By One of the world’s most popular cryptocurrencies Ethereum (ETH) is being considered a commodity now. Yes! You read that right. The chairman of the United States Commodity and Futures Trading Commission (CFTC) Heath Tarbert is considering ETH to be a commodity and thinks that ETH futures’ trading is not fiction anymore.
According to a yahoo finance report, Tarbert, who succeeded J. Christopher Giancarlo in July, presented his opinion about cryptocurrencies at the All Markets Summit on October 10. Prior to this CFTC had already confirmed that Bitcoin (BTC) is a commodity, but this is the first time we have something official from authorities about Ether which is the second-biggest cryptocurrency.
“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,” said Tarbert on stage at the Yahoo Finance’s All Markets Summit which was held in New York.
According to Tarbert, ‘forked’ cryptocurrencies like Bitcoin Cash (BCH), bitcoin gold (BTG), and ethereum classic (ETC), that are created due to forks from the original blockchain, must be treated by the regulators the same way they treat the original cryptocurrency. Tarbert 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.”
The “Howey Test” refers to a 1946 case involving the selling of shares in a citrus grove that the SEC now uses as its north star in determining whether a digital currency behaves like security.
Tarbert also clarified his views on how the CFTC view coins that have been created through initial coin offerings (ICOs). He believes that a cryptocurrency may start as security but can become a commodity in the future. He explained:
“You can have a situation where something in an initial coin offering is a security initially, but over time, it gets more decentralized, and there’s a tangible value there, so you can have things that change back and forth.”
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