A judge from the United States District Court has classified Ether (ETH) as a commodity in her dismissal of a class-action lawsuit against the decentralized exchange, Uniswap.
In her August 30 dismissal order of the case filed by Uniswap users who alleged they lost money due to scam tokens on the exchange, Judge Katherine Polk Failla referred to ETH and Bitcoin (BTC) as “crypto commodities.”
This distinction played a role in her decision to dismiss the case, as Failla was not persuaded by the argument that Uniswap’s token sales fell under the Exchange Act.
Notably, Failla is also the judge presiding over the SEC lawsuit against Coinbase. She has previously overseen other crypto-related cases, including one involving Tether and Bitfinex. Although her comment is not a definitive ruling on Ether’s legal classification in the U.S., it is significant given other recent judicial decisions on cryptocurrencies, such as a July ruling that classified XRP as a security when sold to institutional investors.
In recent years, there has been a jurisdictional struggle between two U.S. financial regulators, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), over cryptocurrencies.
SEC Chair Gary Gensler once stated that “everything other than Bitcoin” falls under the SEC’s jurisdiction as a security.
Conversely, the CFTC has asserted that ETH and other cryptocurrencies are commodities, as evidenced by a lawsuit it filed against Binance in March for alleged Commodities Exchange Act violations. However, U.S. lawmakers have not yet determined how the SEC or CFTC will be granted authority over crypto.
Several bills aimed at providing regulatory clarity for digital assets are making their way through Congress, each proposing different ways to allocate authority between the two regulators.
For example, the Financial Innovation and Technology for the 21st Century Act seeks to establish a process for classifying cryptocurrencies as either securities or commodities.
Other bills, such as the Digital Commodity Exchange Act, explicitly assign regulatory authority to a specific regulator, in this case, requiring crypto spot exchanges to register and be regulated under the CFTC.
Meanwhile, the Digital Asset Market Structure Bill would require cryptocurrencies to obtain SEC certification of sufficient decentralization before being granted commodity status.