The US Commodity Futures Trading Commission has sued Binance for alleged violations of the Commodities Exchange Act and CFTC regulations, including engaging in transactions with digital assets that are commodities, such as Ether (ETH), for people in the United States. The CFTC’s stance on Ether as a commodity is not new, as it has previously claimed this in a lawsuit against FTX in December, and its Chair Rostin Behnam reiterated his view that ETH and stablecoins are commodities in a Senate hearing on March 8.
However, the debate over whether Ether is a commodity or a security has become increasingly complex, particularly since the Ethereum network moved to a proof-of-stake consensus mechanism. While the CFTC’s case against Binance focuses on the nature of Binance’s products rather than the nature of ETH itself, some experts believe that the economics of an offering including ETH could still change the definition applied to the token. Nevertheless, the more complex approach to regulation does not necessarily imply cooperation between the CFTC and Securities and Exchange Commission, and the latter agency could still bring a similar lawsuit against digital assets such as ETH, but with the exception of Bitcoin.
