The regulation of Bitcoin to keep pace with its fast growth has been very frequent recently. Countries such as Iran and Belarus have monitored and analyzed its growth, expecting their next move to be a regulation of the cryptocurrency. The latest development of bitcoin regulation is an American agency considering its regulation. The move was motivated by the fast growth of the cryptocurrency breaking every chain of doubts and jumping the unexpected tallest hurdles.
The CFTC Proposes the Regulation of Bitcoin Trading
The Commodity Future Trading Commission has considered the regulation of Bitcoin trading to be in line with any other commodity. The Regulation seeks to ensure that the buyers of the digital currency can take a physical control of it within 28 days. The company which is well known in the field of trade has a similar regulation applying to commodities such as wheat, oil, and gold.
Traders and exchanges have been entangled by the rule to deliver physical commodities.
Bitcoin, as a decentralized currency that runs on the Blockchain, cannot be physically delivered; this has resulted in a great confusion.
CFTC announced that traders who do not deliver physical commodities within the required days will have their transactions being recognized as a future contract. This is a headache to traders who borrowed or run their trade on a short-term loan. CFTC seeks to ensure that virtual currencies that are bought should be controlled within a month of purchase.
The Bitcoin Price Rise Is Partly Due To CFTC Decision
Bitcoin value has raised so much in 2017 and a lot of people have attributed the rise to different reasons; some based on opinions and some based on facts. The bitcoin price jumped 10 percent alone in 34 hours to reach $19000 today.
The cause of the abnormal rise has partly been attributed to the decision of the CFTC to allow bitcoin futures to begin trading on its exchanges. It was also linked to CBOE launching Bitcoin future. Since the start of the year, bitcoin has posed a whoop Return Of over 900 percent. A trader confessed that the rise of the bitcoin price is the biggest she has seen in over 40 years of working in the financial sector.
The regulator said he will allow CME contract and CBOE future to start trading. These will likely push the price up since it has been estimated that the buyers are more than the sellers in the future markets.
It has been reported that regulators in the US, Singapore, Japan, and China are considering some measurements to control the growth of the digital currency.
Bitcoin has jumped 82 percent in December and over 1700 percent in 2017. The percentage will likely increase at the end of the year, and that is what Bitcoin investors are looking for.
CFTC being part of the rise of the bitcoin price makes it quite confusing whether bitcoin is actually a bubble as they claim because bubble always burst. If the company will continue to run and ensure a safe trade in bitcoin, the price will continue to rise and leave people in regret for not believing in it.
Few Platforms Sanctioned For Failure to Comply
The CFTC has seen to it that all rules and regulations are respected, and the failure to comply leads to a sanction. One of the popular platforms known as Bitfinex was sanctioned by the CFTC for holding the digital coins of buyers for more than the required time frame. According to the CFTC, they “held the purchased Bitcoins in bitcoin deposit wallets that it owned and controlled.”
Even though Bitfinex never agreed to the allegation, they agreed to pay $75,000 as a fine imposed. Companies, such as the CME has planned to offer cash-settled bitcoin future contracts. The CFTC has permitted them to operate under the condition that they will not flout the rules of the platform. Sanctioning the Bitfinex has led to a lot of questions concerning their view on Bitcoin delivery as confirmed by CFTC.
CFTC filed an Order filing and simultaneously settling charges on the Hong Kong-based Bitfinex for multiple reasons. The benefit was also sanctioned or fine for allowing users to borrow money on the platform to trade bitcoin on leveraged, margined, or financed basis.