The United States Government seems to be undecided about the status of bitcoin in the country. In what seems like a conflict between different departments, every department directly or indirectly related to banking and finance are calling it their own. This has caused enough confusion among bitcoin and digital currency companies operating in the country.
Recently the United States Commodities Futures Trading Commission (CFTC) had filed a case against one of the San Francisco based Bitcoin trading platforms. Coinflip was taken to task for not having proper regulatory clearances from the department to run its trading operations on Derivabit, its trading platform. The charges were dropped after the company and its CEO, Francisco Riordan reached a settlement with the CFTC. According to reports, the settlement didn’t include any monetary penalties as he neither confirmed nor denied any misdoings on Coinflip’s part.
With the recent crackdown, CFTC has sent a clear message to everyone watching that Bitcoin is now considered as a commodity and anyone interested in running a bitcoin trading platform would have to go through them (just like they have to go through three more different departments).
While CFTC calls bitcoin a commodity, other departments like Internal Revenue Services (IRS), Securities Exchange Commission (SEC) and Financial Crimes Enforcement Network (FinCEN) are not far behind. Each of the different organizations classifies bitcoin as property, money and currency respectively. This kind of classification can throw anyone off balance, mostly by wondering how one thing can be everything the financial world could have ever thought of, especially when it is supposed to be decentralized, secure and transparent.
Of all the places in the world, United States of America is the only country that has managed to come up with innovative ways of slapping extra paperwork, fees, penalties and regulations on bitcoin. As if these things are not enough, New York State has made it worse by introducing BitLicense. It is not just the bitcoin companies, even bitcoin users have started to feel the heat. Things get even weirder, especially when its neighboring country Canada, its ally United Kingdom and many more countries are making it easier for bitcoin companies to innovate and offer their services to the community.