The crypto industry was curiously watching Sam Bankman-(SBF) Fried’s interview at the Dealbook summit a few hours ago.
In the meantime, though, there has been a very important change in the way regulators look at the question of which other cryptocurrencies besides Bitcoin are commodities.
The U.S. Commodity Futures Trading Commission (CFTC) has been saying in public for a long time that both Bitcoin and Ethereum (ETH) are commodities. But that regulatory evaluation seems to have changed a lot since yesterday.
Rostin Behnam, the head of the CFTC, said at a crypto event at Princeton University that Bitcoin is the only cryptocurrency that should be considered a commodity. By doing this, he completely goes back on what he said before, when he said that Ether is also a commodity.
Fortune says that Behnam called the system of regulators a “matrix” and a “imperfect system.” This may have been to explain his new opinion, but the cooperation between U.S. regulatory agencies was praised.
In a speech on Oct. 24 for the Rutgers Center for Corporate Law and Governance, Behnam said something completely different.
During the speech, he talked about how his agency and the Securities and Exchange Commission (SEC) seem to be fighting over who has the right to regulate cryptocurrencies.
Behnam tried to play down how different they were on many things. At the same time, he said that the CFTC still sees Ethereum (ETH) as a commodity and not a security. He also said, “Chairman Gary Gensler doesn’t agree, or at least hasn’t said for sure one way or the other.”
Even as recently as early October, other CFTC people, like Commissioner Christy Romero, shared the same view. Romero said at an event that she still “takes the position that Ethereum is a commodity, even with proof of stake.”
Gensler has been the head of the SEC since April 2021. In recent months, he has been very clear that Ethereum’s move to proof of stake with its fixed-income returns could make it a security and called for stricter enforcement.
It could be said that this is a very bad sign for the whole crypto industry. Since FTX went down, people have been getting more worried that U.S. regulators will crack down on crypto more.
Even though the crypto industry has different values than SBF, which is a fraud, this is still the case. But the collapse of FTX could be used as a smokescreen to carry out harsh enforcement actions.
At yesterday’s event, Behnam talked about how dangerous an unregulated crypto market is and how important it is to have laws. He also ignored the criticism of his agency and defended the measures by saying that they were necessary because of limited resources.
“It’s different from any other commodity we’ve worked with,” Behnam said, referring to the fact that cryptocurrencies are mostly traded on a retail speculative market.
At the same time, he asked policymakers to move as fast as they could. Behnam said, “We don’t have the time to wait.”
Notably, the CFTC was almost ready to give the Digital Commodities Consumer Protection Act (DCCPA), a bill backed by the SBF that Behnam called a “great step forward” in September, more money and more power to keep an eye on it. The price of Bitcoin is now at $17,129, and the next level of resistance is at $17.197. If this broke, the price could go up to $18,000.
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