Curiously, the crypto industry was watching Sam Bankman-Fried’s (SBF) interview at the Dealbook summit a few hours ago.
In the meantime, however, an extremely important shift in regulatory stance has occurred in the question of which other cryptocurrencies are commodities besides Bitcoin.
The U.S. Commodity Futures Trading Commission (CFTC) has been publicly advocating for quite some time that both Bitcoin and Ethereum (ETH) are commodities. However, that regulatory assessment appears to have changed radically yesterday.
Speaking at a crypto event at Princeton University, CFTC chairman Rostin Behnam stated that the only cryptocurrency that should be considered a commodity is Bitcoin. In doing so, he is doing a complete backpedal from previous statements when he implied that Ether is also a commodity.
As Fortune reports, Behnam called the matrix of regulators an “imperfect system,” possibly to justify his new assessment, but praised the cooperation between U.S. regulatory agencies.
CFTC Performs Complete U-Turn With ‘Bitcoin, Not Ethereum’
Remarkably, Behnam expressed a contrary stance as recently as Oct. 24 during a speech for the Rutgers Center for Corporate Law and Governance, as Bitcoinist reported.
During the speech, he discussed the perceived jurisdictional tussle between his agency and the Securities and Exchange Commission (SEC) when it comes to crypto regulation.
Behnam tried to downplay the disagreement on many issues. At the same time, he noted that the CFTC still considers Ethereum (ETH) as a commodity and not a security. He added the comment; “Chairman [Gary] Gensler thinks otherwise – or at least hasn’t certainly declared one or the other.”
Other CFTC representatives, such as commissioner Christy Romero, also held the same opinion as recently as early October. Romero said at an event that she continues to “take the position that Ethereum is a commodity, even with proof of stake”.
"#Ethereum is a commodity, even with Proof-of-Stake."
— Christy Romero CFTC Commissioner ⚖️ 🏛️ 👩⚖️ pic.twitter.com/utC2nxxfjh
— Altcoin Daily (@AltcoinDailyio) October 4, 2022
Yesterday’s about-face may indicate that SEC chairman Gary Gensler has gained the upper hand in the dispute.
Gensler, who has been SEC chair since April 2021, has been vehemently stating in recent months that Ethereum’s shift to proof of stake with its fixed-income returns could warrant a securities classification, and and called for tougher enforcement measures.
Arguably, this could be a very bad omen for the entire crypto industry. Following the collapse of FTX, fears have been growing in recent days that U.S. regulators will crack down harder on crypto.
This is despite the fact that the crypto industry holds different values than SBF, who committed fraud. However, the FTX collapse could be a useful smokescreen to enforce draconian enforcement actions.
CFTC Chair Calls For More Staff
Behnam stressed the dangers of an unregulated crypto market and the need for legislation at yesterday’s event. He also dismissed criticism of his agency and defended the measures, citing limited resources.
“It is unlike any other commodity we have dealt with,” Behnam said, referring to the prevalent behavior of cryptocurrencies as a speculative retail market.
At the same time, he appealed to policymakers to act as quickly as possible. “We don’t have the luxury of waiting,” Behnam said.
Notably, the CFTC was on the verge of giving more funding and oversight capacity to an SBF-backed bill, the Digital Commodities Consumer Protection Act (DCCPA), which Behnam called a “great step forward” in September.
Meanwhile, the Bitcoin price is trading at $17,129, facing the next resistance at $17.197. If this broken, a leap to $18.000 could be on the cards.