CFTC Employees are now allowed to Trade Crypto

March 6, 2018

Upon first seeing this headline, my thoughts were, “uh oh, things are going to get a lot less productive over at the CFTC!” I remember my first few months of trading, it can be highly addictive!  The important thing here is that we got another layer of clarity to Bitcoin’s legal status. On February 5, 2018, the CFTC wrote a memo outlining the commodity classification for Cryptocurrencies. They stated its employees could trade crypto the same way they would gold or oil, with the exception that they can’t trade on margin, buy bitcoin futures, or use insider information. 

 

The crypto regulatory environment has been rather confusing as to what each government agency controls. If it’s a straight Cryptocurrency, it’s a commodity, and the CFTC has jurisdiction. If the Cryptocurrency is sold through an ICO and satisfies the Howey Test, it’s a Security, and the SEC has jurisdiction. If transactions involve the transmission of money, like a crypto exchange or a crypto ATM, the State regulators get jurisdiction, each imposing 52 different sets of poorly defined guidelines. FinCEN comes into play for the federal antimony laundering provisions, and lest we forget, the IRS reigns supreme, with taxing power over all property – be it a commodity or a security.

 

In that jumbled regulatory mess, the CFTC is one of the only organizations that has expressed a positive sentiment towards the crypto space. (There have been a few good states as well, we see you Wyoming!) The fact that the announcement was driven by an abundance of employee-requests paints the picture of Andreas Anatonopolous’s presence in the windy city, god bless his soul! He’s been advising the Chicago Mercantile Exchange & Chicago Board of Trade (The CME Group Inc.) in structuring the spot rates for a number of months now.  Lets send him over to Jay Clayton’s office next...

 

The CFTC’s Chairman, Mr. Giancarlo, presented himself as a friend to the community at the February 9th hearing before the U.S. senate. He compared the overall crypto market cap to that of McDonalds, in an effort to diminish all the attention and regulation under discussion. He also highlighted that this is the first time his children have expressed any interest in finance or savings, and certainly didn’t want to see any regulations that might squash the younger generations excitement. He also schooled the Senate on the meaning of HODL, said it’s what you do when Honey Badger takes us on another roller-coaster ride, you HOLD ON FOR DEAR LIFE! 

 

My best wishes go out to the newest class of crypto traders over at the CFTC! 

 

Thank you @IndelibleTrade for the beautiful artwork. If anyone wants to see more of his designs, check out: http://pepewisdom.com/18fEWgeCJSg85XgS99BPCgDaG8XoKw9iPP

 

Disclaimer: This is not legal advice, just my opinion. 

 

 

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