The Commodity Futures Trading Commission (CFTC) has confidently classified Ethereum (ETH) and Litecoin (LTC) as commodities in interstate commerce. This stance is evident in the CFTC’s indictment against cryptocurrency exchange KuCoin.
CFTC Indictment Against KuCoin
The day before, U.S. authorities accused KuCoin and its two founders of violating the Bank Secrecy Act, engaging in intentional deception, and participating in the laundering of assets worth $9 billion. Additionally, regulators allege that the crypto exchange also illegally traded over-the-counter commodity futures and offered leveraged transactions.
KuCoin Alleged Commodity Trading
Among other accusations, the CFTC complaint highlights that KuCoin allowed investors to trade commodities. Specifically, the commission confidently included Bitcoin (BTC), Ethereum, and Litecoin (LTC) in this category. The complaint states that “KuCoin solicited and accepted orders, accepted collateral, and operated a facility for trading futures, swaps, and credit, margin, or financed retail trades in digital assets that are commodities, including Bitcoin, Ethereum, and Litecoin (LTC).”
Price Forcast
According to coinmarketcap, the price of Ethereum, the second-largest cryptocurrency, has decreased by 1% over the past 24 hours. At the time of writing, ETH is trading at $3,571.
Meanwhile, Litecoin (LTC) has experienced a price increase of 3.6% over the past 24 hours, with its trading volume soaring by more than 100%. The current price of LTC is $94.99.
SEC vs. CFTC on Crypto Classification
The CFTC’s recent statement contradicts the position of the U.S. Securities and Exchange Commission (SEC). The SEC considers most cryptocurrencies to be securities. This disagreement between the country’s main financial regulators hinders the adoption of a clear regulatory framework for the cryptocurrency market.
Previously, the SEC initiated an investigation against the Ethereum Foundation. The commission subpoenaed several companies that interacted with the non-profit organization. Additionally, the SEC demanded the production of documents and financial records related to the foundation.
History between Ethereum and SEC
The Ethereum (ETH) project came under the SEC’s scrutiny after its transition to the Proof-of-Stake algorithm. The SEC has long desired to determine the status of ETH, possibly aiming to use this opportunity to reject applications for spot ETH-based ETFs (Exchange-Traded Funds).
According to one of the interlocutors, the SEC’s inspection of the organization began after the network of the second cryptocurrency switched to the Proof-of-Stake (PoS) consensus mechanism. Due to the fact that since then a whole network of validators has been used to ensure the operation and security of the blockchain, the Commission considered that it was time to deal with the status of ETH. The investigation into the Ethereum Foundation, a Swiss non-profit organization central to the Ethereum ecosystem, first became known on March 20.
