The state of Illinois in the United States has confirmed that BTC and ETH are digital commodities. What significance does it have for encryption regulation?

According to Fox Business reporter Eleanor Terrett yesterday, Rostin Behnam, chairman of the U.S. Commodity Futures Trading Commission (CFTC), stated that the Illinois court has confirmed that BTC and ETH are digital commodities under the Commodity Exchange Act. This ruling only applies to 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 bill. Don’t just flatter yourself with the significance of a “revolutionary milestone.” After all, there are fifty states in the United States, each with its own system of government and legal system. In addition, the United States has a federal district, the District of Columbia (Washington, DC). In addition to these 50 states and one federal district, the United States also owns some overseas territories, such as Puerto Rico, Guam, the U.S. Virgin Islands, the Northern Mariana Islands, and American Samoa, which also enjoy varying degrees of autonomy in some aspects right.

1. Which states have clarified that BTC and ETH are digital commodities?

US District Courts have clearly classified Bitcoin (BTC) and Ethereum (ETH) as commodities in multiple cases. Here are the court’s 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 virtual currency fraud charges, and the judge ruled that the CFTC had the authority to regulate virtual currencies such as Bitcoin.
• CFTC v. My BigCoin: Massachusetts District Court Judge Rya W. Zobel ruled in 2018 that virtual currencies are commodities under the Commodity Exchange Act. The case involved the fraud of My BigCoin, and the judge determined that the virtual currency met the broad definition of commodities in the Commodity Exchange Act.
• Uniswap Class Action Lawsuit: When Judge Katherine Polk Failla of the District Court for the Southern District of New York dismissed the class action lawsuit against Uniswap in 2023, she made it clear that Bitcoin and Ethereum are "crypto commodities" and not securities.

And so far, no US state has explicitly classified Bitcoin (BTC) and Ethereum (ETH) as securities. However, the U.S. Securities and Exchange Commission (SEC) has expressed on multiple occasions its view that many cryptocurrencies should be considered securities. SEC Chairman Gary Gensler has said that in addition to Bitcoin, most other cryptocurrencies may meet the definition of securities, especially Ethereum (ETH).

SEC’s position is reflected in the following aspects:

• Ripple (XRP) case: In December 2020, the SEC filed a lawsuit against Ripple Labs, claiming that it conducted an unregistered securities offering by selling XRP. While the case focuses on XRP, it reflects the SEC’s regulatory approach to most cryptocurrencies.
• SEC lawsuit against Coinbase: In a recent legal action, the SEC sued Coinbase, claiming that some of the cryptocurrencies on its platform were unregistered securities. The lawsuit covers multiple cryptocurrencies and further demonstrates the SEC’s strict regulatory approach to crypto assets.

The SEC’s stance on cryptocurrencies is generally based on the application of the Howey test under the Securities Act. The Howey test is a standard used to determine whether a transaction constitutes a securities investment contract. According to this test, if a transaction involves the investment of money in a joint enterprise and the profit is expected to be mainly dependent on the efforts of others, the transaction is May be considered securities.

Although the SEC has a strict regulatory attitude towards cryptocurrencies, there are currently no specific state laws that clearly classify Bitcoin and Ethereum as securities. In May this year, the House of Representatives voted to pass the "21st Century Financial Innovation and Technology Act", also known as the FIT21 Act. Although if passed, this bill will clarify the regulatory framework for cryptocurrency in the United States and promote the safe launch of blockchain projects in the United States. , clarify the regulatory responsibilities of the SEC and CFTC, end the grievances between the SEC and CFTC and torture of project parties, but overall, 71 Democrats and 208 Republicans voted in support of the bill, 3 Republicans and 133 Democrats voted against it. President Joe Biden opposed the bill in a policy statement, although he stopped short of saying he would veto it. The bill sends revisions to the Senate, which will ultimately require Biden's approval at an unspecified timeframe.

2. Illinois encryption regulatory policy

Aiying has sorted out Illinois’ policies. Here are a few key points:

1. Licensing requirements

Illinois is promoting a cryptocurrency license similar to New York State’s BitLicense system. This regime requires cryptocurrency companies operating in Illinois to obtain specific licenses from the state to ensure that they meet a series of strict security and compliance requirements. This includes:

• Background Checks: Conduct detailed background checks on the company and its executives to ensure they are not involved in any illegal activity.

• Financial requirements: The company needs to demonstrate that it has sufficient financial resources to support its business and ensure that it can meet its obligations to customers.

• Compliance Program: Companies must have a comprehensive compliance program, including Anti-Money Laundering (AML) and Know Your Customer (KYC) policies

2. Dasar cukai

Illinois juga mempunyai peraturan yang jelas tentang layanan cukai mata wang kripto. Mata wang kripto dianggap sebagai harta dan oleh itu memerlukan pelaporan cukai keuntungan modal apabila berdagang. Ini bermakna:

• Cukai Keuntungan Modal: Apabila anda membeli atau menjual mata wang kripto, anda membayar cukai ke atas kenaikannya, sama seperti apabila anda membeli atau menjual saham.

• Penyimpanan Rekod: Individu dan perniagaan perlu menyimpan rekod urus niaga yang terperinci untuk melaporkan maklumat cukai dengan tepat

3 Perlindungan Pengguna

Illinois mengambil perlindungan pengguna dengan sangat serius, terutamanya dalam ruang mata wang kripto. Untuk tujuan ini, kerajaan negeri telah mengambil langkah berikut:

• Keperluan Ketelusan: Syarikat mata wang kripto dikehendaki menyediakan syarat perkhidmatan dan struktur yuran yang jelas kepada pelanggan untuk mengelakkan penipuan.

• Mekanisme aduan: Mekanisme aduan khas telah diwujudkan supaya pengguna boleh melaporkan sebarang salah laku atau layanan tidak adil kepada kerajaan negeri

Pada masa ini, syarikat perlombongan seperti Sangha Systems telah mewujudkan mekanisme aduan berskala besar di Illinois Cryptocurrency kemudahan perlombongan dan rancangan untuk menyediakan tenaga melalui pembinaan tatasusunan tenaga suria. ATM Bitcoin: Beribu pejabat di Chicago, Illinois, CoinFlip mengendalikan lebih daripada 2,500 ATM Bitcoin di 47 negeri, dan pertukaran mata wang kripto seperti FTX.US telah menubuhkan pejabat di Chicago.

Maklumat rujukan:

• https://x.com/EleanorTerrett/status/1811042341521703213

• https://freemanlaw

  https://freemanlaw.com ://www. coindesk.com/policy/2023/02/27/illinois-officials-pushing-state-crypto-licensing-to-emulate-new-yorks-bitlicense/

• https://www.cftc.gov/

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