This post builds upon an idea presented in Part 4 of current series of posts on considerations for investment funds and advisers related to cryptocurrency derivatives.

In particular, this post provides additional perspectives on the relationship of leverage, margin, and financing to two commodity interests: “retail commodity transactions” and a “swaps”.  We decided to present these comments separate from the current multi-part series on cryptocurrency derivatives, since the topic may appeal to a broader audience than funds and advisers.

This post was co-authored with Michael Selig, an associate attorney in the New York office of Perkins Coie.


Continue Reading Swaps and Retail Commodity Transactions (Leverage, Margin or Financing: Will We Know It When We See It or Only After It Has Been Identified As Such?)

On June 2nd, the U.S. Commodity Futures Trading Commission (the “CFTC”) announced an enforcement order and settlement with BFXNA Inc. d/b/a Bitfinex, an online platform for exchanging and trading cryptocurrencies (the “Platform”).  This posting will summarize that order with the goal of helping our readers make sense of the current state of the law with respect to the CFTC’s regulation of bitcoin and other cryptocurrencies.
Continue Reading Making Sense of the CFTC’s Enforcement Order and Settlement with Bitfinex

On September 24th, the U.S. Commodity Futures Trading Commission (CFTC) settled charges against TeraExchange LLC, a provisionally registered bitcoin swap execution facility (SEF).  The charges stem from a non-deliverable forward (“NDF”) contract based on the relative value of the U.S. Dollar and Bitcoin (the Bitcoin swap) executed over that SEF.

Background: Forwards and NDFs

A forward contract is an agreement between one party (the “Buyer”) and another party (the “Seller”) whereby the Buyer agrees to purchase something in the future from the Seller for a price that is agreed to
Continue Reading 3…The Number of Weeks in a Row for Bitcoin Related CFTC Guidance…CFTC Settles With Bitcoin SEF Over Wash Sales / Prearranged Trading