With Order, CFTC Officially Deems Bitcoin a Regulated Commodity
Action against Coinflip establishes that virtual currencies and their derivatives must comply with Commodity Exchange Act.
The Order finds that, from in or about March 2014 to at least August 2014, Coinflip and its CEO Francisco Riordan operated an online facility named Derivabit, offering to connect buyers and sellers of Bitcoin option contracts.
As a result, the CFTC has determined that Bitcoin and other virtual currencies are properly defined as commodities, and further specifically found that Coinflip's activities related to commodity option transactions were not conducted in compliance with a provision of the CEA, or a provision of the regulations otherwise applicable to swaps, and were not conducted pursuant to the Regulation 32.3 “trade option” exemption.
“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," said Aitan Goelman, the CFTC’s director of enforcement, in a statement.
CFTC Registration — as either a swap execution facility (SEF) or designated contract market (DCM), or both — has proven a crucial issue for several nascent Bitcoin derivatives trading venues, which Waters explored in depth earlier this year.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: https://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@waterstechnology.com
More on Regulation
AI’s next gig: The rising cost of off-channel communications compliance
As the cost of analyzing communications increases, what tools can firms deploy to save time and money while avoiding penalties?
CAT on life support after appeals court ruling
Ahead of a comprehensive review promised by the SEC, lawyers believe that the recent overturn of the Consolidated Audit Trail’s funding order could herald its demise.
Euroclear readies upgrade to settlement efficiency platform
Euroclear, Taskize, and Meritsoft are working together to deliver real-time insights and resolution capabilities to users settling with any of Euroclear’s CSDs.
Messaging’s chameleon: The changing faces and use cases of ISO 20022
The standard is being enhanced beyond its core payments messaging function to be adopted for new business needs.
TT partners Thoma Bravo, Fitch launches GenAI solution, AI infrastructure woes, and more
The Waters Cooler: EquiLend acquires Trading Apps, Ultumus and BMLL partner for ETF data and analytics, and more in this week’s roundup.
CAT funding plan struck down by US appeals court
The 11th Circuit court ruled that the SEC had not established a sufficient precedent to pass the costs of the Consolidated Audit Trail on to broker-dealers.
T+1 for Europe: Crying wolf or real concerns?
Brown Brothers Harriman’s Adrian Whelan asks how prepared the investment industry is for the changes ahead, and if concerns about its implementation are justified.
Crackdown on FX vendors could raise costs for dealers
MTF designation could cost aggregators and EMSs $3m to set up and $1m in annual maintenance.
