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Is bitcoin a currency or a commodity? As it turns out, the CFTC recently settled charges with a bitcoin shop that allowed investors gamblers?
Digital assets can serve several functions. Congress took this action after onion producers reported that price variations in the futures market had been adversely affecting the cash price of onions. The Commission's conclusion that in light of past abuses, the public now needs this minimal protection carries great weight. With the certified record of the informal rule-making proceeding before him, Judge Whitman Knapp of the United States District Court for the Southern District of New York enjoined the regulation that required segregation of customers' funds, but otherwise denied plaintiffs' motion and granted summary judgment for the Commission. The broker only works with PCI-certified international payment service providers. We hate spam - see our privacy policy. The October 8, notice took account of the possibility of heavy capital demands on dealers in London options, and invited suggestions of alternatives.
Given that the CFTC views bitcoin as a commodity, those actions place the cryptocurrency squarely inside of its own jurisdiction. The U. It was over a year ago that the IRS decided that bitcoin was property , and not some form of currency.
Now, the so-called cryptocurrency has achieved another mark of distinction by being designated a commodity by the Commodity Futures Trading Commission , or CFTC. Part of the effort to regulate the bitcoin market is to protect investors against dodgy dealing.
Read : The technology behind bitcoin is being used in surprising ways. In the Order, the CFTC for the first time finds that Bitcoin and other virtual currencies are properly defined as commodities.
The Order further finds that the 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 However, denoting bitcoin as a commodity has left some traditional commodity players perplexed. Risks surrounding the virtual money came to light more than a year ago when bitcoin-exchange platform Mt. Gox implosion. Those hallmarks include a stable market, fluctuation in price and the ability for the underlying asset to be delivered, among others.
Mark DeCambre is MarketWatch's markets editor. He is based in New York. Follow him on Twitter mdecambre.