The District Judge of the USA supported the decision of the Commodity Futures Trading Commission (CFTC) to define crypto-currencies as commodities.
According to the memorandum and order of the CFTC case against the crypto currency businessman Patrick Kerry McDonnell, Judge Jack Weinstein of the New York District Court ruled that “the CFTC can regulate virtual currencies as commodities.”
The main issues of the court case were whether the CFTC has the authority to regulate crypto-currencies as commodities in the absence of relevant federal laws, and whether the law allows, as the document says, “to exercise CFTC jurisdiction over fraud that is not directly related to the sale futures and derivative contracts “.
In both cases, Weinstein answered in the affirmative, and this means that an accusation can be brought against the defendant.
In addition, the judge issued a preliminary judicial order, which prohibits the respondent from making crypto-currency investments during the conduct of business.
CFTC began to consider crypto currency as an exchange commodity in 2015. This decision led to the fact that recently the department began to deal with some crypto-currency companies, which it suspects of fraud.
In particular, in one of several lawsuits filed in January this year, the CFTC accuses McDonnell and his company CabbageTech of misappropriating the digital assets of its customers.
The agency claims that McDonnell appeared to be an expert on crypto-investment, giving recommendations on financial investments with very attractive yields. However, shortly after customers sent him money and crypto-currency tokens, the defendant, as claimed in the lawsuit, appropriated these funds to himself.
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