CFTC has declared that Federal Court agrees with the agency’s ruling of virtual currencies are commodities. So, does this mean it ends the security and commodity debate for all the cryptocurrencies?
Cryptocurrencies are Commodities, CFTC Asserts
The US Commodity Futures Trading Commission (CFTC) announced on Twitter that Federal Court finds virtual currencies as commodities.
According to the official report on CFTC website, on September 26, 2018, the Senior Judge Rya W. Zobel of the US District Court for the District of Massachusetts declared that CFTC has the power to prosecute fraud relating to virtual currencies.
In response, CFTC Director of Enforcement James McDonald commented:
“This is an important ruling that confirms the authority of the CFTC to investigate and combat fraud in the virtual currency markets. This ruling, like the one in McDonnell from Judge Weinstein in the Eastern District of New York, recognizes the broad definition of commodity under the CEA, and also that the CFTC has the power to prosecute fraud with respect to commodities including virtual currencies. We will continue to police these markets in close coordination with our sister agencies.”
Does it mean security and commodity debate is Over?
The court basically agreed with the CFTC’s argument for My Big Coin (MBC) virtual currency being a commodity under the Commodity Exchange Act (CEA). It has covered that MBC “is a virtual currency and it is undisputed that there is futures trading in virtual currencies (specifically involving Bitcoin).”
So, does this mean the security debate has come to an end? Well, this certainly does for Bitcoin as one Twitter user states, “This should be super bullish”, further commenting, “The fact they are commodities and not securities.”
People are surely bullish as a Redditor comments in part,
“How is this General-News and not like, the possible Gravity Altering news it could be?”
However, SEC is still in the picture as well as another Redditor shares, “…although the CFTC declares virtual currency a commodity, it could still be considered by the SEC as security. So it didn’t clear out the implications of SEC decisions, it only gave CFTC the authority to bring cases to court as well.”
Also, there are hundreds of coins in the crypto market serving different purposes. Though this can’t be seen as a blanket statement, it just might set the precedence for a further ruling by authorities in the future.