CFTC Chairman: Majority of Cryptocurrencies are Not Securities

CFTC Chairman: Majority of Cryptocurrencies are Not Securities

According to Fox Business reporter Eleanor Terrett, Rostin Behnam, Chairman of the U.S. Commodity Futures Trading Commission (CFTC), stated during a U.S. Senate Agriculture Committee hearing on digital asset regulation that "70-80% of cryptocurrencies are not securities." Behnam also noted that "the courts in Illinois have held that BTC and ETH are digital commodities under the [Commodity Exchange Act]." This statement provides clarity in the ongoing debate over the classification of cryptocurrencies as securities or commodities. It suggests that the majority of cryptocurrencies fall under the jurisdiction of the CFTC, which regulates futures and options trading, rather than the Securities and Exchange Commission (SEC), which oversees securities markets. The CFTC's designation of most cryptocurrencies as commodities has implications for regulation and enforcement. It means that the CFTC will have primary responsibility for overseeing these assets, and will apply its existing regulatory framework to them. This could include registration requirements for exchanges and intermediaries, as well as anti-fraud and market manipulation rules. Behnam's statement aligns with the views of some industry experts who have argued that many cryptocurrencies are not securities because they do not meet the traditional definition of an investment contract. However, the SEC has taken a broader view of what constitutes a security, and has brought enforcement actions against several cryptocurrency companies and individuals. The ongoing debate over the classification of cryptocurrencies is likely to continue, as regulators and lawmakers seek to establish a clear regulatory framework for these emerging assets.