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U.S. Court Cements Commodity Verdict On Cryptocurrency After Landmark Ruling

Wilma Woo | Oct 04, 2018 | 17:00

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A US court has formally dismissed an attempt to stop the country’s commodities regulator prosecuting an alleged cryptocurrency fraudster, ruling that such assets are commodities.

CFTC Can Legislate With Crypto

In a press release October 3, Senior Judge Rya W. Zobel of the U.S. District Court for the District of Massachusetts ruled in favor of the Commodity Futures Trading Commission (CFTC) in a case involving now-defunct cryptocurrency My Big Coin.

Part of an ongoing legal battle, lawyers for My Big Coin attempted to halt prosecution for misleading claims about its nature by claiming the CFTC had no jurisdiction over virtual currency.

The court disagreed, opening up the route for the CFTC to bring its case against the scheme, which has operated since 2014.

By extension, the release announces, the CFTC considers all cryptocurrencies to be commodities, extending claims earlier this year by fellow regulator the Securities and Exchange Commission (SEC) pertaining only to Bitcoin and Ethereum.

‘An Important Ruling’

“This is an important ruling that confirms the authority of the CFTC to investigate and combat fraud in the virtual currency markets,” CFTC director of enforcement James McDonald commented.

This ruling… recognizes the broad definition of commodity under the (Commodity Exchange Act), and also that the CFTC has the power to prosecute fraud with respect to commodities including virtual currencies.

The news buoyed cryptocurrency commentators, who on social media viewed the step towards a formal definition of all assets as “bullish.”

As Bitcoinist reported this week, CFTC chairman J. Christopher Giancarlo has also lent strength to the possibility of favorable regulation of cryptomarkets going forward, saying Bitcoin and others could “solve” some of the problems associated with fiat currency.

“I personally think cryptocurrencies are here to stay, I think there’s a future for them,” he told CNBC.

He added the agency, together with the SEC, would continue to be “real strong and hard against fraud manipulation.”

What do you think about the US court ruling? Let us know in the comments below! 

Images courtesy of Shutterstock, Bitcoinist archives.