Date
16 November 2018
A US court has upheld a determination that cryptocurrencies can be deemed as commodities and be regulated as such. Photo: Reuters
A US court has upheld a determination that cryptocurrencies can be deemed as commodities and be regulated as such. Photo: Reuters

Virtual currencies are commodities, US judge rules

Virtual currencies can be regulated as commodities by the US Commodity Futures Trading Commission (CFTC), a federal judge ruled in New York Tuesday.

US District Judge Jack Weinstein in Brooklyn ruled that the CFTC had standing to bring a fraud lawsuit against New York resident Patrick McDonnell and his company Coin Drop Markets, allowing the case to go forward, Reuters reports.

Weinstein also entered a preliminary injunction barring McDonnell and Coin Drop Markets from engaging in commodity transactions, the report said.

The CFTC, which is tasked with regulating commodity, futures and derivatives markets, first determined that virtual currencies are commodities in 2015.

Weinstein upheld that determination on Tuesday, saying it was supported by the plain meaning of the word “commodity” and that the CFTC has broad leeway to interpret the federal law regulating commodities.

In its lawsuit, announced in January, the CFTC said that since about January 2017, McDonnell and his company fraudulently offered customers virtual currency trading advice.

According to the agency, the customers, in fact, never received the advice they paid for, and that Coin Drop Markets was never registered with the CFTC.

It said that McDonnell took down the company’s website and stopped responding to customers.

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