The years-old issue of cryptocurrency regulation only broadened with time and so did its complications. One such complication was to decide the nature of the crypto assets to decide the jurisdiction of regulatory agencies. Though the issue remained unsolved until now, a recent US court judgment could act towards resolving the issue. The US District Court judge noted Ethereum as a commodity in the dismissal of a lawsuit against Uniswap.
Judge Katherine Polk Failla dismissed the lawsuit against the decentralized exchange platform Uniswap. Along with the other orders, while ousting the case, the judge also noted that Ethereum and Bitcoin are crypto commodities.
Although Bitcoin and Ethereum were considered out of the debate around whether cryptocurrencies are securities or not, there was no clarity provided on if they are commodities. But the judgment from Judge Failla could show a direction to it.
On August 30, 2023, the judge dismissed the class-action suit brought down against Uniswap Labs, its chief executive officer, foundation, and venture capital backers. The six plaintiffs, who used to be the user of crypto exchange, claimed to lose the money following the purchase of scam tokens from the platform.
The plaintiffs argued that since Uniswap Labs is responsible for controlling the liquidity pools over the platform, it also has control over the pool that scammers created and disappeared after stealing the assets.
In the lawsuit filed in April 2022, the victims demanded the cancellation of the smart contracts leading them to buy the scam tokens and compensation from Uniswap. They cited the Securities Act of 1933 and the Securities Exchange Act of 1934 to back their demands.
However, Judge Failla did not find the argument that the token sales over Uniswap fall under the Exchange Act strong enough. Her statement of considering Ethereum as a commodity was part of this dismissal judgment.
Regulatory Tussle Over Crypto
Although her statement doesn’t provide a definitive verdict on the legal categorization of Ether in the United States, it coincides with the rulings by other judges who have recently determined the status of cryptocurrencies. For instance, in July, a ruling classified XRP as a security when it’s sold to institutional investors.
Over the past few years, there has been a jurisdictional dispute between two U.S. financial regulatory bodies, namely the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), regarding matters related to cryptocurrencies.
SEC Chair Gary Gensler previously asserted that anything apart from Bitcoin falls under the classification of security within the scope of his agency’s authority. In contrast, the Commodity Futures Trading Commission (CFTC) has asserted that ETH and other cryptocurrencies should be considered commodities.
This perspective was highlighted in a lawsuit filed against Binance in March, where the CFTC accused Binance of violating the Commodities Exchange Act.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2023/08/31/judge-dismisses-lawsuit-against-uniswap-says-ethereum-a-commodity/