As per the Commodity Futures Trading Commission (CFTC), Bitcoin will now be classified as a commodity in the U.S. like oil and gold and oil. It has already started to push the unregulated firms down that are working as trade alternatives of the cryptocurrency.
The CFTC explained that it ordered bitcoin alternatives from trading platform Coinflip, and its CEO Francisco Riordan, to restrict trading as it’s not registered in accordance with the rules. Further CFTC said that it also filed, and then settled, charges against the San Francisco-based company.
It may indicate a problematic period for other unregistered bitcoin firms in the U.S. However, it showed that the cryptocurrency will now be considered under the scope of CFTC. The regulator lately said, “CFTC holds that bitcoin, as well as other cryptocurrencies, are a commodity taken under the commodity exchange act.”
Bitcoin is a virtual currency that proposes users to exchange online credits for services or goods. While there is not any central bank that allows them, bitcoins can be generated online via using a computer to accomplish complex tasks, a process called as mining.
Also, bitcoin exchanges, as well as wallet services, and other firms based on virtual currency have also increased in recent years. Crypto services were set up in the U.K. by previous bankers from Goldman Sachs, Morgan Stanley, Societe Generale, and BNP Paribas.
The platform represents itself as a broker that specializes in bitcoin alternatives and deals in financial products linked to the cryptocurrencies’ price. That’s why, it offers users to “go long” and claim that the price of bitcoin will increase, or “go short” and claim the price will decrease.
Technology activists, as well as economists, have been thinking about pigeoning the hole through bitcoin since it’s birth in 2009. In August 2013, the German Finance Ministry declared it as a “unit of account”, indicating that it is could be used for tax/trading applications in the country and could be considered as “private money.”