In a recent development, the US Commodity Futures Trading Commission (CFTC) has brought a case against Kucoin, a cryptocurrency exchange. The CFTC's legal filing asserts that, apart from Bitcoin, Ethereum and Litecoin are also considered commodities.

Commodities, like Bitcoin, Ethereum, and Litecoin, fall under the regulatory purview of the CFTC rather than the Securities and Exchange Commission (SEC), which has been notably stringent on cryptocurrencies. Despite previous efforts by the SEC to categorize Ethereum as a security, the CFTC's stance differs.

Gary Gensler, the Chairman of the SEC, has maintained a view that all cryptocurrencies, excluding Bitcoin, should be classified as securities. However, his position on Ethereum was more lenient until this year.

The US Commodity Futures Trading Commission's argument in the case against Kucoin revolves around allegations of the exchange running an illicit digital asset derivatives platform.

How Does The CFTC Regulate Commodities

The Commodity Futures Trading Commission (CFTC) regulates commodities by overseeing various aspects of the U.S. derivatives markets, including commodity futures, options, swaps, and over-the-counter (OTC) markets.

The CFTC's regulatory scope extends to trading organizations like designated contract markets and swap execution facilities, intermediaries such as commodity pool operators and futures commission merchants, and derivatives clearing organizations.

Under the Commodity Exchange Act (CEA), passed in 1936 and amended over time, the CFTC establishes regulations published in Title 17 of the Code of Federal Regulations to govern commodity futures trading in the U.S.

Additionally, the CFTC enforces rules to ensure transparency, market integrity, and risk reduction in the derivatives marketplace, particularly focusing on areas like swap regulation, capital requirements, business conduct standards, and recordkeeping.

Through its oversight, the CFTC aims to promote competitive and efficient markets while safeguarding investors against manipulation, fraud, and abusive trade practices.