- As per Berkovitz anything encompassed by a “futures contract” can be classified as a commodity.
- He pointed out that commodities do not exclusively consist of physical items like “wheat” or “oats.”
Dan Berkovitz, the former CFTC Commissioner, mentioned in the latest episode of the Unchained podcast that there is a possibility of considering Ethereum’s native Ether token as both a commodity and a security.
In addition to his role as former CFTC Commissioner, it is worth noting that Dan Berkovitz also served as the former general counsel at the Securities and Exchange Commission (SEC). The conflicting statements from the CFTC and the SEC have contributed significantly to the current uncertainty surrounding the legal status of Ether. In the past six months, the CFTC has consistently referred to Ether, as well as several other cryptocurrencies, as commodities.
In his explanation, Berkovitz attributed the confusion to the fact that commodities extend beyond physical items such as “wheat” or “oats.” He emphasized that anything encompassed by a “futures contract” can be classified as a commodity from a technical standpoint.
Furthermore, Berkovitz pointed out that security, which is defined by the Securities Act and the Exchange Act to include instruments like notes and investment contracts, can also be the underlying asset of a futures contract. This overlap subjects such securities to the jurisdiction of both the CFTC and the SEC.
During the podcast, Collin Lloyd, a partner at the multinational law firm Sullivan & Cromwell, criticized the SEC’s assertion that everything except Bitcoin should be classified as a security under federal securities law.
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