Ex-CFTC Commissioner Calls SEC’s Approach On ETH “Illegal”

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Former Commodity Futures Trading Commission (CFTC) commissioner Brian Quintenz has criticized the Securities and Exchange Commission (SEC)’s stance on Ethereum (ETH). He labeled the SEC’s method towards ETH as as “illegal” and raised issues over potential regulatory confusion.

Ex-CFTC Commissioner Provides Clarity On Ethereum Classification

In a thread on X, Quintenz’s critique spotlighted the SEC’s approval of Ethereum futures ETFs on regulated safety exchanges in October 2023. In addition, he emphasised that the SEC’s determination implicitly acknowledged Ethereum’s standing as a non-security and outdoors its jurisdiction. He acknowledged, “When the SEC allowed ETH Futures ETFs to trade on its regulated security exchanges, it explicitly acknowledged the status of the underlying, ETH, as being a non-security and outside of its jurisdiction.”

According to Quintenz, the approval of Ethereum ETFs by the SEC, submit Ethereum’s transition to proof-of-stake (PoS) consensus mechanism in September 2022, means that the SEC thought of Ethereum to not be a safety on the time. He argued, “If the SEC had any doubt about the regulatory treatment of ETH in Oct 2023, it wouldn’t have approved the ETF.”

Furthermore, the previous CFTC commissioner contended that if Ethereum had been deemed a safety, the futures contracts listed by the Commodity Futures Trading Commission (CFTC) could be “illegal.” He famous, “If ETH were in fact a security, then the CFTC-listed futures contracts (on which the ETFs were based) would be illegal.” He additionally asserted, “Moreover, if ETH were a security, then the ETH Futures ETF would be an illegal instrument.”

In addition, Quintenz criticized the SEC for inflicting “confusion and harming the public” by refusing to acknowledge these info. He expressed issues about potential delays or denials of Ethereum ETFs by the SEC, questioning the company’s justification given its prior acknowledgment of Ethereum’s standing as outdoors its jurisdiction.

The above-mentioned issues stem from Prometheum’s request to supply custody providers for Ethereum as a safety. The SEC is but to decide on the matter but it surely has confronted stern contradiction from the CFTC.

Also Read: Breaking: Ethereum Foundation Under Investigation By A State Authority

Quintenz Responds To Regulatory Concerns

Moreover, an X person’s concern echoed broader sentiments inside the cryptocurrency neighborhood concerning the SEC’s method to regulating digital belongings. The person’s inquiry delved into the intricacies of how regulators just like the SEC may method Ethereum’s classification, notably in relation to its potential as a commodity and a safety.

Responding to Quintenz’s submit on X, the person questioned, “How would you respond to their argument that it was an acknowledgment of its commodity status (and therefore the legality of a CFTC regulated futures based product), but not the non-security status of the underlying?” Moreover, additionally they speculated on the SEC’s techniques in courtroom battles and the potential implications for the business.

In response to this intriguingly query, Quintenz provided a easy but robust reply. He asserted, “As I showed in the thread, a commodity is deemed to be a non-security if there is a CFTC-regulated futures or swaps contract on it.” Moreover, Quintenz’s response underscored the importance of regulatory oversight.

Also Read: How BlackRock’s Launch Of A Yield-Bearing Stablecoin On Ethereum Is A Game-Changer