US judge: All crypto is a commodity
My Big Coin was once a rising cryptocurrency. However, the US Commodity Futures Trading Commission (CFTC) stepped in and shut it down, accusing it of violating federal regulations. Not ready to go down without a fight, the company's founders took the CFTC to court and argued that the CFTC had no jurisdiction over their operations. The courts listened to both sides of the debate and have now ruled in favor of the CFTC, adding that all cryptocurrencies are commodities.
According to a press release by the CFTC from two days ago, Senior Judge Rya W. Zobel, a judge with the US District Court for the District of Massachusetts, determined that the commission has the authority to prosecute companies involved with digital currencies for fraud. The CFTC explained, "[T]he Court held that the CFTC had sufficiently alleged that the particular virtual currency at issue, My Big Coin (MBC), was a commodity under the Commodity Exchange Act (CEA) because the CFTC alleged that MBC 'is a virtual currency and it is undisputed that there is futures trading in virtual currencies (specifically involving Bitcoin).' According to the Court, the term 'commodity' 'includes a host of specifically enumerated agricultural products as well as ‘all other goods and articles . . . and all services rights and interests . . . in which contracts for future delivery are presently or in the future dealt in.'"
The ruling echoes statements made previously by the Securities and Exchange Commission (SEC), which had determined that both Bitcoin and Ethereum were commodities. However, the SEC has yet to offer an opinion over cryptocurrencies as a whole.
The CFTC is amenable to cryptocurrencies, as repeatedly evidenced by comments made by its chairman, J. Christopher Giancarlo. He told CNBC this week, “I personally think cryptocurrencies are here to stay, I think there’s a future for them." However, Giancarlo points out that his commision, as well as the SEC, will continue to clamp down on fraud and manipulation in the industry.