Confusion reigns: are cryptocurrencies commodities or securities?

Author: Olly Jackson | Published: 14 Mar 2018

A US district court decision that cryptocurrencies can be regulated as commodities has left exchanges in no doubt that they cannot continue to exist separately from conventional investment platforms. Importantly, it’s pushed some digital currencies officially into the Commodity Futures Trading Commission’s (CFTC) jurisdiction.

The case gave the green light to the CFTC that it could go forward and investigate Coin Drop Markets and New York resident Patrick McDonnell on fraud charges involving the trade of virtual currencies bitcoin and litecoin. The CFTC said that the company fraudulently offered customers cryptocurrency trading advice because they paid for advice they never received. The regulator also said the company was not registered with them. Investors will not need to do anything differently as a result of the judgment but increasing regulatory oversight could see a rise in background checks from exchanges and retail investors potentially excluded from initial coin offerings (ICOs) in the long term....