Regulators Grappling
Regulators and government ethics lawyers are grappling with a number of tricky questions, including whether the coins are commodities, currencies or securities. Another potential issue is whether they are akin to an investment or more like a pile of cash in a drawer.
“Logically it makes sense to apply the same standard they apply to Bitcoin as they apply to other commodities,” said Kathleen Clark, a professor at Washington University School of Law. While digital currencies may be “newfangled,” the CFTC’s “ethics standards seem to be general enough to cover it.”
However, Richard Painter who specializes in securities law and was a White House ethics lawyer under President George W. Bush, said that cryptocurrencies seem to be more like futures than physical commodities.
While most CFTC employees aren’t likely to trade barrels of oil or bushels of wheat, partly because they could need a warehouse to store them, digital coins don’t present that problem.
‘Looks Terrible’
Also, regulatory decisions can have an impact on the underlying markets. One major example: The price of Bitcoin jumped 13 percent on Dec. 1, the day of the CFTC’s announcement that it was allowing Bitcoin futures.
The CFTC should be trying to regulate digital tokens, not allowing its workers to speculate on them, added Painter, a professor at University of Minnesota Law School. “This just looks terrible.”
This article was provided by Bloomberg News.