CFTC Calls For Public Comments To Improve Their Understanding of Ethereum Blockchain

Wilfred Michael 

Wilfred Michael

Reporter

12 December 2018,
14:47
CFTC Calls For Public Comments To Improve Their Understanding of Ethereum Blockchain

The U.S Commodities and Futures Trading Commission (CFTC) has picked interest in digital assets in recent times and now wants to know more about how the system behind the world's third-largest cryptocurrency operates.

To this end, the agency released a notice on Nov 11, asking members of the public to send in comments about “Ether (ETH) and its use on the Ethereum Network.”

As per the notice, the Request For Information (RFI) is going to be published in the Federal Register and will be glad to get comments around the Ethereum blockchain, its opportunities, mechanics, markets and use cases.

Aside from this, the agency also wants information on the similarities and differences between major cryptocurrency Bitcoin and the top altcoin Ethereum.

Public comments and information provided within the 60 days that the RFI is listed in the Federal Register will be used to help the Fintech arm of the CFTC (LabCFTC) according to the release.

 

Why the CFTC May Want To Know More About Ethereum

There is a chance that one of the reasons why the CFTC is seeking more knowledge of the Ethereum Blockchain is to improve the guide which they released in November about smart contracts.

In that primer, the CFTC said that all smart contracts (a significant feature of the Ethereum blockchain) would come under the existing financial laws such as Anti Money Laundering (AML) and the Commodity Exchange Act (CEA).

 

Does the agency want to tweak their earlier opinion? We cannot say for sure.

Another possible reason is the massive decline in the value of ETH since the start of the year. While the crypto markets have generally been bearish for the most of 2018, the altcoin has come off worst, losing nearly 90% throughout the period under consideration.

The stats suggest that ICOs built with Smart Contracts on the Ethereum blockchain are cashing out (selling the ETH tokens) because of the SEC declaration that their tokens are non-compliant and should be labeled as ‘security.’

So it could be that the CFTC wants a clear understanding of the Ethereum blockchain to find out how to classify ETH tokens - either as a commodity like Bitcoin or like any other item under their control.

Conclusively, whatever underground reason the agency has for seeking public comments about Ethereum, the crypto ecosystem will hope that it does not hurt the future of the altcoin but instead save it from its dying state.