Bitcoin trading platforms in the United States may be in for more trouble in the coming days. The US regulators have claimed their first victim, Coinflip for not having proper registrations in place and reached a settlement too.
Coinflip, a San Francisco based bitcoin company involved in matching bitcoin buyers with sellers through its trading platform called Derivabit was booked by the US Commodity Futures Trading Commission for not having required permissions to offer bitcoin options which is now classified as commodities on the company’s platform.
There has been some ambiguity in the United States with respect to cryptocurrencies. Unlike most of the places, bitcoin is treated as both currency and commodity by different government departments. Now that the CFTC considers bitcoin as commodity, platforms dealing with bitcoin trading will have to register accordingly and comply with the laws that generally applies to swaps. It also means that bitcoin trading startups, no matter big or small will have to adhere to the rules that was so far applicable only to conventional commodity derivatives platforms.
Coinflip has not been the only one to face the regulators, there are other bitcoin trading companies and even individuals who have been booked by the Securities Exchange Commission for not having registered as brokers.
Since bitcoin gained popularity, various government agencies have been trying hard to exert their control over bitcoin. However, the decentralized nature of bitcoin has made it difficult for them at each step. There are laws passed in this regard by different aspects of bitcoin market opportunities. Some of these regulations have backfired, one among them is the well-known cryptocurrency regulation introduced few months ago in the State of New York called BitLicense. The compliance requirements for BitLicense has been so intensive that many crypto businesses decided to stop their operations in the State of New York instead of complying with a huge list of requirements.
According to Fortune’s report, Coinflip has reached a settlement with the CFTC without paying any penalties or admitting to any shortcomings on its part.