US Judge Rules Virtual Currencies Like Bitcoin As Commodities
A US federal judge passed a ruling on Tuesday stating that Virtual Currencies such as Bitcoins can be regulated by the U.S. Commodity Futures Trading Commission in a manner similar to that of commodities, according to CNBC
Jack Weinstein, the U.S. District Judge in Brooklyn emphasized upon the point that this shall be of great help to CFTC in proceeding with the fraud lawsuit filed against New York resident Patrick McDonnell and his company Coin Drop Markets. A preliminary injunction was also set by Weinstein who barred both McDonnell and his company from entering into commodity market transactions as of now. McDonnell declined to comment on the court’s ruling against him.
CFTC imparted the tag of commodities to crypto assets back in 2015. The determination on Tuesday was upheld by Weinstein who revealed that it was supported by the simple meaning of the term “commodity” and that CFTC had enough freedom in interpreting the intricacies of federal law regulating commodities. CFTC, which monitors and regulates the functioning of futures, commodity and derivatives market announced in January that McDonnell along with his company has been fraudulently offering cryptocurrency trading advice to its customers since January 2017.
But in reality, the customers never received any advice in exchange of the payments made by them. Neither was Coin Drop Markets ever registered with the CFTC. Gradually the website was taken down by McDonnell and customer queries were left unanswered.
Countries around the world are pressing upon the launch of cryptocurrency regulation but it still has a long way to go before becoming a hard-hitting reality. No laws had yet been passed by Congress for directly addressing the issue. However, both Securities and Exchange Commission and CFTC have been warned to be braced for combating threats of fraud taking shape in the market for virtual tokens.
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