US lawmakers continue to wrestle with how to approach cryptocurrencies, as a federal judge says the likes of bitcoin can be treated as commodities by the CFTC, FinCEN says money transmitter rules apply to ICOs, and Wyoming’s state legislature clears a bill exempting some crypto assets from securities laws.
US District Judge Jack Weinstein has ruled that the CFTC had standing to bring a fraud lawsuit against New York resident Patrick McDonnell and his company Coin Drop Markets.
The CFTC, which has been saying that cryptocurrencies are commodities since 2015, brought the case against McDonnell and Coin Drop in January, accusing them of fraudulently offering customers trading advice. Customers did not receive the advice that they paid for and Coin Drop Markets did not register with the CFTC, says the watchdog, which can now proceed with its case.
Meanwhile, FinCEN (the Financial Crimes Enforcement Network) has published a letter which suggests says that developers and exchanges involved in ICO-derived token sales need to register as money transmitters and comply with relevant AML and KYC rules.
The Securities and Exchange Commission has also been cracking down on the fast-growing cryptocurrency and blockchain sector. According to the Wall Street Journal, the watchdog recently sent out “scores of subpoenas” to firms involved in the industry, with a particular focus on ICOs, many of which may have violated securities laws.
However, while regulatory interest in cryptocurrencies appears to be ramping up, one US state could take a more relaxed approach. Wyoming state legislature has passed a bill that would exempt “utility tokens” that are not clear investment vehicles from securities laws. The bill now heads to governor Matt Mead.