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A judge from the United States District Court has classified Ether (ETH) as a commodity in her ruling to dismiss a class action lawsuit against the decentralized exchange Uniswap.
In an order dated August 30 regarding the case initiated by Uniswap users who alleged financial losses due to fraudulent tokens on the platform, Judge Katherine Polk Failla stated that ETH and Bitcoin (BTC) are “crypto commodities.”
This classification was also part of her rationale for dismissing the lawsuit — Failla expressed skepticism towards the claim that Uniswap’s token sales fell under the jurisdiction of the Exchange Act.
Notably, Failla is also presiding over the SEC lawsuit against Coinbase and has previously overseen other cryptocurrency-related cases, including one involving Tether and Bitfinex.
The SDNY (Failla, J.) also explicitly found in its August 29 decision in Risely v. Uniswap that
Ethereum is a commodity, not a security.
No analysis of the issue, just the conclusion, but still, pretty definitive statement if you ask me.
pic.twitter.com/KEc5Pf5kTC— Bill Hughes : wchughes.eth (@BillHughesDC) August 30, 2023
Although her statement does not constitute a formal ruling on Ether’s legal status in the U.S., it coincides with other judicial decisions regarding cryptocurrencies, such as a July ruling that classified XRP (XRP) as a security when sold through programmatic sales on exchanges.
In recent years, two U.S. financial regulatory bodies, the Securities and Exchange Commission and the Commodity Futures Trading Commission, have been in conflict over jurisdiction related to cryptocurrencies.
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SEC chair Gary Gensler has previously asserted that “everything other than Bitcoin” falls under his agency’s definition of a security.
Conversely, the CFTC has asserted that ETH and other cryptocurrencies should be considered commodities, as evidenced by a lawsuit it filed against Binance in March for alleged violations of the Commodities Exchange Act.
Related: SEC’s first deadlines to approve 7 Bitcoin ETFs coming over the next week
However, U.S. lawmakers have yet to determine how authority over cryptocurrency will be allocated between the SEC and CFTC.
Several bills aimed at providing regulatory clarity for digital assets are progressing through Congress, each proposing different frameworks for distributing authority between the two regulators.
Some, like the Financial Innovation and Technology for the 21st Century Act, seek to establish a process for categorizing cryptocurrencies as either securities or commodities.
Others explicitly assign authority to a regulator, such as the Digital Commodity Exchange Act, which would see crypto spot exchanges registered and overseen by the CFTC.
The Digital Asset Market Structure Bill, on the other hand, would require cryptocurrencies to obtain SEC certification to demonstrate sufficient decentralization before being designated as commodities.
Magazine: DeFi Dad, Hall of Flame: Ethereum is ‘woefully undervalued’ but growing more
