The Commodity Futures Trading Commission (#CFTC) filed a federal civil enforcement action in the U.S. District Court for the Eastern District of New York against Patrick K. McDonnell and CabbageTech, Corp., doing business as Coin Drop Markets (CDM) charging them with fraud and misappropriation in connection with purchases and trading of Bitcoin and Litecoin.

James McDonald, the CFTC’s Director of Enforcement, commented:

“This action is among the latest examples of the CFTC’s continuing commitment to act aggressively and assertively to root out fraud and bad actors involved in virtual currencies. As alleged, the Defendants here preyed on customers interested in Bitcoin and Litecoin, promising them the opportunity to get the inside scoop on the next new thing and to benefit from the trading acumen of a supposed expert. In reality, as alleged, customers only bought into the Defendants’ fraudulent scheme. We will continue to work hard to identify and remove bad actors from these markets.” https://goo.gl/AT2X3p

Yesterday a District Judge in Brooklyn, New York ruled that cryptocurrencies can be regulated as commodities by the CFTC. CFTC had determined in 2015 that digital currencies should be treated as commodities and the District Judge upheld that determination saying that the meaning of the word “commodity” supports it.

As London is the second most influential global financial centre, there is an urgent need to clarify how trading in cryptocurrencies in London is regulate before cryptocurrency fraud increases. https://goo.gl/3Vm4tY