Caroline Pham, a commissioner at the U.S. Commodity Futures Trading Commission (CFTC), has raised concerns about potential violations of the Securities and Exchange Commission's (SEC) authority in the recent accusations against cryptocurrency exchange KuCoin.

The CFTC, along with the US Department of Justice, accused KuCoin of running an illegal digital asset derivatives exchange on March 26. Pham criticized the institution's approach in addressing this issue.

Pham highlighted that the CFTC's complaint suggests that fund shares held by investors, typically seen as securities, could be seen as leveraged trading under commodity laws. This interpretation does not differentiate between an investment in a fund under the SEC's jurisdiction and the trading activities of a fund falling under the CFTC's jurisdiction.

The dispute between the CFTC and SEC concerning jurisdiction in the crypto industry has been ongoing. They have disagreed publicly on whether Ethereum should be classified as a security or a commodity. While SEC Chairman Gary Gensler did not provide a clear answer, he mentioned that many cryptocurrencies are securities. Conversely, the CFTC maintains that ETH is a commodity, which reflects in its allegations against KuCoin.

*This is not investment advice.