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CFTC Chairman Says Ether Is a Commodity

According to a recent report, the new chair of the Commodity Futures Trading Commission (CFTC), Heath Tarbert, has declared that he believes that ether is a commodity. He also anticipates ether futures trading on U.S. markets in the near future. The CFTC has previously taken the position that bitcoin also is a commodity.  He further indicated that he agrees with the SEC that bitcoin and ether are not securities. He also opined that similar assets should be treated similarly. 

In addressing the relevance of the Howey test, he noted that Howey has stood the test of time and it ultimately goes to the fundamental question of whether the offering is something that is being used for capital raising, and whether you are investing in an enterprise or buying something that has tangible store of value in and of itself.

On another hot issue, he indicated that it is possible for a new coin (ICO) to start out as a security but eventually become a commodity when, over time, it gets more decentralized and has a tangible value.

While these comments add a bit of clarity and more confirmation of positions previously taken, many cryptocurrency-related questions remain unanswered.

Copyright © 2019, Sheppard Mullin Richter & Hampton LLP.

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About this Author

James Mattinson Blockchain Technology and Digital Currency Lawyer Sheppard Mullin Washington DC
Partner

Jim Gatto is a partner in the Intellectual Property Practice Group in the firm's Washington, D.C. office. He is also Co-Team Leader of the firm's Digital Media Industry and Social Media and Games Industry Teams, Blockchain Technology and Digital Currency team, and Team Leader of the firm's Open Source Team. 

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Mr. Gatto leverages his unique combination of nearly 30 years of IP experience, business insights and attention to technology trends to help companies develop IP and other legal...

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