1a(9) of the CEA defines commodity to include all services, rights, and interests in which contracts for future delivery are presently or in the future dealt. However, he suggested the ruling may have larger implications. The US Commodity Futures Trading Commission (cftc) has issued its first action against an unregistered bitcoin options trading platform, ordering the startup to cease operations and simultaneously settling the case. In its lawsuit, announced in January, the cftc said that since about January 2017, McDonnell and his company fraudulently offered customers virtual currency trading advice. Show chapters, virtual currencies like bitcoin can be regulated as commodities by the.S. Bitcoin derivatives and futures platforms must register as a swap execution facility or designated contract market. 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, stated Aitan Goelman, the cftcs director of enforcement. It said that McDonnell took down the company's website and stopped responding to customers.
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BitLicense, for example, will soldier on unaffected, as will other state regulators and. Support our journalists today. What does that determination mean for the bitcoin ecosystem and what does this new kind of enforcement action portend for the future? Click here to sign. The Securities and Exchange Commission sees Bitcoin as money. Using derivatives to stabilize value is awkward on a one-off basis, but commercialized and regularized through smart contracts, it gives holders the experience of owning bitcoins with a stable price, even when the market price for bitcoins continues to fluctuate. (For financial newbies, a financial derivative is essentially a contract to buy, sell, or pay, contingent upon the price of a something else.) Coinflip didnt do this and the result was this recent enforcement action. Francisco Riordan, Coinflip Chief Executive, represented himself in the case and believes the cftc settlement was fair. District Judge Jack Weinstein in Brooklyn ruled that the cftc had standing to bring a fraud lawsuit against New York resident Patrick McDonnell and his company Coin Drop Markets, allowing the case to go forward.
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