and a commodity. »
Dan Berkovitz
However, we are a long way from implementing such regulations. It would be a first and a damage to the development of the sector to USA. But nothing could surprise us anymore. The crypto sector is therefore not immune to a surprise.
In fact, raw materials are not purely physical, according to the law. So it doesn’t stop at wheat or gold, but virtually anything that falls under the umbrella of future contracts. On the other hand, stocks include in their fold assets such as notes or investment contracts. Elements likely, too, to be the subject of future contracts. In fact, the two legislations are not totally incompatible. And the cryptos could therefore be placed, without their knowledge of their own free will, in this small interstice.
Lloyd, for his part, remains more moderate on the issue:
“I don’t see anything in the law that would tell me that a series of numbers that runs on a blockchain can by default be considered a security. »
The problem of categorization cryptocurrencies is thorny. Thorny, but essential for the future of the sector. A coming which, as the regulations trample, is handed over in question, hampering the development of crypto companies. However, the latter only want one thing: a minimum of clarity and an end to the SEC’s shameless sanctions against them. A machinery that seems to be racing in recent months, pushing many crypto companies to leave the USA.
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