Bitcoin

It’s Official – Bitcoin Is A Commodity

The U.S. Commodity Futures Trading Commission (CFTC) just added a lot more weight to bitcoin by taking action to declare it as a “commodity,” much like gold and silver.

In an announcement, CFTC declared all cryptocurrencies as a commodity, which gives the agency the right to monitor and regulate business operations using virtual currencies for trading.

“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,” said CFTC Director of Enforcement Aitan Goelman in a press release.

CFTC’s announcement came as it allegedly found that Coinflip was not in the compliance with certain regulations. Coinflip ran an online platform called Derivabit, which offered clients the ability to trade or swap bitcoins without registering with CFTC as a swap execution facility (SEF).

The commission found that during the period of dispute, the online exchange offered to connect buyers and sellers of bitcoin option contracts.

“Beginning in March 2014, Coinflip advertised Derivabit as a risk management platform . . .that connects buyers and sellers of standardized bitcoin options and futures contracts. During this period, Coinflip designated numerous put and call options contracts as eligible for trading on the Derivabit platform. For these contracts, Coinflip listed bitcoin as the asset underlying the option and denominated the strike and delivery prices in U.S. dollars,” the CFTC filing said.

With the ongoing dispute, Derivabit’s operation would continue to remain suspended until it agrees with CFTC’s offer of settlement.

On a similar note, derivative exchange and clearinghouse LedgerX recently received temporary SEF approval to operate a bitcoin options exchange. The company was granted a temporary status to operate with its SEF registration as a derivative clearing organization on Sept. 29. 2014, the CoinTelegraph reported.

With its temporary registration in place, LedgerX might make it to be the first regulated clearing exchange in the market.

 

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