Key Takeaways
- Whether a crypto asset is a commodity or a security depends on how it functions, not simply on the fact that it is computer code.
- Bitcoin and Ether resemble traditional commodities because many independent participants produce them and each unit is interchangeable with every other.
- In 2026 the SEC and CFTC jointly identified Bitcoin and Ether as digital commodities, but Congress has not yet passed a law dividing crypto oversight between the two agencies.
Is Bitcoin more like gold or more like a share of stock? The answer decides which federal agency regulates it and which rules apply to the people who trade it.
In this TalksOnLaw Brief, J. Christopher Giancarlo, the 13th Chairman of the U.S. Commodity Futures Trading Commission, explains how regulators decide when a cryptocurrency is a commodity, and the role he played in the CFTC's early decisions on Bitcoin and Ether.
A Functional Test
Giancarlo's starting point is that all crypto is, at bottom, algorithms. The question is what function a given crypto serves. He compares traditional commodities like oil, wheat, corn, and minerals. They are not issued by a single enterprise; they are produced at many points by many different parties and put into public circulation. And they are fungible: one unit is the same as all the others. A security, by contrast, is issued by a single enterprise to raise money for that enterprise.
Why Bitcoin and Ether Fit
Applying that analysis, Giancarlo explains, the CFTC concluded that Bitcoin and Ether look more like commodities than securities. Thousands of independent participants around the world produce them, much as with minerals, and one coin is treated the same as any other no matter how or by whom it was created. Some crypto protocols, he notes, can also be used to raise capital, and then there is a role for the Securities and Exchange Commission, which Congress set up to oversee capital formation. Where a protocol creates a commodity-like instrument, as with Bitcoin, the CFTC has a role.
The CFTC's Early Decisions
Giancarlo describes his part in that history. In December 2014, then-Chairman Timothy Massad told Congress that the CFTC viewed Bitcoin as a commodity within its jurisdiction. In 2015, in the Coinflip enforcement matter, the commission formally found that Bitcoin and other virtual currencies are commodities. During Giancarlo's tenure as chairman, the CFTC allowed the first U.S.-regulated Bitcoin futures markets, which launched in December 2017. He also did early work that led to Ether being treated as a commodity under CFTC jurisdiction.
What to Know Now
Federal policy has moved substantially toward the functional approach Giancarlo describes. In 2025 the SEC dropped several major enforcement cases against crypto platforms, and Congress enacted the GENIUS Act, creating a federal framework for payment stablecoins. In March 2026 the SEC and CFTC issued a joint interpretation establishing a token taxonomy and identifying Bitcoin, Ether, and a number of other tokens as digital commodities rather than securities, while explaining that a non-security token can still be sold as part of an investment contract. Legislation to divide oversight more permanently has not been enacted. The House passed the CLARITY Act in July 2025, which would give the CFTC primary authority over spot markets in digital commodities, but in September 2026 the Senate fell short of the 60 votes needed to begin debate. Supporters of the agencies' approach see it as overdue clarity, while critics argue that durable rules and investor protections require legislation. For now, the agencies continue to build the framework under existing law.
