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September 18, 2015

US regulator brands Bitcoin a commodity

The US Commodity Futures Trading Commission has branded Bitcoin a commodity, like oil.

By Charlotte Henry

Bitcoin is now officially a commodity, according to the Commodity Futures Trading Commission (CFTC).

The CFTC regulator has now asserted its authority to regulate Bitcoin, having filed and settled charges against Bitcoin exchange Derivabit, which was run by Coin Flip and Riordan.

The exchange was selling derivatives in Bitcoin, and the regulator said in a press release that the CFTC for the first time finds that Bitcoin and other virtual currencies are properly defined as commodities.

It throws into question the much prized annonymity of the cryptocurrency. Many Bitcoins users were attracted to it as they felt it was outside the reaches of the law.

Aitan Goelman, the CFTC’s Director of Enforcement, commented: “While there is a lot of excitement surrounding Bitcoin and other virtual currencies, innovation does not excuse those acting in this space from following the same rules applicable to all participants in the commodity derivatives markets.”

Bitcoin’s new status means that in regulatory terms it is treated on the same basis as items such as oil.

It comes shortly aftert the former chief of bankrupt Bitcoin exchange Mt. Gox who faced re-arrest in August. The CFTC will be hoping that the this regulatory development will help avoid a repeat of that collapse.

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