In traditional markets, when participants trade futures, they are betting on the future price action of an underlying asset. If they hold those futures all the way through settlement, they end up receiving the underlying asset, physically delivered to them.
The CFTC’s new clarity involves a 28-day deadline for physical delivery, allowing the buyer to use their purchased digital asset after that period.
The new guidance includes a person holding or controlling such a commodity, bought via leverage trading or other methods. He or she has “the ability to use the entire quantity of the commodity freely in commerce (away from any particular execution venue) no later than 28 days from the date of the transaction and at all times thereafter,” the Commision said.
The offering party gives over ownership
The CFTC included that the selling party and facilitator do not retain any ownership. The commission explained:
“The offeror and counterparty seller (including any of their respective affiliates or other persons acting in concert with the offeror or counterparty seller on a similar basis) do not retain any interest in, legal right, or control over any of the commodity purchased on margin, leverage, or other financing arrangement at the expiration of 28 days from the date of the transaction.”
Continued clarity from the CFTC shows the prevalence of digital asset trading in the mainstream world, spurring responsive regulatory guidance. Just this January, the Chicago Mercantile Exchange, or CME, launched Bitcoin options trading. Such a product launch showed continued demand for trading Bitcoin after the outfit launched BTC futures in 2017.
UPDATE March 20, 19:15 UTC: This article has been updated with comments Cointelegraph received from the CFTC’s Michael Short after initial publication.
