In a court filing on Tuesday, the U.S. Commodity Futures Trading Commission (CFTC) reaffirmed its position that Ether, the world’s second-largest cryptocurrency by market capitalization, is a commodity.
The CFTC first declared Ether a commodity in 2017, but the question of its regulatory status has been a contentious issue in recent years. In Tuesday’s filing, the agency stated that Ether’s “derivatives contracts are commodities” and that the CFTC has the authority to regulate them.
The filing was in response to a lawsuit brought by cryptocurrency exchange Coinflip, which argued that the CFTC had no jurisdiction over Ether-based derivatives contracts. Coinflip, which was fined by the CFTC in 2015 for operating an unregistered trading platform, had sought to have the agency’s enforcement action against it dismissed.
The CFTC’s ruling is a victory for proponents of Ether and other cryptocurrencies, who have long argued that they should be treated as commodities rather than securities. The agency’s decision is also seen as a sign of increasing regulatory clarity in the cryptocurrency market, which has been plagued by uncertainty and volatility.
Ether’s price has soared in recent months, fueled by growing demand from institutional investors and the increasing adoption of blockchain technology. The cryptocurrency is currently trading at around $600, up from around $200 at the beginning of the year.
The CFTC’s ruling is expected to have a positive impact on the Ether market, as it provides greater legal certainty for market participants and could pave the way for the introduction of more regulated financial products based on the cryptocurrency.
The CFTC’s decision is also expected to have broader implications for the regulation of cryptocurrencies in the United States. Other regulators, such as the Securities and Exchange Commission (SEC), are likely to take the agency’s ruling into account as they continue to grapple with the question of how to regulate the rapidly growing market.
Overall, Tuesday’s court filing is a major milestone for Ether and the broader cryptocurrency market, as it provides greater clarity on the legal status of one of the world’s most popular digital assets.