• Michael Bacina

US Guidance: Ether is officially a commodity...



While the ICO boom has been and gone, the debate around the classification and legal treatment of tokens continues. Bitcoin has always been distinguished from Ether as Bitcoin never had an initial offering, whereas Ether did, and so while it has been easier for Australian or US regulators to state that Bitcoin isn't a security / financial product, Ether has been in a more delicate position. A position watched very closely because, as an early ICO, the treatment of Ether might be indicative of the treatment of other token issuance.


Speaking at Yahoo! Finance's All Markets Summit, the Chair of the Commodities and Futures Trading Commission (the US regulator which overseas ), Mr Heath Talbert said:


We’ve been very clear on bitcoin: bitcoin is a commodity. We haven’t said anything about ether – until now...It is my view as chairman of the CFTC that ether is a commodity.

Ether remains the second largest cryptocurrency by market capitalisation and has the largest pool of smart contract developers working with the project.


The position of the CFTC aligns with the SEC's stated position, that Ether is not a security. Meanwhile in Australia, we are awaiting the outcome of an ICO Consultation which saw many submissions suggesting a categorisation approach following the UK, Singapore and Swiss models, treating a class of tokens meeting certain requirements as a token which would not be considered a security. To date such an approach has been elusive with Australian guidance remaining more closely aligned with the US, which is curious given our legislative framework is far more aligned with the UK or Singapore than the United States.


The US approach appears to more confidently adopt a strange position where a cryptocurrency could move in and out of being a security, depending upon whether it is decentralised enough.


The UK/Swiss/Singapore approach of categorisation of tokens is far more intellectually sound in this author's respectful submission and considerably more supportive of the development of blockchain by providing certainty to users and developers on the platform than the US approach.

© Michael Bacina. All rights reserved

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