In its first action against an unregistered bitcoin options trading platform, the Commodity Futures Trading Commission (CFTC) in the US has ruled that virtual currencies are a commodity and as such should come under the purview of the Commodity Exchange Act (CEA).
The self-regulatory body Thursday ordered Coinflip, trading under the name Derivabit, to wind up operations for failure to comply with the CEA and CFTC regulations.
Aitan Goelman, the CFTC’s director of enforcement, comments: “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.”
In its ruling, the CFTC defines 'commodity' to include "all services, rights and interests in which contracts for future delivery are presently or in the future dealt in".
Accepting that the definition is "broad", the regulatory agency nonetheless concludes that "bitcoin and other virtual currencies are encompassed in the definition and properly defined as commodities".