- CFTC alleged that ETH was a commodity in a KuCoin complaint.
- KuCoin recorded massive outflows, but ETH ETF May approval remains unclear.
The recent KuCoin lawsuit from the CFTC (Commodities Futures Tradings Commission) has reignited the debate over the chances of Ethereum [ETH] ETF approval by May.
In the CFTC complaint, the commission reiterated that Ether, Bitcoin [BTC]and Litecoin [LTC] are raw materials, according to her press release.
“During the Relevant Period, KuCoin solicited and accepted orders, accepted properties to provide margin, and operated a facility for trading futures, swaps and leveraged, margined or financed retail transactions involving digital assets that are commodities, including Bitcoin. [BTC]ether [ETH]and Litecoin [LTC].”
Is it a hidden gem or an SEC/CFTC battle?
Commenting on the development, Jake Chervinsky, Chief Legal Officer at Variant Fund, said: claimed that the lawsuit is a “hidden gem.”
“Hidden gem in the CFTC’s KuCoin complaint. Most of the time, the SEC and CFTC act as if they are not in a battle over crypto. Today, the CFTC is openly attacking the SEC’s alleged investigation into ETH.”
The US SEC (Securities and Exchange Commission) previously called ETH a commodity
However, it has remained unclear following Ethereum’s change from Proof-of-Work (PoW) to Proof-of-Stake (PoS) consensus.
However, Nate Geraci of ETF Store warned the apparent SEC vs. CFTC duel on ETH and called for clarity for users and investors.
“Regardless of what you think about ether, it’s sad that we can’t get the government and regulators to provide clarity on ether, or on crypto in general. Isn’t that what would benefit the general public and investors? Instead, we see cloaked agency images and inconsistencies everywhere.”
True to Geraci’s words, the complaint and resulting lack of clarity have prompted KuCoin users and investors to withdraw massive amounts of money and assets from the exchange.
Provisional facts showed that KuCoin suffered an outflow of approximately $500 million after the complaint;
“In the past few hours, approximately US$500 million worth of KuCoin assets have been withdrawn from Ethereum, including 274 million USDT, 15,500 ETH, 50 million ONDO, 12 million FET, 95.38 million GHX, etc. KuCoin hot wallets still contain more than $3.6 billion in assets on Ethereum.”
Nevertheless, approval odds for ETH ETFs have risen to a pessimistic 25%, with Bloomberg ETF analysts citing a lack of engagement with BTC ETF applications.
However, Grayscale’s legal director remained confident in the approval. to report That,
“I don’t think the perceived lack of involvement from regulators should be indicative of one outcome or another.”
