The dual use of Ethereum as an investment and a commodity, according to previous CFTC commissioner and present SEC Counsel Dan Berkovitz, is not incompatible.
There are unique legislative rules that permit Ethereum to come under the jurisdiction of both the SEC and the CFTC, according to Berkovitz, who took part in a podcast hosted by renowned journalist Laura Shin. According to him, the mistake arises from the fact that a commodity only relates to the physical components, like cotton, eggs, and so forth, to a layperson. Given this, it makes it natural that the CFTC’s name includes the word “futures”.
Ether Properties Defined By CFTC Commissioner
The SEC has jurisdiction over concerns relating to securities, whereas the CFTC is in control of commodity futures and swaps.
Although notes, proof of debt, and investment contracts are all considered forms of security, the latter is put to a Howie Test.
Collin Lloyd, a lawyer at the law firm Sullivan & Cromwell, was another speaker on the program who disputed SEC chair Gensler’s assertions that anything other than Bitcoin should be accorded “security” status under federal law.
Gensler avoided going into further detail when he declared that everything covered by Bitcoin is secure.
The CFTC sued Binance on March 27 for “Willful Evasion” of the law through the sale of unregistered crypto derivative products. As evidence of the authorities’ uncertainty over the categorization of digital assets, the regulator’s characterization of Ethereum as a commodity in the film differed from the SEC’s classification of them as securities.