Ethereum may be both a security and a commodity, said former commissioner CFTC Dan Berkovitz.
The former head of the agency added that the second-largest cryptocurrency falls under the jurisdiction of both agencies — SEC and the CFTC.
“The law is clear. In fact, something can be both a commodity and a security,” he explained.
Berkovitz explained that the confusion in definitions arises from commodities not being strictly physical objects like “wheat” or “oats.” At the same time, anything that falls under the operation of a futures contract can technically be defined as a commodity.
A security, under the official definition, includes promissory notes and investment contracts, falling under the CFTC’s jurisdiction, the former commissioner added.
“It’s a rather odd question: ‘Is this digital asset a security or not?’ I think you should ask: ‘Is it being sold as part of a securities deal?’ It depends on the facts and circumstances,” Berkovitz contends.
In October 2022, CFTC chair Rostin Behnam warned crypto industry participants about the inevitability of regulation.
Earlier, the chair of the U.S. Securities and Exchange Commission, Gary Gensler, has repeatedly stated, that most cryptocurrencies are securities.