Key Takeaways
- “Notwithstanding a regulatory framework around stablecoins, they’re going to be commodities in my view,” Rostin Behnam said
- Behnam asserted that it “would not have allowed” Ether futures products to be listed on CFTC exchanges if it “did not feel strongly that it was a commodity asset.”
- Behnam’s statements on Ether and Stablecoins are, however, completely in contrast with SEC chair Gary Gensler’s views.
On March 8, at a Senate Agriculture Committee hearing on Wednesday, U.S. Commodity Futures Trading Commission(CFTC) Chair Rostin Behnam stated that Ether and stablecoins should be treated as commodities.
“Notwithstanding a 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 said in response to Senator Kirsten Gillibrand’s question on contrasting views held by CFTC and the Securities and Exchange Commission (SEC).
This is, however, not the first time CFTC is declaring Ether as a commodity. In its December lawsuit against Sam Bankman-Fried, FTX, and sister company Alameda Research, the regulator on multiple occasions referred to Ether, Bitcoin, and Tether “among others” as “commodities” under United States law.
In the latest Senate hearing, Behnam asserted that it “would not have allowed” Ether futures products to be listed on CFTC exchanges if it “did not feel strongly that it was a commodity asset.”
“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,” he added.
Behnam, however, has always had a flickering opinion on whether Ether should be treated as a commodity or not. In total contrast to his latest statement, Behnam, in November 2022 had, claimed Bitcoin is the only crypto asset that can be viewed as a commodity.
Behnam’s latest statements on Ether and Stablecoins are, however, completely in contrast with SEC chair Gary Gensler’s views. Gary, on multiple occasions, has reasserted that “everything other than Bitcoin” is security.
The latest statement by CFTC Chair comes amid SEC sending Paxos, issuer of the Binance USD (BUSD) stablecoin, a Wells notice alleging that BUSD is unregistered security. If the SEC considers BUSD a security, then the watchdog would have regulatory oversight over the stablecoin.
BUSD would then need to register with the SEC and further accept SEC’s regulatory scrutiny. Paxos had announced that it had stopped minting BUSD tokens after receiving the SEC notice. Apart from Paxos, SEC had recently also targeted Terraform Labs, calling its algorithmic stablecoin TerraUSD Classic (USTC) security.
