The U.S. Commodity Futures Trading Commission (CFTC) has published a proposed interpretation of how it will deem that a cryptocurrency has been “delivered” from a buyer to a seller.
The agency – which more than two years ago announced that it would regulate bitcoin as a kind of commodity – gave two examples today of how a cryptocurrency would be considered “delivered” in the context of its rules.
As late as October, the agency said that it was still weighing the issue in light of the prevailing lack of clarity since 2015. The process was, perhaps, triggered in part by a $75,000 fine that was issued to digital currency exchange Bitfinex and the subsequent petition from U.S. law firm Steptoe & Johnson LLP calling for a more concrete definition.
Now, the CFTC is taking the first steps toward publicly clarifying how it would define a “delivery,” which the agency said back in October was a complex issue given the wholly digital nature of cryptocurrencies.
According to the CFTC, the two factors which determine that a delivery has taken place are:
“(1) a customer having the ability to: (i) take possession and control of the entire quantity of the commodity, whether it was purchased on margin, or using leverage, or any other financing arrangement, and (ii) use it freely in commerce (both within and away from any particular platform) no later than 28 days from the date of the transaction; and
(2) the offeror and counterparty seller (including any of their respective affiliates or other persons acting in concert with the offeror or counterparty seller on a similar basis) not retaining any interest in or control over any of the commodity purchased on margin, leverage, or other financing arrangement at the expiration of 28 days from the date of the transaction.”
Per the CFTC, the proposed interpretation isn’t final and is subject to a 90-day public comment period, which begins when the interpretation is formally published in the Federal Register.