The U.S. CFTC determines that BTC and ETH are digital commodities

According to CryptoPotato, Rostin Benham, chairman of the U.S. Commodity Futures Trading Commission (CFTC), announced that an Illinois court has officially declared Bitcoin (BTC) and Ethereum (ETH) as commodities. The decision, made during a U.S. Senate committee hearing on Wednesday, effectively ends a dispute between the CFTC and its sister agency over the classification of these cryptocurrencies.

The court’s decision is based on a summary judgment issued on July 3 by U.S. District Judge Mary Rowland of the District of Illinois. The verdict comes as part of a cryptocurrency-related case in which the defendant was found guilty of fraud and failure to register under the Commodity Exchange Act. The defendant is Oregon-based Sam Ikkurty, who lured investors into his fund by promising 15% annual returns in the form of “digital asset commodities” such as BTC and ETH.

The head of the U.S. commodities regulator has once again argued that Bitcoin and Ethereum — the two largest cryptocurrencies by market capitalization — are commodities and his agency should regulate them.

The July 3 ruling was part of a $120 million Ponzi scheme case involving an Oregon man who was charged with fraud. The Illinois district court judge said in his order that both assets qualified as commodities.

It also stated that Olympus (OHM) and KlimaDAO (KLIMA) also qualify as merchandise.

“In its decision, the court reiterated that both Bitcoin and Ethereum are commodities under the Commodity Exchange Act.”

Additionally, Benham cited a 2022 report from the Financial Stability Oversight Council that stated The report highlights gaps in the supervision of spot markets for “non-security digital assets” and calls on the agency to assume greater regulatory responsibilities for digital commodities.

Bainham said that continued inaction by other U.S. regulators will not “eliminate public interest in digital assets” and will only bring greater risks to financial markets and investors.

“Simply put, our current trajectory is unsustainable. We urgently need federal legislation to establish a regulatory framework that protects U.S. investors and, by extension, the financial system from future risks,” he said.

Behnam says CFTC is ready to enforce cryptocurrency rules.

CFTC Chairman outlines five key legislative priorities he believes the agency can introduce to better regulate digital commodities.

These policies include the authority for the agency to establish rules based on the unique risk profile of cryptocurrencies, adopt a permanent "fee-for-service model" financing model, require registrants to comply with a "full disclosure regime" regarding their crypto assets, and strengthen the CFTC “Know Your Customer” and “Anti-Money Laundering” privileges.

Finally, he urged the committee to consider a “rigorous, balanced framework” to determine whether tokens are considered commodities or securities under current law, and to work toward launching a comprehensive education and outreach program about crypto-assets in the United States.

Behnam said: “The SEC and CFTC have a long-standing relationship that promotes strong and sound regulation of the securities and derivatives markets.”

“I believe the two agencies will continue to work closely to ensure that Regulated exchanges’ systems for listing and trading digital assets are reliable, fair and efficient.”

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