CFTC Moves to Cement Authority Over Crypto Fraud Cases

CFTC Moves to Cement Authority Over Crypto Fraud Cases

The Commodity Futures Trading Commission is moving quickly to assert its jurisdiction to police fraud in the cryptocurrency industry.

Just two days after U.S. Judge Jack B. Weinstein of the Eastern District of New Yorkruled in favor of the CFTC, affirming its definition of cryptocurrency as a commodity, the regulator gave notice of "supplemental legal authority" to My Big Coin PayInc - a crypto services company it charged with fraud and misappropriation of funds in January.

Weinstein's ruling was the result of a separate fraud case the CFTC is pursuing against a crypto trading scheme called CabbageTech and its operator, Patrick Kerry McDonnell.

Quoting from that ruling, the notice advises My Big Coin Pay that "virtual currencies 'fall well-within...the [Commodity Exchange Act's] definition of 'commodities'" and the Commission "has standing to exercise its enforcement power over fraud related to virtual currencies sold in interstate commerce."

The CFTC, the Securities and Exchange Commission and the IRS all currently define cryptocurrencies differently and have designated them as commodities, securities and property, respectively.

As for My Big Coin Pay, the Commission alleges that the firm and associated parties Randall Crater and Mark Gillespie misappropriated more than $6 million from their customers, including by transferring customer funds into their personal accounts and subsequently spending the money on personal expenses and luxury goods.

The notice demonstrates that the CFTC's efforts to establish legal precedent are underway, and potentially provides insight into how it will continue to regulate the industry.

Law image via Shutterstock

12.03.2018 / 19:09 29
US Regulators Working Together to Combat Crypto Fraud, Says CFTCs Giancarlo US Regulators Working Together to
US regulators have begun to coordinate with their overseas counterparts to combat cryptocurrency fraud, Commodity Futures Trading Commission (CFTC)
Bitcoin and Cryptocurrencies Are Commodities, Federal Court Rules Bitcoin and Cryptocurrencies Are
Courts, financial regulators, legislators and governments around the world are struggling to fit bitcoin into their existing frameworks. Different
New York Federal Judge Rules That CFTC Can Regulate Cryptocurrencies As Commodities New York Federal Judge Rules That CFTC
A New York federal judge has upheld a fraud case against a crypto investment advice company, maintains that the CFTC can regulate crypto as a
US Judge Rules Cryptocurrencies are Commodities US Judge Rules Cryptocurrencies are
U.S. District Judge Jack Weinstein in Brooklyn ruled that the Commodity Futures Trading Commission(CFTC) hasstandingto regulate cryptocurrencies
US Judge Rules Cryptocurrencies Are Commodities in CFTC Case US Judge Rules Cryptocurrencies Are
A U.S. district judge has backed the U.S. Commodity Futures Trading Commission in defining cryptocurrencies as commodities. According to a Memorandum
US Federal Judge: Bitcoin and Cryptocurrency Are Commodities US Federal Judge: Bitcoin and
For the first time, a federal judge has upheld that Bitcoin and other cryptocurrencies are commodities and thus subject to regulation by the U.S.
Comments (0)
Add a comment
Comment on