In a landmark announcement that sent ripples through the cryptocurrency regulatory landscape, Commodity Futures Trading Commission Chairman Heath Tarbert declared on October 10, 2019, that Ethereum is a commodity under U.S. law — placing the world’s second-largest cryptocurrency under the same regulatory umbrella as Bitcoin.
TL;DR
- CFTC Chairman Heath Tarbert officially declared Ethereum a commodity at the Yahoo Finance Summit
- The ruling opens the door for ETH-based futures contracts and derivatives products
- Forked assets like Ethereum Classic will receive the same commodity classification
- The CFTC and SEC both agree that BTC and ETH are not securities
- Tarbert urged the U.S. to take a leadership role in blockchain and digital asset technology
A Historic Declaration at the Yahoo Finance Summit
Speaking at the Yahoo Finance Summit, Tarbert made the most definitive statement to date regarding Ethereum’s regulatory status in the United States. “We’ve been very clear on bitcoin: bitcoin is a commodity. We haven’t said anything about ether — until now. It is my view as chairman of the CFTC that ether is a commodity,” Tarbert stated.
The announcement marked the first time the CFTC explicitly classified Ethereum under its regulatory jurisdiction. While the commission had long maintained that Bitcoin was a commodity, Ethereum’s status had remained ambiguous, creating uncertainty for institutional investors and derivatives product developers alike.
Ethereum was trading around $191.66 at the time of the announcement, according to CoinMarketCap data, with a total market capitalization of approximately $20.7 billion. Bitcoin held steady near $8,586 with a market cap of $154.4 billion.
What This Means for Ethereum Futures
Tarbert did not stop at the classification — he hinted at the possibility of Ethereum futures products entering the market in the near future. Given that Bitcoin futures already trade on both the CME and the recently launched Bakkt platform, the door is now open for similar ETH-denominated derivatives contracts.
The timing is significant. Bakkt, the physically-settled Bitcoin futures exchange backed by Intercontinental Exchange (ICE), had launched just weeks prior in September 2019. While Bakkt’s early volumes were underwhelming, the regulatory clarity around Ethereum could encourage new product development across the derivatives space.
Forked Assets Receive Equal Treatment
When asked whether forked cryptocurrencies would receive the same classification, Tarbert was equally clear: assets like Ethereum Classic would inherit the commodity status of their parent chain, unless the fork itself raised securities law concerns under the Howey Test.
“It stands to reason that similar assets should be treated similarly,” Tarbert explained. “If the underlying asset hasn’t been determined to be a security and is therefore a commodity, most likely the forked asset will be the same.”
CFTC and SEC: A Coordinated Stance
Tarbert emphasized that the CFTC is working closely with the Securities and Exchange Commission on cryptocurrency regulation. Both agencies agree that Bitcoin and Ethereum do not qualify as securities — a position the SEC first articulated in 2018 when William Hinman, then-director of the SEC’s Division of Corporation Finance, stated that ETH was sufficiently decentralized to avoid securities classification.
Jake Chervinsky, General Counsel at Compound Finance, contextualized the announcement on social media: “The CFTC calling ETH a commodity has nothing to do with securities laws at all. Securities are a type of commodity. Financial instruments can be one, both, or neither. Not to mention that the SEC already said ETH isn’t a security last summer.”
Libra Still in Regulatory Limbo
Tarbert also addressed Facebook’s Libra project, noting that regulators had not yet determined whether the stablecoin would be classified as a security or a commodity. “Is it a security, first and foremost. And if it isn’t a security, it is most likely a commodity,” he said. The comments reflected ongoing regulatory scrutiny of the social media giant’s ambitious digital currency plans.
A Pro-Innovation Stance
Tarbert’s positions echoed those of his predecessor Christopher Giancarlo, widely known as “Crypto Dad” for his supportive stance on digital assets. The new chairman stressed the importance of American leadership in blockchain technology, stating: “I want to stress the importance of blockchain and digital assets to the United States, and in particular, as CFTC Chairman, I want the U.S. to lead in this technology.”
Why This Matters
The CFTC’s explicit classification of Ethereum as a commodity removed one of the most significant regulatory clouds hanging over the Ethereum ecosystem. For developers building decentralized applications, DeFi protocols, and enterprise solutions on Ethereum, the clarity means reduced legal risk and a more predictable path forward for token-based projects. For institutional investors, it signals that Ethereum-based derivatives — including futures and options — could soon become available through regulated U.S. exchanges, unlocking a new wave of capital inflows into the second-largest cryptocurrency by market cap.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always conduct your own research before making investment decisions.