The Chairman of the Commodity Futures Trading Commission (CFTC), Rostin Behnam, has reiterated his stance that stablecoins and Ether are commodities and should fall under the purview of the CFTC. Behnam made the statement during a Senate Agricultural hearing on March 8, in response to questions from Senator Kirsten Gillibrand.
Behnam’s comments are likely to escalate the tug-of-war between regulators in the United States over the control of cryptocurrencies, with the Securities and Exchange Commission (SEC) and the CFTC holding differing views on the matter.
The CFTC’s opinion on Ether and stablecoins was strengthened following the agency’s settlement with stablecoin issuer Tether in 2021. Behnam stated that it was “clear to our enforcement team and the commission that Tether, a stablecoin, was a commodity.”
The CFTC has previously asserted that digital assets such as Ether, Bitcoin, and Tether are commodities, as evidenced in its lawsuit against FTX founder Sam Bankman-Fried in December 2021.
Behnam defended the CFTC’s position during the Senate hearing, stating that the agency would not have allowed Ether futures products to be listed on its exchanges if it did not believe that Ether was a commodity asset.
During the hearing, Senator Gillibrand asked Behnam what evidence the CFTC would put forward to win regulatory influence over Ether, to which Behnam replied that the agency would need “serious legal defenses” to support its argument.
Behnam’s position is at odds with that of SEC Chair Gary Gensler, who claimed in a February 23 New York Magazine interview that “everything other than Bitcoin” is a security. The differing views of the regulators could lead to a regulatory conflict as each vies for control over the cryptocurrency industry.
In mid-February, the SEC targeted stablecoin issuer Paxos, alleging that its Binance USD stablecoin was an unregistered security, and stating that it may sue the firm for violating investor protection laws. The SEC also targeted Terraform Labs, claiming that its algorithmic stablecoin TerraUSD Classic was a security.
Behnam’s comments have been met with pushback from the cryptocurrency industry, with Circle founder and CEO Jeremy Allaire stating that he does not believe “the SEC is the regulator for stablecoins,” and that they should be overseen by a banking regulator.