CFTC: Bitcoin, Ethereum, and Litecoin Are Commodities

The United States Commodity Futures Trading Commission (CFTC) has put itself on a potential collision course with the US Securities and Exchange Commission (SEC) by declaring that Ethereum and Litecoin are commodities alongside Bitcoin. The designation, uncovered as part of last week's lawsuit by federal prosecutors against KuCoin, means that the CFTC does not consider the trio as securities at a time when Ethereum is being investigated by the SEC over this very assertion. While Bitcoin was already known to be safe from the SEC's grasp, the introduction of Ethereum and Litecoin has added more intrigue to the crypto regulatory battle.

Classification May Encourage Institutional Buyers

The CFTC's consideration of the status of the three cryptocurrencies was revealed in the charges laid at KuCoin's door last week:

KuCoin solicited and accepted orders, accepted property to margin, and operated a facility for the trading of futures, swaps, and leveraged, margined, or financed retail transactions involving digital assets that are commodities including Bitcoin (BTC), Ether (ETH), and Litecoin (LTC).

This clearly puts Ethereum and Litecoin in the same category as Bitcoin, at least as far as the CFTC is concerned, which carries significant implications for its regulatory oversight, which affects its market legitimacy, trading infrastructure, and investor confidence. Such a classification will enhance their legitimacy in the eyes of institutional investors due to the mitigation of concerns about fraud and regulatory uncertainty.