Federal Court: Bitcoin is a Commodity
March 7, 2018
judge has ruled that Bitcoin can be regulated as commodity. The
Honorable Jack B. Weinstein of the U.S. District Court for the Eastern
District of New York entered a Preliminary Injunction Order against
Defendants Patrick K. McDonnell and CabbageTech, Corp. d/b/a Coin Drop
The Court’s decision stems from the
CFTC’s January 18, 2018 Complaint charging Defendants with fraud and
misappropriation in connection with purchases and trading of the virtual
currencies Bitcoin and Litecoin.
Following a hearing on March 6, 2018, Judge Weinstein found that the
CFTC had shown a reasonable likelihood that Defendants will continue to
violate the Commodity Exchange Act (CEA). The Court’s Order prohibits
the Defendants from engaging in fraud in violation the CEA, requires
Defendants to preserve books and records, and requires Defendants to
provide expedited discovery.
its continuing litigation, the CFTC seeks, among other relief, a
permanent injunction against future violations of federal commodities
laws, restitution to defrauded customers, disgorgement of benefits from
violations of the Commodity Exchange Act and CFTC Regulations, civil
monetary penalties, and trading bans, as charged.
This case is brought in connection with the CFTC Division of Enforcement
Virtual Currency Task Force. The staff members responsible for this case
are Christopher Giglio, Alejandra de Urioste, Gates S. Hurand, David
Oakland, K. Brent Tomer, Lenel Hickson, Jr., and Manal M. Sultan.