The Commodity Futures Trading Commission (CFTC) refers to both Ethereum (ETH) and Litecoin (LTC) as commodities in its recent KuCoin lawsuit filing. In fact, the CFTC recently filed a civil enforcement action amid criminal charges against the exchange and two of its founders.
The complaint alleges that KuCoin “illegally engaged in commodity trading outside of the exchange” without registering with the CFTC. Additionally, the commission in its complaint identifies Bitcoin, Ethereum, and Litecoin as products that investors were able to trade.
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CFTC says Ethereum and Litecoin are commodities
In the digital asset market, KuCoin emerged as the subject of criminal charges from the US government on Tuesday. Furthermore, the CFTC has now filed a lawsuit against a virtual currency exchange, highlighting the many illegal activities involved in commodity trading.
Additionally, the CFTC called both Ethereum and Litecoin products within KuCoin. Specifically, the Commission listed two virtual currencies, along with Bitcoin, as products that KuCoin illegally allowed investors to transact.
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“These actions placed KuCoin within the purview of the CFTC and required KuCoin to register within the CFTC and comply with all applicable regulations,” the lawsuit states. Additionally, the commission said it is seeking “a temporary civil monetary penalty, a permanent ban on trade and registration, and a permanent injunction against further violations of CEA and CFTC regulations, as charged.” .
The Department of Justice has filed criminal charges against both the KuCoin exchange and its founder. Specifically, it said the exchange violated the Bank Secrecy Act and failed to implement required customer identification procedures.
An interesting development from the lawsuit is the distinction of Ethereum. According to a report earlier this month, the U.S. Securities and Exchange Commission (SEC) is exploring legal action to ensure the safety of ETH. This case encourages product distinctions that the SEC appears to be trying to overturn.
