A federal judge ruled that cryptocurrencies meet the definition of commodities within the regulatory framework of the US Commodities and Futures Trading Commission (CFTC).
The US CFTC filed a case against a technology entrepreneur Randall Crater and the company that was founded in January 2018. The regulators had put an allegation on the defendant that they carried out $6 million fraud against people who wanted to purchase the shady coin called “My Big Coin”. Alleged My Big Coin Pay Inc., manipulated investors by making their Digital Currency to sound more like Bitcoin (BTC) $6370.79 and what not, the company also claimed that it is backed by Gold.
Boston District Judge Rya Zobelruledon Wednesday that My Big Coin did, in fact, meet the definition of a commodity under the Commodity Exchange Act.
The judges reasoning was that coins like My Big Coin and Bitcoin can be, more or less, categorised as Virtual Currencies. She also argued that Bitcoin futures are currently trading on US exchanges and, by extension, CTFC oversight cover Virtual currencies including My Big Coin. During the Decision the Judge responded:
“That is sufficient, especially at the pleading stage, for plaintiff to allege that My Big Coin is a ‘commodity’ under the Act.”
SECURITIES VS COMMODITIES:
Cryptocurrency is a security or a commodity may still be a question, but it is broadly discussed. Different regulators have different approaches. The important aspect of cryptocurrencies is that, different cryptocurrencies will have prompt reactive regulations.
The Security Exchange Commission (SEC) has said that it doesn’t regard Bitcoin or Ethereum as security.
Another US judge from New York has ruled that it’s security laws can be applied in case which comprises two fraudent Initial Coin Offering (ICO). The judge stated:
“Simply labeling an investment opportunity as a ‘virtual currency’ or ‘cryptocurrency’ does not transform an investment contract — a security — into a currency.”
What do you think about this regulatory approach? Let us know in the comments.
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