U.S. Commodity Futures Trading Commission declares Bitcoin as commodity

The U.S. Commodity Futures Trading Commission (CFTC) has declared that Bitcoin and other virtual currencies are a commodity covered by the Commodity Exchange Act.

The decision came after CFTC issued its first action against an unregistered bitcoin options trading platform Coinflip, ordering the startup to cease operations and simultaneously settling the case.

Aitan Goelman, CFTC director of enforcement said, “While there is a lot of excitement surrounding bitcoin and other virtual currencies, innovation does not excuse those acting in this space from following the same rules applicable to all participants in the commodity derivatives markets.”

The press release further noted that under Section 4c of the CEA and Part 32 of the CFTC’s Regulations, commodity option transactions must either be conducted in compliance with provisions of the CEA or Regulations otherwise applicable to swaps, or conducted pursuant to Regulation 32.3, the “trade option” exemption.

The U.S. Commodity Futures Trading Commission is an independent agency of the US government created in 1975, that regulates futures and option markets.