Rostin Behnam, president of the Commodity Futures Trading Commission (CFTC) of the United States, considers that most cryptocurrencies are basic products, a qualifier that places them in the range of merchandise or commodities.
These are very controversial statements. Above all, taking into account the totally different vision that the president of the Securities and Exchange Commission (SEC), Gary Gensler, has expressed so far, for whom all crypto assets (except bitcoin) are securities.
Behnam's comments were made known this December 12 through a publication on CNBC, where the president of the CFTC assures that, according to existing laws, many of the tokens traded in the market are commodities.
With these statements, the official also admits that there is a kind of “turf war” between several of the United States regulatory bodies, particularly between the SEC and the CFTC. A situation that complicates the outlook for cryptocurrency companies operating in that country.
The SEC, for its part, uses the Howey test to determine whether an investment is a security. Following the parameters of this test, derived from a court case argued in 1946, Gensler asserts that many cryptocurrencies are securities because the public and the companies behind them anticipate profits.
The CFTC, for its part, is governed by marketing guidelines and takes into account the price of many cryptocurrencies on the organization's exchanges. A mechanism that exchanges also follow to rate the cryptocurrencies that are exchanged on their platforms, also based on decentralization criteria.
In fact, the Commission had already determined in 2015 that cryptocurrencies met the definition of a commodity. Christopher Giancarlo, president of the Commission for that date, recalled it in a speech he gave before the US Congress.
The CFTC's rating was ratified in March 2018 by Jack Weinstein, a New York District Judge assigned to the legal case between that body and the cryptocurrency operator CabbageTech.
The judge ruled that the CFTC had the power to give cryptocurrencies the regulatory status of commodities . Judge Weinstein made this decision because, in his opinion, cryptocurrencies fit within the description of goods used in commerce and interchangeable with others of the same type.
Given the previous positions, it is obvious that the CFTC and the SEC clash with each other by handling opposing concepts. This, despite the fact that Behnam assures that both institutions have a positive working relationship, “focused on protecting American markets, the country's financial ecosystem and consumers.”
Despite this, the conceptual conflict over whether cryptocurrencies are commodities or securities has become one of the main obstacles to establishing clear regulatory guidelines for the digital assets industry in the US. Hence the insistence of the CFTC chairman on the need for urgent legislative action.
We must also consider the legal implications of both concepts. If cryptocurrencies are classified as commodities, they are perceived as exchangeable commodities, like gold or oil. Users could expect a more flexible approach in terms of regulation. Transactions could be simpler, with fewer administrative restrictions compared to traditional securities.
If classified as securities, they would be subject to stricter regulations, similar to those of stocks and bonds. This could mean more protections for investors, but also more requirements and restrictions, such as the need to disclose certain information and comply with public offering regulations.
The two visions make evident the dilemmas that governments face in their effort to apply laws to an ecosystem as disruptive as bitcoin. The differences that exist, not only between US authorities but between regulators around the world, show the lack of clarity that exists when dealing with these assets.
