The Chairman of the US Commodity Futures Trading Commission (CFTC) has reaffirmed that stablecoins and Ether (ETH) should be classified as commodities, during a recent Senate hearing.
At the Mar. 8 hearing of the Senate Agriculture Committee, CFTC Chairman Rostin Behnam was asked by Senator Kirsten Gillibrand about the divergent views of the regulator and the Securities and Exchange Commission (SEC) following the CFTC’s 2021 settlement with stablecoin issuer Tether. Behnam stated:
“Notwithstanding any regulatory framework around stablecoins, they’re going to be commodities in my view.”
“It was clear to our enforcement team and the commission that Tether, a stablecoin, was a commodity,” he added.
In the past, the CFTC has asserted that certain digital assets such as Bitcoin (BTC), Tether (USDT) and Ether were commodities, such as in its December lawsuit against FTX founder Sam Bankman-Fried.
At the hearing, Senator Gillibrand asked what evidence the CFTC would put forward to gain regulatory influence over Ether. Behnam stated that he “would not have allowed” Ether Futures products to be listed on CFTC exchanges if they “did not feel strongly that it was a commodity asset,” adding:
“We have litigation risk, we have agency credibility risk if we do something like that without serious legal defenses to support our argument that [the] asset is a commodity.”
Behnam’s remarks seem to contradict a view held by SEC Chairman Gary Gensler, who in a Feb. 23 New York Magazine interview claimed that “everything other than Bitcoin” was a security, a claim denied by several crypto lawyers.
The differing opinions from market regulators could lead to conflict when they attempt to regulate the crypto industry. In mid-February, the SEC took action against two stablecoin-issuing companies; Paxos was threatened with a lawsuit for allegedly violating investor protection legislation, and Binance USD (BUSD) was deemed to be an unregistered security.
Around the same time, Delphi Labs general counsel Gabriel Shapiro suggested that Terraform Labs had renamed its algorithmic stablecoin TerraUSD, in a move which could be interpreted as a “roadmap” for more information on how the SEC might structure future suits against stablecoin issuers.
The SEC’s crypto clampdowns have been met with pushback from the industry; Circle CEO and founder Jeremy Allaire argued that the SEC is not the regulator for stablecoins and they should be supervised by a bank regulator instead.
