The chairman of the Commodity Futures Trading Commission (CFTC), Rostin Behnam, has warned that if the Securities and Exchange Commission (SEC) allows one of its registered firms to custody Ether (ETH), it would classify it as a security and create a conflict with US financial market rules. Behnam made this statement during a hearing before the House Committee on Agriculture on March 6, where he confirmed that both Bitcoin and Ether are commodities. He was referring to the recent decision by SEC-licensed special purpose broker-dealer (SPBD) Prometheum to offer ETH custody services. Behnam expressed his belief that this decision does not align with the SEC’s perspective on Ether and emphasized the importance of the SEC’s response to Prometheum’s decision. He stated that if the SEC validates Prometheum’s decision, it would put exchanges that list Ether as a futures contract in violation of SEC rules. While SEC Chair Gary Gensler has not explicitly stated whether ETH is a security or commodity, Behnam stressed the need to maintain market integrity and highlighted that considering Ether as a commodity has been a well-functioning decision for years. He also noted that the current regulatory framework is being tested by the growing participation in the crypto market and called for Congress to take action to address the regulatory gap.
CFTC Chair Raises Concerns About SEC Conflict over Prometheum's Ethereum Involvement