US Regulators Call Ethereum And Litecoin New Commodities

Litecoin and Ethereum are in the commodity category. (Photo; Doc. TheBitcoin News)

JAKARTA - The United States Commodity Futures Trading Commission (CFTC) has taken significant steps by classifying Ethereum (ETH) and Litecoin (LTC) as commodities. This decision is part of a broader regulatory effort against the growing crypto industry.

This announcement comes in the context of lawsuits against KuCoin, one of the globally operating crypto exchanges. The CFTC, along with the US Department of Justice, highlighted KuCoin for allegedly violating some legal provisions, including failures in implementing adequate Know Your Customer (KYC) procedures.

According to CFTC, Bitcoin, Ethereum, and Litecoin are all included in the commodity category, which marks an important milestone in the classification of digital assets. This classification carries heavy regulatory consequences, forcing exchanges that handle these assets to follow strict CFTC rules.

Meanwhile, the US Securities and Exchange Commission (SEC) is also involved in this regulatory debate. The SEC is investigating and seeking to define Ethereum as a security, raising questions about the jurisdiction and supervision of digital assets.

KuCoin himself faces serious accusations from the US Department of Justice. From July 2019 to June 2023, the exchange was accused of not implementing adequate KYC procedures, which the Department of Justice said was introduced only after KuCoin became aware of a government investigation.

The KuCoin case highlights the importance of compliance with KYC and Anti-Money Laundering (AML) regulations in the crypto industry. Failure to comply with these regulations can lead to serious legal consequences, including criminal charges and fines.

Global crypto markets have reacted to this announcement with various speculations. Some analysts believe that this classification can provide better legal clarity for investors and digital asset users. However, there are also concerns that stricter regulations could limit industrial innovation and growth.