The CFTC, Commodity Futures Trading Commission, is making fast moves to assert its jurisdiction in fraud cases in the cryptocurrency industry.
Two days after a Judge in the United States, Jack B. Weinstein, made his ruling in favor of the CFTC, the regulator issued a notice supplemental legal authority notice to a company that was charged with fraud in January. The ruling by the Judge affirmed CFTC’s definition of cryptocurrency. The company served with the notice by the CFTC is called My Big Coin Pay. It is a cryptocurrency service company.
The ruling by the Judge was as a result of a fraud case by the CFTC against CabbageTech, a trading scheme for cryptocurrency that some consider inappropriate.
The notice advised the company, My Big Coin Pay, on the issue of virtual currencies. It states that virtual currencies fall within the definition of commodities. It also states that the commission had full right to exercise its power over fraud related issues in the cryptocurrency world as long as they are sold within interstate commerce.
The Securities and Exchange Commission, the CFTC and the IRS define cryptocurrencies differently. While the CFTC defines cryptocurrency as a commodity, the Securities and Exchange Commission defines cryptocurrency as security while the IRS defines it as property.
Misappropriation Of Funds
The CFTC alleges that My Big Coin Pay misappropriated about $6 million generated from their customers. The accused parties, Mark Gillespie and Randall Crater transferred the funds into their accounts and spent it on luxury goods and personal expenses.
The Commission is thus making moves to establish a legal precedent regarding the case. The report also outlines some of the steps it is taking to make sure that such fraudulent activities do not occur in the future. The idea is to protect the public.