CFTC Sues KuCoin: Ethereum and One Altcoin Classified as Commodities!

The Commodity Futures Trading Commission (CFTC), in parallel with the US Department of Justice, filed a complaint against the cryptocurrency exchange KuCoin, drawing attention to Litecoin and Ethereum details. The US Department of Justice (DOJ) filed a lawsuit against KuCoin on March 26 for violating banking law and conducting unregistered money transfer activities. In parallel, the Commodity Futures Trading Commission (CFTC) also filed a legal complaint against KuCoin and presented an indictment. The detail of Litecoin (LTC) and Ethereum (ETH) in the indictment attracted the cryptocurrency market’s attention. In this indictment, CFTC defined Litecoin and Ethereum as “commodities.” This classification also includes Bitcoin, previously recognized as a commodity by the US. A statement by CFTC lawyers included the following: The KuCoin exchange provided services for trading, swaps, and leveraged, margined, or financed retail transactions involving commodity-based cryptocurrencies, including Bitcoin, Ethereum, and Litecoin. It accepted property for margin and operated a […]

CFTC Sues KuCoin: Ethereum and One Altcoin Classified as Commodities!

The Commodity Futures Trading Commission (CFTC), in parallel with the US Department of Justice, filed a complaint against the cryptocurrency exchange KuCoin, drawing attention to Litecoin and Ethereum details.

The US Department of Justice (DOJ) filed a lawsuit against KuCoin on March 26 for violating banking law and conducting unregistered money transfer activities. In parallel, the Commodity Futures Trading Commission (CFTC) also filed a legal complaint against KuCoin and presented an indictment.

The detail of Litecoin (LTC) and Ethereum (ETH) in the indictment attracted the cryptocurrency market’s attention. In this indictment, CFTC defined Litecoin and Ethereum as “commodities.” This classification also includes Bitcoin, previously recognized as a commodity by the US.

A statement by CFTC lawyers included the following:

The KuCoin exchange provided services for trading, swaps, and leveraged, margined, or financed retail transactions involving commodity-based cryptocurrencies, including Bitcoin, Ethereum, and Litecoin. It accepted property for margin and operated a facility.

Opening a new chapter in the long-standing debate over securities and commodities, CFTC had previously classified Ethereum as a commodity.

In contrast to CFTC, the US Securities and Exchange Commission (SEC) had previously stated several times that Ethereum is a security. In fact, in its statements against spot Ethereum ETF applications, SEC implied that Ethereum could not receive this approval due to its status as a security.

The question of whether a cryptocurrency is a security or a commodity is crucial for many activities, including spot ETF approval. While being classified as a commodity like gold and silver is seen as positive, being classified as a security like stocks brings significant legal issues.

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