With the ink still drying on its Binance action, U.S. Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam reiterated Tuesday at a congressional hearing he believes ether is a commodity – a potentially controversial assertion that differs from what his counterpart at the Securities and Exchange Commission (SEC) has said.
In the high-stakes CFTC action against Binance, the CFTC says several tokens – bitcoin, ether, litecoin and the stablecoins tether and BUSD – are commodities that Binance was illegally trading. A lawmaker on the House Appropriations Committee asked him during a budget hearing Tuesday whether he believes ether (ETH) should be on that list.
"I believe they are a commodity,” Behnam said. “And because they are listed on CFTC exchanges, we do have a regulatory relationship – obviously with the derivatives market and that product, but the underlying market as well.”
Behnam said that belief is driving the case against Binance, and against other institutions trading bitcoin and ether – suggesting such trading at other platforms may eventually face regulatory scrutiny, too.
Securities and Exchange Commission Chair Gary Gensler, however, has argued that proof-of-stake tokens – which would include ether since the Ethereum blockchain's protocol switch last year – are probably securities that should be registered and regulated by his agency. But Gensler hasn’t yet set that in stone with enforcement actions or court wins.
Crypto insiders once viewed Behman and the CFTC as friendlier toward the sector than the SEC and its chairman but the CFTC has authored a number of enforcement actions against crypto companies. The Binance case – targeting the largest crypto platform by trading volume in the world – could have even wider implications.
Behnam was asked by lawmakers Tuesday whether he still hopes to allow space for crypto innovation in the U.S., as he’s stated before.
"It should be absolutely a concern,” he said. “Europe has put in place a pretty comprehensive regime that's going to be implemented over the next couple of years," he said, adding that the U.S. needs to "move the ball forward."
"We don't want to rush,” he said, saying the effort should be “cautious and deliberate.”