New Ruling Defines Bitcoin As A Commodity In The US

The Commodity Futures Trading Commission has cracked down on California-based startup Coinflip Inc. for conducting business without registering with the agency or meeting the criteria to qualify for an exemption.

On Thursday, the Commission issued a statement saying that it had filed and settled the charges against Coinflip, a move which will have far reaching consequences for the cryptocurrency industry as a whole.

Defined As A Commodity

The CFTC statement went further to say that "Bitcoin and other virtual currencies are properly defined as commodities." This ruling is the first time traders have seen a decisive release that classifies the crytpocurrency as a commodity, a topic that has been hotly debated. Some argue that bitcoin should be governed under the Securities and Exchange Commission as a security, but this press release from the CFTC has clearly outlined its jurisdiction over cryptocurrencies.

Related Link: Bitcoin's Image As A Tool For Criminals May Not Be Far-Fetched

What's Next?

The ruling will likely prompt other exchanges that have not registered with the CFTC to reclassify their organizations in order to comply with the new regulations. From now on, any bitcoin startup that wants to operate a trading platform will have to do so as a registered swap execution market. The ruling also puts to bed any arguments that bitcoin should be classed as a security, something many in the bitcoin community may be unhappy about.

However, others believe that the ruling is a positive step forward as it provides new businesses with a clear picture of where they fit in with US regulators.