Namely, the SEC views cryptocurrencies as securities while the CFTC treats them as commodities, and both watchdogs have attempted to secure their viewpoints in court.
As CFTC Commissioner Brian Quintenz explained to Bloomberg in October 2017, "Crypto-tokens offered in a presale can transform. They may start their life as a security regulated under the SEC from a capital-raising perspective but then at some point - maybe possibly quickly or even immediately - turn into a commodity." In February 2018, the agencies held a joint session on their roles in the crypto industry, where they mentioned they were willing to work together to create a regulatory framework.
Further, in May 2018, CFTC Commissioner Rostin Behnam delivered a speech that further stressed the increasing collaboration between his agency and the SEC:."I spoke about my position on the CFTC and the SEC efforts to harmonize rules. Given the large number of dually registered market participants and overlapping policy, there is a real opportunity for the CFTC and SEC to harmonize redundant rules and leave both market participants and regulators in a stronger position."
CFTC vs. crypto fraudstersOn Sept. 26, Judge Rya W. Zobel of the Massachusetts District Court denied a motion to dismiss a case against Randall Crater and his company My Big Coin Pay Inc. That secured yet another win for the CFTC's perspective that cryptocurrencies are commodities.
The CFTC argued that Crater's Nevada-based company My Big Coin Pay was a crypto scheme in which they offered the sale of a "Fully functioning" virtual currency named "My Big Coin".
The CFTC has proven that virtual commodities are already commoditiesAs mentioned above, it wasn't the first case when the CFTC proved that it could directly oversee the crypto market via the CEA. Importantly, Zobel referenced the preceding ruling in the case as a precedent.
According to the agency's claim, CDM's customers never received the financial advice they paid for, as well as the fact that CDM was never registered with the CFTC.Weinstein agreed with the CFTC that virtual currencies are commodities under the CEA, and the CFTC could take action against McDonnell and his company over virtual currency fraud.
More specifically, the judge upheld that determination by arguing that it was supported by the plain meaning of the word "Commodity" and that the CFTC had "Broad leeway" to interpret the federal law.
In August, the CFTC won the court order to permanently ban another crypto-related firm run by Patrick McDonnell called CabbageTech Corp. for "Bold and vicious fraud." Similar to the Massachusetts case, McDonnell argued that the CFTC did not have the authority to regulate his commercial operations.
Will the CFTC regulate more in the near future?Despite securing a couple of crucial wins in court, the CFTC still approaches crypto fraudsters on a case-by-case basis.
Precious Commodities: CFTC Shows Force Against Crypto Scammers, but Maintains 'Do No Harm' Approach
gepubliceerd op Sep 29, 2018
by Cointele | gepubliceerd op Coinage
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