While cryptocurrencies hold great potential in the eyes of enthusiasts, the fact is that lawmakers and government officials often do not know what to make of them, and how to treat them in court.
A US federal judge ruled yesterday that virtual currencies like Bitcoin can be regulated as commodities by the U.S. Commodity Futures Trading Commission (CFTC), Reuters reported.
U.S. District Judge Jack Weinstein in Brooklyn ruled that the CFTC could file a fraud lawsuit against New Yorker Patrick McDonnell and his company Coin Drop Markets, allowing the case to go forward. The judge also barred McDonnell and Coin Drop Markets from engaging in commodity transactions.
Bitcoin has already been classed as a commodity in the US since 2015 by the CFTC, which is tasked with regulating commodity, futures and derivatives markets. The judge’s upholding of that determination only served to reinforce its standing. He said it was supported by the plain meaning of the word “commodity” and that the CFTC had broad leeway to interpret the federal law regulating commodities.
The lawsuit has been announced back in January, and the CFTC says that since around January 2017, McDonnell and his company fraudulently offered customers virtual currency trading advice. In fact, the agency said, the customers never received the advice they paid for, and that Coin Drop Markets was never registered with the CFTC.