The Commodity Futures Trading Commission (CFTC) has designated Ethereum (ETH) and Litecoin (LTC) as commodities, setting a precedent in the regulatory oversight of cryptocurrencies.

This clarification came as part of the CFTC’s civil enforcement action against the cryptocurrency exchange KuCoin, which faces accusations of conducting illegal off-exchange commodity transactions without proper registration.

Ethereum and Litecoin Labeled Commodities by CFTC

The legal action follows close on the heels of criminal charges brought against KuCoin and its founders by the Department of Justice. It spotlights the stringent enforcement measures being applied to cryptocurrency exchanges operating in the US.

The complaint specifically targets KuCoin’s trading practices. These include the unregistered trading of Bitcoin, Ethereum, and Litecoin, all of which the CFTC now firmly categorizes as commodities.

“KuCoin solicited and accepted orders, accepted property to margin, and operated a facility for the trading of futures, swaps, and leveraged, margined, or financed retail transactions involving digital assets that are commodities including Bitcoin (BTC), Ether (ETH), and Litecoin (LTC),” the compliant reads.

Read more: 15 Best KuCoin Alternatives for US Crypto Traders

This regulatory move has significant implications for the market, particularly in light of ongoing debates regarding the classification of cryptocurrencies as commodities or securities. Especially, with recent reports indicating that the Securities and Exchange Commission (SEC) is exploring a legal campaign to classify ETH as a security.

This development from the CFTC, however, leans towards reinforcing Ethereum’s commodity status. It could potentially influence the ongoing legal discourse around the nature of cryptocurrencies.