BOSTON—The U.S. Commodity Futures Trading Commission urged a federal judge to conclude that an obscure virtual currency called My Big Coin is a commodity subject to its oversight, saying it is no different than precious metals like gold.
U.S. Judge Rya Zobel in Boston questioned a CFTC lawyer about the extent the regulator had jurisdiction to pursue a lawsuit against the operators of what it contends was a $6-million virtual currency fraud scheme, Reuters reported.
That lawsuit, filed in January against technology entrepreneur Randall Crater and My Big Coin Pay Inc, is being closely watched by lawyers who say it could determine to what extent the CFTC can police cryptocurrency frauds, Reuters said.
Jonah McCarthy, the CFTC attorney, compared the virtual currency to gold and other precious metals as he argued that it amounted to a good that falls within the Commodity Exchange Act’s broad definition of commodities.
“It’s not a really complicated concept,” he said. “It’s just a digital alternative to something like gold.”
‘Beyond Their Authority’
But Katherine Cooper, a lawyer for Crater, said that because My Big Coin does not have future contracts trading on it, it is not a commodity that the CFTC could pursue a case over.
“In this case, I submit to you, your honor, that they gone way beyond the remit of their authority,” she said, according to Reuters.
Zobel questioned both sides about how virtual currencies work. She did not immediately rule on Crater’s motion to dismiss the case, but said she would “cheerfully dive into this.”
“I will try very hard to get you a fast decision,” she said, according to Reuters.