Bitcoin Defined a Commodity Better for Online Gambling?

Published Sunday, September 20, 2015 -
Bitcoin Defined a Commodity Better for Online Gambling?

Bitcoin virtual currency use for online gambling transactions has made significant traction in the industry since its inception with a number of bumps along the road that sent mixed signals to the consumer.  The U.S. Commodity Futures Trading Commission has settled a few of the problems the Bitcoin currency has had with the definition of virtual currency and its relationship with the current bank associated system.

The CFTC announced recently that the crypto money is a commodity the same as copper, gas or lumber. The commission said in a statement, “In this order, the CFTC for the first time finds that bitcoin and other virtual currencies are properly defined as commodities.”

The designation became necessary when the CFTC charged San Francisco-based bitcoin exchange Coinflip Inc, with not complying with the Commodity Exchange Act (CEA) and the CFTC regulations. The CFTC maintained that Coinflip facilitated commodity options-related transactions.

The U.S. Commodity Futures Trading Commission said the firm operated online platform Derivabit which connected those interested in buying or selling bitcoin futures and contracts for the options. Aitan Goelman, Chief of CFTC’s Enforcement Division, commented on the designation in a statement, “While there is a lot of excitement surrounding bitcoin and other virtual currencies, innovation does not excuse those acting in this space from following the same rules applicable to all participants in the commodity derivatives markets,”

The designation by the Commission means that companies that plan to operate a trading platform for crypto coin derivatives or futures will now have to register as a swap execution facility or designated contract market. The consequence will bring the use of bitcoin which had the advantage of anonymity into a new light. Whether this rule will make the use of virtual currencies for online gambling more expensive or not remains to be seen.

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