Federal Judge Adopts CFTC Position That Cryptocurrencies Are Commodities

Key Points

• A New York federal judge held that virtual currencies are commodities within the meaning of the Commodity Exchange Act.
• This marks the first court decision to assess and to adopt the CFTC's position that virtual currencies are commodities.
• The court elaborated that the CFTC's authority to regulate virtual currencies as commodities does not preclude other agencies, such as the SEC, from exercising power where virtual currencies function differently than derivative commodities.
• This is one of the first cases testing the CFTC's ability to curb alleged fraud and manipulation in the virtual-currency "cash" or "spot" markets.

Last week, a New York federal judge held that virtual currencies are commodities that can be regulated by the Commodity Futures Trading Commission (CFTC), enjoining the defendants, an individual and an affiliated entity, from trading cryptocurrencies on their own or others' behalf or soliciting funds from others,