CFTC Chair Says Ether Is a Commodity, Hints That SEC Disagrees

Token classification has been an ongoing issue in the space and a point of contention for regulators jockeying for jurisdiction

article-image

Source: Shutterstock

share
  • Congress has stepped in to try and clarify the jurisdictional boundaries between agencies
  • The Responsible Financial Innovation Act, introduced in June, suggests placing most cryptoassets under the CFTC’s regulatory purview

The jostling between the CFTC and the SEC continued in New York on Monday, with CFTC Chair Rostin Behnam saying he sees ether as a commodity — not a security.

“Ether, I’ve suggested that it’s a commodity, ” Behnam said at the Regulating Financial Innovation event Monday morning. 

“Chairman [Gary] Gensler thinks otherwise — or at least hasn’t certainly declared one or the other,” he added.

Token classification has been an ongoing issue, and a point of contention for regulators jockeying for jurisdiction, for years. In 2018, William Hinman, the SEC’s then-director of corporate finance, said publicly that the regulator at the time had no plans to classify both bitcoin and ether as securities. 

This September, however, Gensler appeared to take a step back, suggesting the fixed-income like returns of staking ether is consistent with securities classifications. Ether dipped 11% following Gensler’s remarks. 

The SEC has been known to target tokens for unregistered security offerings through enforcement actions. In June, the agency alleged nine cryptoassets were securities in charges against former Coinbase employees accused of insider trading. 

The US financial watchdog charged Ripple Labs, the issuer behind the XRP token, with an unregistered security offering nearly two years ago — the SEC’s biggest initial foray into the rule-making behind the digital assets economy. 

The ongoing lawsuit is expected to end in the coming months. Both parties have agreed to allow a judge to issue a summary judgment, and industry participants have been eager to parse how the agency’s treatment of ether may play into the outcome. 

Financial institutions are moving ahead with ether products even without explicit clarification. Fidelity Digital Assets is planning to roll out ether trading for institutional clients by the end of the month, the company announced last week.  

A person familiar with the matter told Blockworks that ether meets Fidelity’s criteria for listed assets, at least for now. Fidelity Digital Assets has supported bitcoin trading since its launch in 2018. 

Both the CFTC and SEC maintain that the regulatory bodies are committed to working together to establish rules around digital assets. Congress has stepped in recently to try and clear up the blurred lines.

The Responsible Financial Innovation Act, introduced in June, suggests placing most cryptoassets under the CFTC’s regulatory purview, unless otherwise determined by a court. 

With midterm elections inching closer, it is unlikely any bills continue to advance through Congress, but bill cosponsors Sens. Cynthia Lummis, R-Wyo., and Kirsten Gillibrand, D-N.Y., have said they are confident the measure can pass eventually.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 24 - 26, 2026

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template.png

Research

Institutional staking providers specialize in offering secure, compliant, and scalable solutions for organizations, asset managers, and individuals who wish to stake large volumes of digital assets. Staking-as-a-Service Providers (SaaSPs) act as intermediaries, running blockchain nodes and managing the technical complexities of staking on behalf of clients, often providing custody, reporting, and yield optimization features across a broad range of assets and networks.

article-image

Phantom expands its wallet into a money app, powered by Bridge’s CASH stablecoin and Visa-backed payment integration

by Blockworks /
article-image

Robinhood explores overseas expansion as regulators debate whether contracts are financial products or gambling bets

by Blockworks /
article-image

Partnership will bring EURC and USDC to regulated trading, settlement and custody infrastructure under MiCAR rules

by Blockworks /
article-image

New AJUP product on SIX Swiss Exchange gives investors institutional exposure to Solana’s core liquidity engine

by Blockworks /
article-image

Sponsored

Oasis Vault is a self-custody wallet designed to eliminate issues that affect traditional wallets

by Sponsored /
article-image

The SEC’s approval of the generic listing standards opens the door for Litecoin and Solana ETPs