Cryptocurrencies are commodities and CFTC have oversight, says US judge

A closely-watched US court case has revealed that cryptocurrencies should be treated as commodities and that their policing should fall under the purview of the Commodity Futures Trading Commission (CFTC).

Federal judge Rya Zobel has ruled that the CFTC should have oversight of cryptocurrency fraud cases. This will allow the agency to proceed with a $6 million case against My Big Coin Pay Inc., which claimed to sell a gold-backed cryptocurrency and allegedly defrauded 28 investors.

The company’s lawyers had argued that the CFTC had no authority to pursue the case because My Big Coin was not a “tangible good nor a service on which future contracts are traded”, according to Reuters.

But Judge Zobel said that the cryptocurrency did fall under the broad definition of a commodity and ruled that because Bitcoin futures are now trading on American exchanges, the CFTC should continue to regulate on all cryptocurrencies in the US.

The New York Stock Exchange’s owner, Intercontinental Exchange, is due to debut the crypto investment platform Bakkt this year. Bakkt announced that it would build its service “upon the time-tested, regulated futures markets – which have advanced markets ranging from coffee to gold for hundreds of years.”

A 25th September tweet added that Bakkt would produce “physically delivered Bitcoin futures contracts”.

In July CFTC Commissioner Rostin Behnam warned that cryptocurrencies were part of a “technological revolution” that would “proliferate to every economy and every part of the planet.”