Previous CFTC Commissioner and ex-SEC General Counsel Dan Berkovitz impliesย that Ethereumโs native cryptoย token, Ether (ETH), with a current price of $1,817, could hold dual classification as both a commodity and a security.ย
Berkovitz made these remarks withinย a recent episode of Laura Shinโs Unchained podcast, emphasizing that ETHโs legal status could subject it to the regulatory oversight of both theย Unitedย States Commodities Futures Trading Commission and the Securities and Exchange Commission.
Conflicting statements from the CFTC and the SEC have confused Etherโs legal status. The CFTC considers Ether a commodity, while the SEC hasnโt provided a specific category. Reportsย by Berkovitz, an investment can be both a commodity and a security owingย to overlapping definitions. He clarified things arenโt limited to physical items like wheat or oats, and they can deem any investment covered by a futures contract a commodity. This describes the inclusion of โfuturesโ in the CFTCโs name.
Commodity and Security? Previous CFTC Commissioner and Legal Specialists Debate
Reportsย by Berkovitz, securities, as defined by the Securities Act and the Exchange Act, can likewise be subject to a futures contract, โ sliding under the CFTCโs and the SECโs jurisdiction.
The CFTC primarily regulates futures and swaps on commodities, while the SEC concentratesย on securities. Nonetheless, if an investment is considered a commodity by the CFTC and a security under the SECโs definition, both regulatory bodies can have authority over it.
During the podcast, Collin Lloyd, a partner at Sullivan & Cromwell, criticized the SECโs assertion that everything except Bitcoinย (BTC) should be categorized as a โsecurityโ under federal securities law. Lloyd expressed skepticism, stating that no legal precedent shows that a string of digits operating on a blockchainย tech can inherently be deemed a security. He suggested that the key question should be whether the digital investment is being sold as part of a securities transaction, which depends on the specific facts and circumstances.
It is worth keepingย inย mindย that Sullivan & Cromwell, asย ofย now involved in the FTXย Tradingย Ltd bankruptcy case, was hired by Coinbaseย Cryptoย exchange on April 29 toย help the cryptocurrency exchange in its legal dispute with the SEC over ambiguous regulations.
Inย theย meantime, Ethereumย (ETH) founder Vitalik Buterin has cautioned against overloading the Ethereumย (ETH) network, stating that re-staking initiatives or Layer-1 soft forks could harm the networkโs consensus. Buterin supports the dual use of Ether staked by validators, but he opposes using social agreement for layer-2 applications.ย
Donโt overload Ethereumโs consensus:
โ vitalik.eth (@VitalikButerin) May 21, 2023
In a recent blogย post, Buterin emphasized theย dangers associated with excessive usage of the Ethereumย (ETH) consensus layer, particularly from Layer 2 applications, which could overwhelm the blockchain.
Ethereumย (ETH) Faces Selling Pressure Near $1,880, Starts Downward Trend
Ethereumย (ETH) recently aimedย to break through the resistance zone at $1,850 but encountered selling pressure near $1,880, similar to BTCโs price movement. Consequently, Ethereumย (ETH) began a new downward tendency. After reaching a peak of $1,873, the price of Ethereumย (ETH) dropped below the levelย ofย support of $1,850.ย
It likewise breached the 50 percent Fibonacci retracement level of the upward movement from the swing low at $1,792 to the high at $1,873. Ethereumย (ETH) is trading below both $1,830 and the 50-day Simple Moving Average. ETH/USD, a bearish tendency line, is taking shape, with resistance forming around $1,840, further contributing to the selling pressure. If theย present downward momentum persists, Ethereumโs price could continue to decline, potentially testing the levelย ofย support at $1,790.
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