CFTC Reveals That The Federal Court Classifies Virtual Currencies As Commodities, Not Securities
The Commodity Futures Trading Commission (CFTC) brings a massive announcement for the cryptosphere. The Federal Court decided that digital currencies are commodities.
The Court also denied defendants’ motion to dismiss in the commodity fraud case that involves the virtual coin My Big Coin.
Back on September 26, Senior Judge Rya W. Zobel of the U.S. District Court for the District of Massachusetts entered an order holding that the CFTC is able to prosecute fraud which involves virtual currency and denying the defendants’ motion to dismiss the CFTC’s amended complaint.
James McDonald, CFTC Director of Enforcement, commented on the ruling:
“This is an important ruling that confirms the authority of the CFTC to investigate and combat fraud in the virtual currency markets. This ruling, like the one in McDonnell from Judge Weinstein in the Eastern District of New York, recognizes the broad definition of a commodity under the CEA, and also that the CFTC has the power to prosecute fraud concerning commodities including virtual currencies.”
He explained that “We will continue to police these markets in close coordination with our sister agencies.” So, here it is, cryptos are classified as commodities.
You can head here and read the summary of the order.
— CFTC (@CFTC) October 3, 2018
CFTC issues a Customer Advisory on the risks of virtual currencies
They aim to inform the public of all potential risks that are associated with investing or speculating in cryptos or the recently launched Bitcoin futures.
The CFTC also issued several more protection Fraud Advisories that provide the warning signs of fraud.
CFTC’s tweet that the Federal Court classified virtual currencies as commodities sparked a lot of debate on Twitter.
Someone also highlighted the importance of making the difference between commodities and securities, because it seems that by classifying cryptos as commodities, they’re off the hook regarding the “securities” classification.
You can read more about these two terms here.
Andreas Townsend Author
I am a technical writer, author and blogger since 2005. An industry watcher that stays on top of the latest features, extremely passionate about finance news and everything related to crypto.