• The CFTC has recently filed a lawsuit against Binance and its CEO Changpeng Zhao (CZ).
• Ripple employee Neil Hartner warns that the statement made by the CFTC that Bitcoin, Ethereum and Litecoin are commodities may also have implications for the SEC’s case against Ripple.
• A transcript of a November 2022 status hearing between LBRY and the SEC shows how the SEC is using ambiguity as a weapon against the crypto industry.
CFTC Lawsuit Against Binance
The Commodity Futures Trading Commission (CFTC) has recently filed a lawsuit against Binance Holdings and its CEO Changpeng Zhao (CZ). In its complaint, the CFTC writes that Bitcoin, Ethereum and Litecoin are all commodities.
Implications for Ripple Case
Ripple employee Neil Hartner warns that this statement may also have implications for the SEC’s case against Ripple. In a tweet, he notes not to be too euphoric about the statement made by the CFTC as it already made it clear in another case with Telegram that commodities can also be securities. This means if something is both a commodity and security then two regulators could regulate it resulting in confusion.
LBRY Case Shows Pathway For Ripple And Crypto Industry
A transcript of a November 2022 status hearing between LBRY and the SEC shows how ambiguity is being used as a weapon against the crypto industry. The document reveals how LBRY CEO Jeremy Kauffman asked to speak directly to judge Paul Barba about how every offer of remediation he had made was rejected by SEC over five years without them clarifying what rules applied to them.
SEC Ambiguity Weaponizing Confusion
This ambiguity weaponized by SEC means companies like Ripple may face double regulation from both securities regulator and commodity regulator resulting in confusion for companies trying to comply with regulations. Despite knowing this problem exists, so far there appears no solution in sight from U.S law makers which leaves companies like Ripple vulnerable to double regulation from two different agencies where one thing can be classified differently depending on who you ask or when you ask them leading to uncertainty for those operating within crypto space.
The recent lawsuit brought forward by CFTC may have implications for other cases such as those involving Ripple. The use of ambiguous laws coupled with lack of clarity from regulators leaves firms vulnerable to confusion when it comes to complying with regulations which further complicate their operations within U.S market space making them less competitive compared to their international counterparts who have more clarity on regulations governing their businesses