- Tarbert says Ether is a commodity and not a security
- CFTC Chair wants the US to play a leading role in crypto technology
- He suggests Ether futures could come soon
The CFTC Chairman has said he believes Ether (ETH) is a commodity that falls under the agency’s jurisdiction. The chair also expects Ether futures trading on the United States’ market soon.
Playing a Leading Role
The new Commodity Futures Trading Commission (CFTC) chairman Heath Tarbert, was speaking during the Yahoo! Finance All Markets Summit Thursday, October 10, 2019, where he said the world’s second-largest cryptocurrency by market capitalization, is not a security but a commodity.
Tarbert, who assumed office last July reiterated the importance of the U.S. playing a leading role in the digital asset world, just like it has done with previous technological discoveries. Tarbert stated:
“We’ve been very clear on bitcoin: bitcoin is a commodity. We haven’t said anything about Ether—until now […] it is my view as chairman of the CFTC that ether is a commodity […] I want to stress the importance of blockchain and digital assets to the United States, and in particular, as CFTC Chairman, I want the U.S. to lead in this technology.”
Ambiguities in the Market
The Commodity Futures Trading Commission, back in 2015, said it considered bitcoin and other cryptocurrencies to be commodities, a long time before the Securities and Exchange Commission (SEC) did. This is the first time the CFTC has pronounced itself clearly in relation to Ether (ETH). Previously, the sentiments were deeply buried within a filing it made when it charged a company called Coinflip. While Tarbert says there are still ambiguities in the market regarding the status of many coins, he says that ultimately “similar digital assets should be treated similarly.”
According to Tarbert, the CFTC is working with the SEC on the two cryptocurrencies and have agreed both are not securities. Going forward, Tarbert suggested that CFTC may allow ether futures to trade on U.S. markets. The chairman said:
“It stands to reason that similar assets should be treated similarly. If the underlying asset, the original digital asset, hasn’t been determined to be a security and is therefore a commodity, most likely the forked asset will be the same. Unless the fork itself raises some securities law issues under that classic Howey Test.”
Public Comments
Tarbert’s remarks echo the sentiments of the former CFTC head and “Crypto Dad” Christopher Giancarlo and Commissioner Brian Quintenz who hinted at ether derivatives, saying that the regulator has been seeking comments regarding “potential new virtual currency-based futures and derivatives products.” The regulator in 2018, sought public comments on “virtual currencies beyond Bitcoin, namely here ether and its use on the Ethereum Network” to better understand the technology.
