- Bitcoin on Wednesday fell more than 8%, its biggest one-day drop in a month.
- The world’s largest cryptocurrency dropped following a report by the Commodity Futures Trading Commission that raised fears about future regulations.
- Bitcoin recently sold off on reports of tighter regulation in China but quickly rebounded to an all-time high.
The Commodity Futures Trading Commission (CFTC) has revealed it may consider tokens issued through initial coin offerings (ICOs) as commodities.
A publication released today by LabCFTC, a fintech initiative within the US regulator, covers the basics of the technology as well as a number of use cases. However, it also highlights the CFTC’s existing regulatory posture toward cryptocurrencies – back in 2015, the agency said that it would classify bitcoin and other cryptographic assets as commodities.
Notably, the document includes comments on recent Securities and Exchange Commission (SEC) statements around ICOs. In July, the agency said that blockchain-based tokens sold through the funding model could fall under the federal definition of a security, thus triggering a host of regulatory implications reports Coindesk.
Bitcoin fell as much as 8.4 percent, its biggest loss in almost a month, to as low as $5,109.
The U.S. Securities and Exchange Commission has already said tokens from some ICOs can be securities under its oversight. “There is no inconsistency between the SEC’s analysis and the CFTC’s determination” from 2015 that virtual currencies are commodities, the CFTC said.
If September’s price plunge is any guide, losses on bets that bitcoin will fall within U.S. regulatory jurisdiction could be short lived. Bitcoin was quick to shrug off China’s move to tighten its grip on trading, extending an eight-fold increase over the past year to a record high of $5,866 on Oct. 13 reports Bloomberg.
Support looms around the $5,000 level and we’ll be watching for a test, as the Bitcoin Gold fork looms around October 25th.