Hunton Retail Law Resource

Bitcoin has received considerable media attention in recent months as its value soared to $20,000 in December 2017, then retreated to around $9,000 in February 2018, fueling growing speculation regarding its future. While some investors embrace bitcoin, many members of the general public struggle to understand it. And despite the interest in cryptocurrency by investors, as evidenced by the high market value of bitcoin (even after the recent drop in value), very few retailers and merchants accept cryptocurrency as a form of payment. Retailers and merchants appear to (wisely) be ...

Due to volatile and record-breaking valuations, cryptocurrencies and their underlying technology, blockchain, have been at the forefront of financial news headlines. Blockchain technology is, very simply, a decentralized digital ledger that records economic transactions in a way that cannot be copied or destroyed, therefore eliminating fraudulent or duplicative transactions. Bitcoin is perhaps the best known cryptocurrency, and for which blockchain technology was invented. Bitcoins are discovered through “mining,” a process whereby computers use processing power to solve difficult puzzles. The miner who finds the solution receives bitcoins, essentially digital tokens, as a reward. Unlike traditional currencies, bitcoin and other cryptocurrencies do not require a third party or central authority for its users to transfer value. 

On April 4, 2016, the Commodity Futures Trading Commission (“CFTC”) announced a $10 million whistleblower bounty, its largest to date.

Similar to a program administered by the Securities and Exchange Commission (“SEC”), CFTC whistleblowers are eligible for an award worth 10 to 30 percent of an enforcement penalty if they bring original information to the CFTC which leads to an enforcement action that nets more than $1 million in sanctions.

In a ruling of particular importance to the digital currency community, the US Commodity Futures Trading Commission (CFTC) for the first time has definitively ruled that Bitcoin and other digital currencies (also known as virtual currencies or cryptocurrencies) are commodities subject to the CFTC’s jurisdiction. Specifically, in an enforcement action announced on September 17, 2015, the CFTC issued an order against an online platform and its CEO for facilitating the trading of Bitcoin options contracts. We discuss some of the implications of this order below.

On August 4, 2014, the Office of the Comptroller of the Currency (the “OCC”) of the US Department of the Treasury issued new guidance outlining sound banking practices related to consumer debt sales to third-party debt buyers. The bulletin sets forth the OCC’s expectations for banks that engage in debt-sale arrangements and applies to all OCC-supervised banks.

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