Cryptos As Commodities? US Judge Think So!
A federal judge in the US ruled that cryptocurrencies meet the definition of commodities, as its previously written on the US Commodities and Futures Trading Commission (CFTC).
CFTC previously filed a lawsuit against entrepreneur Randall Carter and it’s newly formed company. The regulator alleged that the defendant carried out $6 million fraud against the investor who wanted to buy his digital currency called My Big Coin.
Carter and his friends allegedly promoted their product as a form of Bitcoin and for more, they said their currency is backed by gold.
The judge has decided Bitcoin and My Big Coin can be more or less categorized as virtual currencies. They said:
That is sufficient, especially at the pleading stage, for plaintiff to allege that My Big Coin is a ‘commodity’ under the Act.
We have seen lots of discussions surrounding cryptocurrencies and their qualifications in the US so far. Many argued that it should regulate as securities but also there are other people who briefly think it’s a commodity and it seems the federal judge favors the latter. Additionally, there are lots of people who think each cryptocurrency difffers from the others and therefore each one of them needs to be treated separately.
Meanwhile, The Securities and Exchange Commission (SEC) views Bitcoin and Ethereum not a security.
Earlier this month, another US judge ruled that in the case against two fraud ICO’s that securities laws can be applied to similar cases. They noted:
Simply labeling an investment opportunity as a ‘virtual currency’ or ‘cryptocurrency’ does not transform an investment contract — a security — into a currency.
It looks like we’ll see this discussion repeatedly in the near future.