The ruling only applies to the state of Illinois and does not represent the position of other states or the federal government.
By Aiying
Yesterday, according to Fox Business reporter Eleanor Terrett, Rostin Behnam, the chairman of the Commodity Futures Trading Commission (CFTC), stated that a court in Illinois has confirmed that, under the Commodity Exchange Act, BTC and ETH are digital commodities. However, this ruling only applies to the state of Illinois and does not represent the position of other states or the federal government. So don't get too excited, after all, it's not a federal-level bill, so don't get carried away with the significance of a "milestone in the revolution." After all, the United States has fifty states, each with its own government system and legal framework. In addition, the United States also has a federal district, the District of Columbia (Washington, D.C.). In addition to these 50 states and one federal district, the United States also has some overseas territories, such as Puerto Rico, Guam, the U.S. Virgin Islands, the Northern Mariana Islands, and American Samoa, which also have varying degrees of autonomy in some respects.
I. Which states have explicitly classified BTC and ETH as digital commodities?
U.S. district courts have explicitly classified Bitcoin (BTC) and Ethereum (ETH) as commodities in several cases. The following are the court precedents:
CFTC v. McDonnell: Judge Jack B. Weinstein of the Eastern District of New York ruled in 2018 that Bitcoin is a commodity regulated by the Commodity Futures Trading Commission (CFTC). The case involved fraud charges related to virtual currency, and the judge ruled that the CFTC has the authority to regulate virtual currencies such as Bitcoin.
CFTC v. My BigCoin: Judge Rya W. Zobel of the Massachusetts District Court ruled in 2018 that virtual currency falls under the definition of "commodity" in the Commodity Exchange Act. The case involved fraudulent activities related to My BigCoin, and the judge determined that virtual currency meets the broad definition of "commodity" in the Commodity Exchange Act.
Uniswap Class Action Lawsuit: Judge Katherine Polk Failla of the Southern District of New York dismissed a class action lawsuit against Uniswap in 2023, explicitly stating that Bitcoin and Ethereum are "crypto commodities," not securities.
So far, no U.S. state has explicitly classified Bitcoin (BTC) and Ethereum (ETH) as securities. However, the U.S. Securities and Exchange Commission (SEC) has expressed its view on several occasions that many cryptocurrencies should be considered securities. SEC Chairman Gary Gensler has stated that, apart from Bitcoin, most cryptocurrencies may meet the definition of securities, especially Ethereum (ETH).
The SEC's position is reflected in the following aspects:
Ripple (XRP) Case: In December 2020, the SEC filed a lawsuit against Ripple Labs, alleging that it conducted unregistered securities offerings through the sale of XRP. Although this case focused on XRP, it reflects the SEC's regulatory stance on most cryptocurrencies.
SEC v. Coinbase Lawsuit: In recent legal actions, the SEC sued Coinbase, alleging that some cryptocurrencies on its platform are unregistered securities. This lawsuit involves multiple cryptocurrencies and further demonstrates the SEC's strict regulatory stance on crypto assets.
The SEC's stance on cryptocurrencies is typically based on the application of the Howey test in the Securities Act. The Howey test is a standard used to determine whether a transaction constitutes an investment contract, and according to this test, if a transaction involves an investment of money in a common enterprise with an expectation of profits primarily from the efforts of others, the transaction may be considered a security.
Although the SEC's regulatory stance on cryptocurrencies is strict, there are currently no specific state laws that explicitly classify Bitcoin and Ethereum as securities. In May of this year, the House of Representatives voted to pass the "Financial Innovation and Technology Act of the 21st Century," also known as the FIT21 Act. If passed, this bill will clarify the U.S. regulatory framework for cryptocurrencies, promote the safe launch of blockchain projects in the U.S., clarify the regulatory responsibilities of the SEC and CFTC, and end the feud between the SEC and CFTC and the torment of project parties. However, overall, 71 Democrats and 208 Republicans voted in favor of the bill, while 3 Republicans and 133 Democrats voted against it. President Joe Biden issued a policy statement opposing the bill, although he did not indicate whether he would veto it. The bill will be revised and submitted to the Senate, and it will ultimately require Biden's approval, with no specific timeline. For more details, please refer to Aiying's previous articles:
II. Cryptocurrency Regulation in Illinois
Aiying has summarized the policies of Illinois, and here are a few key points:
1. Licensing Requirements
Illinois is pushing for a cryptocurrency licensing system similar to New York's BitLicense. This system requires cryptocurrency companies operating in Illinois to obtain specific licenses from the state government to ensure compliance with a range of strict security and regulatory requirements. This includes:
Background Checks: Detailed background checks on companies and their executives to ensure they have not been involved in any illegal activities.
Financial Requirements: Companies need to demonstrate sufficient financial resources to support their operations and ensure they can fulfill their obligations to customers.
Compliance Plan: Companies must have a comprehensive compliance plan, including anti-money laundering (AML) and know your customer (KYC) policies
2. Tax Policies
Illinois has specific regulations for the taxation of cryptocurrencies. Cryptocurrencies are treated as property, so capital gains tax must be reported when trading. This means:
Capital Gains Tax: When buying and selling cryptocurrencies, taxes need to be paid on the appreciated portion, similar to trading stocks.
Record Keeping: Individuals and businesses need to maintain detailed transaction records for accurate tax reporting
3. Consumer Protection
Illinois places a strong emphasis on consumer protection, especially in the cryptocurrency field. To this end, the state government has taken the following measures:
Transparency Requirements: Cryptocurrency companies are required to provide clear service terms and fee structures to customers to prevent fraudulent activities.
Complaint Mechanism: A dedicated complaint mechanism has been established, allowing consumers to report any illegal activities or unfair treatment to the state government
Currently, mining company Sangha Systems has established a large-scale cryptocurrency mining facility in Illinois and plans to provide energy through the construction of a solar power array. Bitcoin ATMs: CoinFlip, headquartered in Chicago, Illinois, operates over 2500 Bitcoin ATMs across 47 states. In addition, cryptocurrency exchanges such as FTX.US have established offices in Chicago.
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
