On March 6, 2018, Judge Jack B. Weinstein of the U.S. District Court for the Eastern District of New York ruled that virtual currencies are commodities under the Commodity Exchange Act (CEA) and therefore subject to the Commodity Futures Trading Commission’s (CFTC) anti-fraud and anti-manipulation enforcement authority.
Granting the CFTC’s request for a preliminary injunction against the defendants who allegedly engaged in deception and fraud involving virtual currency spot markets, Judge Weinstein noted that “[u]ntil Congress clarifies the matter,” the CFTC has “concurrent authority” along with other state and federal administrative agencies and civil and criminal courts over transactions in virtual currency.
In Commodity Futures Trading Commission v. McDonnell et al., the CFTC alleged that the defendants violated the CEA by operating a fraudulent scheme involving virtual currency trading and misappropriating investor funds.The primary issue before the court was whether the CFTC had standing to sue the defendants under the CEA.
The court held that the CFTC can pursue fraud and manipulation claims in virtual currency spot markets.
According to the court, virtual currencies are “‘goods’ exchanged in a market for a uniform quality and value.” As such, the court reasoned that they “fall well-within” the common definition of commodity as well as the CEA’s broad definition of commodity, which includes “all other goods and articles ... and all services, rights, and interests ... in which contracts for future delivery are presently or in the future dealt in.
New Asset Class
Not a Commodity
It is silly to believe Bitcoin is not a commodity. Let's not conflate whether something is a commodity with whether or not something should be regulated.
Silliness aside, it is absolutely absurd to believe Bitcoin will "make them all obsolete". When you dramatically overstate your case you look foolish in the process.
Back Below $9000
State-sponsored digital currencies are coming, across the board. It is debatable if Bitcoin survives, or it it does, what value is placed on it.
Mike "Mish" Shedlock