![Ripple CTO Defends Bitcoin Commodity Status: Details](/sites/default/files/styles/736/public/2024-07/s3414.jpg)
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In a recent discussion on X, the debate over the classification of crypto assets as securities or commodities took center stage. An X user suggested that Bitcoin might be considered a security, prompting a response from Ripple's chief technology officer (CTO), who offered an insight into what constitutes a commodity.
Schwartz, known for his active engagement in crypto-related discussions, responded by highlighting a key aspect of what differentiates commodities from securities.
The Ripple CTO responded: "Everyone who owns a commodity has a common interest in seeing its value increase, but that is not a common enterprise, which is what you need to have an investment contract. Everyone individually doing what they think is best for themselves is not a common enterprise."
This suggestion touched on the longstanding debate about whether certain cryptocurrencies should be regulated as securities or commodities. The distinction is crucial because it determines how these assets are regulated and what requirements they must meet.
Recent developments in crypto regulation
The head of U.S. commodities regulator CFTC, Rostin Behnam, recently argued that Bitcoin and Ethereum are commodities. The CFTC chair cited a July 3 ruling in a $120 million Ponzi case involving an Oregon man accused of fraud, where an Illinois district court judge said both assets qualified as commodities.
In the most recent development, on July 30, the SEC responded to the court's minute order seeking leave to amend its complaint on the "Third Party Crypto Asset Securities" defined in its opposition to Binance’s motion to dismiss.
The SEC had argued that several cryptocurrencies, including Solana, Cardano and Polygon, were securities in the Binance lawsuit. The move obviated the need to "issue a ruling as to the sufficiency of the allegations as to those tokens at this time."
Last July, Judge Analisa Torres decided that XRP sales to retail investors on exchanges did not constitute investment contracts, which many consider a loss for the SEC's jurisdiction.