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

key takeaways

  • 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

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.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Research Report Templates (19).png

Research

Suilend has grown into the top money market and liquid staking provider on Sui. STEAMM, Suilend’s Superfluid AMM, presents a compelling avenue for growing market share within Sui’s DEX landscape and revenue generation for the protocol. Suilend’s multi-product suite position it well for owning market share across key verticals. While current metrics across the Sui ecosystem are likely inflated due to Sui Foundation incentive programs, SEND trades at amongst the lowest multiples in the lend/borrow sector, suggesting that a bull case for continued growth in the ecosystem may be mispriced.

article-image

Strive board member Ben Werkman expects thousands of firms to hold BTC, if only “to protect themselves”

article-image

To date, 12.6 million humans have scanned at a World Orb

article-image

One small step for man, one giant leap for Bitcoin

article-image

Jay Woods, Chief Global Strategist at Freedom Capital Markets, said it would be “very rare” for an acquisition to happen since the IPO may occur as soon as next week

article-image

Sponsored

Money is one of the most consequential pieces of infrastructure, and M0 believes its architecture should serve builders, not extract from them

article-image

The financial backwaters they laughed at might be the only thing keeping the dollar afloat