US Senator Affirms Bitcoin Is A Commodity Not A Currency. US Senator John Boozman revealed that even though it is called a cryptocurrency, Bitcoin is still considered a commodity, not a currency. He emphasized that exchanges where commodities are traded, including bitcoin, must be regulated by the Commodity Futures Trading Commission (CFTC).
“Bitcoin, even though it’s a cryptocurrency, it’s still a commodity. It’s a commodity in the eyes of federal courts and the opinion of the chairman of the Securities and Exchange Commission (SEC). There is no dispute about this,” Boozman said in a hearing, quoted from Bitcoin.com, Tuesday (6/12/2022).
Calling FTX’s collapse a shock, the senator said public reports showed a lack of risk management, conflicts of interest and misuse of customer funds.
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Senator Boozman went on to talk about crypto regulation and empowering the Commodity Futures Trading Commission (CFTC) as the primary regulator of the spot crypto market.
“The CFTC has consistently demonstrated its willingness to protect consumers through enforcement action against bad actors,” continued Senator Boozman.
Boozman believes the CFTC is the right agency for an expanded regulatory role in the digital commodity spot market.
In August 2022, Boozman and several senators introduced the Digital Commodity Consumer Protection Act (DCCPA) to empower the CFTC with exclusive jurisdiction over the digital commodity spot market.
Two other bills have been introduced in Congress this year to make the derivatives regulator the primary watchdog for the crypto sector.
While bitcoin is a commodity, SEC Chairman Gary Gensler has repeatedly said most other crypto tokens are securities.
Previously, Sam Bankman-Fried, the founder and former CEO of the now bankrupt crypto exchange FTX made his first public appearance since his company’s collapse.
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Speaking at the New York Times Dealbook Summit with Andrew Ross Sorkin about what he said went against the advice of his lawyers, Bankman-Fried said he had not knowingly mixed customer funds at FTX with funds at his trading firm Alameda Research.
US Senator Affirms Bitcoin Is A Commodity Not A Currency. The liquidity crunch at FTX came after Bankman-Fried quietly moved USD 10 billion (Rp 153.9 trillion) in FTX customer funds to Alameda Research, Reuters reported, citing two people familiar with the matter. At least USD 1 billion of customer funds have disappeared.
Bankman-Fried told Reuters the company had not secretly transferred funds to Alameda Research, but had misread “confusing internal labeling”.
FTX filed for bankruptcy and Bankman-Fried stepped down as chief executive on November 11, after investors withdrew USD 6 billion from the platform in three days and rival cryptocurrency exchange Binance abandoned a rescue deal.
“At the end of November 6th we collected all the data that clearly should be part of the dashboard that I always look at and when we looked at it, there was a serious problem there,” Bankman-Fried said, quoted by CNBC, Friday (2/12/2022) .
Bankman-Fried added he had never attempted fraud and personally did not think he had any criminal responsibility.
“The real answer is that it’s not what I’m focused on. There will be a time and a place for me to think about myself and my own future,” he said.
The FTX boom marked a stunning fall from grace for the 30-year-old entrepreneur who experienced the cryptocurrency boom to last year’s Forbes-pegged net worth of USD 26.5 billion.
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After launching FTX in 2019, he became an influential political donor and vowed to donate the majority of his earnings to charity.
Previously, the European Central Bank (ECB) again gave harsh criticism to Bitcoin. This time the ECB said cryptocurrencies were on a “path to irrelevance”.
In a blogpost titled “Bitcoin’s last stand,” ECB Director General Ulrich Bindseil and analyst Jurgen Schaff said that, for bitcoin supporters, the price stabilization seen this week signals a breather towards new highs.
However, according to the ECB this was an artificially induced last gasp before the road to irrelevance and this was to be expected before FTX went bankrupt and sent the bitcoin price well below USD 16,000.
Bindseil and Schaff said bitcoin was neither suitable as a form of investment nor suitable as a means of payment.
US Senator Affirms Bitcoin Is A Commodity Not A Currency. “Bitcoin’s conceptual design and technological flaws make it questionable as a means of payment: real Bitcoin transactions are cumbersome, slow, and expensive. Bitcoin has never been used in a significant way for legitimate real-world transactions,” they wrote, quoted from CNBC, Monday (5/12/2022).
Bindseil and Schaff say it’s important not to mistake regulations for consent.
They also raised concerns about bitcoin’s poor environmental credentials. The technical underpinnings of cryptocurrencies are such that it requires enormous computing power to verify and approve new transactions.
