In a recent dismissal by U.S. District Court Judge Katherine Polk Failla, Ether was labeled a “commodity.” The lawsuit in question, initiated by Uniswap users alleging losses from scam tokens, was thrown out. The central argument was that Ether and Bitcoin qualify as “crypto commodities.”
Uniswap Lawsuit Triggers Commodity Verdict
Judge Failla’s decision not only revolved around the classification of Ether but also addressed Uniswap’s token sales. She expressed skepticism, pointing out that the sales might not fall under the Exchange Act’s purview.
Judge Failla’s involvement in the crypto world doesn’t stop at Uniswap. Notably, she oversees the SEC’s ongoing lawsuit against Coinbase. Furthermore, her past includes presiding over prominent crypto-related cases, including contentious matters involving Tether and Bitfinex.
It’s crucial to underscore that Failla’s comment on Ether isn’t an outright legal classification as a commodity. However, its timing is significant. Several other judicial figures recently weighed in on cryptocurrencies. It was exemplified by a July decision that viewed XRP as a security, specifically for institutional investors.
Regulatory Tug of War: SEC vs. CFTC
The waters of crypto jurisdiction in the U.S. remain muddied. Two heavyweights, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), are in an ongoing jurisdictional tug of war. The SEC’s Chair, Gary Gensler, holds a firm stance. In his view, everything, with Bitcoin being the exception, is a security under the SEC’s jurisdiction.
In contrast, the CFTC identifies Ether and several other cryptocurrencies as commodities. This stance was clearly illustrated when they pursued Binance in March, alleging violations of the Commodities Exchange Act.
As the regulatory landscape for cryptocurrencies in the U.S. continues to evolve, clarity remains elusive. With critical judicial figures like Judge Failla weighing in, the trajectory for such decisions tilts toward defining cryptocurrencies as commodities or securities. Time, as always, will provide the most definite answers.
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