U.S. CFTC Chief Behnam Insists Bitcoin And Ethereum Are Commodities

Rostin Behnam, the chairman of the Commodity Futures Trading Commission (CFTC), has once more asserted that Bitcoin (BTC) and Ethereum (ETH) — the two largest cryptocurrencies by market value — are commodities as regulators continue engaging in a tug-of-war to secure oversight of the fast-growing digital assets industry.

Court Backs BTC And ETH’s Commodity Status

Speaking on July 9 before the US Senate Committee on Agriculture, Nutrition, and Forestry, Behnam argued that a recent court ruling in Illinois reaffirmed Bitcoin and Ether’s status as commodities. In the Illinois crypto fraud case, district judge Mary M. Rowland sided with the CFTC and labeled Bitcoin, Ether, Olympus (OHM), and KlimaDAO (KLIMA) as digital asset commodities.

“In its decision, the court reaffirmed that both Bitcoin and Ether are commodities under the Commodity Exchange Act (CEA),” the CFTC boss asserted.

Behnam further mentioned a 2022 report from the Financial Stability Oversight Council, which emphasized a gap in regulation of the spot market for crypto assets that are not securities and suggested his agency should take a greater role of oversight for digital commodities.

Streamlined Oversight Of Digital Assets

CFTC chair Benham told the Senate committee that failing to institute federal rules on cryptocurrency isn’t going to keep investors away, and would only lead to a bigger risk to financial markets and investors.

“In short, our current trajectory is not sustainable. Federal legislation is urgently needed to create a pathway for a regulatory framework that will protect American investors and possibly the financial system from future risk,” he explained.

Benham also encouraged the committee to urgently create a “disciplined, balanced framework” that defines what’s a digital commodity and what’s a security under existing legislation, as well as working to introduce an all-around education and outreach program involving cryptocurrencies in the US. 

Behnam’s agency has often been touted in cryptocurrency circles as the preferred U.S. regulator. Industry pundits have contended that its handling of crypto assets is much more reasonable than its sister agency, the Securities and Exchange Commission (SEC).

Benham noted that while the SEC and CFTC frequently coordinate legal enforcement actions, the two agencies lack regulatory coordination.

CFTC officials first called Ethereum a commodity in 2019, when then-chief Heath Tarbert spoke at Yahoo Finance’s All Market Summit. While the SEC has never publicly claimed that Ethereum is a security, a since-dropped probe into “Ethereum 2.0” sparked speculation. Moreover, the Gary Gensler-helmed commission greenlighted applications for spot ETH ETFs in May, suggesting it now views the second-largest crypto as a commodity.