Bitcoin and Ether are Commodities, While the Status of Ripple (XRP) Remains Unclear
In an interview with online news outlet Cheddar CFTC Chairman Heath Tarbert once again clarified the regulator’s attitude towards Bitcoin and Ether.
“So right now, Bitcoin and Ether are the two that we think fall under our jurisdiction.” he said.
In the United States commodities are overseen by the CFTC, while securities are the remit of the Securities Exchange Commission. For the first time the chairman expressed his opinion about XRP — the third largest cryptocurrency by market capitalization, which is quite uncertain.
Tarbert speaks about XRP in commodity-security context
As Tarbert puts it, the regulatory status of XRP is yet to be defined, even though the commission collaborated with the Securities Exchange Commission (SEC) throughout the past year in an attempt “to really think about which falls in what box”.
“We’ve been working closely with the SEC over the last year or so to really think about which falls in what box because I think if I hear anything from market participants it’s that we really need clarity. That without clarity it’s really difficult to figure out how these will eventually be regulated,” Tarbert stated.
CFTC does not want to snuff out innovation
In addition, Tarbert once again stressed, that the organization regards innovations in digital assets positively and has been actively contributing to the market.
“In many ways, what we are regulating, we are creating a market for digital assets, so we are allowing digital assets — the ones that fall within our jurisdiction which is, primarily, they have to be a commodity,” Tarbert said.
The chairman also noted that by embracing the cryptocurrencies ”into the world of the CFTC” the regulator will support the futures market development based on these products. He said that now the CFTC assists in legitimation and add liquidity to the digital assets market by providing it with financial instruments available on traditional futures market, such as price discovery, hedging, risk management and others.
Heath Tarbert, who overtook Christopher Giancarlo in July 2019, stated that the CFTC considered Ether as a commodity in October 2019. Earlier in March 2018 a similar claim was made about Bitcoin.
Regulatory status of XRP is indeed unclear
As it is already stated, the regulatory status of XRP still requires clarification, especially after Ripple, a company behind XRP, entered a class-action lawsuit alleging that it distributed unregistered securities. It was filed in 2018 and reached its peak in August 2019, claiming, that Ripple misled customers and sold XRP as an unregistered security, violating federal law.
At the beginning of December Ripple filed a motion to dismiss the lawsuit, stating that the case is contradictory and ”self-defeating”.