Bitcoin Is Now A Commodity, Says The CFTC
The U.S. Commodity Futures Trading Commission (CFTC) has recently made it known that it now recognizes the virtual currency Bitcoin as a commodity, along with oil and gold. Bitcoin and other virtual currencies are, in fact, recognized as a commodity under the Commodity Exchange Act.
This recognition was also made very clear when CFTC announced that it issued an Order filing and at the same time, reached a settlement with Coinflip, Inc. with regards to charges that the company had allegedly offered Bitcoin options illegally. Moreover, the said company also allegedly operated a facility for trading and processing saw without registering the facility first.
The charges were actually brought up against Coinflip, Inc. and its founder, controlling person and chief executive officer, Francisco Riordan. Moreover, the settlement states that Riordan was actually never registered with the Commission.
Meanwhile, Coinflip Inc.’s illegal Bitcoin activity started in March 2014 when it facilitated the buying and selling of Bitcoin options and future contracts on the company’s “risk management platform” known as Derivabit. On derivabit.com, a customer can readily register as user and deposit Bitcoin into an account with the user’s name.
Derivabit reportedly had 400 users during the period examined by the CFTC. These users can then post bids or offers for designated options contract. Premiums and payments of settlement for option contracts were then paid using Bitcoin. Coinflip would confirm the bid or offer through the website. Moreover, Riordan was in complete control of the Derivabit platform.
CFTC’s order means that Coinflip and Riordan must cease and desist from further violations when it comes to illegally offering Bitcoin options and using an unregistered facility for trading or processing of swaps. Moreover, CFTC reports that the company has been cooperating with the CFTC’s Division of Enforcement’s investigation.