Virtual currencies as commodities—CFTC wins battle in the fight to define cryptocurrencies as commodities but has it won the war?
Posted on Oct 2, 2018 in Financial Services, Government, Litigation, Regulation, Securities & Corporate Governance | Comments Off on Virtual currencies as commodities—CFTC wins battle in the fight to define cryptocurrencies as commodities but has it won the war?
A federal court in Massachusetts allowed the US Commodity Futures Trading Commission’s fraud case against virtual currency operators to continue by finding that the digital coin met the definition of “commodity” under the Commodity Exchange Act.
- The court rejected the defendants’ argument that the virtual currency at issue was not a “commodity” because there was no futures contract underlying the digital coin.
- The court applied an expansive definition of “commodity” finding the virtual currency to be within the same class as Bitcoin for which a futures contract (Bitcoin futures) trades.
- The court affirmed the CFTC’s ability to exercise its anti-fraud authority in the absence of claims of market manipulation.
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