Feds Settle Debut Bitcoin Regulation Case

     (CN) – Derivabit, an unregistered bitcoin operator with 400 users, and its chief executive settled claims that it broke federal regulations on Thursday, ending what the Commodity Futures Trading Commission described as an unprecedented action.
     Owned by the Delaware corporation Coinflip, Derivabit billed itself as a “risk-management platform” connecting “buyers and sellers of standardized bitcoin options and futures contracts.” It operated between March and August 2014.
     Neither the company nor its CEO Francisco Riordan was registered with the commission.
     In a 7-page opinion, the commission held for the first time that bitcoins and other virtual currencies are covered by the Commodity Exchange Act.
     “While there is a lot of excitement surrounding bitcoin and other virtual currencies, innovation does not excuse those acting in this space from following the same rules applicable to all participants in the commodity derivatives markets,” the commission’s enforcement director Aitan Goelman said in a statement.
     Under the settlement, Derivabit agreed to stop violating the Commodity Exchange Act and other commission regulations.

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