U.s. commodity futures trading commission bitcoin
Last Thursday the United States Commodities Futures Trading Commission (CFTC) settled charges against a small and now-defunct operation in San Francisco called Coinflip, which marketed bitcoin. Tag: U.S. Commodity Futures Trading Commission (CFTC) Bitmex Fast-Tracks KYC Program as Regulators Tighten Screws on Anti-Money Laundering Rules Oct 22, NEW YORK (Reuters) - Virtual currencies like bitcoin can be regulated as commodities by the U.S. Commodity Futures Trading Commission, a federal judge ruled Tuesday.
U.s. commodity futures trading commission bitcoin
Bitcoin as a Commodity: What the CFTC’s Ruling MeansBitcoin will now be classed as a commodity in the U. It added that it had also filed, and simultaneously settled, charges against the San Francisco-based firm. This might mean a nervous couple of months for other unregistered bitcoin derivatives firms in the U.
Aitan Goelman, the CFTC's director of enforcement, added that "while there is a lot of excitement surrounding bitcoin Bitcoin is a virtual currency that allows users to exchange online credits for goods and services. While there is no central bank that issues them, bitcoins can be created online by using a computer to complete difficult tasks, a process known as mining.
As well as bitcoin exchanges and wallet services, a small but growing sector of derivatives firms selling products based on the digital currency have also sprung up in recent years. Crypto Facilities was set up in the U. The platform pitches itself as a broker which specializes in bitcoin derivatives, and trades financial products like options and futures which are directly linked to the price of the cryptocurrency.
More broadly, the classification also now means it is more likely the CFTC could, under its market manipulation authority, police fraudulent activities on exchanges where bitcoins — and not just bitcoin derivatives — are traded.
However, the CFTC has suggested it is not particularly interested in going down that path, and in fact there may be some limits on its ability to do so without a specific connection to commodities derivatives markets. This leaves the primary impact of the enforcement action itself to be felt by companies like Coinflip, which offer bitcoin derivatives to users in the US. Using derivatives to stabilize value is awkward on a one-off basis, but commercialized and regularized through smart contracts, it gives holders the experience of owning bitcoins with a stable price, even when the market price for bitcoins continues to fluctuate.
Recall, though, that while cooperation with an investigation is sometimes a good strategy, willy-nilly and lawyer-less discussion with government investigators almost never is.
Still, this enforcement action suggests that, without something more flagrant, criminal punishment for these types of offenses is not especially likely. Bitcoin is now officially a commodity. Even small unregistered sellers of bitcoin derivatives are wise to make plans to deal with potential enforcement actions. Washington DC image via Shutterstock. This is not legal advice, and is not intended to establish an attorney-client relationship. You can reach Jared at jmarx hwglaw.
Before getting to that, though, keep in mind the importance of bitcoin derivatives themselves. Likewise, violation of any CFTC rule is, somewhat amazingly, punishable with jail time.
0 thoughts on “U.s. commodity futures trading commission bitcoin”