In an Aug. 30 dismissal order of the case brought by Uniswap users who claimed they lost money due to scam tokens on the exchange — Judge Katherine Polk Failla wrote ETH and Bitcoin (BTC) were “crypto commodities.”
The distinction was also part of her reasoning for dismissing the case — Failla said she wasn’t convinced by an argument that Uniswap’s token sales were subject to the Exchange Act.
Interestingly, Failla is also the judge overseeing the SEC lawsuit against Coinbase. She has also had previous experience in overseeing other crypto cases in the past, 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.
— Bill Hughes : wchughes.eth (@BillHughesDC) August 30, 2023
While her comment is not a distinct ruling on Ether’s legal classification in the U.S., it comes as other judges have made decisions on cryptocurrencies such as a July ruling classing XRP (XRP) as a security when sold through programmatic sales on exchanges.
In recent years, two U.S. financial regulators, the Securities and Exchange Commission and the Commodity Futures Trading Commission have tussled over jurisdiction concerning cryptocurrencies.
Meanwhile, the CFTC has laid claim to ETH and other cryptocurrencies as commodities — per a suit it filed against Binance in March for alleged Commodities Exchange Act violations.
However, U.S. lawmakers are yet to decide how the SEC or CFTC will be handed authority over crypto.
Multiple bills to provide digital asset regulatory clarity are inching their way through Congress which vary in how to divvy authority between the two regulators.
Some, such as the Financial Innovation and Technology for the 21st Century Act, aim to create a process for categorizing cryptocurrencies into either securities or commodities.
Others explicitly hand power to a regulator such as the Digital Commodity Exchange Act which sees crypto spot exchanges registered and regulated under the CFTC.
The Digital Asset Market Structure Bill, meanwhile, would see cryptocurrencies undergo SEC certification to prove adequate decentralization before being given commodity status.