Bitcoin is now a commodity according to the Commodity Futures Trading Commission (CFTC). On Thursday the organization publicly stated it had settled with a Bitcoin exchange for trading option contracts after an enforcement case against a Bitcoin operator.
“In this order, the CFTC for the first time finds that Bitcoin and other virtual currencies are properly defined as commodities,” according to the press release. CFTC now has authority to oversee cryptocurrency futures and options. 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 CFTC’s director of enforcement.
The target of the charges, San Francisco based Coinflip, allegedly violated Section 4c of the CEA and Part 32 of the CFTC regulations. In other words, it never registered as a swap execution facility or designated contract market. Francisco Riordan, Coinflip Chief Executive, represented himself in the case and believes the CFTC settlement was fair.
“The definition of a ‘commodity’ is broad… Bitcoin and other virtual currencies are encompassed in the definition and properly defined as commodities,” the agency wrote.
So let’s get caught up.
And now, the CFTC views it as a commodity.
Images from Shutterstock and Wikimedia.