The Commodities Futures Trading Commission (CFTC) in the United States has just published a primer on virtual currencies. This guide covers the basics of virtual currencies, the risks associated with these and the role of the CFTC in their regulation.
Crypto-currencies, commodities or securities ?
Daniel Gorfne, head of innovation at the CFTC, said during the release of the guide : “While the people in the world are trying to understand the ecosystem of virtual currency, we thought it was timely and important for our guide to explain this complex universe. The aim is to identify how the developments involve the CFTC, and highlight the risks that investors and users should review them carefully. “The guide also emphasises that the definition of a product in the” Commodities Exchanges Act ” is a broad one and covers physical goods, natural resources and the rates of interest or foreign exchange rates. In addition, the CFTC monitors the derivative contracts and its ability is activated when virtual currency is used in derivative contracts.
A decision pop-up from the CFTC
There has been much debate on the question of whether virtual currencies should be classified as a commodity or a security. As of 2015, the CFTC had issued the idea that Bitcoin was a commodity and would be subject to its jurisdiction. The SEC has recently asserted its own authority in taking action against the operators of the ICO. It was also found that some tokens of ICO may have the characteristics of a title. The CFTC states it, that the actual structure of the chip would determine whether the token is classified as a contract of security or derivative with an underlying product.
Source : Cointelegraph