CFTC's Cryptocurrency Authority Backed By Fraud Suit Judge

Law360 (March 7, 2018, 8:51 PM EST) -- A New York federal judge ruled Tuesday that cryptocurrencies can be regulated by the Commodity Futures Trading Commission as commodities, rejecting a fraud defendant's argument that he and his cryptocurrency trading advice company are outside the commodities watchdog's jurisdiction.

U.S. District Judge Jack B. Weinstein reached the conclusion as part of an order denying Patrick K. McDonnell's bid to dismiss a CFTC complaint alleging that he and his company CabbageTech Corp. — which has done business under the name Coin Drop Markets — sold fraudulent cryptocurrency trading advice and investment services and then made off with customers' money.

Based on his...

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