Prometheum Issue Prompts US Watchdog To Call For Clarity On Whether Ethereum Is A Security

On Mar 7, 2024

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Remarks relating to Prometheum by Commodity Futures Trading Commission (CFTC) chairman Rostin Behnam have reignited calls for clarity on whether Ethereum is a security or a commodity.

This comes after Prometheum, the only U.S.-registered crypto securities platform, announced that the leading altcoin will be the first digital asset it will custody. In so doing, it is treating Ethereum as though it is a security while the firm’s regulator, the Securities and Exchange Commission (SEC), has yet to clarify its view on the issue.

Indeed, in an interview with Bloomberg Television today, SEC chair Gary Gensler said he would ”defer on that question” of whether Ethereum is a security or a commodity.

Prometheum calls itself an “SEC registered, full-service market ecosystem for digital asset securities,” and says it is “a bridge from securities to crypto.”

Behnam says both Ethereum and Bitcoin are commodities, and questions any contrasting classification by the SEC.

Ethereum And Bitcoin Are Commodities By Default

The regulatory uncertainty was a focal point during an annual appearance before the House Agriculture Committee on Mar. 6.

During the hearing, Behnam urged Congress to pass legislation regarding the matter. “We need to fill the gap in crypto regulation,” he said. Behnam then said the notion that crypto is “going away” is “just a false narrative, ” pointing to Bitcoin’s recent price performance as proof.

I look forward to testifying next week in front of the House Agriculture Committee to discuss the CFTC’s agenda, enforcement program and challenges facing the agency. My testimony will be posted on the committee’s website and @CFTC. https://t.co/cxafe0uTUb
— Rostin Behnam (@CFTCbehnam) February 28, 2024

When asked to explain why Bitcoin or other cryptos should be considered as commodities, Behnam said that this classification is “mostly used in the counter negative.” He elaborated by saying that the SEC’s inability to label Bitcoin and Ethereum as securities means that they are commodities by default.

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