The CFTC has asserted that Bitcoin is, and other virtual currencies may be, commodities under the Commodity Exchange Act. As such, pursuant to Section 2(c)(2)(D) of such Act, “off exchange” financed retail transactions in virtual currency are prohibited unless an exception applies. One exception found in Section 2(c)(2)(D)(ii)(III)(aa) provides, in relevant part, that such a prohibition shall not apply to a “contract of sale that results in actual delivery [of the commodity] within 28 days.” On December 15, 2017 the CFTC issued a proposed interpretation and requested comments on the meaning of “actual delivery” in the context of virtual currencies and retail financed transactions.
This GT Advisory discusses whether secured financing can be maintained while satisfying the CFTC’s interpretation of “actual delivery”. Moreover, the advisory considers whether the “actual delivery exception” is available for retail finance transactions that are not “contracts of sale.”
To read the full GT Advisory, please click here.