CFTC Labels Bitcoin and Ethereum as Commodities in Binance Lawsuit

• CFTC Chair indicated the agency’s intent to maintain oversight of the crypto sector.
• The new categorization of cryptocurrencies has divided the crypto community.

U.S. officials have accused Binance, the biggest cryptocurrency exchange in the world, of breaking the law in an attempt to step up their crackdown on the cryptocurrency industry. The cryptocurrency sector has been quick to focus on the CFTC’s designation of cryptocurrencies like Bitcoin, Ethereum, and Litecoin as commodities, one of the numerous arguments made in the agency’s 74-page court brief.

In a statement, CFTC Chair Rostin Behnam indicated the agency’s intent to maintain oversight of the unsteady and possibly unsafe digital asset market. The Commodities Futures Trading Commission (CFTC) is in charge of overseeing derivative goods such as commodity-linked financial contracts.

Legal documents filed by the regulatory agency cite it as saying:

“[Binance] operated a facility for the trading of futures, options, swaps, and leveraged retail commodity transactions involving digital assets that are commodities including bitcoin (BTC), ether (ETH), and litecoin (LTC) for persons in the United States.”

CFTC Vs SEC

The Commodity Futures Trading Commission (CFTC) further alleges in court documents that Binance’s trading volume and profitability were significantly aided by the company’s extensive solicitation and access to customers based in the United States engaging in various digital asset spot and derivative transactions involving commodities.

The new categorization of cryptocurrencies has divided the cryptocurrency community. Despite widespread knowledge of and agreement with the CFTC’s pro-commodity stance, questions remain in the wake of SEC director Gary Gensler’s claim that “any cryptocurrency is a security,” with Bitcoin being the only exception.

With this development, Litecoin, the thirteenth biggest cryptocurrency by market share, has confirmed through Twitter that it recognizes itself as a commodity under Section 1a (9) of the Act, 7 U.S.C.