United States Judge: Bitcoin and Cryptocurrencies are Commodities
It is a fact that cryptocurrencies are treated as a medium of exchange in many regions of the world. But the U.S Commodities and Futures Trading Commission (CFTC) has said that virtual currencies are commodities and in a recent lawsuit filed against a crypto-related business, a New York district court has ruled in favor of the CFTC
Judge Jack Weinstein, from the district court in New York, has ruled that “virtual currencies can be regulated by CFTC as a commodity.” In the order written on March 6, the big wig stated that:
“Virtual currencies are ‘goods’ exchanged in a market for a uniform quality and value… They fall well within the common definition of ‘commodity.’”
According to the case file, at issue in the case was whether the regulatory body had enough rights to regulate cryptocurrencies as commodities, since there are no federal level laws governing the crypto industry. The other focus point was whether it was legally correct for the CFTC to “exercise its jurisdiction over fraud that is in no way connected to the sale of futures or derivative contracts.”
The presiding judge answered in the affirmative to both questions, meaning the CFTC was operating fully within the ambits of the law. Therefore, the case can be brought against the defendant. Weinstein promptly granted a preliminary injunction stopping the defendant from continuing his cryptocurrency business until the case was concluded.
“While there is a lot of excitement surrounding Bitcoin and other virtual currencies, innovation does not excuse those acting in this space from following the same rules applicable to all participants in the commodity derivatives markets.” The CFTC’s director of enforcement, Aitan Goelman, stated in 2015 when the Commission served the first cease and desist order to a firm offering bitcoin-related services.
Since that time the regulatory commission has been shutting down unregistered and scam virtual currency firm.
In January the CFTC sued McDonnell and his startup, CabbageTech for defrauding clients.
The defendant branded himself as an expert in crypto trading and that his expert crypto trading advice could yield over 300 percent gain for investors. After receiving cash and crypto from people interested in his services, he scammed them and shut down all his communication channels with clients.