- The Chairman of the Commoditiy Futures Trading Commission (CFTC), Heath Tarbert, confirmed in an interview that Bitcoin and Ethereum are not securities.
- With regard to Ripple’s XRP token, the CFTC is still uncertain and did not give a clear classification.
The chairman of the CFTC, Heath Tarbert, has spoken in a recent interview with Cheddar about the regulatory situation in the USA. Tarbert confirmed that Bitcoin and Ethereum are commodities and, by virtue of their classification, fall within the jurisdiction of the CFTC. However, the assessment of the XRP token issued by Ripple remains unclear.
BTC and ETH are raw materials, status of XRP not clear
Tarbert describes that at the present time BTC and ETH are raw materials and therefore regulated by the CFTC (freely translated):
So right now, Bitcoin and Ether are the two that we think fall under our jurisdiction.
In the United States of America, the CFTC is responsible for the regulation of commodities and goods, while the Security and Exchange Commission (SEC) is responsible for the regulation of securities. If a cryptocurrency is classified as a security, this has more far-reaching consequences, as securities are regulated differently and also entail different tax-related obligations to provide evidence.
When the moderator asked Tarbert whether XRP would be classified as a commodity or a security, Tarbert explained that this question is still unresolved and that the CFTC is working closely with the SEC to finally clarify the matter:
It’s unclear (if XRP is a security) stay tuned. 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.
The continuing uncertainty leaves many investors in the dark and is a sign that there is a great need in the United States of America for a legal basis that is clear for all market participants.
Nevertheless, Tarbert is open-minded about digital assets and states that the derivatives market can grow organically in the long term on the basis of the products already available and thus contribute to legitimising the cryptocurrency market. Here, the crypto market benefits from the 100-year tradition and clear legal framework of the futures market.
Ripple had already stated in the past that Ripple and XRP exist independently of each other and that Ripple has no influence on the price development of XRP. The community sees a possible influence on the price of XRP, especially in the monthly sales of XRP. Selling XRP would create selling pressure, which could induce investors to sell XRP and thus negatively influence the price.
Experts and investors demand clarity
Bitcoin Bulle and multiple billionaire Mike Novogratz calls on the regulatory authorities to finally provide clarity in this area. Otherwise the USA could lose its leading role in the blockchain and fintech sector to other more attractive locations such as China, Malta or Singapore:
If the US regulators don’t allow for fintech innovation, the Chinese will eat our lunch. Crypto and blockchain will be part of the financial and consumer infrastructure in the future. The acceptance of digital assets, being stable coins for payment systems, or securities offerings in tokenized form, or new forms of value like
$btc are all synergistic.
It remains to be seen whether and when a regulatory framework will be created in such an important market as the United States of America. The price of XRP follows the current market trend and has increased by 4.71% to USD 0.23 within the last 24 hours.