Commodity Futures Trading Commission is making a quick move to declare its jurisdiction to police scam in the cryptocurrency trading. Jack B. Weinstein, a Judge of the Eastern District of New York, favoured the CFTC and affirmed its definition of cryptocurrency as a commodity. A notice of supplemental-legal-authority was given to My Big Coin Pay Inc, which is a crypto-services company that got charged with deception and misuse of funds in January.
This ruling was basically the outcome of a distinct crypto fraud case that CFTC is pursuing against a crypto-trading-scheme known as CabbageTech. Mentioning from that ruling, the notice directs My Big Coin Pay that;
“Virtual currencies ‘fall well-within…the [Commodity Exchange Act’s] definition of commodities and the Commission has the standing to exercise its enforcement power over fraud related to virtual currencies sold in interstate commerce.”
The SEC (Securities and Exchange Commission), the IRS, and the CFTC, all have a different meaning of cryptocurrencies at this time and have selected them as securities, property, and commodities individually.
Now for My Big Coin Pay, the Commission asserts that the stable and related parties; Randall Crater and Mark Gillespie embezzled over $6 million from their clients, as well as by transferring funds of customers into their private accounts and later, spending their funds on purchasing their luxury goods and personal stuff.
Many novel cases have been also filed by the CFTF in the past months, which includes three linked to virtual-currency fraud. These cases were the first ones that were brought to the commission since it allowed the launch of bitcoin commodities contracts, the past month. The notice also revealed how CFTC is working hard to establish legitimate precedent and potentially provides a vision of how it will endure regulating the industry.