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CFTC Says Ethereum and Litecoin Are Commodities in New Lawsuit

1 min
Updated by Bary Rahma
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In Brief

  • The CFTC has classified Ethereum and Litecoin as commodities in a legal action against KuCoin.
  • This move follows criminal charges by the Department of Justice and emphasizes strict regulation.
  • It impacts the ongoing debate on whether cryptos should be treated as commodities or securities.
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The Commodity Futures Trading Commission (CFTC) has designated Ethereum (ETH) and Litecoin (LTC) as commodities, setting a precedent in the regulatory oversight of cryptocurrencies.

This clarification came as part of the CFTC’s civil enforcement action against the cryptocurrency exchange KuCoin, which faces accusations of conducting illegal off-exchange commodity transactions without proper registration.

Ethereum and Litecoin Labeled Commodities by CFTC

The legal action follows close on the heels of criminal charges brought against KuCoin and its founders by the Department of Justice. It spotlights the stringent enforcement measures being applied to cryptocurrency exchanges operating in the US.

The complaint specifically targets KuCoin’s trading practices. These include the unregistered trading of Bitcoin, Ethereum, and Litecoin, all of which the CFTC now firmly categorizes as commodities.

“KuCoin solicited and accepted orders, accepted property to margin, and operated a facility for the trading of futures, swaps, and leveraged, margined, or financed retail transactions involving digital assets that are commodities including Bitcoin (BTC), Ether (ETH), and Litecoin (LTC),” the compliant reads.

Read more: 15 Best KuCoin Alternatives for US Crypto Traders

This regulatory move has significant implications for the market, particularly in light of ongoing debates regarding the classification of cryptocurrencies as commodities or securities. Especially, with recent reports indicating that the Securities and Exchange Commission (SEC) is exploring a legal campaign to classify ETH as a security.

This development from the CFTC, however, leans towards reinforcing Ethereum’s commodity status. It could potentially influence the ongoing legal discourse around the nature of cryptocurrencies.

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Bary Rahma
Bary Rahman, a talented journalist, graduated from New York University with a degree in Journalism. Skilled in SEO, she has worked with CNN, showcasing her investigative skills and storytelling abilities. In addition to her journalistic accomplishments, Bary has contributed her expertise as a content writer for Binance, crafting insightful articles on the dynamic crypto industry. Her unique fusion of journalism and SEO makes her a versatile and highly respected figure in the industry.