In a recent dismissal order of a class action lawsuit against the decentralized exchange Uniswap, United States District Court Judge, Katherine Polk Failla referred to Ether and Bitcoin as “crypto commodities.” This label aided in her reasoning for the case dismissal, wherein Uniswap users alleged losses due to scam tokens on the exchange. However, she disregarded their argument that the token sales fell under the Exchange Act jurisdiction.
It’s worth mentioning that Judge Failla’s involvement isn’t limited to this case alone; she is also overseeing the Securities and Exchange Commission (SEC) lawsuit against Coinbase and has had prior experience with other crypto cases, including those related to Tether and Bitfinex.
Interestingly, the legal classification of cryptocurrencies in the U.S. does not stem entirely from Failla’s comment. Other judges have previously made decisions on cryptocurrencies such as XRP, which was categorized as a security when sold through programmatic sales on exchanges in July.
The SEC and the Commodity Futures Trading Commission (CFTC) have been navigating a murky territory, with both entities laying claims on different aspects of cryptocurrencies. In a noteworthy incidence, SEC chair Gary Gensler once claimed that “everything other than Bitcoin” falls under the SEC’s purview. Conversely, the CFTC has stood its ground by claiming Ether and other digital currencies as commodities.
Amidst these conflicting stances, U.S. lawmakers are yet to finalize which agency — the SEC or the CFTC — will eventually carry the baton of authority over digital-assets. Multiple bills aiming to provide digital asset regulatory clarity are slowly advancing in the Congress, which vary in assigning authority between the two regulators.
Among them, the Financial Innovation and Technology for the 21st Century Act, is seeking to establish a process for categorizing cryptocurrencies into either securities or commodities. Some legislation, such as the Digital Commodity Exchange Act, proposes to hand over the reins of power to a regulator and make crypto spot exchanges registered and regulated under the CFTC.
The Digital Asset Market Structure Bill, on the other hand, advocates that cryptocurrencies should undergo SEC certification to prove adequate decentralization before being given commodity status. These developments are indicative of the growing importance of legal classifications for digital assets, paving the way for a more organized and well-regulated crypto environment in the future.
Source: Cointelegraph
